10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended September 30, 2011

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____ to _____.

Commission File No.  001-34075

PIEDMONT MINING COMPANY, INC.

(Exact Name of Registrant as Specified in Its Charter)

North Carolina	56-1378516
(State or Other Jurisdiction Of Incorporation or Organization)	(I.R.S. Employer Identification Number)
18124 Wedge Parkway, Suite 214 Reno, Nevada	89511
(Address of Principal Executive Offices)	(Zip Code)

Registrant’s telephone number, including area code (212) 734-9848

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports); and (2) has been subject to such filing requirements for the past 90 days.

Yes ¨                                No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T ( § 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

 Yes ¨                              No ¨

Indicate by checkmark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company.  See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.  (Check one):

Large accelerated filer	¨	Accelerated filer	¨
Non-accelerated filer	¨	Smaller reporting company	x
(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ¨                      No x

As of November 18, 2011 there were 78,376,025 outstanding shares of the issuer’s common stock.

PIEDMONT MINING COMPANY, INC.

FORM 10-Q INDEX

	Page Number
PART I – FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets	3
Consolidated Statements of Loss	4
Consolidated Statements of Cash Flows	5
Notes to Consolidated Financial Statements	6
Item 2. Management’s Discussion and Analysis or Plan of Operations	11
Item 3. Quantitative and Qualitative Disclosures About Market Risks	13
Item 4. Controls and Procedures	13
PART II – OTHER INFORMATION
Item 1. Legal Proceedings	14
Item 1A. Risk Factors.	14
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	14
Item 3. Defaults Upon Senior Securities	14
Item 4. [Removed and Reserved]	14
Item 5. Other Information	14
Item 6. Exhibits	14
Signature Page	15

PIEDMONT MINING COMPANY, INC.

(An Exploration Stage Company)

CONSOLIDATED BALANCE SHEETS

	September 30, 2011			December 31, 2010
	(unaudited)
ASSETS
CURRENT ASSETS
Cash	$	52		$	176
RECLAMATION BOND (Note 3)		-			11,566
MINERAL PROPERTY (Note 3)		-			1
INTEREST IN OIL LEASES (Note 2)		2			2
	$	54		$	11,745
LIABILITIES AND STOCKHOLDERS’ DEFICIT
CURRENT LIABILITIES
Accounts payable	$	395,638		$	366,534
Due to related parties (Note 5)		916,376			754,685
TOTAL LIABILITIES		1,312,014			1,121,219
STOCKHOLDERS’ DEFICIT
CAPITAL STOCK (Note 6)
Authorized: 200,000,000 Common stock no par value 50,000,000 Preferred stock $1.00 par valueCommon stock issued and outstanding: 78,376,025 shares (December 31, 2010 – 78,376,025)		16,825,810			16,825,810
ADDITIONAL PAID IN CAPITAL		872,643			872,643
ACCUMULATED DEFICIT		(12,564,287	)		(12,564,287	)
DEFICIT ACCUMULATED DURING THE EXPLORATION STAGE		(6,446,126	)		(6,243,640	)
STOCKHOLDERS’ DEFICIT		(1,311,960	)		(1,109,474	)
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT	$	54		$	11,745

CONTINGENCIES (Notes 1 & 4)

SUBSEQUENT EVENT (Notes 3 & 9)

The accompanying notes are an integral part of these consolidated financial statements.

3

PIEDMONT MINING COMPANY, INC.

(An Exploration Stage Company)

CONSOLIDATED STATEMENTS OF LOSS

(unaudited)

	Three months ended September 30, 2011			Three months ended September 30, 2010			Nine months ended September 30, 2011			Nine months ended September 30, 2010			For the Period from January 1, 2002 (Date of Inception of Exploration Stage) to September 30, 2011
REVENUES
Oil revenues	$	-		$	-		$	-		$	-		$	3,233
EXPENSES
Depreciation		-			-			-						146,383
Exploration, geological and geophysical costs (Note 2)		-			402			54			25,979			2,347,353
Finance fees		-			-			-			-			191,200
General and administrative		17,061			9,183			37,587			55,500			1,027,235
Impairment (recovery) of mineral properties (Note 3)					-			(14,184	)					327,790
Management fees		42,000			42,000			126,000			126,000			1,308,872
Professional fees		9,759			49,392			53,029			114,044			1,086,261
		68,820			100,977			202,486			321,523			6,435,094
LOSS BEFORE OTHER ITEMS		(68,820	)		(100,977	)		(202,486	)		(321,523	)		(6,431,861	)
OTHER ITEMS
Interest income		-			-			-			-			32,325
Other non-operating losses		-			10,500			-			10,575			(46,590	)
NET LOSS FOR THE PERIOD	$	(68,820	)	$	(90,477	) )	$	(202,486	)	$	(310,948	)	$	(6,446,126	)
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING BASIC AND DILUTED		78,376,025			78,376,025			78,376,025			72,979,364
BASIC AND DILUTED LOSS PER SHARE	$	(0.00 3	)	$	(0.004	)	$	(0.003	)	$	(0.00 4	)

The accompanying notes are an integral part of these consolidated financial statements 

4

PIEDMONT MINING COMPANY, INC.

(An Exploration Stage Company)

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

	Nine months ended September 30, 2011			Nine months ended September 30, 2010			For the Period from January 1, 2002 (Date of Inception of Exploration Stage) to September 30, 2011
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss for the period	$	(202,486	)	$	(310,948	)	$	(6,446,126	)
Adjustments to reconcile net loss to net cash from operating activities
- depreciation		-			-			146,383
- impairment (recovery) of mineral properties		(14,184	)		-			327,791
- stock based compensation		-			-			409,468
- warrants issued as finance fee		-			-			92,100
-non-cash expenses								47,468
- stock issued as finance fee		-			-			100,000
- other income		-			-			21,100
- loss on other non-operating activities		-			-			(21,000	)
Changes in operating assets and liabilities:
- prepaid expenses and other		-			-			949
- due to related parties		161,691			158,495			821,169
- accounts payable and accrued liabilities		54,855			113,509			663,935
NET CASH USED IN OPERATING ACTIVITIES		(124	)		(38,944	)		(3,836,763	)
CASH FLOWS USED IN INVESTING ACTIVITIES
Refund of reclamation bond		-			-			1,797
Purchase of property and equipment		-			-			(5,579	)
Purchase of oil and gas interests		-			-			(2	)
Mineral property costs		-			-			(296,042	)
Proceeds from non-operating activities		-			-			97,125
NET CASH USED IN INVESTING ACTIVITIES		-			-			(202,701	)
CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of shares for cash, net of issuance costs					22,500			3,747,674
Convertible notes		-			-			291,145
NET CASH FROM FINANCING ACTIVITIES					22,500			4,038,819
DECREASE IN CASH		(124	)		(16,444	)		(645	)
CASH, BEGINNING		176			16,466			697
CASH, ENDING	$	52		$	22		$	52

SUPPLEMENTARY CASH FLOW INFORMATION (Note 7)

The accompanying notes are an integral part of these consolidated financial statements.

5

NOTE 1:  NATURE OF OPERATIONS AND BASIS OF PRESENTATION

Piedmont Mining Company, Inc. (the “Company”) was formed in 1983 under the laws of North Carolina, USA and is currently in the exploration stage. Since 2002 the Company has been primarily involved in the evaluation and exploration of mineral properties in the state of Nevada.  The Company’s focus has been on the exploration of gold and silver properties in Nevada.

Going Concern

These financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America with the assumptions applicable to a going concern which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business.

The Company is in the exploration stage and to date has not yet generated net revenues or cash flow from its activities, except for some minor cash flow from interests in two oil wells and advances from management. The Company has a history of losses and has a working capital deficit of $1,311,962 and an accumulated deficit of $19,010,413 at September 30, 2011.  The Company is dependent on the continued support of its creditors and its ability to raise further capital. In the current market conditions there is uncertainty that the necessary funding can be obtained as needed, raising substantial doubt as to the ability of the Company to continue as a going concern.  These financial statements do not reflect any adjustments to the carrying values of assets that might result from the outcome of this uncertainty.

The Company plans to fund its ongoing operations primarily by way of private placements of its securities and advances from management. Management believes that advances from management will contribute toward funding the Company’s activities until appropriate levels of funding can be arranged to recommence exploration and/or a merger can be arranged.. If the Company is unsuccessful in obtaining adequate funding, its proposed activities will continue to be postponed until market conditions improve.

On March 4, 2011, the Company entered into a Reorganization and Share Exchange Agreement, which was terminated on April 30, 2011, as provided for in the Agreement.  (Refer to Note 8)

Unaudited Interim Financial Statements

The accompanying unaudited interim consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q. They do not include all information and footnotes required by United States generally accepted accounting principles for complete financial statement disclosure. However, except as disclosed herein, there has been no material changes in the information disclosed in the notes to the financial statements for the year ended December 31, 2010, included in the Company’s Form 10-K filed with the Securities and Exchange Commission on March 24, 2011. The unaudited interim consolidated financial statements should be read in conjunction with those financial statements included in the Form 10-K. In the opinion of management, all adjustments considered necessary for a fair presentation, consisting solely of normal recurring adjustments, have been made. Operating results for the nine months ended September 30, 2011 are not necessarily indicative of the results that may be expected for the year ending December 31, 2011.

Recent accounting pronouncements with future effective dates are not expected to have a significant impact on the Company’s current financial statements

NOTE 2:  INTEREST IN OIL LEASES

The Company was granted interests in two oil wells in Tennessee in consideration for $2 consisting of a 10.5% undivided working interest in one well and a 6% over-riding royalty interest in another.  There was no cash flow from oil production in 2010 or in 2011 to date.

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NOTE 3:  MINERAL PROPERTY

The Company has entered into exploration agreements as described below. A summary of the carrying amount of capitalized costs is as follows:

	September 30, 2011		December 31, 2010
Mineral Property
PPM Gold	$	-	$	1

	September 30, 2011		December 31, 2010
Reclamation Bonds
PPM Gold	$	-	$	11,566

PPM Gold Project

In April, 2007, the Company signed an “Exploration Agreement with Option to form Joint Venture” (the “Exploration Agreement”) with Miranda US, Inc., a wholly-owned subsidiary of Miranda Gold Corp. (“Miranda”), a Canadian corporation listed on the TSX Venture Exchange.  Under the terms of the Exploration Agreement, the Company has an option to earn a 55% interest in mining claims, located in Humboldt County, Nevada in consideration of incurring $1,750,000 in exploration work over a five year period.

The Company has not been able to meet its work commitment requirements in a timely manner due to a lack of adequate funding.  As a result, the Company wrote down the carrying value of this project to $1 at December 31, 2009.

On July 28, 2011, the Bureau of Land Management notified the Company that the PPM project was closed at the request of Miranda and that the reclamation bond was being returned to Miranda.  Miranda has agreed to release the Company from all outstanding liabilities in exchange for the return of the reclamation bond.  As a result, the Company wrote down the remaining carrying value of this project including the reclamation bond to $Nil, and recognized a net recovery of $14,184 at June 30, 2011.

NOTE 4:  CONTINGENCY

During the year ended December 31, 2010, the Company was advised by its attorneys that a third party claimed a balance of $87,372 for uncompleted work expenditure requirements owing to them under a previous agreement.  The Company believes this claim is without foundation or merit and is disputing the amount.  The Company has not recorded a liability in relation to the foregoing matter as the amount and likelihood of loss, if any, cannot be determined or reliably measured at this time.

NOTE 5:  DUE TO RELATED PARTIES AND RELATED PARTY TRANSACTIONS

During the nine months ended September 30, 2011 the Company incurred management fees of $126,000 (2010: $126,000) to the Company’s President and CEO. In addition, the Company reimbursed the President for office rent which totaled $14,400 for the nine months ended September 30, 2011 (2010: $14,400).  At September 30, 2011, a balance of $703,664 (December 31, 2010: $561,039) was owed to the President and CEO for unpaid management fees, rent and expense reimbursements.

During the nine months ended September 30, 2011, the Company incurred exploration costs and fees of $Nil (2010: $420) to the Company’s Vice-President.  At September 30, 2011 a balance of $33,668 (December 31, 2010: $33,668) was owing to the Vice-President for unpaid fees, exploration costs and expense reimbursements.

From time to time, the Company’s officers and directors advance loans to the Company. These loans bear interest at 5% per annum. These loans are unsecured and have no fixed repayment terms. The unpaid balance relating to these advances, which include accrued interest, at September 30, 2011 was $179,043 (December 31, 2010: $159,978).

7

No stock options were granted to officers or directors by the Company for the nine month period ended September 30, 2011.  All related party transactions involving provision of services or transfer of tangible assets in the normal course of business were recorded at the exchange amount, which is the value established and agreed to by the related parties.

8

NOTE 6:  CAPITAL STOCK

Share Capital

The Company’s capitalization is 50,000,000 authorized preferred shares with a par value of $1.00 per share and 200,000,000 common shares with no par value.

Preferred Stock transactions:

On March 4, 2011, the Company entered into a Series A Preferred Stock Purchase Agreement with Financial Resolutions of America Corporation (“FRAC”), pursuant to which FRAC purchased an aggregate of 200,000 shares of Company’s Series A Preferred Stock, for an aggregate purchase price of $479,290, which was paid in the form of a promissory note with the indebtedness represented by such note to be due and payable in full at the contemplated closing.  The agreement was terminated on April 30, 2011, the preferred shares were returned and the promissory note was canceled.

Common Share transactions:

During the nine months ended September 30, 2011, the Company did not have any common share transactions.

Stock-Based Compensation and Other Equity Transactions

The Company does not have a stock-based compensation plan. The Company’s Compensation Committee makes recommendations to the Board of Directors for the granting of awards of stock options to its officers and directors on a discretionary basis.

No stock options were granted during the nine months ended September 30, 2011

Below is a summary of the stock option activity for the nine months ended September 30, 2011.

	Number of Options			Weighted Average Exercise Price
Total Options:
Outstanding, December 31, 2010		4,250,000		$	0.245
Expired September 30, 2011		(2,500,000	)		0.242
Outstanding, September 30 2011		1,750,000		$	0.25

The following tables summarize information and terms of the options outstanding and exercisable:

									Weighted
			Weighted						Average
			Average		Weighted				Remaining		Weighted
			Remaining		Average				Contractual		Average
Range of Exercise Prices	Number of Shares		Contractual Life (in years)		Exercise Price		Number of Shares		Life (in years)		Exercise Price
Options outstanding at September 30, 2011							Options exercisable at September 30, 2011
$ 0.25		1,750,000		0.357	$	0.25		1,750,000		0.286	$	0.25
Options outstanding at December 31, 2010							Options exercisable at December 31, 2010
$ 0.23 – 0.28		4,250,000		0.62	$	0.245		4,250,000		0.62	$	0.245

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NOTE 6:  CAPITAL STOCK (continued)

Common stock purchase warrants

Total outstanding warrants at September 30, 2011 were 2,654,167. The exercise prices on all warrants range from $0.03 to $0.16 per share. The warrants are exercisable immediately upon issuance and expiration dates range from two and five years from the date of issuance.

During the nine months ended September 30, 2011, the Company did not issue any warrants.

A summary of the Company’s stock purchase warrants as of September 30, 2011 is presented below:

	Number of Warrants			Weighted Average Exercise Price		Weighted Average Remaining Life (years)
Balance, December 31, 2010		3,162,500		$	0.057		1.52
Expired		(508,333	)		0.110		-
Balance at September 30, 2011		2,654,167		$	0.047		1.02

NOTE 7: SUPPLEMENTAL CASH FLOW INFORMATION

Other information	Nine months ended September 30, 2011		Nine months ended September 30, 2010
Cash paid for interest	$	-	$	-
Cash paid for income taxes	$	-	$	-

NOTE 8:  REORGANIZATION AND SHARE EXCHANGE AGREEMENT

On March 4, 2011, the Company entered into a Reorganization and Share Exchange Agreement (the “Share Exchange Agreement”) with FRAC, a California corporation which operates a judgment recovery business using its proprietary servicing platform, and all of FRAC’s shareholders.  Pursuant to the agreement, the FRAC Shareholders would exchange all of the common stock of FRAC owned by them, representing all of the issued and outstanding shares of common stock of FRAC, for shares of Series C Preferred Stock of the Company (the “Exchange”).  Upon consummation of the proposed Exchange, it was contemplated that FRAC shareholders would hold shares in the Company and FRAC would become a wholly owned subsidiary of the Company.

Concurrent with the Share Exchange Agreement and as contemplated therein, on March 4, 2011, the Company entered into a Series A Preferred Stock Purchase Agreement with FRAC, pursuant to which FRAC purchased an aggregate of 200,000 shares of Company’s Series A Preferred Stock, which in the aggregate represent voting rights equal to approximately 70% of the Company’s total voting power, for an aggregate purchase price of $479,290, which was represented  in the form of a promissory note  to be due and payable in full at the contemplated closing. In the event the Share Exchange Agreement is terminated, FRAC would return the shares of Series A Preferred Stock in exchange for cancellation of the promissory note issued in connection with the purchase of such shares.

In connection with the transactions, the Company filed Articles of Amendment to designate shares of Series A Preferred Stock and Series B Preferred Stock as follows:

· Designation of Series A Preferred Stock.  On March 4, 2011, the Company filed Articles of Amendment amending the Company’s Articles of Incorporation to designate 200,000 shares of the Company’s authorized Preferred Stock as Series A Preferred Stock. Shares of Series A Preferred Stock have been designated with the following rights, privileges, and preferences:  Each share of Series A Preferred Stock shall entitle the holder thereof to 1,000 votes, and the right to vote, together as a single class with holders of all common stock and preferred stock then outstanding, on any question or matter upon which holders of the Company’s common stock are entitled to vote.  Shares of Series A Preferred Stock shall not entitle the holders thereof to any dividends or liquidation preferences and such shares shall not be convertible into any other security of the Company.

10

· Designation of Series B Preferred Stock.  On March 4, 2011, the Company filed Articles of Amendment amending the Company’s Articles of Incorporation to designate 10,000,000 shares of the Company’s authorized Preferred Stock as Series B Preferred Stock.  Shares of Series B Preferred Stock have been designated with the following rights, privileges, and preferences: Each share of Series B Preferred Stock shall automatically convert into shares of the Company’s post-Reverse Split Common Stock at a rate of one post-Reverse Split share of the Company’s Common Stock.

On April 30, 2011 the Reorganization and Share Exchange Agreement was terminated with no further obligations of either party. Accordingly, the Series A Preferred Stock was returned to the Company in exchange for cancellation of the promissory note originally issued for such shares.  No Series B Preferred Stock was issued.

The company took the position that the transaction was never completed as contemplated and that control did not pass.

Acccordingly a business combination transaction did not occur.

NOTE 9:  SUBSEQUENT EVENTS

Management has evaluated events occurring between the end of its fiscal quarter September 30, 2011 to the date of filing.

Item 2.  Management’s Discussion And Analysis Or Plan Of Operations

Forward-Looking Statements and Associated Risks.

Except for statements of historical facts, this report contains forward-looking statements involving risks and uncertainties. You can identify these statements by forward-looking words including “believes,” “considers,” “intends,”  “expects,” “may,” “will,” “should,” “forecast, “ or “anticipates,” or the equivalents of those words or comparable terminology, and by discussions of strategies that involve risks and uncertainties. Forward-looking statements are not guarantees of our future performance or results, and our actual results could differ materially from those anticipated in these forward-looking statements. We wish to caution readers to consider the important factors, among others, that in some cases have affected, and in the future could affect our actual results and could cause actual consolidated results for future fiscal years to differ materially from those expressed in any forward-looking statements made by us or on our behalf. These factors include without limitation, our ability to obtain capital and other financing in the amounts and at the times needed, identification of suitable exploration properties for acquisition, the successful discovery of gold, silver or other precious metals in quantities economically feasible for profitable production, changes in gold and silver prices, changes in the political climate for gold and silver exploration, and other risk factors listed from time to time in our Securities and Exchange Commission reports, including in particular the factors and discussions under the heading “Risk Factors” in the Annual Report on Form 10-K for the year ended December 31, 2010  that was filed with the Securities and Exchange Commission on March 24, 2011.

Overview of Business

The Company is a North Carolina corporation that was formed in 1983. From its inception until 1992, it was engaged in exploration for, and production of, gold and other precious metals and the evaluation of gold properties in North Carolina and South Carolina. From 1983 until 1992 it was engaged in exploration, mining and production of gold and silver at its Haile Gold Mine Property near Kershaw, South Carolina. Operations ceased at the Haile Mine Property in 1993.  The Company did not again become engaged in exploration activities until 2004, when it relocated its principal place of business to Reno, Nevada. Since October 2003, we have been an exploration stage company engaged in exploration for gold and silver in the state of Nevada.

We had option agreements on exploration properties in the state of Nevada, but due to a lack of adequate funding, our exploration agreements have been terminated.  Our exploration plans are uncertain due to a lack of adequate funding.

Although we obtained a small amount of cash flow from our interest in two oil wells in Tennessee during the third quarter of 2009, there is no assurance that we will receive any cash flow in the future.  Our ability to continue as a going concern is dependent on our ability to obtain additional capital.  We plan to fund our operations by private placements of securities, transactions with other entities and advances from our management. In light of the conditions of the global economy, there is no guarantee that we will be able to raise the required capital to continue as a going concern.

11

Going Concern

The report of our independent auditors in our December 31, 2010 financial statements includes an explanatory paragraph indicating that there is substantial doubt about our ability to continue as a going concern due to recurring losses from operations, an accumulated deficit of $18,807,927 and a working capital deficit of $1,121,041 at December 31, 2010. Our ability to continue as a going concern will be determined by our ability to raise adequate funds and conduct one or more successful exploration programs. Our financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Critical Accounting Policies

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make a wide variety of estimates and assumptions that affect: (1) the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements, and (2) the reported amounts of revenues and expenses during the reporting periods covered by the financial statements. Our management makes judgments and estimates about the effect of matters that are inherently uncertain. As the number of variables and assumptions affecting the future resolution of the uncertainties increases, these judgments become even more subjective and complex. We have identified certain accounting policies that are most important to the portrayal of our current financial condition and results of operations.

Results of Operations

Discussion of Revenues

In the third quarter of 2009, we received our first revenues from interests in two small oil wells for a total of $3,233.We have not received any revenues during the six  months ended  June 30, 2011, and there is no assurance that we will receive any revenues in the future.

We do not anticipate that any significant revenues will be achieved from gold and silver exploration properties until we:

· Obtain financing to continue our operations; or

· Enter into a joint venture with a third party.

There is no guarantee that we will obtain the financing required to continue our operations. In addition, in the event we are able to secure funds to continue our exploration projects, there is no assurance that our exploration activities will locate viable gold and/or silver reserves, or if an economic mineral deposit were discovered that we would be able to commence commercial production, or that if we do locate viable mineralization that we would be able to secure the funding necessary to proceed with the mining and production of ore.

                       Expenses for the Three Month and Nine Month Periods ended September 30, 2011 vs September 30, 2010

Exploration, geological and geophysical costs decreased by $402, or 100% to $0 for the three months ended September 30, 2011 as compared to $402 for the three months ended September 30, 2010.  The principal reason for this decrease was a reduction in exploration activities due to a lack of funding.

Exploration, geological and geophysical costs decreased by $25,925, or 100% to $0 for the nine months ended September 30, 2011 as compared to $25,979 for the nine months ended September 30, 2010.  The principal reason for this decrease was a reduction in exploration activities due to a lack of funding.

A recovery of previous mineral property impairments in the amount of $14,184 was recorded for the three and nine months ended September 30, 2011 as compared to $0 for the three and nine months ended September 30, 2010.  The principal reason for this was a write-down of the PPM Gold Project net with the forgiveness of debt related to the project.

General and administrative expenses increased by $7,878 or 85.79% to $17,061 for the three months ended September 30, 2011 as compared to $9,183 for the three months ended September 30, 2010.  The principal reasons for this change were an increase in interest expense and a reduction in public reporting expenses.

General and administrative expenses decreased by $17,913 or 32.28% to $37,587 for the nine months ended September 30, 2011 as compared to $55,500 for the nine months ended September 30, 2010.  The principal reasons for this change were a reduction in travel and related expenses by the Company’s President and CEO and a decrease in interest expense.

Management fees of $42,000 and $126,000 were the same for the three and nine months ended September 30, 2011 as compared to the three and nine months ended September 30, 2010.

12

For the three months ended September 30, 2011, professional fees decreased by $39,633 to $9,759 as compared to $49,392 for the three months ended September 30, 2010.  This change for the three month period is due to the inactivity of the Company during this quarter.

For the nine months ended September 30, 2011, professional fees decreased by $61,015 to $53,029 as compared to $114,044 for the nine months ended September 30, 2010.  This change for the nine month period is due to a reduction in legal fees.

Liquidity and Financial Condition

Cash and Working Capital

The Company has suspended its exploration operations due to a lack of funding and to date it has not yet generated any revenues or cash flow from its activities, except for some minor cash flow from interests in two small oil wells in 2009. The Company has had a history of losses.  We had an accumulated deficit of $18,807,927 from our inception in 1983 to December 31, 2010, and an accumulated deficit of $19,010,413 at September 30, 2011.  We had a working capital deficit of $1,311,962 at September 30, 2011 and $1,121,041 at December 31, 2010.  We have no remaining long-term obligations.

We had a cash balance of $176 on December 31, 2010 and a cash balance of $52 on September 30, 2011.  For the nine month period ending September 30, 2011, we had net cash outflows of $124.  We had current liabilities of $1,312,014, which consisted of approximately 30% in accounts payable and 70% in amounts due to related parties for management fees, expenses and reimbursements, as of September 30, 2011.

The cash flows used in operations for the nine month period ended September 30, 2011 were $124 compared with $38,944 for the same period in 2010.  Cash flows used in operations for the nine month period ended September 30, 2011 consisted primarily of a net loss of $202,486, an increase in accounts payable and accrued liabilities of $54,855, and an increase of $161,691 in amounts unpaid to related parties for fees, cash advances, expenses paid on behalf of the Company.

We had no financing activity during the nine months ended September 30, 2011

Internal and External Sources of Liquidity

During the remaining fiscal year 2011, we expect that our operations will be funded by advances from management and  payments from outside parties. In addition, we are evaluating, and expect to continue to evaluate, a wide array of potential strategic transactions and relationships with third parties.   However, there is no assurance that we will be able to obtain sufficient funds to support our operations as planned.   We are dependent on the continued support of our creditors, our ability to raise further capital to fund ongoing expenditures. In current market conditions there is uncertainty that the necessary funding can be obtained as needed, raising substantial doubt as to the ability of the Company to continue operating as a going concern.  In the event, we are unable to raise additional capital, we will not be able to meet our obligations and will be required to further curtail or terminate some of our projects and/or activities.

Contractual Obligations

We do not engage in hedging transactions and we have no hedged mineral resources.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements.

We do not engage in hedging transactions and we have no hedged resources.

Item 3. Quantitative and Qualitative Disclosure About Market Risks

Not Applicable.

Item 4. Controls And Procedures

(A)         Evaluation of Disclosure Controls and Procedures

13

Disclosure controls and procedures are designed to ensure that information required to be disclosed in the reports filed or submitted by us under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported, within the time periods specified in the rules and forms of the Securities and Exchange Commission. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in the reports filed under the Securities Exchange Act of 1934 is accumulated and communicated to our management, including our principal executive and financial officers, as appropriate, to allow timely decisions regarding required disclosure.

We have reviewed the effectiveness of the design and operation of our disclosure controls and procedures. Based upon that evaluation, our principal executive officer and financial officers concluded that there are some weaknesses in our internal controls, including those which relate to the review, approval and reconciliation of accounting data and entries. We believe that our disclosure controls and procedures are adequate, given our limited resources.  We hope to address these issues by reviewing and revising our internal accounting policies and procedures in the future.

(B)           Changes in Internal Control Over Financial Reporting

 There has been no change in our internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting, except that we continue to look for ways to improve our internal controls.

PART II – OTHER INFORMATION

Item 1. Legal Proceedings

To the best knowledge of management, there are no material legal proceedings pending against the Company.

Item 1A. Risk factors

Not Applicable.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. [Removed and Reserved]

Item 5. Other Information

None.

Item 6. Exhibits

Exhibit No.	Description
31.1	Certification Pursuant to Section 302*
32.1	Certification Pursuant to 18 U.S.C. Section 1350*

*Filed herewith

14

SIGNATURES

Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	PIEDMONT MINING COMPANY, INC.,
	a North Carolina Corporation
Dated:   November  18, 2011	/s/ Robert M. Shields, Jr.
	By:  Robert M. Shields, Jr.
	Its:  Chief Executive Officer (Principal Executive Officer)
	and Chief Financial Officer (Principal Financial Officer and
	Principal Accounting Officer)

15

EX-31.1

EXHIBIT 31.1

OFFICER’S CERTIFICATE

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Robert M. Shields, Jr. certify that:

I have reviewed this Quarterly Report on Form 10-Q of Piedmont Mining Company, Inc.

1. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

2. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

3. I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

4. I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:
November 18, 2011	By:	/s/ Robert M. Shields, Jr
		Name:  Robert M. Shields, Jr.
		Title:  Chief Executive Officer (Principal Executive
		Officer) and  Chief Financial Officer (Principal
		Financial Officer and Principal Accounting Officer)

EX-32.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Piedmont Mining Company, Inc. (the “Company”) on Form 10-Q for the period ended September 30, 2011, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned, in the capacities and on the date indicated below, hereby certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to his knowledge:

1.           The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.           The information contained in the Report fairly presents, in all material respects, the financial condition and results of operation of the Company.

Date:
November 18, 2011	By:	/s/ Robert M. Shields, Jr.
		Name:  Robert M. Shields, Jr.
		Title:  Chief Executive Officer (Principal Executive
		Officer) and Chief Financial Officer (Principal
		Financial Officer and Principal Accounting
		Officer)

XML

CONTINGENCY

9 Months Ended

Sep. 30, 2011

Loss Contingency [Abstract]

Contingencies Disclosure [Text Block]

NOTE 4:  CONTINGENCY

During the year ended December 31, 2010, the Company was advised by its attorneys that a third party claimed a balance of $87,372 for uncompleted work expenditure requirements owing to them under a previous agreement.  The Company believes this claim is without foundation or merit and is disputing the amount.  The Company has not recorded a liability in relation to the foregoing matter as the amount and likelihood of loss, if any, cannot be determined or reliably measured at this time.

XML

MINERAL PROPERTY

9 Months Ended

Sep. 30, 2011

Mineral Property [Abstract]

Mineral Property [Text Block]

NOTE 3:  MINERAL PROPERTY

The Company has entered into exploration agreements as described below. A summary of the carrying amount of capitalized costs is as follows:

	September 30, 2011		December 31, 2010
Mineral Property
PPM Gold	$	-	$	1

	September 30, 2011		December 31, 2010
Reclamation Bonds
PPM Gold	$	-	$	11,566

PPM Gold Project

In April, 2007, the Company signed an “Exploration Agreement with Option to form Joint Venture” (the “Exploration Agreement”) with Miranda US, Inc., a wholly-owned subsidiary of Miranda Gold Corp. (“Miranda”), a Canadian corporation listed on the TSX Venture Exchange.  Under the terms of the Exploration Agreement, the Company has an option to earn a 55% interest in mining claims, located in Humboldt County, Nevada in consideration of incurring $1,750,000 in exploration work over a five year period.

The Company has not been able to meet its work commitment requirements in a timely manner due to a lack of adequate funding.  As a result, the Company wrote down the carrying value of this project to $1 at December 31, 2009.

On July 28, 2011, the Bureau of Land Management notified the Company that the PPM project was closed at the request of Miranda and that the reclamation bond was being returned to Miranda.  Miranda has agreed to release the Company from all outstanding liabilities in exchange for the return of the reclamation bond.  As a result, the Company wrote down the remaining carrying value of this project including the reclamation bond to $Nil, and recognized a net recovery of $14,184 at June 30, 2011.

XML

CONSOLIDATED BALANCE SHEETS (USD $)	Sep. 30, 2011	Dec. 31, 2010
ASSETS
Cash	$ 52	$ 176
RECLAMATION BOND (Note 3)	0	11,566
MINERAL PROPERTY (Note 3)	0	1
INTEREST IN OIL LEASES (Note 2)	2	2
Assets, Total	54	11,745
LIABILITIES AND STOCKHOLDERS' DEFICIT
Accounts payable	395,638	366,534
Due to related parties (Note 5)	916,376	754,685
TOTAL LIABILITIES	1,312,014	1,121,219
STOCKHOLDERS' DEFICIT
CAPITAL STOCK (Note 6) Authorized: 200,000,000 Common stock no par value 50,000,000 Preferred stock $1.00 par valueCommon stock issued and outstanding: 78,376,025 shares (December 31, 2010 78,376,025)	16,825,810	16,825,810
ADDITIONAL PAID IN CAPITAL	872,643	872,643
ACCUMULATED DEFICIT	(12,564,287)	(12,564,287)
DEFICIT ACCUMULATED DURING THE EXPLORATION STAGE	(6,446,126)	(6,243,640)
STOCKHOLDERS' DEFICIT	(1,311,960)	(1,109,474)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT	$ 54	$ 11,745

XML

NATURE OF OPERATIONS AND BASIS OF PRESENTATION

9 Months Ended

Sep. 30, 2011

Accounting Policies [Abstract]

Business Description and Basis of Presentation [Text Block]

NOTE 1:  NATURE OF OPERATIONS AND BASIS OF PRESENTATION

Piedmont Mining Company, Inc. (the “Company”) was formed in 1983 under the laws of North Carolina, USA and is currently in the exploration stage. Since 2002 the Company has been primarily involved in the evaluation and exploration of mineral properties in the state of Nevada.  The Company’s focus has been on the exploration of gold and silver properties in Nevada.

Going Concern

These financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America with the assumptions applicable to a going concern which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business.

The Company is in the exploration stage and to date has not yet generated net revenues or cash flow from its activities, except for some minor cash flow from interests in two oil wells and advances from management. The Company has a history of losses and has a working capital deficit of $1,311,962 and an accumulated deficit of $19,010,413 at September 30, 2011.  The Company is dependent on the continued support of its creditors and its ability to raise further capital. In the current market conditions there is uncertainty that the necessary funding can be obtained as needed, raising substantial doubt as to the ability of the Company to continue as a going concern.  These financial statements do not reflect any adjustments to the carrying values of assets that might result from the outcome of this uncertainty.

The Company plans to fund its ongoing operations primarily by way of private placements of its securities and advances from management. Management believes that advances from management will contribute toward funding the Company’s activities until appropriate levels of funding can be arranged to recommence exploration and/or a merger can be arranged.. If the Company is unsuccessful in obtaining adequate funding, its proposed activities will continue to be postponed until market conditions improve.

On March 4, 2011, the Company entered into a Reorganization and Share Exchange Agreement, which was terminated on April 30, 2011, as provided for in the Agreement.  (Refer to Note 8)

Unaudited Interim Financial Statements

The accompanying unaudited interim consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q. They do not include all information and footnotes required by United States generally accepted accounting principles for complete financial statement disclosure. However, except as disclosed herein, there has been no material changes in the information disclosed in the notes to the financial statements for the year ended December 31, 2010, included in the Company’s Form 10-K filed with the Securities and Exchange Commission on March 24, 2011. The unaudited interim consolidated financial statements should be read in conjunction with those financial statements included in the Form 10-K. In the opinion of management, all adjustments considered necessary for a fair presentation, consisting solely of normal recurring adjustments, have been made. Operating results for the nine months ended September 30, 2011 are not necessarily indicative of the results that may be expected for the year ending December 31, 2011.

Recent accounting pronouncements with future effective dates are not expected to have a significant impact on the Company’s current financial statements

XML

INTEREST IN OIL LEASES

9 Months Ended

Sep. 30, 2011

Interest In Oil Leases Disclosure [Abstract]

Interest In Oil Leases Disclosure [Text Block]

NOTE 2:  INTEREST IN OIL LEASES

The Company was granted interests in two oil wells in Tennessee in consideration for $2 consisting of a 10.5% undivided working interest in one well and a 6% over-riding royalty interest in another.  There was no cash flow from oil production in 2010 or in 2011 to date.

XML

CONSOLIDATED BALANCE SHEETS [Parenthetical] (USD $)	Sep. 30, 2011	Dec. 31, 2010
Common stock, shares authorized	200,000,000	200,000,000
Common stock, shares issued	78,376,025	78,376,025
Common stock, shares outstanding	78,376,025	78,376,025
Preferred stock, par value (in dollars per share)	$ 1	$ 1
Preferred stock, shares authorized	50,000,000	50,000,000

XML

DOCUMENT AND ENTITY INFORMATION	9 Months Ended
	Sep. 30, 2011	Nov. 18, 2011
Entity Registrant Name	Piedmont Mining Company, Inc.
Entity Central Index Key	0001366826
Current Fiscal Year End Date	--12-31
Entity Filer Category	Smaller Reporting Company
Trading Symbol	pied
Entity Common Stock, Shares Outstanding		78,376,025
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2011
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2011

XML

CONSOLIDATED STATEMENTS OF LOSS (USD $)	3 Months Ended		9 Months Ended		118 Months Ended
	Sep. 30, 2011	Sep. 30, 2010	Sep. 30, 2011	Sep. 30, 2010	Sep. 30, 2011
REVENUES
Oil revenues	$ 0	$ 0	$ 0	$ 0	$ 3,233
EXPENSES
- depreciation	0	0	0	0	146,383
Exploration, geological and geophysical costs (Note 2)	0	402	54	25,979	2,347,353
Finance fees	0	0	0	0	191,200
General and administrative	17,061	9,183	37,587	55,500	1,027,235
Impairment (recovery) of mineral properties (Note 3)		0	(14,184)	0	327,791
Management fees	42,000	42,000	126,000	126,000	1,308,872
Professional fees	9,759	49,392	53,029	114,044	1,086,261
Operating Expenses, Total	68,820	100,977	202,486	321,523	6,435,094
LOSS BEFORE OTHER ITEMS	(68,820)	(100,977)	(202,486)	(321,523)	(6,431,861)
OTHER ITEMS
Interest income	0	0	0	0	32,325
Other non-operating losses	0	10,500	0	10,575	(46,590)
NET LOSS FOR THE PERIOD	$ (68,820)	$ (90,477)	$ (202,486)	$ (310,948)	$ (6,446,126)
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING BASIC AND DILUTED (in shares)	78,376,025	78,376,025	78,376,025	72,979,364
BASIC AND DILUTED LOSS PER SHARE (in dollars per share)	$ (0.003)	$ (0.004)	$ (0.003)	$ (0.004)

XML

SUPPLEMENTAL CASH FLOW INFORMATION

9 Months Ended

Sep. 30, 2011

Supplemental Cash Flow Elements [Abstract]

Cash Flow, Supplemental Disclosures [Text Block]

NOTE 7: SUPPLEMENTAL CASH FLOW INFORMATION

Other information	Nine months ended September 30, 2011		Nine months ended September 30, 2010
Cash paid for interest	$	-	$	-
Cash paid for income taxes	$	-	$	-

XML

CAPITAL STOCK

9 Months Ended

Sep. 30, 2011

Stockholders Equity Note [Abstract]

Stockholders' Equity Note Disclosure [Text Block]

NOTE 6:  CAPITAL STOCK

Share Capital

The Company’s capitalization is 50,000,000 authorized preferred shares with a par value of $1.00 per share and 200,000,000 common shares with no par value.

Preferred Stock transactions:

On March 4, 2011, the Company entered into a Series A Preferred Stock Purchase Agreement with Financial Resolutions of America Corporation (“FRAC”), pursuant to which FRAC purchased an aggregate of 200,000 shares of Company’s Series A Preferred Stock, for an aggregate purchase price of $479,290, which was paid in the form of a promissory note with the indebtedness represented by such note to be due and payable in full at the contemplated closing.  The agreement was terminated on April 30, 2011, the preferred shares were returned and the promissory note was canceled.

Common Share transactions:

During the nine months ended September 30, 2011, the Company did not have any common share transactions.

Stock-Based Compensation and Other Equity Transactions

The Company does not have a stock-based compensation plan. The Company’s Compensation Committee makes recommendations to the Board of Directors for the granting of awards of stock options to its officers and directors on a discretionary basis.

No stock options were granted during the nine months ended September 30, 2011

Below is a summary of the stock option activity for the nine months ended September 30, 2011.

	Number of Options			Weighted Average Exercise Price
Total Options:
Outstanding, December 31, 2010		4,250,000		$	0.245
Expired September 30, 2011		(2,500,000	)		0.242
Outstanding, September 30 2011		1,750,000		$	0.25

The following tables summarize information and terms of the options outstanding and exercisable:

									Weighted
			Weighted						Average
			Average		Weighted				Remaining		Weighted
			Remaining		Average				Contractual		Average
Range of Exercise Prices	Number of Shares		Contractual Life (in years)		Exercise Price		Number of Shares		Life (in years)		Exercise Price
Options outstanding at September 30, 2011							Options exercisable at September 30, 2011
$ 0.25		1,750,000		0.357	$	0.25		1,750,000		0.286	$	0.25
Options outstanding at December 31, 2010							Options exercisable at December 31, 2010
$ 0.23 – 0.28		4,250,000		0.62	$	0.245		4,250,000		0.62	$	0.245

Common stock purchase warrants

Total outstanding warrants at September 30, 2011 were 2,654,167. The exercise prices on all warrants range from $0.03 to $0.16 per share. The warrants are exercisable immediately upon issuance and expiration dates range from two and five years from the date of issuance.

During the nine months ended September 30, 2011, the Company did not issue any warrants.

A summary of the Company’s stock purchase warrants as of September 30, 2011 is presented below:

	Number of Warrants			Weighted Average Exercise Price		Weighted Average Remaining Life (years)
Balance, December 31, 2010		3,162,500		$	0.057		1.52
Expired		(508,333	)		0.110		-
Balance at September 30, 2011		2,654,167		$	0.047		1.02

XML

REORGANIZATION AND SHARE EXCHANGE AGREEMENT

9 Months Ended

Sep. 30, 2011

Reorganisation and Share Exchange Agreement [Abstract]

Reorganisation and Share Exchange Agreement [Text Block]

NOTE 8:  REORGANIZATION AND SHARE EXCHANGE AGREEMENT

On March 4, 2011, the Company entered into a Reorganization and Share Exchange Agreement (the “Share Exchange Agreement”) with FRAC, a California corporation which operates a judgment recovery business using its proprietary servicing platform, and all of FRAC’s shareholders.  Pursuant to the agreement, the FRAC Shareholders would exchange all of the common stock of FRAC owned by them, representing all of the issued and outstanding shares of common stock of FRAC, for shares of Series C Preferred Stock of the Company (the “Exchange”).  Upon consummation of the proposed Exchange, it was contemplated that FRAC shareholders would hold shares in the Company and FRAC would become a wholly owned subsidiary of the Company.

Concurrent with the Share Exchange Agreement and as contemplated therein, on March 4, 2011, the Company entered into a Series A Preferred Stock Purchase Agreement with FRAC, pursuant to which FRAC purchased an aggregate of 200,000 shares of Company’s Series A Preferred Stock, which in the aggregate represent voting rights equal to approximately 70% of the Company’s total voting power, for an aggregate purchase price of $479,290, which was represented  in the form of a promissory note  to be due and payable in full at the contemplated closing. In the event the Share Exchange Agreement is terminated, FRAC would return the shares of Series A Preferred Stock in exchange for cancellation of the promissory note issued in connection with the purchase of such shares.

In connection with the transactions, the Company filed Articles of Amendment to designate shares of Series A Preferred Stock and Series B Preferred Stock as follows:

· Designation of Series A Preferred Stock.  On March 4, 2011, the Company filed Articles of Amendment amending the Company’s Articles of Incorporation to designate 200,000 shares of the Company’s authorized Preferred Stock as Series A Preferred Stock. Shares of Series A Preferred Stock have been designated with the following rights, privileges, and preferences:  Each share of Series A Preferred Stock shall entitle the holder thereof to 1,000 votes, and the right to vote, together as a single class with holders of all common stock and preferred stock then outstanding, on any question or matter upon which holders of the Company’s common stock are entitled to vote.  Shares of Series A Preferred Stock shall not entitle the holders thereof to any dividends or liquidation preferences and such shares shall not be convertible into any other security of the Company.

· Designation of Series B Preferred Stock.  On March 4, 2011, the Company filed Articles of Amendment amending the Company’s Articles of Incorporation to designate 10,000,000 shares of the Company’s authorized Preferred Stock as Series B Preferred Stock.  Shares of Series B Preferred Stock have been designated with the following rights, privileges, and preferences: Each share of Series B Preferred Stock shall automatically convert into shares of the Company’s post-Reverse Split Common Stock at a rate of one post-Reverse Split share of the Company’s Common Stock.

On April 30, 2011 the Reorganization and Share Exchange Agreement was terminated with no further obligations of either party. Accordingly, the Series A Preferred Stock was returned to the Company in exchange for cancellation of the promissory note originally issued for such shares.  No Series B Preferred Stock was issued.

The company took the position that the transaction was never completed as contemplated and that control did not pass.

Acccordingly a business combination transaction did not occur.

XML

SUBSEQUENT EVENTS

9 Months Ended

Sep. 30, 2011

Subsequent Events [Abstract]

Subsequent Events [Text Block]

NOTE 9:  SUBSEQUENT EVENTS

Management has evaluated events occurring between the end of its fiscal quarter September 30, 2011 to the date of filing.

XML

CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)	9 Months Ended		118 Months Ended
	Sep. 30, 2011	Sep. 30, 2010	Sep. 30, 2011
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss for the period	$ (202,486)	$ (310,948)	$ (6,446,126)
Adjustments to reconcile net loss to net cash from operating activities
- depreciation	0	0	146,383
- impairment (recovery) of mineral properties	(14,184)	0	327,791
- stock based compensation	0	0	409,468
- warrants issued as finance fee	0	0	92,100
-non-cash expenses			47,468
- stock issued as finance fee	0	0	100,000
- other income	0	0	21,100
- loss on other non-operating activities	0	0	(21,000)
Changes in operating assets and liabilities:
- prepaid expenses and other	0	0	949
- due to related parties	161,691	158,495	821,169
- accounts payable and accrued liabilities	54,855	113,509	663,935
NET CASH USED IN OPERATING ACTIVITIES	(124)	(38,944)	(3,836,763)
CASH FLOWS USED IN INVESTING ACTIVITIES
Refund of reclamation bond	0	0	1,797
Purchase of property and equipment	0	0	(5,579)
Purchase of oil and gas interests	0	0	(2)
Mineral property costs	0	0	(296,042)
Proceeds from non-operating activities	0	0	97,125
NET CASH USED IN INVESTING ACTIVITIES	0	0	(202,701)
CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of shares for cash, net of issuance costs		22,500	3,747,674
Convertible notes	0	0	291,145
NET CASH FROM FINANCING ACTIVITIES		22,500	4,038,819
DECREASE IN CASH	(124)	(16,444)	(645)
CASH, BEGINNING	176	16,466	697
CASH, ENDING	$ 52	$ 22	$ 52

XML

DUE TO RELATED PARTIES AND RELATED PARTY TRANSACTIONS

9 Months Ended

Sep. 30, 2011

Related Party Transactions [Abstract]

Related Party Transactions Disclosure [Text Block]

NOTE 5:  DUE TO RELATED PARTIES AND RELATED PARTY TRANSACTIONS

During the nine months ended September 30, 2011 the Company incurred management fees of $126,000 (2010: $126,000) to the Company’s President and CEO. In addition, the Company reimbursed the President for office rent which totaled $14,400 for the nine months ended September 30, 2011 (2010: $14,400).  At September 30, 2011, a balance of $703,664 (December 31, 2010: $561,039) was owed to the President and CEO for unpaid management fees, rent and expense reimbursements.

During the nine months ended September 30, 2011, the Company incurred exploration costs and fees of $Nil (2010: $420) to the Company’s Vice-President.  At September 30, 2011 a balance of $33,668 (December 31, 2010: $33,668) was owing to the Vice-President for unpaid fees, exploration costs and expense reimbursements.

From time to time, the Company’s officers and directors advance loans to the Company. These loans bear interest at 5% per annum. These loans are unsecured and have no fixed repayment terms. The unpaid balance relating to these advances, which include accrued interest, at September 30, 2011 was $179,043 (December 31, 2010: $159,978). 

No stock options were granted to officers or directors by the Company for the nine month period ended September 30, 2011.  All related party transactions involving provision of services or transfer of tangible assets in the normal course of business were recorded at the exchange amount, which is the value established and agreed to by the related parties.