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13. Income Taxes

12 Months Ended

Dec. 31, 2013

The Company’s income tax provisions (benefit) for the years ended December 31, 2013, 2012, and 2011, were as follows:

	2013		2012		2011
Federal
Current	$	-	$	-	$	-
Deferred		196,113		151,915		87,675
Total	$	196,113	$	151,915	$	87,675

State
Current	$	-	$	-	$	9,168
Deferred		33,338		15,192		8,767
Total	$	33,338	$	15,192	$	17,935

Foreign	$	-	$	-	$	-

Total provision (benefit)	$	229,451	$	167,107	$	105,610

Domestic and foreign components of income (loss) from operations before income taxes for the years ended December 31, 2013, 2012, and 2011 are as follows:

	2013			2012			2011
Domestic	$	163,632		$	301,391		$	1,342,530
Foreign		(1,575,351	)		(692,820	)		(600,000	)
Total	$	(1,411,719	)	$	(391,429	)	$	742,530

At December 31, 2013 and 2012, the Company had net deferred tax assets as follows:

	2013			2012
Deferred tax asset:
Other	$	-		$	11,151
Foreign exploration costs		168,401			208,855
Foreign net operating loss carry forward		232,723			374,110
Foreign other		42,612			217,887
Federal and state net operating
loss carry forward		35,424			39,824
Deferred tax asset		479,160			851,827

Valuation allowance (foreign)		(279,235	)		(605,496	)
Valuation allowance (federal)		(71,786	)		-
Total deferred tax asset		128,139			246,331

Deferred tax liability:
Property, plant, and equipment		(128,139	)		(16,880	)
Total deferred tax liability		(128,139	)		(16,880	)

Net Deferred Tax Asset	$	-		$	229,451

Using the guidelines contained in ASC 740, management believes that it is more likely than not that both the foreign and United States deferred tax assets will not be utilized. Therefore a valuation allowance equal to 100% of the deferred tax assets has been recorded.

At December 31, 2013, the Company has United States net operating loss carry forwards of approximately $51,000 that expire at various dates between 2026 and 2029. In addition, the company has unexpired Montana state net operating loss carry forwards of approximately $479,000 which expire between 2016 and 2020, and unexpired Idaho state net operating loss carry forwards of approximately $23,000, which expire at various dates between 2026 and 2032. The company has approximately $776,000 of Mexican net operating loss carry forwards which expire between 2019 and 2022.

The income tax provision (benefit) differs from the amount of income tax determined by applying the U.S. federal income tax rate to pretax income (loss) for the years ended December 31, 2013, 2012 and 2011 due to the following:

	2013					2012					2011
Computed expected tax provision (benefit)	$	(494,102	)	-35.0	%	$	(137,000	)	-35.0	%	$	259,886		35.0	%
Effect of permanent differences							-		0.0	%		4,662		0.6	%

Foreign taxes		78,768		5.6	%		34,641		8.9	%		24,000		3.2	%
Other (1)		899,260		63.7	%		61,770		15.8	%		126,062		17.0	%
Increase in valuation allowance foreign							207,696		53.1	%
Increase in valuation allowance U.S.		71,786		5.1	%							-		-
Release of valuation allowance U.S.												(309,000	)	-41.6	%
Release of valuation allowance Foreign		(326,261	)	-23.1	%		-		0.0	%
Total	$	229,451		16	%	$	167,107		42.7	%	$	105,610		14.2	%

(1) In 2013 there were revisions to estimates of foreign net operating loss carry forwards.

During the years ended December 31, 2013, 2012, and 2011, there were no material uncertain tax positions taken by the Company. The Company’s United States income tax filings are subject to examination for the years 2011 through 2013, and 2011 and 2013 in Mexico. In the event that the Company is assessed penalties and or interest, penalties will be charged to other operating expense and interest will be charged to interest expense.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

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