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<SEC-DOCUMENT>0001062993-05-001283.txt : 20061004
<SEC-HEADER>0001062993-05-001283.hdr.sgml : 20061004

<ACCEPTANCE-DATETIME>20050603153549

<PRIVATE-TO-PUBLIC>

ACCESSION NUMBER:		0001062993-05-001283

CONFORMED SUBMISSION TYPE:	10KSB/A

PUBLIC DOCUMENT COUNT:		5

CONFORMED PERIOD OF REPORT:	20041231

FILED AS OF DATE:		20050603

DATE AS OF CHANGE:		20050615


FILER:


	COMPANY DATA:	

		COMPANY CONFORMED NAME:			NEW JERSEY MINING CO

		CENTRAL INDEX KEY:			0001030192

		STANDARD INDUSTRIAL CLASSIFICATION:	GOLD & SILVER ORES [1040]

		IRS NUMBER:				820490295

		STATE OF INCORPORATION:			ID

		FISCAL YEAR END:			1231



	FILING VALUES:

		FORM TYPE:		10KSB/A

		SEC ACT:		1934 Act

		SEC FILE NUMBER:	000-28837

		FILM NUMBER:		05877565



	BUSINESS ADDRESS:	

		STREET 1:		89 APPLEBERG RD

		STREET 2:		PO BOX 1019

		CITY:			KELLOGG

		STATE:			ID

		ZIP:			83837

		BUSINESS PHONE:		208-783-3331



	MAIL ADDRESS:	

		STREET 1:		89 APPLEBERG ROAD

		STREET 2:		PO BOX 1019

		CITY:			KELLOGG

		STATE:			ID

		ZIP:			83837



</SEC-HEADER>

<DOCUMENT>
<TYPE>10KSB/A
<SEQUENCE>1
<FILENAME>form10ksba.htm
<DESCRIPTION>AMENDMENT NO. 1 FOR THE ANNUAL REPORT FOR THE FISCAL YEAR ENDED DECEMBER 31, 2004
<TEXT>
<!DOCTYPE HTML PUBLIC "form10ksb">


<HTML>
<HEAD>
   <TITLE>Filed by Automated Filing Services Inc. (604) 609-0244 - New Jersey Mining Company - Form 10-KSB/A</TITLE>



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<BODY bgcolor="#FFFFFF" style="font-size: 10pt;">


<A name="page_1"></A><HR noshade align="center" width="100%" size=3 color="black"><P align="center"><font size="5"><strong>UNITED STATES<br>SECURITIES AND EXCHANGE COMMISSION</strong></font><br> Washington, D.C. 20549</P>
<P align="center"><B><font size="5">FORM 10-KSB /A </font></B></P>
<P align="center"> (Mark One) </P>

<P align="center"> <font size="3" face="WINGDINGS">&nbsp;&nbsp;&#120;</font>&nbsp;&nbsp;ANNUAL
  REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934</P>
<P align="center"> For the fiscal year ended <strong><u>December 31, 2004 </u></strong></P>
<P align="center"> <font size="3" face="WINGDINGS">&nbsp;&nbsp;&#168;</font>&nbsp;&nbsp;TRANSITION
  REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 </P>
<P align="center">For the transition period __________________ to __________________</P>
<P align="center"> Commission file number<strong><u> 000-28837 </u></strong></P>
<P align="center"> <B><u><font size="5">NEW JERSEY MINING COMPANY </font></u></B><br>
  (Name of small business issuer in its charter) </P>
<TABLE style="font-size:10pt;border-color:black;border-collapse:collapse;" cellpadding="0" cellspacing="0" width="100%" border="0">
  <TR valign="bottom">
    <TD width=50% align=center> <strong><u>Idaho&nbsp;</u></strong> </TD>
    <TD align=center> <strong><u>82-0490295&nbsp; </u></strong></TD>
  </TR>
  <TR valign="bottom">
    <TD width=50% align=center> (State or other jurisdiction of incorporation
      or&nbsp; </TD>
    <TD align=center> (I.R.S. Employer Identification No.)&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD width=50% align=center> organization)&nbsp; </TD>
    <TD align=left>&nbsp; </TD>
  </TR>
  <TR>
    <TD width="50%">&nbsp; </TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD width=50% align=center> <strong><u>89 Appleberg Road, Kellogg, Idaho&nbsp;
      </u></strong></TD>
    <TD align=center> <strong><u>83837</u></strong>&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD width=50% align=center> (Address of principal executive offices)&nbsp;
    </TD>
    <TD align=center> (Zip code)&nbsp; </TD>
  </TR>
</TABLE>
<P align="center"> Issuer&#8217;s telephone number, including area code:<strong><u>
  (208) 783-1032 </u></strong></P>
<P align="center"> Securities registered under Section 12(b) of the Exchange Act:
  <br>
  <strong><u>None</u></strong> </P>
<P align="center"> Securities registered under Section 12(g) of the Exchange Act:
  <br>
  <strong><u>Common Stock, No par value per share </u></strong></P>
<P align="center"> Check whether the issuer (1) filed all reports required to
  be filed by Section 13 or 15(d) of the Exchange Act during the past 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<font size="3" face="WINGDINGS">&nbsp;&nbsp;&#120;</font>&nbsp;&nbsp;
  No<font size="3" face="WINGDINGS">&nbsp;&nbsp;&#168;</font>&nbsp;&nbsp;</P>
<P align="center"> Check if there is no disclosure of delinquent filers in response
  to Item 405 of Regulation S-B contained in this form and no disclosure will
  be contained, to the best of registrant&#8217;s knowledge, in definitive proxy
  or information statements incorporated by reference in Part III of this Form
  10-KSB or any amendment to this Form 10-KSB.<font size="3" face="WINGDINGS">&nbsp;&nbsp;&#168;</font>&nbsp;&nbsp;</P>
<P align="center"> The registrant&#8217;s revenues for its most recent fiscal
  year were &#36; nil. </P>
<P align="center"> The aggregate market value of the voting stock held by non-affiliates
  of the registrant, based on the average of the bid and ask prices on March 10,
  2005, as reported by the Over the Counter Bulletin Board was &#36;9,972,400.
</P>
<P align="center"> At March 10, 2005, the registrant had 21,679,070 outstanding
  shares of no par value common stock. </P>
<P align="center"> 1</P>

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<A name="page_2"></A>

<P align="center"> <B>TABLE OF CONTENTS </B></P>
<TABLE style="font-size:10pt;border-color:black;border-collapse:collapse;" cellpadding="0" cellspacing="0" width="100%" border="0">
  <TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan=2 align=left> <a href="#page_3">Glossary of Significant Mining
      Terms</a></TD>
    <TD width=5% align=right><a href="#page_3">3</a></TD>
  </TR>
  <TR>
    <TD width="10%">&nbsp; </TD>
    <TD align="left">&nbsp;</TD>
    <TD width="5%" align="right">&nbsp;</TD>
  </TR>
  <TR align="center" valign="bottom" bgcolor="#EEEEEE">
    <TD width=10%>&nbsp; </TD>
    <TD> <a href="#page_5"><B>PART I</B></a></TD>
    <TD width=5%>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="10%">&nbsp; </TD>
    <TD align="left">&nbsp;</TD>
    <TD width="5%" align="right">&nbsp;</TD>
  </TR>
  <TR valign="bottom" bgcolor="#EEEEEE">
    <TD width=10% align=left> <a href="#page_5"><strong>Item 1.</strong></a></TD>
    <TD align=left><a href="#page_5"> Description of Business</a></TD>
    <TD width=5% align=right><a href="#page_5">5</a></TD>
  </TR>
  <TR valign="bottom">
    <TD width=10% align=left> <a href="#page_9"><strong>Item 2.</strong></a></TD>
    <TD align=left><a href="#page_9"> Description of Property</a></TD>
    <TD width=5% align=right><a href="#page_9">9</a></TD>
  </TR>
  <TR valign="bottom" bgcolor="#EEEEEE">
    <TD width=10% align=left> <a href="#page_19"><strong>Item 3.</strong></a></TD>
    <TD align=left><a href="#page_19"> Legal Proceedings</a></TD>
    <TD width=5% align=right><a href="#page_19">19</a></TD>
  </TR>
  <TR valign="bottom">
    <TD width=10% align=left> <a href="#page_20"><strong>Item 4.</strong></a></TD>
    <TD align=left><a href="#page_20"> Submission of Matters to a Vote of Security
      Holders</a></TD>
    <TD width=5% align=right><a href="#page_20">20</a></TD>
  </TR>
  <TR bgcolor="#EEEEEE">
    <TD width="10%">&nbsp; </TD>
    <TD align="left">&nbsp;</TD>
    <TD width="5%" align="right">&nbsp;</TD>
  </TR>
  <TR align="center" valign="bottom">
    <TD width=10%>&nbsp; </TD>
    <TD> <a href="#page_21"><B>PART II</B></a></TD>
    <TD width=5%>&nbsp;</TD>
  </TR>
  <TR bgcolor="#EEEEEE">
    <TD width="10%">&nbsp; </TD>
    <TD align="left">&nbsp;</TD>
    <TD width="5%" align="right">&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD width=10% align=left> <a href="#page_21"><strong>Item 5.</strong></a></TD>
    <TD align=left><a href="#page_21"> Market for Common Equity and Related Stockholder
      Matters</a></TD>
    <TD width=5% align=right><a href="#page_21">21</a></TD>
  </TR>
  <TR valign="bottom" bgcolor="#EEEEEE">
    <TD width=10% align=left><a href="#page_23"><strong>Item 6.</strong> </a></TD>
    <TD align=left><a href="#page_23"> Management's Discussion and Analysis of
      Financial&nbsp;Condition and Results of Operations</a></TD>
    <TD width=5% align=right><a href="#page_23">23</a></TD>
  </TR>
  <TR valign="bottom">
    <TD width=10% align=left> <a href="#page_25"><strong>Item 7.</strong></a></TD>
    <TD align=left><a href="#page_25"> Financial Statements</a></TD>
    <TD width=5% align=right><a href="#page_25">25</a></TD>
  </TR>
  <TR valign="bottom" bgcolor="#EEEEEE">
    <TD width=10% align=left><strong><a href="#page_49">Item 8.</a></strong> </TD>
    <TD align=left> <a href="#page_49">Changes In and Disagreements With Accountants
      on&nbsp;Accounting and Financial Disclosure</a></TD>
    <TD width=5% align=right><a href="#page_49">49</a></TD>
  </TR>
  <TR valign="bottom">
    <TD width=10% align=left> <strong><a href="#page_50">Item 8A.</a></strong></TD>
    <TD align=left> <a href="#page_50">Controls and Procedures</a></TD>
    <TD width=5% align=right><a href="#page_50">50</a></TD>
  </TR>
  <TR bgcolor="#EEEEEE">
    <TD width="10%">&nbsp; </TD>
    <TD align="left">&nbsp;</TD>
    <TD width="5%" align="right">&nbsp;</TD>
  </TR>
  <TR align="center" valign="bottom">
    <TD width=10%>&nbsp; </TD>
    <TD> <a href="#page_51"><B>PART III</B></a></TD>
    <TD width=5%>&nbsp;</TD>
  </TR>
  <TR valign="bottom" bgcolor="#EEEEEE">
    <TD width=10% align=left>&nbsp; </TD>
    <TD align=left>&nbsp; </TD>
    <TD width=5% align=right>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD width=10% align=left><a href="#page_51"><strong>Item 9.</strong> </a></TD>
    <TD align=left><a href="#page_51"> Directors, Executive Officers, Promoters
      and Control&nbsp;Persons; Compliance With Section 16(a) of the Exchange
      Act</a></TD>
    <TD width=5% align=right><a href="#page_51">51</a></TD>
  </TR>
  <TR valign="bottom" bgcolor="#EEEEEE">
    <TD width=10% align=left> <a href="#page_53"><strong>Item 10.</strong></a></TD>
    <TD align=left><a href="#page_53"> Executive Compensation</a></TD>
    <TD width=5% align=right><a href="#page_53">53</a></TD>
  </TR>
  <TR valign="bottom">
    <TD width=10% align=left> <a href="#page_54"><strong>Item 11.</strong></a></TD>
    <TD align=left><a href="#page_54"> Security Ownership of Certain Beneficial
      Owners</a></TD>
    <TD width=5% align=right><a href="#page_53">54</a></TD>
  </TR>
  <TR valign="bottom" bgcolor="#EEEEEE">
    <TD width=10% align=left> <a href="#page_55"><strong>Item 12.</strong></a></TD>
    <TD align=left><a href="#page_55"> Certain Relationships and Related Transactions</a></TD>
    <TD width=5% align=right><a href="#page_55">55</a></TD>
  </TR>
  <TR valign="bottom">
    <TD width=10% align=left> <a href="#page_56"><strong>Item 13.</strong></a></TD>
    <TD align=left><a href="#page_56"> Exhibits and Reports on Form 8-K</a></TD>
    <TD width=5% align=right><a href="#page_55">55</a></TD>
  </TR>
  <TR valign="bottom" bgcolor="#EEEEEE">
    <TD width=10% align=left> <a href="#page_57"><strong>Item 14.</strong></a></TD>
    <TD align=left><a href="#page_57"> Principal Accounting Fees and Services</a></TD>
    <TD width=5% align=right><a href="#page_57">57</a></TD>
  </TR>
  <TR>
    <TD width="10%">&nbsp; </TD>
    <TD align="left">&nbsp;</TD>
    <TD width="5%" align="right">&nbsp;</TD>
  </TR>
  <TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan=2 align=left><a href="#page_58"><B>Signatures</B> </a></TD>
    <TD width=5% align=right><a href="#page_58">58</a></TD>
  </TR>
</TABLE>
<P align="right"> 2</P>

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<A name="page_3"></A>

<P>
<B>GLOSSARY </B></P>
<P>
Ag- Silver. </P>
<P>
Au- Gold. </P>
<P>
Alluvial- Adjectivally used to identify minerals deposited over time by moving water. </P>
<P>
Argillites- Metamorphic rock containing clay minerals. </P>
<P>
Arsenopyrite- An iron-arsenic sulfide. Common constituent of gold mineralization. </P>
<P>
Bedrock- Solid rock underlying overburden. </P>
<P>
CIL- A standard gold recovery process involving the leaching with cyanide in agitated tanks with activated carbon. CIL means "carbon-in-leach." </P>
<P>
Crosscut- A nominally horizontal tunnel, generally driven at right angles to the strike of a vein. </P>
<P>
Deposit- A mineral deposit is a mineralized body which has been intersected by sufficient closely-spaced drill holes or underground sampling to support sufficient tonnage and average grade(s)of metal(s)to warrant further exploration or development
activities.</P>
<P>
Development Stage- As defined by the SEC- includes all issuers engaged in the preparation of an established commercially mineable deposit (reserves) for its extraction which are not in the production stage. </P>
<P>
Drift- A horizontal mine opening driven on the vein. Driving is a term used to describe the excavation of a tunnel. </P>
<P>
Exploration Stage- As defined by the SEC- includes all issuers engaged in the search for mineral deposits (reserves) which are not in either the development or production stage. </P>
<P>
Fault- A fracture in the earth's crust accompanied by a displacement of one side of the fracture with respect to the other and in a direction parallel to the fracture. </P>
<P>
Flotation- A physiochemical process for the separation of finely divided solids from one another. Separation of these (dissimilar) discrete solids from each other is affected by the selective attachment of the particle surface to gas bubble. </P>
<P>
Galena- A lead sulfide mineral. The most important lead mineral in the Coeur d'Alene Mining District. </P>
<P>
Grade- A term used to assign the concentration of metals per unit weight of ore. An example - ounces of gold per ton of ore (opt). One troy ounce per short ton is 34.28 parts per million or 34.28 grams per metric tonne. </P>
<P>
Mineralization- The presence of minerals in a specific area or geologic formation. </P>
<P>
Ore- A mineral or aggregate of minerals which can be mined and treated at a profit. A large quantity of ore which is surrounded by non-ore ore sub-ore material is called an orebody. </P>
<P align="right"> 3</P>

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<A name="page_4"></A>

<P>
Production Stage- As defined by the SEC - includes all issuers engaged in the exploitation of a mineral deposit (reserve). </P>
<P>
Pyrite- An iron sulfide. A common mineral associated with gold mineralization. </P>
<P>
Quartz- Crystalline silica (SiO2). An important rock-forming and gangue material in gold veins. </P>
<P>
Quartzites- Metamorphic rock containing quartz. </P>
<P>
Raise- An opening driven upward generally on the vein. </P>
<P>
Reserves- That part of a mineral deposit which could be economically and legally extracted or produced at the time of the reserve determination. Reserves are subcategorized as either proven (measured) reserves, for which (a) quantity is computed
from dimensions revealed in outcrops, trenches, workings, or drill holes, and grade and/or quality are computed from the results of detailed sampling, and (b) the sites for inspection, sampling, and measurement are spaced so closely and geologic
character is so well defined that size, shape, depth, and mineral content are well-established; or probable(indicated) reserves, for which quantity and grade and/or quality are computed from information similar to that used for proven (measured)
reserves, yet the sites for inspection, sampling and measurement are farther apart. </P>
<P>
Stope &#8211; An underground void created by the mining of ore. </P>
<P>
Tetrahedrite- Sulfosalt mineral containing copper, antimony and silver. </P>
<P>
Vein- A zone or body of mineralized rock lying within boundaries separating it from neighboring wallrock. A mineralized zone having a more or less regular development in length, width and depth to give it a tabular form and commonly inclined at a
considerable angle to the horizontal. </P>
<P>
Wallrock- Barren rock surrounding a vein. </P>
<P align="center"> [The balance of this page has been intentionally left blank.]
</P>
<P align="right"> 4</P>

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<A name="page_5"></A>

<P align="center"> <B>PART I </B></P>
<P align="center"> <B>ITEM 1. </B></P>
<P align="center"> <B>DESCRIPTION OF THE BUSINESS </B></P>
<P>
<B>BUSINESS DEVELOPMENT </B></P>
<P> With the exception of historical matters, the matters discussed in this report
  are forward-looking statements within the meaning of the Private Securities
  Litigation Reform Act of 1995 and involve risks and uncertainties that could
  cause actual results to differ materially from projections or estimates contained
  herein. Such forward-looking statements include statements regarding planned
  levels of exploration and other expenditures, anticipated mine lives, timing
  of production and schedules for development and permitting. Factors that could
  cause actual results to differ materially include, among others, metals price
  volatility and permitting delays. Most of these factors are beyond the Company&#8217;s
  ability to predict or control. The Company disclaims any obligation to update
  any forward-looking statement made herein. Readers are cautioned not to put
  undue reliance on forward-looking statements.</P>
<P>
<B>Form and Year of Organization </B></P>
<P>
New Jersey Mining Company (&#8220;the Company&#8221;) is a corporation organized under the laws of the State of Idaho on July 18, 1996. The Company was dormant until December 31,1996, when all of the assets and liabilities of the New Jersey Joint
Venture (a partnership) were transferred to the Company in exchange for 10,000,000 shares of common stock. The New Jersey Joint Venture, a partnership, was formed in 1994 to develop the New Jersey mine. The partnership consisted of Mine Systems
Design, Inc. [75%], Plainview Mining Company [13%], Silver Trend Mining Company [10%], Mark C. Brackebusch [1%], and Mascot Silver-Lead Mines, Inc. [1%].</P>
<P>
<B>Any Bankruptcy, Receivership or Similar Proceedings </B></P>
<P>
There have been no bankruptcy, receivership or similar proceedings. </P>
<P>
<B>Any Material Reclassification, Merger, Consolidation, or Purchase or Sale of a Significant Amount of Assets Not in the Ordinary Course of Business. </B></P>
<P> There have been no material reclassifications or purchases or sales of a significant
  amount of assets not in the ordinary course of business for the past three years.
  However, on October 22, 2002, the Company completed a merger with Gold Run Gulch
  Mining Company (GRG). The Company exchanged 1,916,250 common shares for all
  the outstanding shares of GRG. The exchange ratio was 0.875 of a share of New
  Jersey Mining Co. for one share of (GRG). The shares issued to GRG were restricted
  by SEC Rule 144. GRG's primary asset was the New Jersey mine property which
  included 62 acres of patented mining claims, mineral rights to 108 acres of
  fee land, and approximately 130 acres of unpatented mining claims.</P>
<P>
<B>BUSINESS OF THE COMPANY </B></P>
<P>
<B>General Description of the Business </B></P>
<P> The Company is involved in exploring for and developing gold, silver and base
  metal ore resources in the Pacific Northwest of the USA. The Company has a portfolio
  of mineral properties: the New Jersey mine, the Silver Strand mine, the Golden
  Chest mine, the CAMP project, the Lost Eagle project, the</P>
<P align="right"> 5</P>

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<A name="page_6"></A>

<P>
Wisconsin-Teddy project, the Roughwater project and the Silver Button project. The New Jersey mine, the Golden Chest mine and the Silver Strand mine are the Company's development stage properties while the other properties are exploration stage
properties.</P>
<P>
<B>Effect of Existing or Probable Governmental Regulations on the Business </B></P>
<P>
All operating plans have been made in consideration of existing governmental regulations. Regulations that would most affect operations are related to water quality. A plan of operation is usually required before exploration or mining activities can
be conducted on public land that is administered by the Bureau of Land Management or US Forest Service. The New Jersey mine, the Silver Strand mine and the Golden Chest properties are part of the expanded Bunker Hill Superfund Site. Current plans
for expanded cleanup do not include our mines. There is no known evidence that previous operations at the New Jersey mine prior to 1910 caused any ground water or stream pollution or discharged any tailings into the South Fork of the Coeur d'Alene
River; however, such evidence could be uncovered. The nature of the risk would probably be to clean up or cover old mine tailings that may have washed downstream from upstream mining operations. No mineral processing operations were ever conducted
at the Silver Strand mine and water sampling data has not indicated any pollution. There are no mineral processing tailings deposits at the Golden Chest mine, however, at least two old adits have small water discharges. The Company could conceivably
be required to conduct cleanup operations at its own expense, however the EPA&#8217;s Record of Decision for the Bunker Hill Mining and Metallurgical Complex Operating Unit 3 does not include any cleanup activities at the Company&#8217;s mines. New
Jersey Mining Company has not received any notifications that it could be liable for any environmental cleanup.</P>
<P>
<B>Costs and Effects of Compliance with Environmental Laws (Federal, State and Local) </B></P>
<P>
No major Federal permits [except EPA storm water permit which is a blanket state-wide permit] are required for the New Jersey mine because most operations are on private land and there are no process discharges to streams. Any exploration program
conducted by the Company on unpatented mining claims, usually administered by the U.S. Bureau of Land Management (BLM), requires a Plan of Operation to be submitted. An approved plan of operations for a mining operation at the Silver Strand will
most likely require water quality monitoring, a reclamation plan, and possibly, the treatment of the mine water. A reclamation bond will be required before operations can begin at the Silver Strand. The amount of the reclamation bond is estimated to
be about &#36;60,000. Water quality monitoring at the Silver Strand is expected to cost about &#36;2,000 per year. </P>
<P>
The Company is also subject to the rules of the U.S. Department of Labor, Mine Safety and Health Administration (MSHA) for the New Jersey mine and Golden Chest mine operations. When a mine is operating, MSHA performs a series of inspections to
verify compliance with mine safety laws.</P>
<P>
The New Jersey mine has two important State of Idaho permits. The first is an Idaho Cyanidation Permit and the second is a reclamation plan for surface mining operations. No permit is required for the current flotation process as there is no
discharge of water to surface waters and the tailings impoundments are less than 30 feet high from toe to crest. An Idaho cyanidation permit was granted October 10, 1995 [No. CN-000027] The cyanidation process, CIL, has not been implemented at the
New Jersey mine as of this date. The deposition of tailings using paste technology is a unique part of the permit. Tailings will be dewatered to a paste consistency using a high density thickener. Cyanide will be destroyed in the paste using bleach,
and the tailings will be deposited on a sloped stack. Fred W. Brackebusch has received a U.S. patent (5,636,942) on this new tailings technology. Reclamation of the tailings stack will be done concurrently with mining. The Cyanidation permit
requires quarterly surface and groundwater monitoring prior to startup of the CIL plant and monthly sampling once operations </P>
<P align="right"> 6</P>

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<A name="page_7"></A>

<P>
commence. The current water monitoring program costs the Company about &#36;2,000 on an annual basis. The estimated annual cost for sampling, if CIL operations begin is about &#36;25,000.</P>
<P> A surface mining reclamation plan for the New Jersey mine was approved by
  the Idaho State Department of Lands in 1993. The plan calls for grading of steep
  fill slopes and planting of vegetation on the area disturbed by the open pit
  mine. An annual reclamation fee of &#36;130 is paid to the Idaho Department
  of Lands for surface disturbance associated with the New Jersey mine open pit.
  The Company has estimated its costs to reclaim the New Jersey mine site to be
  &#36;12,500. </P>
<P>
The Company submitted a Plan of Operation to the US Forest Service (USFS) in April 2003 for a seasonal, underground mining operation at the Silver Strand mine. USFS conducted an Environmental Assessment (EA) of the plan and requested public comments
on the EA in September 2004. Public comments were submitted by two environmental groups and the Company provided additional information and clarification to address the public comments. A final decision document with a Finding of No Significant
Impact (FONSI) is expected to be issued by the USFS shortly. A 45 day appeal period follows the issuance of the FONSI. An appeal of the FONSI decision could delay operations at the Silver Strand for an unknown period of time. </P>
<P>
When the Company plans an exploration drilling program on Federal Land, it must submit a Plan of Operations to either the BLM or US Forest Service. Compilation of the plan can take several days of professional time and a reclamation bond is usually
required to start drilling once the plan is approved. Bond costs vary directly with surface disturbance area, but a small, single set-up drilling program usually requires a bond amount of about &#36;2,000. On completion of the reclamation and
approval by the managing agency, the bond amount is returned to the Company. </P>
<P>
The Company complies with local building codes and ordinances as required by law. </P>
<P>
<B>Number of Total Employees and Number of Full Time Employees </B></P>
<P>
The Company's total number of employees is five including President Fred Brackebusch, Vice President Grant Brackebusch and Secretary Tina Brackebusch. Fred W. Brackebusch and Tina C. Brackebusch work part-time for the Company. Exploration and
development work is currently performed by independent contractors hired by the Company.</P>
<P>
<B>REPORTS TO SECURITY HOLDERS </B></P>
<P> The Company is not required to deliver an annual report to shareholders, however,
  it plans to deliver an annual report to shareholders in 2005. The annual report
  will contain audited financial statements. The Company may also rely on the
  Internet in the future to deliver annual reports to shareholders. </P>
<P>
The Company filed a Form 10-SB with the Securities and Exchange Commission on January 11, 2000. The filing became effective on January 27, 2000. The Company has filed the required annual 10-KSB reports, quarterly 10-QSB reports, and occasional 8-K
reports since that time. </P>
<P>
The public may read a copy of any materials the Company files with the SEC at the SEC's Public Reference Room at 450 Fifth Street, N.W., Washington, D.C. 20549. The public may obtain information on the operation of the Public Reference Room by
calling the SEC at 1-800-SEC-0330. The SEC maintains an Internet site (<U><FONT color="#0000ff">http://www.sec.gov</FONT></U>) that contains reports, proxy and information statements, and other information regarding issuers that file electronically
with the SEC. </P>
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<A name="page_8"></A>

<P> The Company maintains a website where recent press releases and other information
  can be found. A link to the Company&#8217;s filings with the SEC is provided
  on the Company&#8217;s website - www.newjerseymining.com. </P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P align="center"> [The balance of this page has been intentionally left blank.]
</P>
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<P align="center"> <B>ITEM 2.</B></P>
<P align="center"> <B>DESCRIPTION OF PROPERTIES </B></P>
<P align="center"> <img src="projectlocationmap.gif" width="575" height="532"> </P>
<p></p>
<p> <strong>Figure 1 - Project
  Location Map</strong>
<P align="right">9</P>
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<A name="page_10" id="page_10"></A>
<P>
<B>NEW JERSEY MINE </B></P>
<P>
Location </P>
<P>
The New Jersey mine is located in the Gold Run Gulch area, comprising about 15 square miles in the Coeur d'Alene Mining District. Located 2 miles east of Kellogg, Idaho, the New Jersey property area includes the gold bearing Coleman vein system, a
base metal Sullivan-type prospect known as the Enterprise and another gold prospect called the Scotch Thistle. The mine is adjacent to U.S. Interstate 90 and is easily accessed by local roads throughout the entire year. Three phase electrical power
is supplied to the New Jersey mill by Avista Utilities. The area is underlain by argillites and quartzites of the Prichard formation [member of Belt Supergroup], which commonly hosts gold mineralization.</P>
<P>
Mineral Property </P>
<P>
The Company owns 62 acres of patented mining claims, mineral rights to 108 acres of fee land, and approximately 130 acres of unpatented mining claims. The unpatented claims are on federal land administered by the U.S. Bureau of Land Management. The
Coleman pit is located on the patented mining claims. </P>
<P>
Mineral Leases </P>
<P>
A mineral lease from William Zanetti in the New Jersey mill area contains about 60 acres. Alliance Title and Escrow Corporation of Wallace, Idaho has issued a Commitment for Title Insurance for the fee simple property leased from William Zanetti.
The lease provides for the Company's exploration, development and mining of minerals on fee land through October 2008 and thereafter as long as mining operations are deemed continuous. The lessor may terminate the lease upon the Company's failure to
perform under the terms of the lease. The lease provides for royalties of 5% of net sales of ores or concentrates less transportation also know as a Net Smelter Return. Additional royalties of 1% to 5% are due if the gold price exceeds &#36;632 per
ounce as of December 31, 2004. This additional royalty gold price is indexed to the Consumer Price Index with the December 1988 CPI as the base. Also, annual advance royalties totaling &#36;500 per year are required under the lease. The advance
royalties are accumulated and will be credited against the royalty obligations.</P>
<P>
A second mineral lease, known as the Grenfel lease, was acquired from Mine Systems Design, Inc. (MSD) in 2001 in exchange for 1,000,000 shares of the Company's Common Stock. The lease covers the mineral rights to 68 acres located north of the New
Jersey mine area. The lease has a fifteen year term and thereafter so long as mining operations are deemed continuous. The lessors may terminate the leases upon the Company's failure to perform under the terms of the lease. A 3% Net Smelter Return
(NSR) royalty will be paid to the lessors if production is achieved. However, the NSR shall not exceed 10% of the net proceeds, except the NSR shall not be less than 1%. No advance royalties are required by this lease.</P>
<P>
History</P>
<P> There are at least 14 gold prospects in or near the New Jersey mine area.
  Most of the prospecting activity was completed before the turn of the century,
  and almost no work has been done for at least 50 </P>
<P align="right">10</P>

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<A name="page_11" id="page_11"></A>

<P>
years. Just after the turn of the century, at the New Jersey mine, more than 2,500 feet of development workings including drifts, crosscuts, shafts, and raises, were driven by the New Jersey Mining and Milling Company (an unrelated company) to
develop the Coleman vein and the northwest branch of the Coleman vein. A 10 stamp gravity mill was built and operated for a short period. The amount of money spent from 1899 to 1910 appears to have been &#36;500,000 to &#36;1,000,000 in 1996
dollars. The operation was discontinued because of the difficulty in recovering fine gold without cyanidation technology, because of the lower price of gold relative to mining costs, and because of inadequate drilling and mining technology. For
example, the Coleman vein, a hard quartz vein, was so difficult to drill using hand steel that drifts along the vein were not driven to any great lengths. A considerable portion of the gold is in free grains, so there is a strong nugget effect. </P>
<P>
Present Condition and Work Completed on the Property </P>
<P>
A 100 tonne per day flotation mill has been built and commissioned on the New Jersey mine property. A crushing plant was built and commissioned in 1996. The grinding circuit was built in 1996, and the flotation circuit was built in early 2004 and
commissioned in September 2004. It consists of five rougher cells and three cleaner cells all of which were purchased new in 2004. Flotation concentrate is dewatered by a pressure filter and dumped into a bin. A ball mill is used to grind the
crushed ore and is the limiting factor for throughput. Currently, hourly throughput is limited to about 4.7 tonnes per hour. Production data indicates that metallurgical recovery of gold to concentrate is about 93%.</P>
<P>
During 2001, the Company drilled two holes to explore a geophysical anomaly detected in the autumn of 2000. One hole intercepted a broad zone of arsenopyrite mineralization, named the Grenfel zone, which contained two separate zones of anomalous
gold content ( 0.70 grams per tonne gold over two separate 10 meter intervals) In 2002, 1,317 meters of diamond drilling was completed amongst 11 holes at the New Jersey mine. The drilling confirmed the continuity of the Coleman vein system as nine
of the holes intercepted the vein system. Reserves were not increased as the drilling was too widely spaced. The best intercept was in DDH02-02 which assayed 2.76 gpt gold over 12.5 meters including 2.5 meters of 6.80 gpt gold. Drilling was
conducted at the Scotch Thistle prospect, Enterprise prospect and northern Coleman vein in 2003. Silver, lead and zinc mineralization was discovered at the Enterprise and a new zone of gold mineralization was found at the Scotch Thistle. In 2004,
two drillholes were drilled at the Enterprise where base metal mineralization (lead, zinc &amp; silver) was intercepted. Also in 2004, a single hole was drilled at the Scotch Thistle prospect and intercepted a gold zone that assayed 2.56 gpt over
6.6 meters extending the zone discovered a year earlier.</P>
<P>
Exploration Plans </P>
<P>
The Company has plans to do more exploratory core drilling at the Enterprise and Scotch Thistle prospects. New road construction will be required for the Enterprise drilling. An exploration crosscut is planned for the 2400 Level on the Coleman vein.
All of these planned programs are dependent on the Company&#8217;s ability to raise capital and will not be completed until sufficient funds are raised. </P>
<P>
Geology and Reserves </P>
<P>
The description of the geology of the New Jersey mine and the calculation of mineral resources have been completed by the Company. The description of the geology of the area can be verified from third party published reports by the U.S. Geological
Survey and unpublished reports by Oscar Hershey, former Coeur d'Alene District geologist. The Company is solely responsible for the reserve calculations.</P>
<P>
Geology </P>
<P align="right"> 11</P>

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<A name="page_12" id="page_12"></A>

<P>
The Prichard formation, which is 25,000 feet in thickness, underlies the New Jersey mine area which is adjacent to and north of the major Osburn fault. The Osburn fault is in the center of a Proterozoic rifting basin. The Prichard formation is
divided into nine rock units of alternating argillites and quartzites, and the units exposed in the New Jersey mine area appear to belong to the lower members. A broad domal structure with a series of tighter folds near the Osburn fault typifies the
structure of the area. South of the Osburn fault, the Wallace formation is exposed on the north flank of the Big Creek anticline. A fault was discovered by the 2001 drilling program. The fault appears to be a fairly large east-west striking
structure that may separate the Coleman veins from the Grenfel zone. However, more information is required to confirm that hypothesis. </P>
<P>
Gold mineralization is associated with sulfide-bearing quartz veins which cut the bedding in Prichard argillite and quartzite. Associated sulfides are pyrite, arsenopyrite, chalcopyrite, low-silver tetrahedrite, galena, and sphalerite. Most commonly
in the Coleman vein of the New Jersey mine visible gold is associated with the tetrahedrite. Gold prospects are concentrated in the New Jersey mine area possibly because of the presence of lower Prichard stratigraphic members, an anticlinal
structure, and/or the existence of a gold source. Gold is associated with arsenic, copper, and antimony. Igneous dikes are relatively rare. Some wallrock alteration has been observed. The Coleman vein shows a characteristic brecciation The
cumulative strike length of the veins on the property based on exposures in drifts, outcrops and float is about 460 meters. </P>
<P>
Reserves </P>
<P>
The reserves at the New Jersey mine as of this date are those contained within the open pit on the Coleman vein. Open pit reserves are from the planned pit which extends from the south portal north to the terminus of the Coleman Vein. The vertical
extent of the pit is from the surface outcrop down to the Keyhole Tunnel level. Grade estimation for the blocks in the pit reserve is based upon calculated head grades from 5,000 short tons of gravity-mill production. Other sample sources include
channel samples from the outcrop and also from the Keyhole Tunnel. </P>

Open Pit Reserve (Proven &amp; Probable)
<TABLE width="100%" border="2" cellpadding="3" cellspacing="0" bordercolor="#000000" style="font-size:10pt;border-color:black;border-collapse:collapse;">
  <TR align="center" valign="top">
    <TD align=left> Ore Blocks&nbsp; </TD>
    <TD width=22%> Metric<br> Tonnes</TD>
    <TD width=22%> Gold Grade<br> (grams per tonne)</TD>
    <TD width=22%> Ounces (gold)</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> Coleman (17+00 to 21+00)&nbsp; </TD>
    <TD width=22% align=right> 56,250&nbsp; </TD>
    <TD width=22% align=center> 4.56&nbsp; </TD>
    <TD width=22% align=right> 8,306&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> Coleman Split (21+00 to 23+00&nbsp; </TD>
    <TD width=22% align=right> 21,320&nbsp; </TD>
    <TD width=22% align=center> 3.53&nbsp; </TD>
    <TD width=22% align=right> 2,420&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> North Vein (21+00)&nbsp; </TD>
    <TD width=22% align=right> 2,990&nbsp; </TD>
    <TD width=22% align=center> 8.57&nbsp; </TD>
    <TD width=22% align=right> 825&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> Total&nbsp; </TD>
    <TD width=22% align=right> 80,560&nbsp; </TD>
    <TD width=22% align=center> 4.45&nbsp; </TD>
    <TD width=22% align=right> 11,551&nbsp; </TD>
  </TR>
</TABLE>
<P> The open pit reserve tonnages
  are diluted. That is, the expected dilution from open pit mining is accounted
  for in the grade and tonnage of the reserve blocks. The ounces stated in the
  above table are contained ounces. </P>
<p> The cutoff grade used was
  3.5 grams/tonne gold. The cutoff grade is based on historical costs of a 100
  tonne/day open pit operation with a CIL/gravity mineral processing plant recovering
  95% of the gold. Gold prices used were those on December 31,2004 or $14.09/gram
  ($438.10/troy ounce). <br>
</p>
<P align="right"> 12</P>

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<P>
<B>SILVER STRAND MINE </B></P>
<P>
Location </P>
<P>
The Silver Strand mine is located in Kootenai County, Idaho about 12 miles east-northeast of Coeur d'Alene, Idaho. The property consists of 15 unpatented lode claims. It is situated on Lone Cabin Creek, a tributary of Burnt Cabin Creek and of the
Little North Fork Coeur d'Alene River. Primary access is from Coeur d'Alene via paved and dirt roads from Fernan Lake to Lone Cabin Creek. </P>
<P>
Mineral Property </P>
<P>
The Company's Silver Strand mine consists of fifteen unpatented lode claims on federal land administered by the U.S. Forest Service. The claims were acquired from Trend Mining Company pursuant to a purchase agreement dated July 14, 2000. Mine
Systems Design, Inc. assumed Trend&#8217;s royalty on the Silver Strand claims in July 2001. The royalty is a 1.5% Net Smelter Return (NSR) capped at &#36;50,000 after which the NSR decreases to 0.5% . </P>
<P>
History </P>
<P>
The Silver Strand deposit was discovered during nearby logging activity during the 1960's and mined during the 1970's and 1980's for siliceous smelter flux. Production was 13,752 tons grading 0.093 ounces per ton gold, 9.6 ounces per ton silver and
87.1% silica. The mining operation was shut down when the ASARCO Tacoma smelter closed in the early 1980's. Previous owner/operators include Silver Strand Mining Company, Silver Trend Mining Company and Trend Mining Company. Mine Systems Design,
Inc. (MSD) had an exploration agreement with Silver Trend Mining Company that was terminated in 1997. During the term of that lease, MSD made an agreement with U.S. Bureau of Mines, Spokane Research Center to conduct a mining research product at the
Silver Strand mine. The USBM monitored water quality and flows from the mine, maintained the underground openings and conducted some diamond drilling. </P>
<P>
Present Condition and Work Completed on the Property </P>
<P>
The Silver Strand mine is an underground mine that was mined during the 1970's and early 1980's. No mining has taken place at the property since that time. Since mining was suspended only limited exploration has taken place at the Silver Strand
including geochemical sampling and diamond drilling. In 1997, Silver Trend Mining Company completed a four hole surface diamond drilling program which totaled 795 meters. The mine is accessed by three horizontal openings called levels: the No. 2
Level, the No. 225 Level and the No. 3 Level which is the lowest level and is located at the creek bottom adjacent to forest road No. 411. All three levels are accessible from the surface via a network of dirt roads. The USBM installed a large
culvert at the portal of the No. 3 Level in order to stabilize that entrance. No surface infrastructure presently exists at the Silver Strand. There is no energy available at the site. Any electrical energy requirements would have to be satisfied
with an on-site generator. </P>
<P> During 2002, an exploration drilling program was completed at the Silver Strand.
  Also, rehabilitation of the 225 Level portal was started but not completed in
  2002. The drilling was successful in extending the limits of the ore shoot below
  the No. 3 Level. In April 2003, the Company submitted a Plan of Operations (POO)
  to the USFS for a seasonal underground mining operation with a planned production
  rate of 1,000 tonnes per month. A geophysical exploration program was completed
  at the Silver Strand in 2004. Several anomalies were discovered and the largest
  merits exploration drilling. </P>
<P align="right"> 13</P>

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<A name="page_14" id="page_14"></A>

<P>
USFS conducted an Environmental Assessment (EA) of the plan and requested public comments on the EA in September 2004. Public comments were submitted by two environmental groups and the Company provided additional information and clarification to
address the public comments. A final decision document with a Finding of No Significant Impact (FONSI) is expected to be issued by the USFS shortly. A 45 day appeal period follows the issuance of the FONSI. An appeal of the FONSI decision could
delay operations at the Silver Strand for an unknown period of time. </P>
<P>
The startup of mining at the Silver Strand is dependent on the timely receipt of a permit from the USFS, economic gold and silver prices, and sufficient funding. </P>
<P>
Geology and Reserves </P>
<P>
Company geologists have completed the description of the geology of the Silver Strand mine. Reserve calculations were completed by the Company&#8217;s geologists and engineers. Verification of the area&#8217;s geology can be found from third party
published reports by Alfred L. Anderson of the Idaho Bureau of Mines and Geology (Pamphlet 53).</P>
<P>
Geology </P>
<P>
The upper part of the Revett Formation outcrops at the mine. The upper Revett member contains alternating sequences of quartzite and siltite-argillite. Beds dip shallowly to moderately northerly (30 to 50 degrees). Alfred L. Anderson of the Idaho
Bureau of Mines and Geology mapped the geology and discussed the mineral resources of Kootenai County in 1940 (Pamphlet 53). Anderson combined the Burke and Revett formations and estimated the combined thickness to be from 1,000 to 3000 feet. There
are no major intrusive rocks near the Silver Strand mine. A major diabase dike has intruded the Silver Strand mineralized zone. The Burnt Cabin fault is the major geologic structure near the Silver Strand mine. </P>
<P>
The Silver Strand orebody consists of a nearly-vertical, silicified (quartz) replacement zone which cuts the flat to moderately dipping Revett beds. The zone is not a fissure-filling vein. The boundaries and shape of the silicified zone were
determined to some extent by the 1997 diamond drilling program. The sulfide ore mined to date appears to be enclosed within the quartz zone. The ore is black and very fine-grained. Sulfide minerals are not easy to identify because of the
fine-grained texture. Occasional euhedral crystals of pyrite can be observed, and tetrahedrite is visible in the higher grade ore. Minerals observed by microscopic study during metallurgical tests include: pyrite, tetrahedrite, tennatite,
sphalerite, arsenopyrite and stibnite. </P>
<P>
Reserves </P>
<P> Ore grades and dimensions
  of the reserve blocks are based on chip sampling of the vein underground and
  diamond drilling. Reserves were calculated using a gold equivalent cutoff grade
  of 5 grams per tonne gold, a minimum mining width of 1.5 meters, and the standard
  practices of the Coeur d&#8217;Alene Mining District. The cutoff grade is based
  on historical and estimated costs of a 1,000 tonne/month underground mining
  operation, hauling ore to the Company&#8217;s mineral processing plant about
  40 miles distant, and processing with a flotation mineral processing plant recovering
  75-80% of the silver and gold. Silver and gold prices used were those on December
  31,2004 or $0.218/gram ($6.79/troy ounce) and $14.09/gram ($438.10/troy ounce),
  respectively. </P>
<TABLE width="100%" border="2" cellpadding="3" cellspacing="0" bordercolor="#000000" style="font-size:10pt;border-color:black;border-collapse:collapse;">
  <TR valign="bottom">
    <TD width=15% rowspan="2" align=left valign="middle"> Classification </TD>
    <TD width=16% rowspan="2" align=center valign="middle"> Metric<br> Tonnes</TD>
    <TD colspan=2 align=center valign="middle"> Gold Grade</TD>
    <TD colspan=2 align=center valign="middle"> Silver Grade</TD>
  </TR>
  <TR valign="bottom">
    <TD width=16% align=center valign="middle"> Grams Per<br> Tonne</TD>
    <TD width=16% align=center valign="middle"> Ounces Per<br> Ton</TD>
    <TD width=16% align=center valign="middle"> Grams Per<br> Tonne</TD>
    <TD width=16% align=center valign="middle"> Ounces Per Ton</TD>
  </TR>
  <TR valign="middle">
    <TD width=15% align=left> Proven &amp;<br> Probable</TD>
    <TD width=16% align=center> 6,903 </TD>
    <TD width=16% align=center> 5.43 </TD>
    <TD width=16% align=center> 0.158 </TD>
    <TD width=16% align=center> 361 </TD>
    <TD width=16% align=center> 10.5 </TD>
  </TR>
</TABLE>
<P>
The reserve tonnages are diluted. That is, the expected dilution from underground mining is accounted for in the grade and tonnage of the reserve blocks. </P>
<P align="right"> 14</P>

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<P>
<B>GOLDEN CHEST </B></P>
<P>
Location </P>
<P>
The Golden Chest project is located in Reeder Gulch about 1.2 miles east of Murray, Idaho along Forest Highway 9. The property consists of two mining leases and unpatented claims covering approximately 500 acres. The site is accessible by unimproved
dirt roads and no surface infrastructure is present at the site. Electrical power supplied by Avista Utilities has been installed by the Company to the portal site in Reader Gulch. </P>
<P>
Mineral Lease </P>
<P>
On September 5, 2003, the Company signed an exploration agreement with an option to lease with Paymaster Resources Incorporated on the Golden Chest mine covering about 270 acres. In February 2004, Paymaster assigned its interest to Metaline Contact
Mines of Murray, Idaho. On January 3, 2005, the Company signed a mining lease on the Golden Chest with Metaline Contact Mines (MTLI) and J.W. Beasley Interests, LLC (JWBI). The Company completed a pre-feasiblity study on the open pit resource
drilled by Newmont Mining and issued 50,000 shares of its restricted common stock to both MTLI and JWBI to exercise the mining lease. The term of the lease is fifteen years and as long thereafter as Leased Substances are mined, processed or marketed
from the Leased Premises. A Net Smelter Royalty (NSR) of 3% is payable to the Lessors. An additional NSR up to a maximum 3% is payable based on a sliding scale of increasing gold prices adjusted by the Consumer Price Index (CPI) using June 2003 as
the base. See table below. A copy of the mining lease was filed as an exhibit in the Company&#8217;s 10-KSB for the year ending December 31, 2003. </P>
<P>
Sliding Scale for Additional NSR Royalty </P>
<TABLE width="70%" border="2" cellpadding="3" cellspacing="0" bordercolor="#000000" style="font-size:10pt;border-color:black;border-collapse:collapse;">
  <TR valign="top">
    <TD align=left> &nbsp; &nbsp;Price of Gold, &#36; / Troy Ounce&nbsp; <br>
      &nbsp;(using December 2004 CPI-U)&nbsp; </TD>
    <TD width=50% align=center> Additional NSR Royalty </TD>
  </TR>
  <TR valign="top">
    <TD align=left>&lt; $415</TD>
    <TD width=50% align=center> None </TD>
  </TR>
  <TR valign="top">
    <TD align=left> $415 to $467&nbsp; </TD>
    <TD width=50% align=center> 1.0% </TD>
  </TR>
  <TR valign="top">
    <TD align=left> $467 to $519&nbsp; </TD>
    <TD width=50% align=center> 1.5% </TD>
  </TR>
  <TR valign="top">
    <TD align=left> $519 to $570&nbsp; </TD>
    <TD width=50% align=center> 2.0% </TD>
  </TR>
  <TR valign="top">
    <TD align=left>&gt; $570 </TD>
    <TD width=50% align=center> 3.0% </TD>
  </TR>
</TABLE>
<P>
Finally, the Company will issue 50,000 shares of restricted common stock for each increment of 10,000 troy ounces of gold production. </P>
<P>
On January 3, 2005, the Company signed a mining lease with Prichard Creek Resource Partners , LLC that covers about 41 acres of unpatented lode claims. Upon exercising the lease the Company issued 30,000 shares of restricted common stock to Prichard
Creek Resource Partners. The term of the lease is fifteen years and as long thereafter as Leased Substances are mined, processed or marketed from the Leased Premises. A Net Smelter Royalty (NSR) of 3% is payable to the Lessors. An additional NSR is
based on the same sliding scale presented in the table above is also payable to Prichard Creek Resource Partners. Finally, if commercial production is commenced from these claims a one-time payment of 30,000 shares of the Company&#8217;s common
stock is payable to Prichard Creek Resource Partners. </P>
<P>
The Company also holds a total of 195 acres at the Golden Chest property through unpatented claims wholly owned by the Company. The portion of these claims within Sections 4 and 5 of Township 49N, Range 5E, BM are subject to a 1% Net Profits Royalty
payable to MTLI and JWBI. </P>
<P align="right"> 15</P>

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<P>
History </P>
<P>
The Golden Chest was the largest lode producer in the Murray district, producing 65,000 ounces of gold from narrow high grade veins primarily in the late 1800&#8217;s. Newmont Exploration Limited (NEL) spent over &#36;500,000 on an exploration
program at the Golden Chest in the late 1980s, which consisted of soil and rock sampling; surface and underground mapping; and 11,133 feet of drilling. Newmont&#8217;s work identified a potential open pit with an inferred geologic resource, not
reserves, of 230,000 ounces of gold. Newmont dropped the property in 1990, apparently because it did not meet their criterion of a 1 million ounce open-pit resource. New Jersey Mining Company signed an exploration agreement with an option to lease
the property in June 2003. </P>
<P>
Present Condition and Work Completed on the Property </P>
<P>
During 2004, the Company completed an exploration ramp 152 meters long that intercepted the Katie-Dora vein. Then the vein was drifted on for 40 meters to the northeast before intercepting an old stope. Chip sampling of the vein was completed for
each round or about every 2.5 to 3.0 meters. No drifting was completed in a southerly direction on the Katie-Dora vein. Material from drifting on the vein was stockpiled at the Golden Chest and subsequently processed at the New Jersey mill in
Kellogg. Bulk flotation of sulfides was used to produce a gold-bearing pyrite concentrate. Approximately 1,280 wet tonnes were processed at the mill. Processing was completed for this development material on March 9, 2005, and the sale of the
concentrate is pending. </P>
<P>
Also during the past year, a deep core drilling program comprised of 4 holes and 1,142 meters was completed at the Golden Chest. The deepest hole, DDH04-06 intercepted 17.5 meters that assayed 4.83 gpt gold including a higher grade section of 5.8
meters that assayed 10.13 gpt gold. This intercept is thought to be significant because it may indicate increasing gold grade for the Idaho vein at depth.</P>
<P> The Company completed studies
  in 2004 on the potentially open pitable resource drilled by Newmont. Handbook
  and scaled costs were used in conjunction with current gold prices and gold
  prices substantially higher than current prices or three-year average prices.
  It was concluded that the resource would not be feasible as a stand-alone project
  and does not meet several requirements of reserves. Therefore, exploration at
  the Golden Chest will be directed toward developing resources on the Idaho vein
  for a larger scale underground mine. </P>
<P> In preparation for a small underground mining operation on the Katie-Dora
  vein, the Company built a shop/dry facility at the portal, improved 600 meters
  of haul-road and installed single phase power to the portal. A phase converter
  has also been installed at the portal. Electrical power is supplied by Avista
  Utilities.</P>
<P> The Company has the necessary
  permits to operate the planned underground mine. </P>
<P>
Development &amp; Exploration Plans </P>
<P>
The Company plans to begin a 50 tonne per day mining operation on the Katie-Dora vein exposed by the ramp. Ore will be shipped to the New Jersey mill in Kellogg for processing. A core drilling program is also planned for the Golden Chest to drill
offset holes from DDH04-6 in order to determine the extents of the gold mineralization. The core drilling program will be dependent on the Company&#8217;s ability to raise sufficient funds. </P>
<P>
Geology and Reserves </P>
<P align="left"> Company geologists have completed the description of the geology
  of the Golden Chest mine. Reserve calculations were completed by the Company&#8217;s
  geologist and engineer. Verification of the area&#8217;s </P>
<P align="right">16</P>

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<P>
geology can be found from third party published reports by Philip J. Shenon (Idaho Bureau of Mines Pamphlet No. 47) and unpublished reports by Newmont Mining Corporation. </P>
<P>
Geology </P>
<P>
Gold mineralization occurs in veins associated with a thrust fault that has exploited the top of a quartzite unit on the east limb of a north-trending synclinal fold. The mineralization occurs in two types of quartz veins which are generally
conformable to bedding of the Prichard formation of Proterozoic age. Thin banded veins, occurring in argillite, contain visible gold, pyrite, arsenopyrite, galena, and sphalerite. Thicker, massive veins occur in quartzite and contain pyrite,
sphalerite, galena, chalcopyrite, scheelite and rare visible gold. Gold mineralization is of Mesozoic age and related to granitic intrusive rocks. </P>
<P>
Reserves </P>
<P> Ore grades and dimensions of the reserve are based on chip sampling of the
  Katie-Dora vein underground and surface core drilling. Reserves were calculated
  by the Company&#8217;s geologist and engineer using a cutoff grade of 5 grams
  per tonne gold, a minimum mining width of 2 meters, and the standard practices
  of the Coeur d&#8217;Alene Mining District.</P>
<P>The cutoff grade is based on historical and estimated costs of a 500 tonne/month
  underground mining operation, hauling ore to the Company&#8217;s mineral processing
  plant about 40 miles distant, and processing with a flotation mineral processing
  plant recovering 90% of the gold. Gold prices used were those on December 31,2004
  or $14.09/gram ($438.10/troy ounce). </P>
<TABLE width="80%" border="2" cellpadding="3" cellspacing="0" bordercolor="#000000" style="font-size:10pt;border-color:black;border-collapse:collapse;">
  <TR valign="middle">
    <TD width=26% align=left> Classification </TD>
    <TD width=25% align=center> Metric Tonnes</TD>
    <TD width=25% align=center> Gold Grade<br> (grams per tonne)&nbsp; </TD>
    <TD width=25% align=center> Ounces of Gold</TD>
  </TR>
  <TR valign="top">
    <TD width=26% align=left> Proven &amp; Probable&nbsp; </TD>
    <TD width=25% align=center> 8,170</TD>
    <TD width=25% align=center> 13.0</TD>
    <TD width=25% align=center> 3,415</TD>
  </TR>
</TABLE>
<P>
The reserve tonnages are diluted. That is, the expected dilution from underground mining is accounted for in the grade and tonnage of the reserve blocks. </P>
<P>
<B>CAMP PROJECT </B></P>
<P>
Location </P>
<P>
The CAMP project is an underground exploration project without known ore reserves. It is located south of the City of Osburn, Idaho, in the approximate center of the silver belt of the Coeur d'Alene Mining District. The CAMP is accessed by the
Mineral Point mine road otherwise known as the McFarren Gulch road. The CAMP project covers approximately 380 acres. The Company controls 17.75% of the land in the CAMP. Merger Mines and Coeur d'Alene Mines Corp. (CDE:NYSE) control the remainder.
Coeur d'Alene Mines Corp. is the operator of the property. The CAMP area extends from the surface to 900 feet below sea level. Electrical power is available at the site. </P>
<P>
Mineral Lease</P>
<P>
As part of a July 26, 1978 lease agreement with Coeur d'Alene Mines Corp. (Coeur), the Company will receive a 7.1% Net Profits Interest (NPI),if the property is put into production. However, according to the agreement, Coeur can retain 93.925% of
the net profits until Coeur is reimbursed in total for its advance payments and expenditures. The term of the lease is 61 years. The Agreement also calls for Coeur to spend &#36;50,000 annually on exploration. However, a December 18, 1992 Amendment
to the Agreement allowed Coeur to fulfill the exploration work requirement until 2006 by applying past work in the amount of &#36;1,436,243 towards the exploration work requirement.</P>
<P>
History </P>
<P align="right"> 17</P>

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<P>
Originally the CAMP project was leased to ASARCO during the period from 1969 through 1972. ASARCO developed an exploration drift on the 1400 level of the Coeur d'Alene mine (aka Mineral Point mine), before terminating the drift 1000 feet short of
its planned length. The drift extended 1,000 feet into the CAMP project area before terminating. A series of diamond drill holes were planned along the 1400 level drift, but ASARCO terminated the lease agreement before any drilling could take place.
</P>
<P>
In 1978, Coeur signed a new lease agreement with Merger Mines and Plainview Mining Co. Plainview Mining Co. was acquired by the Company in February 1998. Coeur began an exploration program soon thereafter consisting of geochemical soil sampling,
trenching, an exploration tunnel and diamond drilling (surface &amp; underground). The exploration program continued through 1982. Coeur spent a total of &#36;1,436,243 on the project.</P>
<P>
Geology </P>
<P> The CAMP area lies astride
  the Silver Belt of the Coeur d'Alene Mining District. The north limb of the
  Big Creek anticline trends through the CAMP area. Most of the silver orebodies
  in the Silver Belt are located in the north limb of the Big Creek anticline.
  Prospective fault structures that trend through the CAMP property include the
  Polaris fault, Silver Summit vein-fault, Chester fault, and other structures.
  Favorable rock types are located in the footwall of the Polaris fault including
  the St. Regis and Revett formation. </P>
<P>
The property has not received any more exploration activity since 1982 and, to the best of our knowledge, Coeur d&#8217;Alene Mines has no plans for exploration. </P>
<P>
<B>LOST EAGLE PROSPECT </B></P>
<P>
Summary </P>
<P>
The Lost Eagle is an exploration project without known ore reserves. It is located in the West Fork of Eagle Creek near Murray, Idaho. The outcrop of the Lost Eagle vein is located on the hillside above a USFS road. Access to the outcrop is by foot
only. Electrical power is not available at the site. The Company's five lode claims cover 103 acres and are on public land administered by the U.S. Forest Service. The project is a gold and silver exploration project. The Lost Eagle vein is a quartz
vein carrying sulfides that outcrops in the Revett formation. The sulfide minerals found in the vein are galena, pyrite, hessite and petzite. Hessite is a silver telluride mineral and petzite is a gold-silver telluride mineral. The presence of
tellurides is thought to be significant as tellurides are usually associated with high-grade gold deposits near alkaline-igneous bodies. However, no known igneous bodies are mapped in the area. Historical workings included two short adits, about 5
meters long, located along the strike of a quartz vein system. An upper adit established by the old-timers exposes the vein where it is mineralized. Work completed by the Company includes re-opening of the adit, channel sampling the vein,
geochemical soil sampling, and a geophysical survey.</P>
<P>
In 2003, the Company completed two diamond drillholes each about 185 meters in length. Both holes intercepted abundant alteration including carbonate enrichment, potassic alteration, and a halo of specular hematite and pyrite with occasional galena.
Gold and silver values were only weakly anomalous. Anomalous levels of molybdenum were also discovered by the 2003 drilling. No exploration work was completed on the property in 2004. Exploration plans call for additional diamond drilling but the
holes will be collared closer to the outcrop by using a helicopter to place the drill.</P>
<P align="right"> 18</P>

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<P>
<B>WISCONSIN-TEDDY PROSPECT </B></P>
<P>
Summary </P>
<P>
The Wisconsin-Teddy is an exploration project without known ore reserves. The project area lies north of the New Jersey mine and is accessed by a local frontage road. Electrical power is available adjacent to the site. The Company's claims cover 83
acres. The claims are unpatented and are on public land administered by the U.S. Bureau of Land Management. The project is a base metal exploration project in the Prichard formation. Several tunnels with an aggregate length of 2,000 feet were driven
on the property prior to 1930. This development was related to two veins systems - a copper-gold vein and a zinc-lead-silver vein. Work completed by the Company included the opening of the Teddy underground workings, sampling on the surface and
underground, and geologic mapping. Two exploration holes were drilled in the summer of 2003 and anomalous base metal mineralization was found. No exploration work was completed in 2004 and there are no plans for additional exploration work in 2005.
</P>
<P>
<B>SILVER BUTTON PROSPECT</B> </P>
<P> The Silver Button is an
  exploration project without known ore reserves and covers an area of 20 acres
  and is located in the Clark Fork mining district of northern Idaho. Clark Fork
  is about 60 miles north of Kellogg, Idaho. The property was staked by the Company
  in 2004 and is located in the Lightning Creek drainage. Float collected from
  over a 100 m length of a vein subcrop on a talus slope contained silver minerals
  as identified by microscopic analyses and by chemical analyses. Access to the
  site is via foot trail and no electrical power is available at the site. Only
  preliminary field sampling and claim staking have taken place at the prospect.
  A Plan of Operations for a helicopter-mobilized core-drilling program has been
  submitted to the US Forest Service (USFS). Exploration drilling will be dependent
  on the Company&#8217;s ability to raise sufficient funds and the timely receipt
  of a permit from the USFS. </P>
<P>
<B>ROUGHWATER PROSPECT </B></P>
<P>
Roughwater is an exploration project without known ore reserves. The Roughwater prospect is comprised of nine unpatented claims in the Clark Fork mining district about 60 miles north of Kellogg. The property is located near Bear Creek in the
Lightning Creek drainage and a series of closed logging roads access the property. No electrical power is available at the site. To date, the work completed on the property includes sampling of surface outcrops and preliminary metallurgical
testwork. The property is a copper-gold showing with minor platinum group metal content. The host rock is a quartz diorite sill which has intruded the Prichard formation. No work was completed on the property in 2004 and no work is planned for 2005.
</P>
<P align="center"> <B>ITEM 3. </B></P>
<P align="center"> <B>LEGAL PROCEEDINGS </B></P>
<P>
The Company is not currently involved in any legal proceedings and is not aware of any pending or potential legal actions. </P>
<P align="right"> 19</P>

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<A name="page_20" id="page_20"></A>

<P align="center">
<B>ITEM 4. </B></P>
<P align="center">
<B>SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS</B> </P>
<P align="left"> No matters were submitted to a vote of shareholders during the
  fourth quarter of 2004. </P>
<P align="left">&nbsp;</P>
<P align="left">&nbsp;</P>
<P align="center">
[The balance of this page has been intentionally left blank.]</P>
<P align="right"> 20</P>

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<P align="center"> <B>PART II. </B></P>
<P align="center"> <B>ITEM 5. </B></P>
<P align="center"> <B>MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS</B>
</P>
<P>
Market Information </P>
<P>
The Company's stock trades on the NASD's OTCBB under the symbol "NJMC". The Company began trading on the OTCBB on January 28, 1998 following its merger with Plainview Mining Company, Inc.</P>
<P>
The following table sets forth, for the respective periods indicated, the prices for the Company's Common Stock in the over-the-counter market according to the NASD's OTC Bulletin Board. These prices represent inter-dealer quotations, without
adjustments for retail markups, markdowns or commissions and may not necessarily represent actual transactions. All prices in the following table have been rounded to the nearest whole cent. </P>
<TABLE width="80%" border="2" cellpadding="3" cellspacing="0" bordercolor="#000000" style="font-size:10pt;border-color:black;border-collapse:collapse;">
  <TR valign="bottom">
    <TD align=left> <B>Year Ending December 31, 2004</B>&nbsp; </TD>
    <TD width=30% align=center> <B>High Bid</B>&nbsp; </TD>
    <TD width=30% align=center> <B>Low Bid</B>&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> First Quarter&nbsp; </TD>
    <TD width=30% align=center> $0.75&nbsp; </TD>
    <TD width=30% align=center> $0.57&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> Second Quarter&nbsp; </TD>
    <TD width=30% align=center> $0.75&nbsp; </TD>
    <TD width=30% align=center> $0.51&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> Third Quarter&nbsp; </TD>
    <TD width=30% align=center> $0.73&nbsp; </TD>
    <TD width=30% align=center> $0.65&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> Fourth Quarter&nbsp; </TD>
    <TD width=30% align=center> $0.75&nbsp; </TD>
    <TD width=30% align=center> $0.49&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> <B>Year Ending December 31, 2003</B>&nbsp; </TD>
    <TD width=30% align=center> <B>High Bid</B>&nbsp; </TD>
    <TD width=30% align=center> <B>Low Bid</B>&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> First Quarter&nbsp; </TD>
    <TD width=30% align=center> $0.65&nbsp; </TD>
    <TD width=30% align=center> $0.29&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> Second Quarter&nbsp; </TD>
    <TD width=30% align=center> $0.48&nbsp; </TD>
    <TD width=30% align=center> $0.27&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> Third Quarter&nbsp; </TD>
    <TD width=30% align=center> $0.56&nbsp; </TD>
    <TD width=30% align=center> $0.27&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> Fourth Quarter&nbsp; </TD>
    <TD width=30% align=center> $0.90&nbsp; </TD>
    <TD width=30% align=center> $0.44&nbsp; </TD>
  </TR>
</TABLE>
<P>
Shareholders </P>
<P>
As of March 10, 2005 there were approximately 957 shareholders of record of the Company's Common Stock. As of March 10, 2005 the Company had issued and outstanding 21,679,070 shares of Common Stock, and the Company had 1,514,775 warrants outstanding
for a fully diluted total of 23,193,845. </P>
<P>
Dividend Policy </P>
<P>
The Company has not declared or paid cash dividends or made distributions in the past and the Company does not anticipate that it will pay cash dividends or make distributions in the foreseeable future. The Company currently intends to retain and
reinvest future earnings, if any, to finance its operations. </P>
<P>
Transfer Agent </P>
<P>
The transfer agent for the Company's Common Stock is Columbia Stock Transfer Company, P.O. Box 2196, Coeur d'Alene, Idaho 83816-2196.</P>
<P>
Recent Sales of Unregistered Securities </P>
<P>
On February 28, 2005 the Company completed a non-brokered (i.e. no commissions were paid to an underwriter) of 259,900 units for a price of &#36;0.55 per unit. Each unit consists of one share of common </P>
<P align="right"> 21</P>

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<A name="page_22" id="page_22"></A>

<P>
stock plus one-half of a warrant. Each full warrant is exercisable into one share of common stock at a price of &#36;0.85. The warrant expires on April 1, 2006. The offering was made in reliance on exemptions from registration provided by Section
4(2) and Rule 506 of Regulation D of the Securities Act of 1933, as amended. </P>
<P> For the year ending December 31 2004, the Company issued 228,860 shares of
  restricted common stock for management and director&#8217;s fees, equipment,
  services, and an exploration lease payment. A value of &#36;145,299 (&#36;0.63
  per share) was assigned to these fees, equipment and services. See the statement
  of shareholder&#8217;s equity for a detailed list. These issuances were made
  in reliance on exemptions from registration provided by Section 4(2) of the
  Securities Act of 1933, as amended. </P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P align="center"> [The balance of this page has been intentionally left blank.]</P>
<P align="right"> 22</P>

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<P align="center"> <B>ITEM 6. </B></P>
<P align="center"> <B>MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
  <br>
  AND RESULTS OF OPERATIONS</B> </P>
<P>
Plan of Operation: </P>
<P>
The Company is executing its plan to continue exploration for gold, silver and base metal deposits in the greater Coeur d&#8217;Alene Mining District of northern Idaho. The Company has three mines which are ready to commence production, the Golden
Chest and the New Jersey, which have produced some ore, and the Silver Strand which is still in the environmental permitting phase. Exploration programs at all three mines are being conducted as well as in other out-lying areas. </P>
<P> An exploration ramp at the Golden Chest mine was completed in 2004 and enough
  proven and probable reserves, grading 13 grams/tonne gold, were developed to
  justify a 500 tonne/month operation. Infrastructure is being completed at the
  mine preparatory to driving a raise and I-drifts. It is planned to mine and
  process about 2,500 tonnes during 2005 producing about 1,000 ounces of gold.
</P>
<P>
The Coleman open pit at the New Jersey mine is developed and scheduled to produce about 3,500 tonnes in 2005 containing about 350 ounces of gold. </P>
<P>
Operating permits for a seasonal mining operation at the Silver Strand mine have still not been received from the U.S. Forest Service, although a favorable decision seems imminent. The permitting process has now been ongoing for over 22 months,
which is longer than had been expected. All pre-production work must await receipt of the operating permits. Planned pre-production work for 2004 was cancelled because of the permitting delay, and permits may not be received in time to commence
pre-production work in the spring of 2005. </P>
<P>
The Company has upgraded its mineral processing plant, the New Jersey mill, to add the flotation process which was needed to produce marketable concentrates for smelters. The new processing circuit has been commissioned with ores from the New Jersey
and Golden Chest mines. An amount of marketable sulfide concentrate has been produced and the first shipment of approximately 23 tonnes was shipped in March 2005. Included in the upgrade were eight new flotation cells, pumps, a filter press, a
concentrate bin, and various fabricated structures </P>
<P> Exploration drilling is
  planned in 2005 contingent on availability of funding. The highest priority
  drilling is at the Golden Chest where a deep intercept on the Idaho vein was
  drilled in 2004. The Company&#8217;s geologists think the potential of the Idaho
  vein is high for development of resources suitable for larger scale underground
  mining. </P>
<p> A surface geophysical/geochemical
  program at the Silver Strand mine was completed in the fourth quarter of 2004
  to test for extension of the mineralized zone both eastward and westward on
  strike. The program was successful in locating several anomalies, and a follow-up
  program to include drilling is
<P align="right">23</P>

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<A name="page_24" id="page_24"></A>

<P>
being designed. Reconnaissance geochemical sampling was also completed in an area surrounding the Silver Strand mine, and at least two gold anomalies were discovered. Follow-up reconnaissance work will be conducted in 2005. </P>
<P>
The Company has sufficient funding to commence production both at the Golden Chest mine and the New Jersey mine, but additional funding will be necessary for exploration projects in 2005. Plans are being made to secure additional funding needed. </P>
<P>
Production is planned to commence in March 2005 and continue throughout the 2005 year. Cash flow generated by production will be used for exploration and management purposes so net income is not anticipated in 2005. </P>
<P> The Company currently has five employees and uses consultants or contractors
  for project tasks. Up to 4 additional employees may be hired in 2005. </P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P align="center"> [The balance of this page has been intentionally left blank.]</P>
<P align="right"> 24</P>

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<A name="page_25" id="page_25"></A>

<P align="center">
<B>ITEM 7. </B></P>
<P align="center"> <B>FINANCIAL STATEMENTS </B></P>
<table style="font-size: 10pt;" width="100%" border="0" cellspacing="3" cellpadding="0">
  <tr bordercolor="#000000">
    <td width="76%" valign="top" style="border-right-width:3px;border-right-style:solid;">&nbsp;</td>
    <td style="border-right-width:3px;border-right-style:solid;"><font size="5">DECORIA,<br>
      MAICHEL <br>
      &amp; TEAGUE</font><br> <font size="1">A PROFESSIONAL SERVICES FIRM </font></td>
  </tr>
</table>
<P><B>Report of Independent Registered Public Accounting Firm</B> </P>
<P> Board of Directors <br>
  New Jersey Mining Company </P>
<P align="justify"> We have audited the accompanying balance sheet of New Jersey
  Mining Company (<I>A Development Stage Company</I>) (&#8220;the Company&#8221;)
  as of December 31, 2004 and 2003, and the related statements of operations,
  changes in stockholders&#8217; equity, and cash flows for the years then ended,
  and for the period from inception on July 18, 1996 to December 31, 2004. These
  financial statements are the responsibility of the Company&#8217;s management.
  Our responsibility is to express an opinion on these financial statements based
  on our audits. We did not audit the cumulative totals of the Company for the
  period from inception on July 18, 1996 to December 31, 2002, which totals reflect
  a deficit of &#36;161,247 accumulated during the development stage. Those totals
  were audited by another auditor whose report dated March 24, 2003, except for
  Note 2 as which date was March 5, 2004, expressed an unqualified opinion on
  those statements. </P>
<P align="justify"> We conducted our audits in accordance with the standards of
  the Public Company Accounting Oversight Board (United States). Those standards
  require that we plan and perform the audit to obtain reasonable assurance about
  whether the financial statements are free of material misstatement. An audit
  includes examining, on a test basis, evidence supporting the amounts and disclosures
  in the financial statements. An audit also includes assessing the accounting
  principles used and significant estimates made by management, as well as evaluating
  the overall financial statement presentation. We believe that our audits and
  the reports of the other auditors provide a reasonable basis for our opinion.
</P>
<P align="justify"> In our opinion, based on our audits, the financial statements
  referred to above present fairly, in all material respects, the financial position
  of New Jersey Mining Company as of December 31, 2004 and 2003, and the results
  of its operations and its cash flows for the years then ended, and for the period
  from inception on July 18, 1996 to December 31, 2004 (other than cumulative
  totals for the period from inception on July 18, 1996 to December 31, 2002,
  on which we express no opinion), in conformity with accounting principles generally
  accepted in the United States of America.</P>
<P align="justify"> As discussed in Note 2 to the financial statements, the Company
  changed its method of accounting for exploration costs in 2003. </P>
<P align="justify"> DeCoria, Maichel &amp; Teague P.S. <br>
  /s/ Decoria, Maichel &amp; Teague P.S. </P>
<P align="justify"> Spokane, Washington <br>
  February 23, 2005 </P>
<P align="right"> 25</P>

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<A name="page_26" id="page_26"></A>
<P> <B><font size="3">NEW JERSEY MINING COMPANY </font></B><font size="3"><br>
  <I>(A Development Stage Company) </I><br>
  <B>TABLE OF CONTENTS </B></font></P>
<TABLE style="font-size:10pt;border-color:black;border-collapse:collapse;" cellpadding="0" cellspacing="0" width="100%" border="0">
  <TR valign="bottom">
    <TD align=left>&nbsp; </TD>
    <TD width=10% align=right> Page</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
  </TR>
  <TR valign="bottom" bgcolor="#EEEEEE">
    <TD align=left><a href="#page_26"> Balance Sheets, December 31, 2004 and 2003</a></TD>
    <TD width=10% align=right><a href="#page_26"> 26</a></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
  </TR>
  <TR valign="bottom" bgcolor="#EEEEEE">
    <TD align=left><a href="#page_27"> Statements of Operations for the years
      ended December 31, 2004 and 2003 and from the&nbsp;date of inception on
      July 18, 1996 through December 31, 2004</a></TD>
    <TD width=10% align=right> <a href="#page_27">27</a></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
  </TR>
  <TR valign="bottom" bgcolor="#EEEEEE">
    <TD align=left> <p><a href="#page_28">Statement of Changes in Stockholders&#8217;
        Equity for the period from inception on July 18, 1996 through December
        31, 2004</a></p></TD>
    <TD width=10% align=right> <a href="#page_28">28- 29</a></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
  </TR>
  <TR valign="bottom" bgcolor="#EEEEEE">
    <TD align=left><a href="#page_30"> Statements of Cash Flows for the years
      ended December 31, 2004 and 2003 and from the date of inception on July
      18, 1996 through December 31, 2004</a></TD>
    <TD width=10% align=right> <a href="#page_30">30</a></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
  </TR>
  <TR valign="bottom" bgcolor="#EEEEEE">
    <TD align=left><a href="#page_31"> Notes to Financial Statements</a></TD>
    <TD width=10% align=right><a href="#page_31"> 31-47</a></TD>
  </TR>
</TABLE>
<BR>
<P align="right"> 26</P>

<HR noshade align="center" width="100%" size=5 color="black" style="page-break-after:always;">
<A name="page_27" id="page_27"></A>
<P> <B><font size="3">New Jersey Mining Company </font></B><font size="3"><br>
  <I>(A Development Stage Company) </I><br>
  <B>Balance Sheets </B><br>
  <I>December 31, 2004 and 2003</I></font></P>
<TABLE style="font-size:10pt;border-color:black;border-collapse:collapse;" cellpadding="0" cellspacing="0" width="100%" border="0">
  <TR valign="bottom">
    <TD align=left>&nbsp; </TD>
    <TD width=1% align=left style="border-bottom-width:1px;border-bottom-style:solid">&nbsp; </TD>
    <TD width=12% align=center style="border-bottom-width:1px;border-bottom-style:solid"> 2004 </TD>
    <TD width=2% align=center valign="top">&nbsp; </TD>
    <TD width=1% align=center style="border-bottom-width:1px;border-bottom-style:solid">&nbsp; </TD>
    <TD width=12% align=center style="border-bottom-width:1px;border-bottom-style:solid"> 2003 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left></TD>
    <TD align=left valign="top">&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left></TD>
    <TD align=left valign="top">&nbsp;</TD>
  </TR>
  <TR valign="bottom" bgcolor="#E6EFFF">
    <TD colspan="6" align=center><B>ASSETS</B>&nbsp; </TD>
    <TD align=left valign="top">&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left></TD>
    <TD align=left valign="top">&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left></TD>
    <TD align=left valign="top">&nbsp;</TD>
  </TR>
  <TR valign="bottom" bgcolor="#E6EFFF">
    <TD align=left> Current assets:&nbsp; </TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=12% align=left> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=12% align=left> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> &nbsp; &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;Cash and cash equivalents&nbsp;
    </TD>
    <TD width=1% align=left> &#36;</TD>
    <TD width=12% align=right> 151,764 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left> &#36;</TD>
    <TD width=12% align=right> 346,268 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
  </TR>
  <TR valign="bottom" bgcolor="#E6EFFF">
    <TD align=left> &nbsp; &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;Other current assets&nbsp;
    </TD>
    <TD width=1% align=left style="border-bottom-width:1px;border-bottom-style:solid">&nbsp; </TD>
    <TD width=12% align=right style="border-bottom-width:1px;border-bottom-style:solid"> 2,346 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left style="border-bottom-width:1px;border-bottom-style:solid">&nbsp; </TD>
    <TD width=12% align=right style="border-bottom-width:1px;border-bottom-style:solid"> - </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> &nbsp; &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;&nbsp;
      &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;Total current
      assets&nbsp; </TD>
    <TD width=1% align=left style="border-bottom-width:1px;border-bottom-style:solid">&nbsp; </TD>
    <TD width=12% align=right style="border-bottom-width:1px;border-bottom-style:solid"> 154,110 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left style="border-bottom-width:1px;border-bottom-style:solid">&nbsp; </TD>
    <TD width=12% align=right style="border-bottom-width:1px;border-bottom-style:solid"> 346,268 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
  </TR>
  <TR bgcolor="#E6EFFF">
    <TD>&nbsp; </TD>
    <TD width="1%" align="left">&nbsp;</TD>
    <TD width="12%">&nbsp;</TD>
    <TD width="2%" valign="top">&nbsp;</TD>
    <TD width="1%" align="left">&nbsp;</TD>
    <TD width="12%">&nbsp;</TD>
    <TD width="2%" valign="top">&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> &nbsp; &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;Building and equipment&nbsp;
    </TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=12% align=right> 657,886 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=12% align=right> 271,676 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
  </TR>
  <TR valign="bottom" bgcolor="#E6EFFF">
    <TD align=left nowrap> &nbsp; &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;Mineral properties
      and deferred development costs&nbsp; </TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=12% align=right> 787,274 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=12% align=right> 787,274 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> &nbsp; &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;Other assets&nbsp;
    </TD>
    <TD width=1% align=left style="border-bottom-width:1px;border-bottom-style:solid">&nbsp; </TD>
    <TD width=12% align=right style="border-bottom-width:1px;border-bottom-style:solid"> - </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left style="border-bottom-width:1px;border-bottom-style:solid">&nbsp; </TD>
    <TD width=12% align=right style="border-bottom-width:1px;border-bottom-style:solid"> 2,346 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
  </TR>
  <TR bgcolor="#E6EFFF">
    <TD>&nbsp; </TD>
    <TD width="1%" align="left">&nbsp;</TD>
    <TD width="12%">&nbsp;</TD>
    <TD width="2%" valign="top">&nbsp;</TD>
    <TD width="1%" align="left">&nbsp;</TD>
    <TD width="12%">&nbsp;</TD>
    <TD width="2%" valign="top">&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> &nbsp; &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;&nbsp;
      &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;Total assets&nbsp;
    </TD>
    <TD width=1% align=left style="border-bottom-width:4px;border-bottom-style:double">$</TD>
    <TD width=12% align=right style="border-bottom-width:4px;border-bottom-style:double"> 1,599,270 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left style="border-bottom-width:4px;border-bottom-style:double">$</TD>
    <TD width=12% align=right style="border-bottom-width:4px;border-bottom-style:double"> 1,407,564 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
  </TR>
  <TR bgcolor="#E6EFFF">
    <TD>&nbsp; </TD>
    <TD width="1%" align="left">&nbsp;</TD>
    <TD width="12%">&nbsp;</TD>
    <TD width="2%" valign="top">&nbsp;</TD>
    <TD width="1%" align="left">&nbsp;</TD>
    <TD width="12%">&nbsp;</TD>
    <TD width="2%" valign="top">&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="1%" align="left">&nbsp;</TD>
    <TD width="12%">&nbsp;</TD>
    <TD width="2%" valign="top">&nbsp;</TD>
    <TD width="1%" align="left">&nbsp;</TD>
    <TD width="12%">&nbsp;</TD>
    <TD width="2%" valign="top">&nbsp;</TD>
  </TR>
  <TR valign="bottom" bgcolor="#E6EFFF">
    <TD colspan="6" align=center> <B>LIABILITIES AND STOCKHOLDERS&#8217; EQUITY</B>
    </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="1%" align="left">&nbsp;</TD>
    <TD width="12%">&nbsp;</TD>
    <TD width="2%" valign="top">&nbsp;</TD>
    <TD width="1%" align="left">&nbsp;</TD>
    <TD width="12%">&nbsp;</TD>
    <TD width="2%" valign="top">&nbsp;</TD>
  </TR>
  <TR valign="bottom" bgcolor="#E6EFFF">
    <TD align=left> Current liabilities:&nbsp; </TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=12% align=left> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=12% align=left> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> &nbsp; &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;Accounts payable&nbsp;
    </TD>
    <TD width=1% align=left> &#36;</TD>
    <TD width=12% align=right> 8,111 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left> &#36;</TD>
    <TD width=12% align=right> 11,610 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
  </TR>
  <TR valign="bottom" bgcolor="#E6EFFF">
    <TD align=left> &nbsp; &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;Accrued payroll and
      payroll-related expenses&nbsp; </TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=12% align=right> 5,715 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=12% align=right> - </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> &nbsp; &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;Accounts payable to
      related party&nbsp; </TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=12% align=right> - </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=12% align=right> 2,000 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
  </TR>
  <TR valign="bottom" bgcolor="#E6EFFF">
    <TD align=left> &nbsp; &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;Obligation under capital
      lease, current&nbsp; </TD>
    <TD width=1% align=left style="border-bottom-width:1px;border-bottom-style:solid">&nbsp; </TD>
    <TD width=12% align=right style="border-bottom-width:1px;border-bottom-style:solid"> 12,687 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left style="border-bottom-width:1px;border-bottom-style:solid">&nbsp; </TD>
    <TD width=12% align=right style="border-bottom-width:1px;border-bottom-style:solid"> - </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> &nbsp; &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;&nbsp;
      &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;Total current
      liabilities&nbsp; </TD>
    <TD width=1% align=left style="border-bottom-width:1px;border-bottom-style:solid">&nbsp; </TD>
    <TD width=12% align=right style="border-bottom-width:1px;border-bottom-style:solid"> 26,513 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left style="border-bottom-width:1px;border-bottom-style:solid">&nbsp; </TD>
    <TD width=12% align=right style="border-bottom-width:1px;border-bottom-style:solid"> 13,610 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
  </TR>
  <TR bgcolor="#E6EFFF">
    <TD>&nbsp; </TD>
    <TD width="1%" align="left">&nbsp;</TD>
    <TD width="12%">&nbsp;</TD>
    <TD width="2%" valign="top">&nbsp;</TD>
    <TD width="1%" align="left">&nbsp;</TD>
    <TD width="12%">&nbsp;</TD>
    <TD width="2%" valign="top">&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> Obligation under capital lease, noncurrent&nbsp; </TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=12% align=right> 57,388 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=12% align=right> - </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
  </TR>
  <TR valign="bottom" bgcolor="#E6EFFF">
    <TD align=left> Accrued reclamation costs&nbsp; </TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=12% align=right> 12,500 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=12% align=right> 12,500 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> Payable to officers, in common stock&nbsp; </TD>
    <TD width=1% align=left style="border-bottom-width:1px;border-bottom-style:solid">&nbsp; </TD>
    <TD width=12% align=right style="border-bottom-width:1px;border-bottom-style:solid"> - </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left style="border-bottom-width:1px;border-bottom-style:solid">&nbsp; </TD>
    <TD width=12% align=right style="border-bottom-width:1px;border-bottom-style:solid"> 11,519 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
  </TR>
  <TR bgcolor="#E6EFFF">
    <TD>&nbsp; </TD>
    <TD width="1%" align="left">&nbsp;</TD>
    <TD width="12%">&nbsp;</TD>
    <TD width="2%" valign="top">&nbsp;</TD>
    <TD width="1%" align="left">&nbsp;</TD>
    <TD width="12%">&nbsp;</TD>
    <TD width="2%" valign="top">&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> &nbsp; &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;&nbsp;
      &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;Total liabilities&nbsp;
    </TD>
    <TD width=1% align=left style="border-bottom-width:1px;border-bottom-style:solid">&nbsp; </TD>
    <TD width=12% align=right style="border-bottom-width:1px;border-bottom-style:solid"> 96,401 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left style="border-bottom-width:1px;border-bottom-style:solid">&nbsp; </TD>
    <TD width=12% align=right style="border-bottom-width:1px;border-bottom-style:solid"> 37,629 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
  </TR>
  <TR bgcolor="#E6EFFF">
    <TD>&nbsp; </TD>
    <TD width="1%" align="left">&nbsp;</TD>
    <TD width="12%">&nbsp;</TD>
    <TD width="2%" valign="top">&nbsp;</TD>
    <TD width="1%" align="left">&nbsp;</TD>
    <TD width="12%">&nbsp;</TD>
    <TD width="2%" valign="top">&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> Commitments and contingencies (Note 10)&nbsp; </TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=12% align=left> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=12% align=left> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
  </TR>
  <TR bgcolor="#E6EFFF">
    <TD>&nbsp; </TD>
    <TD width="1%" align="left">&nbsp;</TD>
    <TD width="12%">&nbsp;</TD>
    <TD width="2%" valign="top">&nbsp;</TD>
    <TD width="1%" align="left">&nbsp;</TD>
    <TD width="12%">&nbsp;</TD>
    <TD width="2%" valign="top">&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> Stockholders&#8217; equity:&nbsp; </TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=12% align=left> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=12% align=left> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
  </TR>
  <TR valign="bottom" bgcolor="#E6EFFF">
    <TD align=left> &nbsp; &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;Preferred stock; no
      par value, 1,000,000 shares&nbsp; </TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=12% align=left> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=12% align=left> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> &nbsp; &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;&nbsp;
      &nbsp;&nbsp; &nbsp;authorized; no shares issued and outstanding&nbsp; </TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=12% align=left> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=12% align=left> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
  </TR>
  <TR valign="bottom" bgcolor="#E6EFFF">
    <TD align=left> &nbsp; &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;Common stock; no par
      value, 50,000,000&nbsp; </TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=12% align=left> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=12% align=left> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> &nbsp; &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;&nbsp;
      &nbsp;&nbsp; &nbsp;shares authorized; 2004-21,520,800 and 2003-&nbsp; </TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=12% align=left> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=12% align=left> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
  </TR>
  <TR valign="bottom" bgcolor="#E6EFFF">
    <TD align=left> &nbsp; &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;&nbsp;
      &nbsp;&nbsp; &nbsp;18,669,890 shares issued and outstanding&nbsp; </TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=12% align=right> 2,965,945 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=12% align=right> 1,910,456 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> &nbsp; &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;Deficit accumulated
      during the development stage&nbsp; </TD>
    <TD width=1% align=left style="border-bottom-width:1px;border-bottom-style:solid">&nbsp; </TD>
    <TD width=12% align=right style="border-bottom-width:1px;border-bottom-style:solid"> (1,463,076 </TD>
    <TD width=2% align=left valign="top"> )&nbsp; </TD>
    <TD width=1% align=left style="border-bottom-width:1px;border-bottom-style:solid">&nbsp; </TD>
    <TD width=12% align=right style="border-bottom-width:1px;border-bottom-style:solid"> (540,521 </TD>
    <TD width=2% align=left valign="top"> )&nbsp; </TD>
  </TR>
  <TR valign="bottom" bgcolor="#E6EFFF">
    <TD align=left> &nbsp; &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;&nbsp;
      &nbsp;&nbsp; &nbsp;Total stockholders&#8217; equity&nbsp; </TD>
    <TD width=1% align=left style="border-bottom-width:1px;border-bottom-style:solid">&nbsp; </TD>
    <TD width=12% align=right style="border-bottom-width:1px;border-bottom-style:solid"> 1,502,869 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left style="border-bottom-width:1px;border-bottom-style:solid">&nbsp; </TD>
    <TD width=12% align=right style="border-bottom-width:1px;border-bottom-style:solid"> 1,369,935 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="1%" align="left">&nbsp;</TD>
    <TD width="12%">&nbsp;</TD>
    <TD width="2%" valign="top">&nbsp;</TD>
    <TD width="1%" align="left">&nbsp;</TD>
    <TD width="12%">&nbsp;</TD>
    <TD width="2%" valign="top">&nbsp;</TD>
  </TR>
  <TR valign="bottom" bgcolor="#E6EFFF">
    <TD align=left> &nbsp; &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;&nbsp;
      &nbsp;&nbsp; &nbsp;Total liabilities and stockholders&#8217; equity&nbsp;
    </TD>
    <TD width=1% align=left style="border-bottom-width:4px;border-bottom-style:double">$</TD>
    <TD width=12% align=right style="border-bottom-width:4px;border-bottom-style:double">1,599,270 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left style="border-bottom-width:4px;border-bottom-style:double">$</TD>
    <TD width=12% align=right style="border-bottom-width:4px;border-bottom-style:double"> 1,407,564 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
  </TR>
</TABLE>
<P align="center"> <I>The accompanying notes are an integral part of these financial
  statements. <br>
  </I>27</P>
<HR noshade align="center" width="100%" size=5 color="black" style="page-break-after:always;">
<A name="page_28" id="page_28"></A>
<P> <B><font size="3">New Jersey Mining Company </font></B><font size="3"><br>
  <I>(A Development Stage Company) </I></font><br>
  <B><font size="3">Statements of Operations </font></B></P>
<TABLE style="font-size:10pt;border-color:black;border-collapse:collapse;" cellpadding="0" cellspacing="0" width="100%" border="0">
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=center></TD>
    <TD align=center valign="top">&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
    <TD align=center></TD>
    <TD align=center valign="top">&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
    <TD align=center>From Inception </TD>
    <TD align=left valign="top">&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp; </TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=12% align=center> </TD>
    <TD width=2% align=center valign="top">&nbsp; </TD>
    <TD width=1% align=center>&nbsp; </TD>
    <TD width=12% align=center> </TD>
    <TD width=2% align=center valign="top">&nbsp; </TD>
    <TD width=1% align=center>&nbsp; </TD>
    <TD width=14% align=center>(July 18, 1996) </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp; </TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD colspan="4" align=center> Years Ended&nbsp; </TD>
    <TD width=2% align=center valign="top">&nbsp; </TD>
    <TD width=1% align=center>&nbsp; </TD>
    <TD width=14% align=center>Through </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp; </TD>
    <TD width=1% align=left style="border-bottom-width:1px;border-bottom-style:solid">&nbsp;
    </TD>
    <TD colspan="4" align=center style="border-bottom-width:1px;border-bottom-style:solid">
      December 31,&nbsp; </TD>
    <TD width=2% align=center valign="top">&nbsp; </TD>
    <TD width=1% align=center>&nbsp; </TD>
    <TD width=14% align=center>December 31, 2004 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp; </TD>
    <TD width=1% align=left style="border-bottom-width:1px;border-bottom-style:solid">&nbsp;
    </TD>
    <TD width=12% align=center style="border-bottom-width:1px;border-bottom-style:solid">
      2004</TD>
    <TD width=2% align=center valign="top">&nbsp; </TD>
    <TD width=1% align=center style="border-bottom-width:1px;border-bottom-style:solid">&nbsp;
    </TD>
    <TD width=12% align=center style="border-bottom-width:1px;border-bottom-style:solid">
      2003 </TD>
    <TD width=2% align=center valign="top">&nbsp; </TD>
    <TD width=1% align=center style="border-bottom-width:1px;border-bottom-style:solid">&nbsp;
    </TD>
    <TD width=14% align=center nowrap style="border-bottom-width:1px;border-bottom-style:solid"> (Unaudited) </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="12%" align="right">&nbsp;</TD>
    <TD width="2%" valign="top">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="12%" align="right">&nbsp;</TD>
    <TD width="2%" valign="top">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="14%" align="right">&nbsp;</TD>
    <TD width="2%" valign="top">&nbsp;</TD>
  </TR>
  <TR valign="bottom" bgcolor="#E6EFFF">
    <TD align=left> Operating expenses:&nbsp; </TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=12% align=right> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=12% align=right> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=14% align=right> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left nowrap> &nbsp; &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;Expenses paid
      or to be paid with common stock:&nbsp; </TD>
    <TD width=1% align=left>&nbsp;</TD>
    <TD width=12% align=right> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=12% align=right> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=14% align=right> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
  </TR>
  <TR valign="bottom" bgcolor="#E6EFFF">
    <TD align=left> &nbsp; &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;&nbsp;
      &nbsp;&nbsp; &nbsp;Management fees&nbsp; </TD>
    <TD width=1% align=left> &#36;</TD>
    <TD width=12% align=right> 41,754 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left> &#36;</TD>
    <TD width=12% align=right> 148,645 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left> &#36;</TD>
    <TD width=14% align=right> 190,399 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> &nbsp; &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;&nbsp;
      &nbsp;&nbsp; &nbsp;Directors fees&nbsp; </TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=12% align=right> 49,000 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=12% align=right> 7,200 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=14% align=right> 58,450 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
  </TR>
  <TR valign="bottom" bgcolor="#E6EFFF">
    <TD align=left> &nbsp; &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;&nbsp;
      &nbsp;&nbsp; &nbsp;Services&nbsp; </TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=12% align=right> 14,550 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=12% align=right> 7,262 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=14% align=right> 34,440 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> &nbsp; &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;&nbsp;
      &nbsp;&nbsp; &nbsp;Exploration&nbsp; </TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=12% align=right> 12,000 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=12% align=right> 8,000 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=14% align=right> 20,000 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
  </TR>
  <TR valign="bottom" bgcolor="#E6EFFF">
    <TD align=left> &nbsp; &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;Exploration expense&nbsp;
    </TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=12% align=right> 505,006 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=12% align=right> 102,841 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=14% align=right> 618,390 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> &nbsp; &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;General and administrative
      expenses&nbsp; </TD>
    <TD width=1% align=left style="border-bottom-width:1px;border-bottom-style:solid">&nbsp;
    </TD>
    <TD width=12% align=right style="border-bottom-width:1px;border-bottom-style:solid">
      302,908 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left style="border-bottom-width:1px;border-bottom-style:solid">&nbsp;
    </TD>
    <TD width=12% align=right style="border-bottom-width:1px;border-bottom-style:solid">
      74,138 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left style="border-bottom-width:1px;border-bottom-style:solid">&nbsp;
    </TD>
    <TD width=14% align=right style="border-bottom-width:1px;border-bottom-style:solid">
      482,264 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
  </TR>
  <TR valign="bottom" bgcolor="#E6EFFF">
    <TD align=left> &nbsp; &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;&nbsp;
      &nbsp;&nbsp; &nbsp;Total operating expenses&nbsp; </TD>
    <TD width=1% align=left style="border-bottom-width:1px;border-bottom-style:solid">&nbsp;
    </TD>
    <TD width=12% align=right style="border-bottom-width:1px;border-bottom-style:solid">
      925,218 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left style="border-bottom-width:1px;border-bottom-style:solid">&nbsp;
    </TD>
    <TD width=12% align=right style="border-bottom-width:1px;border-bottom-style:solid">
      348,086 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left style="border-bottom-width:1px;border-bottom-style:solid">&nbsp;
    </TD>
    <TD width=14% align=right style="border-bottom-width:1px;border-bottom-style:solid">
      1,403,943 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="12%" align="right">&nbsp;</TD>
    <TD width="2%" valign="top">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="12%" align="right">&nbsp;</TD>
    <TD width="2%" valign="top">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="14%" align="right">&nbsp;</TD>
    <TD width="2%" valign="top">&nbsp;</TD>
  </TR>
  <TR valign="bottom" bgcolor="#E6EFFF">
    <TD align=left> Other (income) expense:&nbsp; </TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=12% align=right> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=12% align=right> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=14% align=right> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> &nbsp; &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;Royalty and other income&nbsp;
    </TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=12% align=right> (2,663 </TD>
    <TD width=2% align=left valign="top"> )&nbsp; </TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=12% align=right> (2,762 </TD>
    <TD width=2% align=left valign="top"> )&nbsp; </TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=14% align=right> (61,817 </TD>
    <TD width=2% align=left valign="top"> )&nbsp; </TD>
  </TR>
  <TR valign="bottom" bgcolor="#E6EFFF">
    <TD align=left> &nbsp; &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;Write-off of goodwill&nbsp;
    </TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=12% align=right> - </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=12% align=right> 30,950 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=14% align=right> 30,950 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> &nbsp; &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;Write-off of investment&nbsp;
    </TD>
    <TD width=1% align=left style="border-bottom-width:1px;border-bottom-style:solid">&nbsp;
    </TD>
    <TD width=12% align=right style="border-bottom-width:1px;border-bottom-style:solid">
      - </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left style="border-bottom-width:1px;border-bottom-style:solid">&nbsp;
    </TD>
    <TD width=12% align=right style="border-bottom-width:1px;border-bottom-style:solid">
      3,000 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left style="border-bottom-width:1px;border-bottom-style:solid">&nbsp;
    </TD>
    <TD width=14% align=right style="border-bottom-width:1px;border-bottom-style:solid">
      90,000 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
  </TR>
  <TR valign="bottom" bgcolor="#E6EFFF">
    <TD align=left> &nbsp; &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;&nbsp;
      &nbsp;&nbsp; &nbsp;Total other (income) expense&nbsp; </TD>
    <TD width=1% align=left style="border-bottom-width:1px;border-bottom-style:solid">&nbsp;
    </TD>
    <TD width=12% align=right style="border-bottom-width:1px;border-bottom-style:solid">
      (2,663 </TD>
    <TD width=2% align=left valign="top"> )&nbsp; </TD>
    <TD width=1% align=left style="border-bottom-width:1px;border-bottom-style:solid">&nbsp;
    </TD>
    <TD width=12% align=right style="border-bottom-width:1px;border-bottom-style:solid">
      31,188 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left style="border-bottom-width:1px;border-bottom-style:solid">&nbsp;
    </TD>
    <TD width=14% align=right style="border-bottom-width:1px;border-bottom-style:solid">
      59,133 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="12%" align="right">&nbsp;</TD>
    <TD width="2%" valign="top">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="12%" align="right">&nbsp;</TD>
    <TD width="2%" valign="top">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="14%" align="right">&nbsp;</TD>
    <TD width="2%" valign="top">&nbsp;</TD>
  </TR>
  <TR valign="bottom" bgcolor="#E6EFFF">
    <TD align=left> <B>Net loss</B>&nbsp; </TD>
    <TD width=1% align=left style="border-bottom-width:4px;border-bottom-style:double">
      &#36;</TD>
    <TD width=12% align=right style="border-bottom-width:4px;border-bottom-style:double">
      922,555 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left style="border-bottom-width:4px;border-bottom-style:double">
      &#36;</TD>
    <TD width=12% align=right style="border-bottom-width:4px;border-bottom-style:double">
      379,274 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left style="border-bottom-width:4px;border-bottom-style:double">$</TD>
    <TD width=14% align=right style="border-bottom-width:4px;border-bottom-style:double">1,463,076</TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="12%" align="right">&nbsp;</TD>
    <TD width="2%" valign="top">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="12%" align="right">&nbsp;</TD>
    <TD width="2%" valign="top">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="14%" align="right">&nbsp;</TD>
    <TD width="2%" valign="top">&nbsp;</TD>
  </TR>
  <TR bgcolor="#E6EFFF">
    <TD>&nbsp; </TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="12%" align="right">&nbsp;</TD>
    <TD width="2%" valign="top">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="12%" align="right">&nbsp;</TD>
    <TD width="2%" valign="top">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="14%" align="right">&nbsp;</TD>
    <TD width="2%" valign="top">&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> Net loss per common share-basic&nbsp; </TD>
    <TD width=1% align=left style="border-bottom-width:4px;border-bottom-style:double">
      &#36;</TD>
    <TD width=12% align=right style="border-bottom-width:4px;border-bottom-style:double">
      0.05 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left style="border-bottom-width:4px;border-bottom-style:double">
      &#36;</TD>
    <TD width=12% align=right style="border-bottom-width:4px;border-bottom-style:double">
      0.02 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left style="border-bottom-width:4px;border-bottom-style:double">
      &#36;</TD>
    <TD width=14% align=right style="border-bottom-width:4px;border-bottom-style:double">
      0.11 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
  </TR>
  <TR bgcolor="#E6EFFF">
    <TD>&nbsp; </TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="12%" align="right">&nbsp;</TD>
    <TD width="2%" valign="top">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="12%" align="right">&nbsp;</TD>
    <TD width="2%" valign="top">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="14%" align="right">&nbsp;</TD>
    <TD width="2%" valign="top">&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> Weighted average common&nbsp; </TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=12% align=right> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=12% align=right> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=14% align=right> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
  </TR>
  <TR valign="bottom" bgcolor="#E6EFFF">
    <TD align=left> &nbsp; &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;shares outstanding-basic&nbsp;
    </TD>
    <TD width=1% align=right style="border-bottom-width:4px;border-bottom-style:double">&nbsp;
    </TD>
    <TD width=12% align=right style="border-bottom-width:4px;border-bottom-style:double">20,206,685</TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=right style="border-bottom-width:4px;border-bottom-style:double">&nbsp;
    </TD>
    <TD width=12% align=right style="border-bottom-width:4px;border-bottom-style:double">7,196,258
    </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left style="border-bottom-width:4px;border-bottom-style:double">&nbsp;
    </TD>
    <TD width="14%" align=right style="border-bottom-width:4px;border-bottom-style:double">13,690,917</TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
  </TR>
</TABLE>
<P align="center"> <I>The accompanying notes are an integral part of these financial
  statements. <br>
  </I>28</P>
<HR noshade align="center" width="100%" size=5 color="black" style="page-break-after:always;">
<A name="page_29" id="page_29"></A>
<P> <B><font size="3">New Jersey Mining Company </font></B><font size="3"><br>
  <I>(A Development Stage Company) </I></font><br>
  <B><font size="3">Statement</font></B><font size="3"><B> of Changes in Stockholders'
  Equity </B><br>
  <B>From Inception (July 18, 1996) Through December 31, 200 2
  (Unaudited) and for the Years Ended December 31, 2004 and 2003 </B></font></P>
<TABLE style="font-size:8pt;border-color:black;border-collapse:collapse;" cellpadding="0" cellspacing="0" width="100%" border="0">
  <TR valign="bottom">
    <TD align=left>&nbsp; </TD>
    <TD width=9% align=center>&nbsp; </TD>
    <TD width=2% align=center valign="top"></TD>
    <TD width=1% align=center> </TD>
    <TD width=9% align=center>&nbsp; </TD>
    <TD width=2% align=center valign="top">&nbsp;</TD>
    <TD width=1% align=center>&nbsp; </TD>
    <TD width=11% align=center> <B>Deficit</B> </TD>
    <TD width=2% align=center valign="top">&nbsp; </TD>
    <TD width=1% align=center> </TD>
    <TD width=9% align=center> </TD>
    <TD width=2% align=center valign="top">&nbsp; </TD>
    <TD width=1% align=center> </TD>
    <TD width=9% align=center> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp; </TD>
    <TD width=9% align=center>&nbsp; </TD>
    <TD width=2% align=center valign="top"></TD>
    <TD width=1% align=center> </TD>
    <TD width=9% align=center>&nbsp; </TD>
    <TD width=2% align=center valign="top">&nbsp;</TD>
    <TD width=1% align=center>&nbsp; </TD>
    <TD width=11% align=center> <B>Accumulated</B> </TD>
    <TD width=2% align=center valign="top">&nbsp; </TD>
    <TD width=1% align=center> </TD>
    <TD width=9% align=center> </TD>
    <TD width=2% align=center valign="top">&nbsp; </TD>
    <TD width=1% align=center> </TD>
    <TD width=9% align=center> <B>Total</B> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp; </TD>
    <TD colspan="4" align=center style="border-bottom-width:1px;border-bottom-style:solid"> <B>Common Stock</B>&nbsp; </TD>
    <TD width=2% align=center valign="top">&nbsp;</TD>
    <TD width=1% align=center>&nbsp; </TD>
    <TD width=11% align=center> <B>During the</B> </TD>
    <TD width=2% align=center valign="top">&nbsp; </TD>
    <TD width=1% align=center> </TD>
    <TD width=9% align=center> <B>Treasury</B> </TD>
    <TD width=2% align=center valign="top">&nbsp; </TD>
    <TD width=1% align=center> </TD>
    <TD width=9% align=center> <B>Stockholders'</B> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp; </TD>
    <TD width=9% align=center style="border-bottom-width:1px;border-bottom-style:solid"> <B>Shares</B>&nbsp; </TD>
    <TD width=2% align=center valign="top"></TD>
    <TD width=1% align=center style="border-bottom-width:1px;border-bottom-style:solid"> </TD>
    <TD width=9% align=center style="border-bottom-width:1px;border-bottom-style:solid"> <B>Amount</B>&nbsp; </TD>
    <TD width=2% align=center valign="top">&nbsp;</TD>
    <TD width=1% align=center style="border-bottom-width:1px;border-bottom-style:solid">&nbsp; </TD>
    <TD width=11% align=center nowrap style="border-bottom-width:1px;border-bottom-style:solid">
      <B>Development Stage</B></TD>
    <TD width=2% align=center valign="top">&nbsp; </TD>
    <TD width=1% align=center style="border-bottom-width:1px;border-bottom-style:solid"> </TD>
    <TD width=9% align=center style="border-bottom-width:1px;border-bottom-style:solid"> <B>Stock</B> </TD>
    <TD width=2% align=center valign="top">&nbsp; </TD>
    <TD width=1% align=center style="border-bottom-width:1px;border-bottom-style:solid"> </TD>
    <TD width=9% align=center style="border-bottom-width:1px;border-bottom-style:solid"> <B>Equity</B> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
  </TR>
  <TR valign="bottom" bgcolor="#E6EFFF">
    <TD align=left> Issuance of common stock for:&nbsp; </TD>
    <TD width=9% align=right>&nbsp; </TD>
    <TD width=2% align=left valign="top"></TD>
    <TD width=1% align=left> </TD>
    <TD width=9% align=right>&nbsp; </TD>
    <TD width=2% align=left valign="top">&nbsp;</TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=11% align=right> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left> </TD>
    <TD width=9% align=right> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left> </TD>
    <TD width=9% align=right> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left nowrap> &nbsp; &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;Assets and liabilities
      of New Jersey Joint Venture&nbsp; </TD>
    <TD width=9% align=right> 10,000,000&nbsp; </TD>
    <TD width=2% align=left valign="top">&nbsp;</TD>
    <TD width=1% align=left> &#36;</TD>
    <TD width=9% align=right> 207,968&nbsp; </TD>
    <TD width=2% align=left valign="top">&nbsp;</TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=11% align=right> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left> </TD>
    <TD width=9% align=right> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left> &#36;</TD>
    <TD width=9% align=right> 207,968 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
  </TR>
  <TR valign="bottom" bgcolor="#E6EFFF">
    <TD align=left> &nbsp; &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;Acquisition of Plainview
      Mining Company&nbsp; </TD>
    <TD width=9% align=right> 1,487,748&nbsp; </TD>
    <TD width=2% align=left valign="top"></TD>
    <TD width=1% align=left> </TD>
    <TD width=9% align=right> 148,000&nbsp; </TD>
    <TD width=2% align=left valign="top">&nbsp;</TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=11% align=right> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left> </TD>
    <TD width=9% align=right> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left> </TD>
    <TD width=9% align=right> 148,000 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> &nbsp; &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;Cash from sales&nbsp;
    </TD>
    <TD width=9% align=right> 228,816&nbsp; </TD>
    <TD width=2% align=left valign="top"></TD>
    <TD width=1% align=left> </TD>
    <TD width=9% align=right> 110,115&nbsp; </TD>
    <TD width=2% align=left valign="top">&nbsp;</TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=11% align=right> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left> </TD>
    <TD width=9% align=right> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left> </TD>
    <TD width=9% align=right> 110,115 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
  </TR>
  <TR valign="bottom" bgcolor="#E6EFFF">
    <TD align=left> &nbsp; &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;Services&nbsp; </TD>
    <TD width=9% align=right> 14,000&nbsp; </TD>
    <TD width=2% align=left valign="top"></TD>
    <TD width=1% align=left> </TD>
    <TD width=9% align=right> -&nbsp; </TD>
    <TD width=2% align=left valign="top">&nbsp;</TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=11% align=right> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left> </TD>
    <TD width=9% align=right> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left> </TD>
    <TD width=9% align=right> &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;
      &nbsp; &nbsp; &nbsp;- </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> Net loss&nbsp; </TD>
    <TD width=9% align=right style="border-bottom-width:1px;border-bottom-style:solid">&nbsp; </TD>
    <TD width=2% align=left valign="top"></TD>
    <TD width=1% align=left style="border-bottom-width:1px;border-bottom-style:solid"> </TD>
    <TD width=9% align=right style="border-bottom-width:1px;border-bottom-style:solid">&nbsp; </TD>
    <TD width=2% align=left valign="top">&nbsp;</TD>
    <TD width=1% align=left style="border-bottom-width:1px;border-bottom-style:solid">&#36;</TD>
    <TD width=11% align=right style="border-bottom-width:1px;border-bottom-style:solid"> (44,174 </TD>
    <TD width=2% align=left valign="top"> )&nbsp; </TD>
    <TD width=1% align=left style="border-bottom-width:1px;border-bottom-style:solid"> </TD>
    <TD width=9% align=right style="border-bottom-width:1px;border-bottom-style:solid"> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left style="border-bottom-width:1px;border-bottom-style:solid"> </TD>
    <TD width=9% align=right style="border-bottom-width:1px;border-bottom-style:solid"> (44,174 </TD>
    <TD width=2% align=left valign="top"> )&nbsp; </TD>
  </TR>
  <TR valign="bottom" bgcolor="#E6EFFF">
    <TD align=left> Balance, December 31, 1997&nbsp; </TD>
    <TD width=9% align=right> 11,730,564&nbsp; </TD>
    <TD width=2% align=left valign="top"></TD>
    <TD width=1% align=left> </TD>
    <TD width=9% align=right> 466,083&nbsp; </TD>
    <TD width=2% align=left valign="top">&nbsp;</TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=11% align=right> (44,174 </TD>
    <TD width=2% align=left valign="top"> )&nbsp; </TD>
    <TD width=1% align=left> </TD>
    <TD width=9% align=right> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left> </TD>
    <TD width=9% align=right> 421,909 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> Issuance of common stock for:&nbsp; </TD>
    <TD width=9% align=right>&nbsp; </TD>
    <TD width=2% align=left valign="top"></TD>
    <TD width=1% align=left> </TD>
    <TD width=9% align=right>&nbsp; </TD>
    <TD width=2% align=left valign="top">&nbsp;</TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=11% align=right> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left> </TD>
    <TD width=9% align=right> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left> </TD>
    <TD width=9% align=right> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
  </TR>
  <TR valign="bottom" bgcolor="#E6EFFF">
    <TD align=left> &nbsp; &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;Acquisition of Plainview
      Mining Company&nbsp; </TD>
    <TD width=9% align=right> 1,512,252&nbsp; </TD>
    <TD width=2% align=left valign="top"></TD>
    <TD width=1% align=left> </TD>
    <TD width=9% align=right> 152,000&nbsp; </TD>
    <TD width=2% align=left valign="top">&nbsp;</TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=11% align=right> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left> </TD>
    <TD width=9% align=right> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left> </TD>
    <TD width=9% align=right> 152,000 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> &nbsp; &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;Cash from sales&nbsp;
    </TD>
    <TD width=9% align=right> 117,218&nbsp; </TD>
    <TD width=2% align=left valign="top"></TD>
    <TD width=1% align=left> </TD>
    <TD width=9% align=right> 29,753&nbsp; </TD>
    <TD width=2% align=left valign="top">&nbsp;</TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=11% align=right> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left> </TD>
    <TD width=9% align=right> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left> </TD>
    <TD width=9% align=right> 29,753 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
  </TR>
  <TR valign="bottom" bgcolor="#E6EFFF">
    <TD align=left> &nbsp; &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;Services&nbsp; </TD>
    <TD width=9% align=right> 18,000&nbsp; </TD>
    <TD width=2% align=left valign="top"></TD>
    <TD width=1% align=left> </TD>
    <TD width=9% align=right> -&nbsp; </TD>
    <TD width=2% align=left valign="top">&nbsp;</TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=11% align=right> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left> </TD>
    <TD width=9% align=right> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left> </TD>
    <TD width=9% align=right> &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;
      &nbsp; &nbsp; &nbsp;- </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> Treasury stock acquired with Plainview acquisition&nbsp; </TD>
    <TD width=9% align=right>&nbsp; </TD>
    <TD width=2% align=left valign="top"></TD>
    <TD width=1% align=left> </TD>
    <TD width=9% align=right>&nbsp; </TD>
    <TD width=2% align=left valign="top">&nbsp;</TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=11% align=right> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left> &#36;</TD>
    <TD width=9% align=right> (136,300 </TD>
    <TD width=2% align=left valign="top"> )&nbsp; </TD>
    <TD width=1% align=left> </TD>
    <TD width=9% align=right> (136,300 </TD>
    <TD width=2% align=left valign="top"> )&nbsp; </TD>
  </TR>
  <TR valign="bottom" bgcolor="#E6EFFF">
    <TD align=left> Net loss&nbsp; </TD>
    <TD width=9% align=right style="border-bottom-width:1px;border-bottom-style:solid">&nbsp; </TD>
    <TD width=2% align=left valign="top"></TD>
    <TD width=1% align=left style="border-bottom-width:1px;border-bottom-style:solid"> </TD>
    <TD width=9% align=right style="border-bottom-width:1px;border-bottom-style:solid">&nbsp; </TD>
    <TD width=2% align=left valign="top">&nbsp;</TD>
    <TD width=1% align=left style="border-bottom-width:1px;border-bottom-style:solid">&nbsp; </TD>
    <TD width=11% align=right style="border-bottom-width:1px;border-bottom-style:solid"> (30,705 </TD>
    <TD width=2% align=left valign="top"> )&nbsp; </TD>
    <TD width=1% align=left style="border-bottom-width:1px;border-bottom-style:solid"> </TD>
    <TD width=9% align=right style="border-bottom-width:1px;border-bottom-style:solid"> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left style="border-bottom-width:1px;border-bottom-style:solid"> </TD>
    <TD width=9% align=right style="border-bottom-width:1px;border-bottom-style:solid"> (30,705 </TD>
    <TD width=2% align=left valign="top"> )&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> Balance, December 31, 1998&nbsp; </TD>
    <TD width=9% align=right> 13,378,034&nbsp; </TD>
    <TD width=2% align=left valign="top"></TD>
    <TD width=1% align=left> </TD>
    <TD width=9% align=right> 647,836&nbsp; </TD>
    <TD width=2% align=left valign="top">&nbsp;</TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=11% align=right> (74,879 </TD>
    <TD width=2% align=left valign="top"> )&nbsp; </TD>
    <TD width=1% align=left> </TD>
    <TD width=9% align=right> (136,300 </TD>
    <TD width=2% align=left valign="top"> )&nbsp; </TD>
    <TD width=1% align=left> </TD>
    <TD width=9% align=right> 436,657 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
  </TR>
  <TR valign="bottom" bgcolor="#E6EFFF">
    <TD align=left> Issuance of common stock for services&nbsp; </TD>
    <TD width=9% align=right> 79,300&nbsp; </TD>
    <TD width=2% align=left valign="top"></TD>
    <TD width=1% align=left> </TD>
    <TD width=9% align=right> -&nbsp; </TD>
    <TD width=2% align=left valign="top">&nbsp;</TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=11% align=right> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left> </TD>
    <TD width=9% align=right> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left> </TD>
    <TD width=9% align=right> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> Net loss&nbsp; </TD>
    <TD width=9% align=right style="border-bottom-width:1px;border-bottom-style:solid">&nbsp; </TD>
    <TD width=2% align=left valign="top"></TD>
    <TD width=1% align=left style="border-bottom-width:1px;border-bottom-style:solid"> </TD>
    <TD width=9% align=right style="border-bottom-width:1px;border-bottom-style:solid">&nbsp; </TD>
    <TD width=2% align=left valign="top">&nbsp;</TD>
    <TD width=1% align=left style="border-bottom-width:1px;border-bottom-style:solid">&nbsp; </TD>
    <TD width=11% align=right style="border-bottom-width:1px;border-bottom-style:solid"> (23,738 </TD>
    <TD width=2% align=left valign="top"> )&nbsp; </TD>
    <TD width=1% align=left style="border-bottom-width:1px;border-bottom-style:solid"> </TD>
    <TD width=9% align=right style="border-bottom-width:1px;border-bottom-style:solid"> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left style="border-bottom-width:1px;border-bottom-style:solid"> </TD>
    <TD width=9% align=right style="border-bottom-width:1px;border-bottom-style:solid"> (23,738 </TD>
    <TD width=2% align=left valign="top"> )&nbsp; </TD>
  </TR>
  <TR valign="bottom" bgcolor="#E6EFFF">
    <TD align=left> Balance, December 31, 1999&nbsp; </TD>
    <TD width=9% align=right> 13,457,334&nbsp; </TD>
    <TD width=2% align=left valign="top"></TD>
    <TD width=1% align=left> </TD>
    <TD width=9% align=right> 647,836&nbsp; </TD>
    <TD width=2% align=left valign="top">&nbsp;</TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=11% align=right> (98,617 </TD>
    <TD width=2% align=left valign="top"> )&nbsp; </TD>
    <TD width=1% align=left> </TD>
    <TD width=9% align=right> (136,300 </TD>
    <TD width=2% align=left valign="top"> )&nbsp; </TD>
    <TD width=1% align=left> </TD>
    <TD width=9% align=right> 412,919 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> Issuance of common stock for:&nbsp; </TD>
    <TD width=9% align=right>&nbsp; </TD>
    <TD width=2% align=left valign="top"></TD>
    <TD width=1% align=left> </TD>
    <TD width=9% align=right>&nbsp; </TD>
    <TD width=2% align=left valign="top">&nbsp;</TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=11% align=right> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left> </TD>
    <TD width=9% align=right> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left> </TD>
    <TD width=9% align=right> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
  </TR>
  <TR valign="bottom" bgcolor="#E6EFFF">
    <TD align=left> &nbsp; &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;Silver Strand property&nbsp;
    </TD>
    <TD width=9% align=right> 50,000&nbsp; </TD>
    <TD width=2% align=left valign="top"></TD>
    <TD width=1% align=left> </TD>
    <TD width=9% align=right> 68,750&nbsp; </TD>
    <TD width=2% align=left valign="top">&nbsp;</TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=11% align=right> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left> </TD>
    <TD width=9% align=right> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left> </TD>
    <TD width=9% align=right> 68,750 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> &nbsp; &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;Services&nbsp; </TD>
    <TD width=9% align=right> 62,100&nbsp; </TD>
    <TD width=2% align=left valign="top"></TD>
    <TD width=1% align=left> </TD>
    <TD width=9% align=right> 4,313&nbsp; </TD>
    <TD width=2% align=left valign="top">&nbsp;</TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=11% align=right> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left> </TD>
    <TD width=9% align=right> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left> </TD>
    <TD width=9% align=right> 4,313 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
  </TR>
  <TR valign="bottom" bgcolor="#E6EFFF">
    <TD align=left> Net loss&nbsp; </TD>
    <TD width=9% align=right style="border-bottom-width:1px;border-bottom-style:solid">&nbsp; </TD>
    <TD width=2% align=left valign="top"></TD>
    <TD width=1% align=left style="border-bottom-width:1px;border-bottom-style:solid"> </TD>
    <TD width=9% align=right style="border-bottom-width:1px;border-bottom-style:solid">&nbsp; </TD>
    <TD width=2% align=left valign="top">&nbsp;</TD>
    <TD width=1% align=left style="border-bottom-width:1px;border-bottom-style:solid">&nbsp; </TD>
    <TD width=11% align=right style="border-bottom-width:1px;border-bottom-style:solid"> (20,492 </TD>
    <TD width=2% align=left valign="top"> )&nbsp; </TD>
    <TD width=1% align=left style="border-bottom-width:1px;border-bottom-style:solid"> </TD>
    <TD width=9% align=right style="border-bottom-width:1px;border-bottom-style:solid"> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left style="border-bottom-width:1px;border-bottom-style:solid"> </TD>
    <TD width=9% align=right style="border-bottom-width:1px;border-bottom-style:solid"> (20,492 </TD>
    <TD width=2% align=left valign="top"> )&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> Balance at December 31, 2000&nbsp; </TD>
    <TD width=9% align=right> 13,569,434&nbsp; </TD>
    <TD width=2% align=left valign="top"></TD>
    <TD width=1% align=left> </TD>
    <TD width=9% align=right> 720,899&nbsp; </TD>
    <TD width=2% align=left valign="top">&nbsp;</TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=11% align=right> (119,109 </TD>
    <TD width=2% align=left valign="top"> )&nbsp; </TD>
    <TD width=1% align=left> </TD>
    <TD width=9% align=right> (136,300 </TD>
    <TD width=2% align=left valign="top"> )&nbsp; </TD>
    <TD width=1% align=left> </TD>
    <TD width=9% align=right> 465,490 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
  </TR>
  <TR valign="bottom" bgcolor="#E6EFFF">
    <TD align=left> Issuance of common stock for:&nbsp; </TD>
    <TD width=9% align=right>&nbsp; </TD>
    <TD width=2% align=left valign="top"></TD>
    <TD width=1% align=left> </TD>
    <TD width=9% align=right>&nbsp; </TD>
    <TD width=2% align=left valign="top">&nbsp;</TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=11% align=right> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left> </TD>
    <TD width=9% align=right> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left> </TD>
    <TD width=9% align=right> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> &nbsp; &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;Grenfel lease&nbsp;
    </TD>
    <TD width=9% align=right> 1,000,000&nbsp; </TD>
    <TD width=2% align=left valign="top"></TD>
    <TD width=1% align=left> </TD>
    <TD width=9% align=right> 100,000&nbsp; </TD>
    <TD width=2% align=left valign="top">&nbsp;</TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=11% align=right> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left> </TD>
    <TD width=9% align=right> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left> </TD>
    <TD width=9% align=right> 100,000 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
  </TR>
  <TR valign="bottom" bgcolor="#E6EFFF">
    <TD align=left> &nbsp; &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;Lost Eagle property&nbsp;
    </TD>
    <TD width=9% align=right> 50,000&nbsp; </TD>
    <TD width=2% align=left valign="top"></TD>
    <TD width=1% align=left> </TD>
    <TD width=9% align=right> 5,000&nbsp; </TD>
    <TD width=2% align=left valign="top">&nbsp;</TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=11% align=right> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left> </TD>
    <TD width=9% align=right> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left> </TD>
    <TD width=9% align=right> 5,000 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> &nbsp; &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;Roughwater property&nbsp;
    </TD>
    <TD width=9% align=right> 255,000&nbsp; </TD>
    <TD width=2% align=left valign="top"></TD>
    <TD width=1% align=left> </TD>
    <TD width=9% align=right> 25,500&nbsp; </TD>
    <TD width=2% align=left valign="top">&nbsp;</TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=11% align=right> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left> </TD>
    <TD width=9% align=right> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left> </TD>
    <TD width=9% align=right> 25,500 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
  </TR>
  <TR valign="bottom" bgcolor="#E6EFFF">
    <TD align=left> &nbsp; &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;Services&nbsp; </TD>
    <TD width=9% align=right> 68,400&nbsp; </TD>
    <TD width=2% align=left valign="top"></TD>
    <TD width=1% align=left> </TD>
    <TD width=9% align=right> 6,840&nbsp; </TD>
    <TD width=2% align=left valign="top">&nbsp;</TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=11% align=right> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left> </TD>
    <TD width=9% align=right> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left> </TD>
    <TD width=9% align=right> 6,840 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> Net loss&nbsp; </TD>
    <TD width=9% align=right style="border-bottom-width:1px;border-bottom-style:solid">&nbsp; </TD>
    <TD width=2% align=left valign="top"></TD>
    <TD width=1% align=left style="border-bottom-width:1px;border-bottom-style:solid"> </TD>
    <TD width=9% align=right style="border-bottom-width:1px;border-bottom-style:solid">&nbsp; </TD>
    <TD width=2% align=left valign="top">&nbsp;</TD>
    <TD width=1% align=left style="border-bottom-width:1px;border-bottom-style:solid"> $</TD>
    <TD width=11% align=right style="border-bottom-width:1px;border-bottom-style:solid"> (6,448 </TD>
    <TD width=2% align=left valign="top"> )&nbsp; </TD>
    <TD width=1% align=left style="border-bottom-width:1px;border-bottom-style:solid"> </TD>
    <TD width=9% align=right style="border-bottom-width:1px;border-bottom-style:solid"> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left style="border-bottom-width:1px;border-bottom-style:solid"> </TD>
    <TD width=9% align=right style="border-bottom-width:1px;border-bottom-style:solid"> (6,448 </TD>
    <TD width=2% align=left valign="top"> )&nbsp; </TD>
  </TR>
  <TR valign="bottom" bgcolor="#E6EFFF">
    <TD align=left> Balance, December 31, 2001&nbsp; </TD>
    <TD width=9% align=right> 14,942,834&nbsp; </TD>
    <TD width=2% align=left valign="top"></TD>
    <TD width=1% align=left> </TD>
    <TD width=9% align=right> 858,239&nbsp; </TD>
    <TD width=2% align=left valign="top">&nbsp;</TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=11% align=right> (125,557 </TD>
    <TD width=2% align=left valign="top"> )&nbsp; </TD>
    <TD width=1% align=left> </TD>
    <TD width=9% align=right> (136,300 </TD>
    <TD width=2% align=left valign="top"> )&nbsp; </TD>
    <TD width=1% align=left> </TD>
    <TD width=9% align=right> 596,382 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
  </TR>
</TABLE>
<P align="center"> <I>The </I><I>accompanying</I><I> notes are an </I><I>integral</I><I>
  part of these </I><I>financial</I><I> </I><I>statements.</I><I> <br>
  </I>29</P>
<HR noshade align="center" width="100%" size=5 color="black" style="page-break-after:always;">
<A name="page_30" id="page_30"></A>
<P> <B><font size="3">New Jersey Mining Company </font></B><font size="3"><br>
  <I>(A Development Stage Company) </I><br>
  <B>Statement of Changes in Stockholders' Equity, continued: <br>
  From Inception (July 18, 1996) Through December 31, 200 2
  (Unaudited) and for the Years Ended December 31, 2004 and 2003 </B></font></P>
<TABLE style="font-size:8pt;border-color:black;border-collapse:collapse;" cellpadding="0" cellspacing="0" width="100%" border="0">
  <TR valign="bottom">
    <TD align=left>&nbsp; </TD>
    <TD width=9% align=center> </TD>
    <TD width=2% align=center valign="top">&nbsp; </TD>
    <TD width=1% align=center> </TD>
    <TD width=9% align=center>&nbsp; </TD>
    <TD width=2% align=center valign="top">&nbsp; </TD>
    <TD width=1% align=center> </TD>
    <TD width=11% align=center> <B>Deficit</B> </TD>
    <TD width=2% align=center valign="top">&nbsp; </TD>
    <TD width=1% align=center>&nbsp;</TD>
    <TD width=9% align=center> </TD>
    <TD width=2% align=center valign="top">&nbsp; </TD>
    <TD width=1% align=center> </TD>
    <TD width=9% align=center> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp; </TD>
    <TD width=9% align=center> </TD>
    <TD width=2% align=center valign="top">&nbsp; </TD>
    <TD width=1% align=center> </TD>
    <TD width=9% align=center>&nbsp; </TD>
    <TD width=2% align=center valign="top">&nbsp; </TD>
    <TD width=1% align=center> </TD>
    <TD width=11% align=center> <B>Accumulated</B> </TD>
    <TD width=2% align=center valign="top">&nbsp; </TD>
    <TD width=1% align=center>&nbsp;</TD>
    <TD width=9% align=center> </TD>
    <TD width=2% align=center valign="top">&nbsp; </TD>
    <TD width=1% align=center> </TD>
    <TD width=9% align=center> <B>Total</B> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp; </TD>
    <TD colspan=4 align=center style="border-bottom-width:1px;border-bottom-style:solid"> <B>Common Stock</B>&nbsp; </TD>
    <TD width=2% align=center valign="top">&nbsp; </TD>
    <TD width=1% align=center> </TD>
    <TD width=11% align=center> <B>During the</B> </TD>
    <TD width=2% align=center valign="top">&nbsp; </TD>
    <TD width=1% align=center>&nbsp;</TD>
    <TD width=9% align=center> <B>Treasury</B> </TD>
    <TD width=2% align=center valign="top">&nbsp; </TD>
    <TD width=1% align=center> </TD>
    <TD width=9% align=center> <B>Stockholders'</B> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp; </TD>
    <TD width=9% align=center style="border-bottom-width:1px;border-bottom-style:solid"> <B>Shares</B> </TD>
    <TD width=2% align=center valign="top">&nbsp; </TD>
    <TD width=1% align=center style="border-bottom-width:1px;border-bottom-style:solid"> </TD>
    <TD width=9% align=center style="border-bottom-width:1px;border-bottom-style:solid"> <B>Amount</B>&nbsp; </TD>
    <TD width=2% align=center valign="top">&nbsp;</TD>
    <TD width=1% align=center style="border-bottom-width:1px;border-bottom-style:solid">&nbsp;</TD>
    <TD width=11% align=center nowrap style="border-bottom-width:1px;border-bottom-style:solid"><B>Development
      Stage</B> </TD>
    <TD width=2% align=center valign="top">&nbsp; </TD>
    <TD width=1% align=center style="border-bottom-width:1px;border-bottom-style:solid">&nbsp;</TD>
    <TD width=9% align=center style="border-bottom-width:1px;border-bottom-style:solid"> <B>Stock</B> </TD>
    <TD width=2% align=center valign="top">&nbsp; </TD>
    <TD width=1% align=center style="border-bottom-width:1px;border-bottom-style:solid"> </TD>
    <TD width=9% align=center style="border-bottom-width:1px;border-bottom-style:solid"> <B>Equity</B> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
  </TR>
  <TR valign="bottom" bgcolor="#E6EFFF">
    <TD align=left> Issuance of common stock for:&nbsp; </TD>
    <TD width=9% align=right> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left> </TD>
    <TD width=9% align=right>&nbsp; </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left> </TD>
    <TD width=11% align=right> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left>&nbsp;</TD>
    <TD width=9% align=right> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left> </TD>
    <TD width=9% align=right> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> &nbsp; &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;Cash from sales&nbsp;
    </TD>
    <TD width=9% align=right> 1,700,000 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left> </TD>
    <TD width=9% align=right> 255,000 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left> </TD>
    <TD width=11% align=right> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left>&nbsp;</TD>
    <TD width=9% align=right> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left> </TD>
    <TD width=9% align=right> 255,000 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
  </TR>
  <TR valign="bottom" bgcolor="#E6EFFF">
    <TD align=left> &nbsp; &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;Services&nbsp; </TD>
    <TD width=9% align=right> 9,835 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left> </TD>
    <TD width=9% align=right> 1,475 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left> </TD>
    <TD width=11% align=right> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left>&nbsp;</TD>
    <TD width=9% align=right> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left> </TD>
    <TD width=9% align=right> 1,475 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> &nbsp; &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;Directors fees&nbsp;
    </TD>
    <TD width=9% align=right> 15,000 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left> </TD>
    <TD width=9% align=right> 2,250 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left> </TD>
    <TD width=11% align=right> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left>&nbsp;</TD>
    <TD width=9% align=right> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left> </TD>
    <TD width=9% align=right> 2,250 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
  </TR>
  <TR valign="bottom" bgcolor="#E6EFFF">
    <TD align=left nowrap> &nbsp; &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;Acquisition
      of Gold Run Gulch Mining Company&nbsp; </TD>
    <TD width=9% align=right> 1,916,250 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left> </TD>
    <TD width=9% align=right> 273,954 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left> </TD>
    <TD width=11% align=right> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left>&nbsp;</TD>
    <TD width=9% align=right> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left> </TD>
    <TD width=9% align=right> 273,954 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> Net loss, as previously reported&nbsp; </TD>
    <TD width=9% align=right style="border-bottom-width:1px;border-bottom-style:solid"> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left style="border-bottom-width:1px;border-bottom-style:solid"> </TD>
    <TD width=9% align=right style="border-bottom-width:1px;border-bottom-style:solid">&nbsp; </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left style="border-bottom-width:1px;border-bottom-style:solid"> </TD>
    <TD width=11% align=right style="border-bottom-width:1px;border-bottom-style:solid"> (51,307 </TD>
    <TD width=2% align=left valign="top"> )&nbsp; </TD>
    <TD width=1% align=left style="border-bottom-width:1px;border-bottom-style:solid">&nbsp;</TD>
    <TD width=9% align=right style="border-bottom-width:1px;border-bottom-style:solid"> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left style="border-bottom-width:1px;border-bottom-style:solid"> </TD>
    <TD width=9% align=right style="border-bottom-width:1px;border-bottom-style:solid"> (51,307 </TD>
    <TD width=2% align=left valign="top"> )&nbsp; </TD>
  </TR>
  <TR valign="bottom" bgcolor="#E6EFFF">
    <TD align=left> Balance, December 31, 2002, as previously reported&nbsp; </TD>
    <TD width=9% align=right> 18,583,919 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left> </TD>
    <TD width=9% align=right> 1,390,918 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left> </TD>
    <TD width=11% align=right> (176,864 </TD>
    <TD width=2% align=left valign="top"> )&nbsp; </TD>
    <TD width=1% align=left>&nbsp;</TD>
    <TD width=9% align=right> (136,300 </TD>
    <TD width=2% align=left valign="top"> )&nbsp; </TD>
    <TD width=1% align=left> </TD>
    <TD width=9% align=right> 1,077,754 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> Change in accounting for exploration costs&nbsp; </TD>
    <TD width=9% align=right> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left> </TD>
    <TD width=9% align=right>&nbsp; </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left> </TD>
    <TD width=11% align=right> (9,883 </TD>
    <TD width=2% align=left valign="top"> )&nbsp; </TD>
    <TD width=1% align=left>&nbsp;</TD>
    <TD width=9% align=right> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left> </TD>
    <TD width=9% align=right> (9,883 </TD>
    <TD width=2% align=left valign="top"> )&nbsp; </TD>
  </TR>
  <TR valign="bottom" bgcolor="#E6EFFF">
    <TD align=left> Correction of error in accounting for stock issuance costs&nbsp;
    </TD>
    <TD width=9% align=right style="border-bottom-width:1px;border-bottom-style:solid"> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left style="border-bottom-width:1px;border-bottom-style:solid"> </TD>
    <TD width=9% align=right style="border-bottom-width:1px;border-bottom-style:solid"> (25,500 </TD>
    <TD width=2% align=left valign="top"> )&nbsp; </TD>
    <TD width=1% align=left style="border-bottom-width:1px;border-bottom-style:solid"> </TD>
    <TD width=11% align=right style="border-bottom-width:1px;border-bottom-style:solid"> 25,500 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left style="border-bottom-width:1px;border-bottom-style:solid">&nbsp;</TD>
    <TD width=9% align=right style="border-bottom-width:1px;border-bottom-style:solid"> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left style="border-bottom-width:1px;border-bottom-style:solid"> </TD>
    <TD width=9% align=right style="border-bottom-width:1px;border-bottom-style:solid"> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> Balance, December 31, 2002, restated&nbsp; </TD>
    <TD width=9% align=right> 18,583,919 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left> </TD>
    <TD width=9% align=right> 1,365,418 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left> </TD>
    <TD width=11% align=right> (161,247 </TD>
    <TD width=2% align=left valign="top"> )&nbsp; </TD>
    <TD width=1% align=left>&nbsp;</TD>
    <TD width=9% align=right> (136,300 </TD>
    <TD width=2% align=left valign="top"> )&nbsp; </TD>
    <TD width=1% align=left> </TD>
    <TD width=9% align=right> 1,067,871 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
  </TR>
  <TR valign="bottom" bgcolor="#E6EFFF">
    <TD align=left> Issuance of common stock for:&nbsp; </TD>
    <TD width=9% align=right> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left> </TD>
    <TD width=9% align=right>&nbsp; </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left> </TD>
    <TD width=11% align=right> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left>&nbsp;</TD>
    <TD width=9% align=right> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left> </TD>
    <TD width=9% align=right> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> &nbsp; &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;Cash from exercise
      of stock purchase warrants&nbsp; </TD>
    <TD width=9% align=right> 810,000 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left> </TD>
    <TD width=9% align=right> 200,750 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left> </TD>
    <TD width=11% align=right> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left>&nbsp;</TD>
    <TD width=9% align=right> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left> </TD>
    <TD width=9% align=right> 200,750 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
  </TR>
  <TR valign="bottom" bgcolor="#E6EFFF">
    <TD align=left> &nbsp; &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;Cash from sales, net
      of issuance costs&nbsp; </TD>
    <TD width=9% align=right> 795,000 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left> </TD>
    <TD width=9% align=right> 318,000 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left> </TD>
    <TD width=11% align=right> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left>&nbsp;</TD>
    <TD width=9% align=right> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left> </TD>
    <TD width=9% align=right> 318,000 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> &nbsp; &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;Management fees&nbsp;
    </TD>
    <TD width=9% align=right> 363,200 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left> </TD>
    <TD width=9% align=right> 137,126 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left> </TD>
    <TD width=11% align=right> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left>&nbsp;</TD>
    <TD width=9% align=right> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left> </TD>
    <TD width=9% align=right> 137,126 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
  </TR>
  <TR valign="bottom" bgcolor="#E6EFFF">
    <TD align=left> &nbsp; &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;Directors fees&nbsp;
    </TD>
    <TD width=9% align=right> 18,000 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left> </TD>
    <TD width=9% align=right> 7,200 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left> </TD>
    <TD width=11% align=right> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left>&nbsp;</TD>
    <TD width=9% align=right> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left> </TD>
    <TD width=9% align=right> 7,200 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> &nbsp; &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;Equipment&nbsp; </TD>
    <TD width=9% align=right> 5,000 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left> </TD>
    <TD width=9% align=right> 3,000 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left> </TD>
    <TD width=11% align=right> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left>&nbsp;</TD>
    <TD width=9% align=right> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left> </TD>
    <TD width=9% align=right> 3,000 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
  </TR>
  <TR valign="bottom" bgcolor="#E6EFFF">
    <TD align=left> &nbsp; &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;Services&nbsp; </TD>
    <TD width=9% align=right> 21,915 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left> </TD>
    <TD width=9% align=right> 7,262 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left> </TD>
    <TD width=11% align=right> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left>&nbsp;</TD>
    <TD width=9% align=right> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left> </TD>
    <TD width=9% align=right> 7,262 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> &nbsp; &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;Exploration lease&nbsp;
    </TD>
    <TD width=9% align=right> 20,000 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left> </TD>
    <TD width=9% align=right> 8,000 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left> </TD>
    <TD width=11% align=right> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left>&nbsp;</TD>
    <TD width=9% align=right> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left> </TD>
    <TD width=9% align=right> 8,000 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
  </TR>
  <TR valign="bottom" bgcolor="#E6EFFF">
    <TD align=left> Treasury stock cancelled&nbsp; </TD>
    <TD width=9% align=right> (1,947,144 </TD>
    <TD width=2% align=left valign="top"> )&nbsp; </TD>
    <TD width=1% align=left> </TD>
    <TD width=9% align=right> (136,300 </TD>
    <TD width=2% align=left valign="top"> )&nbsp; </TD>
    <TD width=1% align=left> </TD>
    <TD width=11% align=right> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left>&nbsp;</TD>
    <TD width=9% align=right> 136,300 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left> </TD>
    <TD width=9% align=right> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> Net loss&nbsp; </TD>
    <TD width=9% align=right style="border-bottom-width:1px;border-bottom-style:solid"> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left style="border-bottom-width:1px;border-bottom-style:solid"> </TD>
    <TD width=9% align=right style="border-bottom-width:1px;border-bottom-style:solid">&nbsp; </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left style="border-bottom-width:1px;border-bottom-style:solid"> </TD>
    <TD width=11% align=right style="border-bottom-width:1px;border-bottom-style:solid"> (379,274 </TD>
    <TD width=2% align=left valign="top"> )&nbsp; </TD>
    <TD width=1% align=left style="border-bottom-width:1px;border-bottom-style:solid">&nbsp;</TD>
    <TD width=9% align=right style="border-bottom-width:1px;border-bottom-style:solid"> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left style="border-bottom-width:1px;border-bottom-style:solid"> </TD>
    <TD width=9% align=right style="border-bottom-width:1px;border-bottom-style:solid"> (379,274 </TD>
    <TD width=2% align=left valign="top"> )&nbsp; </TD>
  </TR>
  <TR valign="bottom" bgcolor="#E6EFFF">
    <TD align=left> Balance, December 31, 2003&nbsp; </TD>
    <TD width=9% align=right> 18,669,890 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left> </TD>
    <TD width=9% align=right> 1,910,456 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left> </TD>
    <TD width=11% align=right> (540,521 </TD>
    <TD width=2% align=left valign="top"> )&nbsp; </TD>
    <TD width=1% align=left>&nbsp;</TD>
    <TD width=9% align=right> 0 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left> </TD>
    <TD width=9% align=right> 1,369,935 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> Issuance of common stock for:&nbsp; </TD>
    <TD width=9% align=right> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left> </TD>
    <TD width=9% align=right>&nbsp; </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left> </TD>
    <TD width=11% align=right> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left>&nbsp;</TD>
    <TD width=9% align=right> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left> </TD>
    <TD width=9% align=right> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
  </TR>
  <TR valign="bottom" bgcolor="#E6EFFF">
    <TD align=left> &nbsp; &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;Cash from exercise
      of stock purchase warrants&nbsp; </TD>
    <TD width=9% align=right> 1,437,500 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left> </TD>
    <TD width=9% align=right> 398,750 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left> </TD>
    <TD width=11% align=right> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left>&nbsp;</TD>
    <TD width=9% align=right> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left> </TD>
    <TD width=9% align=right> 398,750 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> &nbsp; &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;Cash from sales&nbsp;
    </TD>
    <TD width=9% align=right> 1,184,550 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left> </TD>
    <TD width=9% align=right> 511,440 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left> </TD>
    <TD width=11% align=right> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left>&nbsp;</TD>
    <TD width=9% align=right> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left> </TD>
    <TD width=9% align=right> 511,440 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
  </TR>
  <TR valign="bottom" bgcolor="#E6EFFF">
    <TD align=left> &nbsp; &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;Management and directors&#8217;
      fees&nbsp; </TD>
    <TD width=9% align=right> 153,460 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left> </TD>
    <TD width=9% align=right> 102,273 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left> </TD>
    <TD width=11% align=right> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left>&nbsp;</TD>
    <TD width=9% align=right> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left> </TD>
    <TD width=9% align=right> 102,273 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> &nbsp; &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;Equipment&nbsp; </TD>
    <TD width=9% align=right> 28,650 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left> </TD>
    <TD width=9% align=right> 16,476 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left> </TD>
    <TD width=11% align=right> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left>&nbsp;</TD>
    <TD width=9% align=right> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left> </TD>
    <TD width=9% align=right> 16,476 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
  </TR>
  <TR valign="bottom" bgcolor="#E6EFFF">
    <TD align=left> &nbsp; &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;Services&nbsp; </TD>
    <TD width=9% align=right> 26,750 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left> </TD>
    <TD width=9% align=right> 14,550 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left> </TD>
    <TD width=11% align=right> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left>&nbsp;</TD>
    <TD width=9% align=right> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left> </TD>
    <TD width=9% align=right> 14,550 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> &nbsp; &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;Exploration lease&nbsp;
    </TD>
    <TD width=9% align=right> 20,000 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left> </TD>
    <TD width=9% align=right> 12,000 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left> </TD>
    <TD width=11% align=right> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left>&nbsp;</TD>
    <TD width=9% align=right> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left> </TD>
    <TD width=9% align=right> 12,000 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
  </TR>
  <TR valign="bottom" bgcolor="#E6EFFF">
    <TD align=left> Net loss&nbsp; </TD>
    <TD width=9% align=right style="border-bottom-width:1px;border-bottom-style:solid"> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left style="border-bottom-width:1px;border-bottom-style:solid"> </TD>
    <TD width=9% align=right style="border-bottom-width:1px;border-bottom-style:solid">&nbsp; </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left style="border-bottom-width:1px;border-bottom-style:solid"> </TD>
    <TD width=11% align=right style="border-bottom-width:1px;border-bottom-style:solid"> (922,555 </TD>
    <TD width=2% align=left valign="top"> )&nbsp; </TD>
    <TD width=1% align=left style="border-bottom-width:1px;border-bottom-style:solid">&nbsp;</TD>
    <TD width=9% align=right style="border-bottom-width:1px;border-bottom-style:solid"> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left style="border-bottom-width:1px;border-bottom-style:solid"> </TD>
    <TD width=9% align=right style="border-bottom-width:1px;border-bottom-style:solid"> (922,555 </TD>
    <TD width=2% align=left valign="top"> )&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> Balance, December 31, 2004&nbsp; </TD>
    <TD width=9% align=right style="border-bottom-width:4px;border-bottom-style:double"> 21,520,800 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left style="border-bottom-width:4px;border-bottom-style:double"> &#36;</TD>
    <TD width=9% align=right style="border-bottom-width:4px;border-bottom-style:double"> 2,965,945 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left style="border-bottom-width:4px;border-bottom-style:double"> &#36;</TD>
    <TD width=11% align=right style="border-bottom-width:4px;border-bottom-style:double"> (1,463,076 </TD>
    <TD width=2% align=left valign="top"> )&nbsp; </TD>
    <TD width=1% align=left style="border-bottom-width:4px;border-bottom-style:double">$</TD>
    <TD width=9% align=right style="border-bottom-width:4px;border-bottom-style:double"> - </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left style="border-bottom-width:4px;border-bottom-style:double"> &#36;</TD>
    <TD width=9% align=right style="border-bottom-width:4px;border-bottom-style:double"> 1,502,869 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
  </TR>
</TABLE>
<P align="center"> <I>The </I><I>accompanying</I><I> notes are an </I><I>integral</I><I>
  part of these </I><I>financial</I><I> </I><I>statements.</I><I> <br>
  </I>30</P>
<HR noshade align="center" width="100%" size=5 color="black" style="page-break-after:always;">
<A name="page_31" id="page_31"></A>
<P> <B><font size="3">New Jersey Mining Company </font></B><font size="3"><br>
  <I>(A Development Stage Company) </I></font><br>
  <B><font size="3">Statements of Cash Flows </font></B></P>
<TABLE style="font-size:10pt;border-color:black;border-collapse:collapse;" cellpadding="0" cellspacing="0" width="100%" border="0">
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=center></TD>
    <TD align=center valign="top">&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
    <TD align=center></TD>
    <TD align=center valign="top">&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
    <TD align=center>From Inception </TD>
    <TD align=left valign="top">&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp; </TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=12% align=center> </TD>
    <TD width=2% align=center valign="top">&nbsp; </TD>
    <TD width=1% align=center>&nbsp; </TD>
    <TD width=12% align=center> </TD>
    <TD width=2% align=center valign="top">&nbsp; </TD>
    <TD width=1% align=center>&nbsp; </TD>
    <TD width=14% align=center>(July 18, 1996) </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp; </TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD colspan=4 align=center> Years Ended </TD>
    <TD width=2% align=center valign="top">&nbsp; </TD>
    <TD width=1% align=center>&nbsp; </TD>
    <TD width=14% align=center>Through </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp; </TD>
    <TD width=1% align=left style="border-bottom-width:1px;border-bottom-style:solid">&nbsp;
    </TD>
    <TD colspan=4 align=center style="border-bottom-width:1px;border-bottom-style:solid">
      December 31, </TD>
    <TD width=2% align=center valign="top">&nbsp; </TD>
    <TD width=1% align=center>&nbsp; </TD>
    <TD width=14% align=center>December 31, 2004 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp; </TD>
    <TD width=1% align=left style="border-bottom-width:1px;border-bottom-style:solid">&nbsp;
    </TD>
    <TD width=12% align=center style="border-bottom-width:1px;border-bottom-style:solid">
      2004 </TD>
    <TD width=2% align=center valign="top">&nbsp; </TD>
    <TD width=1% align=center style="border-bottom-width:1px;border-bottom-style:solid">&nbsp;
    </TD>
    <TD width=12% align=center style="border-bottom-width:1px;border-bottom-style:solid">
      2003 </TD>
    <TD width=2% align=center valign="top">&nbsp; </TD>
    <TD width=1% align=center style="border-bottom-width:1px;border-bottom-style:solid">&nbsp;
    </TD>
    <TD width=14% align=center nowrap style="border-bottom-width:1px;border-bottom-style:solid"> (Unaudited)
      </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
  </TR>
  <TR valign="bottom" bgcolor="#E6EFFF">
    <TD align=left> Cash flows from operating activities:&nbsp; </TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=12% align=right> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=12% align=right> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=14% align=right> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> &nbsp; &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;Net loss&nbsp; </TD>
    <TD width=1% align=left> &#36;</TD>
    <TD width=12% align=right> (922,555 </TD>
    <TD width=2% align=left valign="top"> )&nbsp; </TD>
    <TD width=1% align=left> &#36;</TD>
    <TD width=12% align=right> (379,274 </TD>
    <TD width=2% align=left valign="top"> )&nbsp; </TD>
    <TD width=1% align=left> $</TD>
    <TD width=14% align=right> (1,463,076 </TD>
    <TD width=2% align=left valign="top"> )&nbsp; </TD>
  </TR>
  <TR valign="bottom" bgcolor="#E6EFFF">
    <TD align=left> &nbsp; &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;Adjustments to reconcile
      net loss to net cash&nbsp; </TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=12% align=right> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=12% align=right> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=14% align=right> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> &nbsp; &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;&nbsp;
      &nbsp;&nbsp; &nbsp;used by operating activities:&nbsp; </TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=12% align=right> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=12% align=right> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=14% align=right> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
  </TR>
  <TR valign="bottom" bgcolor="#E6EFFF">
    <TD align=left> &nbsp; &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;&nbsp;
      &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;Write-off of goodwill&nbsp;
    </TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=12% align=right> - </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=12% align=right> 30,950 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=14% align=right> 30,950 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> &nbsp; &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;&nbsp;
      &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;Write-off of investment&nbsp;
    </TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=12% align=right> - </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=12% align=right> 3,000 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=14% align=right> 90,000 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
  </TR>
  <TR valign="bottom" bgcolor="#E6EFFF">
    <TD align=left> &nbsp; &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;Stock issued or to
      be issued for:&nbsp; </TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=12% align=right> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=12% align=right> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=14% align=right> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> &nbsp; &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;&nbsp;
      &nbsp;&nbsp; &nbsp;Management fees&nbsp; </TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=12% align=right> 41,754 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=12% align=right> 148,645 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=14% align=right> 190,399 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
  </TR>
  <TR valign="bottom" bgcolor="#E6EFFF">
    <TD align=left> &nbsp; &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;&nbsp;
      &nbsp;&nbsp; &nbsp;Directors fees&nbsp; </TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=12% align=right> 49,000 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=12% align=right> 7,200 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=14% align=right> 58,450 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> &nbsp; &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;&nbsp;
      &nbsp;&nbsp; &nbsp;Services&nbsp; </TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=12% align=right> 14,550 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=12% align=right> 7,262 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=14% align=right> 34,441 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
  </TR>
  <TR valign="bottom" bgcolor="#E6EFFF">
    <TD align=left> &nbsp; &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;&nbsp;
      &nbsp;&nbsp; &nbsp;Exploration&nbsp; </TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=12% align=right> 12,000 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=12% align=right> 8,000 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=14% align=right> 20,000 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> &nbsp; &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;Change in:&nbsp; </TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=12% align=right> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=12% align=right> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=14% align=right> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
  </TR>
  <TR valign="bottom" bgcolor="#E6EFFF">
    <TD align=left> &nbsp; &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;&nbsp;
      &nbsp;&nbsp; &nbsp;Other assets&nbsp; </TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=12% align=right> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=12% align=right> (44 </TD>
    <TD width=2% align=left valign="top"> )&nbsp; </TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=14% align=right> (624 </TD>
    <TD width=2% align=left valign="top"> )&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> &nbsp; &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;&nbsp;
      &nbsp;&nbsp; &nbsp;Accounts payable&nbsp; </TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=12% align=right> (3,499 </TD>
    <TD width=2% align=left valign="top"> )&nbsp; </TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=12% align=right> 3,683 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=14% align=right> 5,141 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
  </TR>
  <TR valign="bottom" bgcolor="#E6EFFF">
    <TD align=left> &nbsp; &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;&nbsp;
      &nbsp;&nbsp; &nbsp;Accrued payroll and related payroll expense&nbsp; </TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=12% align=right> 5,715 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=12% align=right> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=14% align=right> 5,715 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> &nbsp; &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;&nbsp;
      &nbsp;&nbsp; &nbsp;Accounts payable to related party&nbsp; </TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=12% align=right> (2,000 </TD>
    <TD width=2% align=left valign="top"> )&nbsp; </TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=12% align=right> 2,000 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=14% align=right> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
  </TR>
  <TR valign="bottom" bgcolor="#E6EFFF">
    <TD align=left> &nbsp; &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;&nbsp;
      &nbsp;&nbsp; &nbsp;Accrued reclamation costs&nbsp; </TD>
    <TD width=1% align=left style="border-bottom-width:1px;border-bottom-style:solid">&nbsp;
    </TD>
    <TD width=12% align=right style="border-bottom-width:1px;border-bottom-style:solid">
      - </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left style="border-bottom-width:1px;border-bottom-style:solid">&nbsp;
    </TD>
    <TD width=12% align=right style="border-bottom-width:1px;border-bottom-style:solid">
      12,500 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left style="border-bottom-width:1px;border-bottom-style:solid">&nbsp;
    </TD>
    <TD width=14% align=right style="border-bottom-width:1px;border-bottom-style:solid">
      12,500 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> &nbsp; &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;&nbsp;
      &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;Net cash used
      by operating activities&nbsp; </TD>
    <TD width=1% align=left style="border-bottom-width:1px;border-bottom-style:solid">&nbsp;
    </TD>
    <TD width=12% align=right style="border-bottom-width:1px;border-bottom-style:solid">
      (805,035 </TD>
    <TD width=2% align=left valign="top"> )&nbsp; </TD>
    <TD width=1% align=left style="border-bottom-width:1px;border-bottom-style:solid">&nbsp;
    </TD>
    <TD width=12% align=right style="border-bottom-width:1px;border-bottom-style:solid">
      (156,078 </TD>
    <TD width=2% align=left valign="top"> )&nbsp; </TD>
    <TD width=1% align=left style="border-bottom-width:1px;border-bottom-style:solid">&nbsp;
    </TD>
    <TD width=14% align=right style="border-bottom-width:1px;border-bottom-style:solid">
      (1,016,104 </TD>
    <TD width=2% align=left valign="top"> )&nbsp; </TD>
  </TR>
  <TR bgcolor="#E6EFFF">
    <TD align="left">&nbsp; </TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="12%" align="right">&nbsp;</TD>
    <TD width="2%" valign="top">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="12%" align="right">&nbsp;</TD>
    <TD width="2%" valign="top">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="14%" align="right">&nbsp;</TD>
    <TD width="2%" valign="top">&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> Cash flows from investing activities:&nbsp; </TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=12% align=right> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=12% align=right> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=14% align=right> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
  </TR>
  <TR valign="bottom" bgcolor="#E6EFFF">
    <TD align=left> &nbsp; &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;Purchases of buildings
      and equipment&nbsp; </TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=12% align=right> (294,734 </TD>
    <TD width=2% align=left valign="top"> )&nbsp; </TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=12% align=right> (16,839 </TD>
    <TD width=2% align=left valign="top"> )&nbsp; </TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=14% align=right> (368,868 </TD>
    <TD width=2% align=left valign="top"> )&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> &nbsp; &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;Purchases of mineral
      properties&nbsp; </TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=12% align=right> - </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=12% align=right> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=14% align=right> (5,904 </TD>
    <TD width=2% align=left valign="top"> )&nbsp; </TD>
  </TR>
  <TR valign="bottom" bgcolor="#E6EFFF">
    <TD align=left> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Cash
      of acquired companies </TD>
    <TD align=left style="border-bottom-width:1px;border-bottom-style:solid">&nbsp;</TD>
    <TD align=right style="border-bottom-width:1px;border-bottom-style:solid">&nbsp;</TD>
    <TD align=left valign="top">&nbsp;</TD>
    <TD align=left style="border-bottom-width:1px;border-bottom-style:solid">&nbsp;</TD>
    <TD align=right style="border-bottom-width:1px;border-bottom-style:solid">&nbsp;</TD>
    <TD align=left valign="top">&nbsp;</TD>
    <TD align=left style="border-bottom-width:1px;border-bottom-style:solid">&nbsp;</TD>
    <TD align=right style="border-bottom-width:1px;border-bottom-style:solid"> 38,269 </TD>
    <TD align=left valign="top">&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> &nbsp; &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;Deferral of development
      costs&nbsp; </TD>
    <TD width=1% align=left style="border-bottom-width:1px;border-bottom-style:solid">&nbsp;
    </TD>
    <TD width=12% align=right style="border-bottom-width:1px;border-bottom-style:solid">
      - </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left style="border-bottom-width:1px;border-bottom-style:solid">&nbsp;
    </TD>
    <TD width=12% align=right style="border-bottom-width:1px;border-bottom-style:solid">
      (40,001 </TD>
    <TD width=2% align=left valign="top"> )&nbsp; </TD>
    <TD width=1% align=left style="border-bottom-width:1px;border-bottom-style:solid">&nbsp;
    </TD>
    <TD width=14% align=right style="border-bottom-width:1px;border-bottom-style:solid">
      (225,535 </TD>
    <TD width=2% align=left valign="top"> )&nbsp; </TD>
  </TR>
  <TR valign="bottom" bgcolor="#E6EFFF">
    <TD align=left> &nbsp; &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;&nbsp;
      &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;Net cash used
      by investing activities&nbsp; </TD>
    <TD width=1% align=left style="border-bottom-width:1px;border-bottom-style:solid">&nbsp;
    </TD>
    <TD width=12% align=right style="border-bottom-width:1px;border-bottom-style:solid">
      (294,734 </TD>
    <TD width=2% align=left valign="top"> )&nbsp; </TD>
    <TD width=1% align=left style="border-bottom-width:1px;border-bottom-style:solid">&nbsp;
    </TD>
    <TD width=12% align=right style="border-bottom-width:1px;border-bottom-style:solid">
      (56,840 </TD>
    <TD width=2% align=left valign="top"> )&nbsp; </TD>
    <TD width=1% align=left style="border-bottom-width:1px;border-bottom-style:solid">&nbsp;
    </TD>
    <TD width=14% align=right style="border-bottom-width:1px;border-bottom-style:solid">
      ( 562,038 </TD>
    <TD width=2% align=left valign="top"> )&nbsp; </TD>
  </TR>
  <TR>
    <TD align="left">&nbsp; </TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="12%" align="right">&nbsp;</TD>
    <TD width="2%" valign="top">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="12%" align="right">&nbsp;</TD>
    <TD width="2%" valign="top">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="14%" align="right">&nbsp;</TD>
    <TD width="2%" valign="top">&nbsp;</TD>
  </TR>
  <TR valign="bottom" bgcolor="#E6EFFF">
    <TD align=left> Cash flows from financing activities:&nbsp; </TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=12% align=right> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=12% align=right> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=14% align=right> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> &nbsp; &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;Exercise of stock purchase
      warrants&nbsp; </TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=12% align=right> 398,750 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=12% align=right> 200,750 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=14% align=right> 599,500 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
  </TR>
  <TR valign="bottom" bgcolor="#E6EFFF">
    <TD align=left> &nbsp; &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;Sales of common stock,
      net of issuance costs&nbsp; </TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=12% align=right> 511,440 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=12% align=right> 318,000 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=14% align=right> 1,198,807 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> &nbsp; &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;Principal payments
      on capital lease&nbsp; </TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=12% align=right> (4,935 </TD>
    <TD width=2% align=left valign="top"> )&nbsp; </TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=12% align=right> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=14% align=right> (48,401 </TD>
    <TD width=2% align=left valign="top"> )&nbsp; </TD>
  </TR>
  <TR valign="bottom" bgcolor="#E6EFFF">
    <TD align=left> &nbsp; &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;Payments on note payable
      to bank&nbsp; </TD>
    <TD width=1% align=left style="border-bottom-width:1px;border-bottom-style:solid">&nbsp;
    </TD>
    <TD width=12% align=right style="border-bottom-width:1px;border-bottom-style:solid">
    </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left style="border-bottom-width:1px;border-bottom-style:solid">&nbsp;
    </TD>
    <TD width=12% align=right style="border-bottom-width:1px;border-bottom-style:solid">
    </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left style="border-bottom-width:1px;border-bottom-style:solid">&nbsp;
    </TD>
    <TD width=14% align=right style="border-bottom-width:1px;border-bottom-style:solid">
      (20,000 </TD>
    <TD width=2% align=left valign="top"> )&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left nowrap> &nbsp; &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;&nbsp;
      &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;Net cash provided
      by financing activities&nbsp; </TD>
    <TD width=1% align=left style="border-bottom-width:1px;border-bottom-style:solid">&nbsp;
    </TD>
    <TD width=12% align=right style="border-bottom-width:1px;border-bottom-style:solid">
      905,265 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left style="border-bottom-width:1px;border-bottom-style:solid">&nbsp;
    </TD>
    <TD width=12% align=right style="border-bottom-width:1px;border-bottom-style:solid">
      518,750 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left style="border-bottom-width:1px;border-bottom-style:solid">&nbsp;
    </TD>
    <TD width=14% align=right style="border-bottom-width:1px;border-bottom-style:solid">
      1,729,906 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
  </TR>
  <TR bgcolor="#E6EFFF">
    <TD align="left">&nbsp; </TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="12%" align="right">&nbsp;</TD>
    <TD width="2%" valign="top">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="12%" align="right">&nbsp;</TD>
    <TD width="2%" valign="top">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="14%" align="right">&nbsp;</TD>
    <TD width="2%" valign="top">&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> Net change in cash&nbsp; </TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=12% align=right> (194,504 </TD>
    <TD width=2% align=left valign="top"> )&nbsp; </TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=12% align=right> 305,832 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=14% align=right> 151,764 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
  </TR>
  <TR valign="bottom" bgcolor="#E6EFFF">
    <TD align=left> Cash, beginning of period&nbsp; </TD>
    <TD width=1% align=left style="border-bottom-width:1px;border-bottom-style:solid">&nbsp;
    </TD>
    <TD width=12% align=right style="border-bottom-width:1px;border-bottom-style:solid">
      346,268 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left style="border-bottom-width:1px;border-bottom-style:solid">&nbsp;
    </TD>
    <TD width=12% align=right style="border-bottom-width:1px;border-bottom-style:solid">
      40,436 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left style="border-bottom-width:1px;border-bottom-style:solid">&nbsp;
    </TD>
    <TD width=14% align=right style="border-bottom-width:1px;border-bottom-style:solid">
      0 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> Cash, end of period&nbsp; </TD>
    <TD width=1% align=left style="border-bottom-width:4px;border-bottom-style:double">$</TD>
    <TD width=12% align=right style="border-bottom-width:4px;border-bottom-style:double">151,764
    </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left style="border-bottom-width:4px;border-bottom-style:double">$</TD>
    <TD width=12% align=right style="border-bottom-width:4px;border-bottom-style:double">
      346,268 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left style="border-bottom-width:4px;border-bottom-style:double">$</TD>
    <TD width=14% align=right style="border-bottom-width:4px;border-bottom-style:double">
      151,764 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
  </TR>
  <TR bgcolor="#E6EFFF">
    <TD align="left">&nbsp; </TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="12%" align="right">&nbsp;</TD>
    <TD width="2%" valign="top">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="12%" align="right">&nbsp;</TD>
    <TD width="2%" valign="top">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="14%" align="right">&nbsp;</TD>
    <TD width="2%" valign="top">&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> Interest paid in cash&nbsp; </TD>
    <TD width=1% align=left style="border-bottom-width:4px;border-bottom-style:double">
      &#36;</TD>
    <TD width=12% align=right style="border-bottom-width:4px;border-bottom-style:double">
      3,042 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=12% align=right> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left style="border-bottom-width:4px;border-bottom-style:double">
      $</TD>
    <TD width=14% align=right style="border-bottom-width:4px;border-bottom-style:double">
      3,042 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
  </TR>
  <TR bgcolor="#E6EFFF">
    <TD align="left">&nbsp; </TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="12%" align="right">&nbsp;</TD>
    <TD width="2%" valign="top">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="12%" align="right">&nbsp;</TD>
    <TD width="2%" valign="top">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="14%" align="right">&nbsp;</TD>
    <TD width="2%" valign="top">&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> Non-cash investing and financing activities:&nbsp; </TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=12% align=right> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=12% align=right> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=14% align=right> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
  </TR>
  <TR valign="bottom" bgcolor="#E6EFFF">
    <TD align=left> Common stock issued for:&nbsp; </TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=12% align=right> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=12% align=right> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=14% align=right> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> &nbsp; &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;Equipment&nbsp; </TD>
    <TD width=1% align=left style="border-bottom-width:4px;border-bottom-style:double">
      &#36;</TD>
    <TD width=12% align=right style="border-bottom-width:4px;border-bottom-style:double">
      16,476 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left style="border-bottom-width:4px;border-bottom-style:double">
      &#36;</TD>
    <TD width=12% align=right style="border-bottom-width:4px;border-bottom-style:double">
      3,000 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left style="border-bottom-width:4px;border-bottom-style:double">
      &#36;</TD>
    <TD width=14% align=right style="border-bottom-width:4px;border-bottom-style:double">
      19,476 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
  </TR>
  <TR valign="bottom" bgcolor="#E6EFFF">
    <TD align=left> &nbsp; &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;Mineral properties&nbsp;
    </TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=12% align=right> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=12% align=right> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left style="border-bottom-width:4px;border-bottom-style:double">
      $</TD>
    <TD width=14% align=right style="border-bottom-width:4px;border-bottom-style:double">
      199,300 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> &nbsp; &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;Acquisitions of companies,
      excluding cash&nbsp; </TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=12% align=right> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=12% align=right> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left style="border-bottom-width:4px;border-bottom-style:double">$</TD>
    <TD width=14% align=right style="border-bottom-width:4px;border-bottom-style:double">
      743,653 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
  </TR>
  <TR valign="bottom" bgcolor="#E6EFFF">
    <TD align=left> Capital lease obligation for equipment acquired&nbsp; </TD>
    <TD width=1% align=left style="border-bottom-width:4px;border-bottom-style:double">
      &#36;</TD>
    <TD width=12% align=right style="border-bottom-width:4px;border-bottom-style:double">
      75,000 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=12% align=right> </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
    <TD width=1% align=left style="border-bottom-width:4px;border-bottom-style:double">
      &#36;</TD>
    <TD width=14% align=right style="border-bottom-width:4px;border-bottom-style:double">
      93,275 </TD>
    <TD width=2% align=left valign="top">&nbsp; </TD>
  </TR>
</TABLE>
<P align="center"> <I>The accompanying notes are an integral part of these financial
  statements.</I><br>
  31</P>

<HR noshade align="center" width="100%" size=5 color="black" style="page-break-after:always;">
<A name="page_32" id="page_32"></A>
<P> <B><font size="3">New Jersey Mining Company </font></B><font size="3"><br>
  <I>(A Development Stage Company) </I><br>
  <B>Notes to Financial Statements </B></font></P>
<TABLE style="font-size:10pt;border-color:black;border-collapse:collapse;" cellpadding="0" cellspacing="0" width="100%" border="0">
  <TR>
    <TD width="5%" valign=top nowrap> <B>1.</B>&nbsp; &nbsp; &nbsp; </TD>
    <TD> <B>Description of Business</B> </TD>
  </TR>
  <TR>
    <TD colspan=2>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD> <div align="justify">New Jersey Mining Company (&#8220;the Company&#8221;)
        was incorporated as an Idaho corporation on July 18, 1996. The Company's
        primary business is exploring for and developing gold, silver and base
        metal mining resources in Idaho. </div></TD>
  </TR>
  <TR>
    <TD colspan=2>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD> <div align="justify">On December 31, 1996, the Company acquired all of
        the assets and liabilities of a partnership known as New Jersey Joint
        Venture (&#8220;NJJV&#8221;), including the New Jersey gold mine and mill
        located near Kellogg, Idaho, in exchange for 10,000,000 shares of common
        stock. NJJV was owned by various other individuals and mining companies
        including Mine Systems Design, Inc. ("MSD"), an Idaho corporation owned
        by Fred Brackebusch and his son, Grant Brackebusch, officers and directors
        of the Company. The assets and liabilities of NJJV, as transferred, consisted
        of: </div></TD>
  </TR>
</TABLE>
<br>
<TABLE width="80%" border="0" align="center" cellpadding="0" cellspacing="0" style="font-size:10pt;border-color:black;border-collapse:collapse;">
  <TR valign="bottom">
    <TD align=left> Assets acquired:&nbsp; </TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=18% align=left>&nbsp; </TD>
  </TR>
  <TR valign="bottom" bgcolor="#E6EFFF">
    <TD align=left> &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Cash&nbsp; </TD>
    <TD width=1% align=left> &#36;</TD>
    <TD width=18% align=right> 16,565&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Building and equipment&nbsp;
    </TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=18% align=right> 176,267&nbsp; </TD>
  </TR>
  <TR valign="bottom" bgcolor="#E6EFFF">
    <TD align=left> &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Other assets&nbsp; </TD>
    <TD width=1% align=left style="border-bottom-width:1px;border-bottom-style:solid">&nbsp;
    </TD>
    <TD width=18% align=right style="border-bottom-width:1px;border-bottom-style:solid">
      63,306&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp; </TD>
    <TD width=1% align=left style="border-bottom-width:1px;border-bottom-style:solid">&nbsp;
    </TD>
    <TD width=18% align=right style="border-bottom-width:1px;border-bottom-style:solid">
      256,138&nbsp; </TD>
  </TR>
  <TR valign="bottom" bgcolor="#E6EFFF">
    <TD align=left> Liabilities assumed:&nbsp; </TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=18% align=left>&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Accounts payable&nbsp; </TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=18% align=right> 2,969&nbsp; </TD>
  </TR>
  <TR valign="bottom" bgcolor="#E6EFFF">
    <TD align=left> &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Note payable to bank&nbsp;
    </TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=18% align=right> 20,000&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left nowrap> &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Capitalized lease
      obligation&nbsp; </TD>
    <TD width=1% align=left style="border-bottom-width:1px;border-bottom-style:solid">&nbsp;
    </TD>
    <TD width=18% align=right style="border-bottom-width:1px;border-bottom-style:solid">
      25,201&nbsp; </TD>
  </TR>
  <TR valign="bottom" bgcolor="#E6EFFF">
    <TD align=left>&nbsp; </TD>
    <TD width=1% align=left style="border-bottom-width:1px;border-bottom-style:solid">&nbsp;
    </TD>
    <TD width=18% align=right style="border-bottom-width:1px;border-bottom-style:solid">
      48,170&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left> Net assets acquired as of December 31, 1996&nbsp; </TD>
    <TD width=1% align=left style="border-bottom-width:4px;border-bottom-style:double">
      &#36;</TD>
    <TD width=18% align=right style="border-bottom-width:4px;border-bottom-style:double">
      207,968&nbsp; </TD>
  </TR>
</TABLE>
<BR>
<TABLE style="font-size:10pt;border-color:black;border-collapse:collapse;" cellpadding="0" cellspacing="0" width="100%" border="0">
  <TR>
    <TD width="5%" valign=top nowrap> <B>2.</B>&nbsp; &nbsp; &nbsp; </TD>
    <TD> <div align="justify"><B>Summary of Accounting Policies</B> </div></TD>
  </TR>
  <TR>
    <TD colspan=2>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD> <div align="justify"><U>Development Stage Enterprise</U> </div></TD>
  </TR>
  <TR>
    <TD colspan=2>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD> <div align="justify">The Company's financial statements are prepared
        using the accrual method of accounting and according to the provisions
        of Statement of Financial Accounting Standards No. 7, &#8220;Accounting
        for Development Stage Enterprises,&#8221; as it devotes substantially
        all of its efforts to acquiring and developing mining interests that will
        eventually provide sufficient net profits to sustain the Company&#8217;s
        existence. Until such interests are engaged in commercial production,
        the Company will continue to prepare its financial statements and related
        disclosures in accordance with entities in the development stage. </div></TD>
  </TR>
</TABLE>
<P align="right"> 32</P>
<HR noshade align="center" width="100%" size=5 color="black" style="page-break-after:always;">
<A name="page_33" id="page_33"></A>
<P> <B><font size="3">New Jersey Mining Company </font></B><font size="3"><br>
  <I>(A Development Stage Company) </I><br>
  <B>Notes to Financial Statements </B></font></P>
<TABLE style="font-size:10pt;border-color:black;border-collapse:collapse;" cellpadding="0" cellspacing="0" width="100%" border="0">
  <TR>
    <TD width="5%" valign=top nowrap> <B>2.</B>&nbsp; &nbsp; &nbsp; </TD>
    <TD> <div align="justify"><B>Summary of Significant Accounting Policies, continued</B>
      </div></TD>
  </TR>
  <TR>
    <TD colspan=2>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD> <div align="justify"><U>Use of Estimates</U> </div></TD>
  </TR>
  <TR>
    <TD colspan=2>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD> <div align="justify">The preparation of the financial statements in conformity
        with accounting principles generally accepted in the United States of
        America requires management to make estimates and assumptions that affect
        the amounts reported in the financial statements and accompanying notes.
        Actual results could differ from those estimates. </div></TD>
  </TR>
  <TR>
    <TD colspan=2>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD> <div align="justify"><U>Income Taxes</U> </div></TD>
  </TR>
  <TR>
    <TD colspan=2>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD> <div align="justify">Income taxes are accounted for under the liability
        method. Under this method deferred income tax liabilities or assets at
        the end of each period are determined using the tax rate expected to be
        in effect when the taxes are expected to be paid or recovered. A valuation
        allowance is recorded to reduce the deferred tax assets if there is uncertainty
        regarding their realization. </div></TD>
  </TR>
  <TR>
    <TD colspan=2>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD> <div align="justify"><U>Fair Values of Financial Instruments</U> </div></TD>
  </TR>
  <TR>
    <TD colspan=2>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD> <div align="justify">The carrying amounts of financial instruments including
        cash and cash equivalents, and accounts payable approximated their fair
        values as of December 31, 2004 and 2003. </div></TD>
  </TR>
  <TR>
    <TD colspan=2>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD> <div align="justify"><U>Net Loss Per Share</U> </div></TD>
  </TR>
  <TR>
    <TD colspan=2>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD> <div align="justify">Net loss per share is computed by dividing net loss
        by the weighted average number of common shares outstanding during the
        year. Diluted net loss per share reflects the potential dilution that
        could occur from common shares issuable through stock options, warrants,
        and other convertible securities. At December 31, 2004 and 2003, there
        were 1,528,975 and 1,747,500, respectively, shares available for issuance
        upon exercise of warrants. The effect of potential issuances of shares
        under these warrants would be anti-dilutive, and therefore basic and diluted
        losses per share are the same. </div></TD>
  </TR>
  <TR>
    <TD colspan=2>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD> <div align="justify"><U>Cash Equivalents</U> </div></TD>
  </TR>
  <TR>
    <TD colspan=2>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD> <div align="justify">The Company considers cash in banks and other deposits
        with a maturity of three months or less, that can be liquidated without
        prior notice or penalty, to be cash and cash equivalents. </div></TD>
  </TR>
</TABLE>
<P align="right"> 33</P>
<HR noshade align="center" width="100%" size=5 color="black" style="page-break-after:always;">
<A name="page_34" id="page_34"></A>
<P> <B><font size="3">New Jersey Mining Company </font></B><font size="3"><br>
  <I>(A Development Stage Company) </I><br>
  <B>Notes to Financial Statements </B></font></P>
<TABLE style="font-size:10pt;border-color:black;border-collapse:collapse;" cellpadding="0" cellspacing="0" width="100%" border="0">
  <TR>
    <TD width="5%" valign=top nowrap> <B>2.</B>&nbsp; &nbsp; &nbsp; </TD>
    <TD> <div align="justify"><B>Summary of Significant Accounting Policies, Continued:</B>
      </div></TD>
  </TR>
  <TR>
    <TD colspan=2>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD> <div align="justify"><U>Investments</U> </div></TD>
  </TR>
  <TR>
    <TD colspan=2>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD> <div align="justify">Marketable equity securities are categorized as
        available-for-sale and carried at quoted market value. Investments in
        securities of privately held entities are quoted at their estimated fair
        value. Realized gains and losses on the sale of securities are recognized
        on a specific identification basis. Unrealized gains and losses are included
        as a component of accumulated other comprehensive income or loss, net
        of related deferred income taxes, if applicable, unless a permanent impairment
        in value has occurred, which is then charged to operations. During 2003,
        the Company wrote-off its investment of &#36;3,000 in a marketable equity
        security that had become permanently impaired. </div></TD>
  </TR>
  <TR>
    <TD colspan=2>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD> <div align="justify"><U>Building and Equipment</U> </div></TD>
  </TR>
  <TR>
    <TD colspan=2>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD> <div align="justify">Building and equipment are stated at the lower of
        cost or estimated net realizable value. Depreciation and amortization
        is based on the estimated useful lives of the assets and is computed using
        straight-line and unit-of-production methods. When assets are retired
        or sold, the costs and related allowances for depreciation and amortization
        are eliminated from the accounts and any resulting gain or loss is reflected
        in operations. </div></TD>
  </TR>
  <TR>
    <TD colspan=2>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD> <div align="justify"><U>Mineral Properties</U> </div></TD>
  </TR>
  <TR>
    <TD colspan=2>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD> <div align="justify">Significant payments related to the acquisition
        of mineral properties, mineral rights, and mineral leases are capitalized.
        If a commercially mineable ore body is discovered, such costs are amortized
        when production begins using the units-of-production method based on proven
        and probable reserves. If no commercially mineable ore body is discovered
        or such rights are otherwise determined to have no value, such costs are
        expensed in the period in which it is determined the property has no future
        economic value. </div></TD>
  </TR>
</TABLE>
<P align="right"> 34</P>
<HR noshade align="center" width="100%" size=5 color="black" style="page-break-after:always;">
<A name="page_35" id="page_35"></A>
<P> <B><font size="3">New Jersey Mining Company </font></B><font size="3"><br>
  <I>(A Development Stage Company) </I><br>
  <B>Notes to Financial Statements </B></font></P>
<TABLE style="font-size:10pt;border-color:black;border-collapse:collapse;" cellpadding="0" cellspacing="0" width="100%" border="0">
  <TR>
    <TD width="5%" valign=top nowrap> <B>2.</B>&nbsp; &nbsp; &nbsp; </TD>
    <TD> <div align="justify"><B>Summary of Significant Accounting Policies, Continued:</B>
      </div></TD>
  </TR>
  <TR>
    <TD colspan=2>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD> <div align="justify"><U>Mine Exploration and Development Costs</U> </div></TD>
  </TR>
  <TR>
    <TD colspan=2>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD> <div align="justify">During the fourth quarter of 2003, the Company changed
        its accounting policy, retroactive to January 1, 2002, with respect to
        its accounting for exploration costs. The Company now records exploration
        costs as operating expenses in the period that they occur, and only capitalizes
        exploration costs on areas of interest that have proven reserves and are
        in development or production. The Company's previous policy was to capitalize
        all such expenditures as deferred development costs of the properties
        being explored. The change was made in order for the Company&#8217;s accounting
        practices to be consistent with prevailing mining industry accounting
        trends and securities regulations. </div></TD>
  </TR>
  <TR>
    <TD colspan=2>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD> <div align="justify">Mine development costs are capitalized after proven
        and probable reserves have been identified and classified as deferred
        development costs until production ensues. Amortization is calculated
        using the units-of-production method over the expected life of the operation
        based on the estimated recoverable mineral ounces. </div></TD>
  </TR>
  <TR>
    <TD colspan=2>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD> <div align="justify"><U>Property Evaluations</U> </div></TD>
  </TR>
  <TR>
    <TD colspan=2>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD> <div align="justify">Annually, or more frequently as circumstances require,
        the Company evaluates the carrying amounts of its mineral properties,
        including deferred development costs, to assess whether such amounts are
        recoverable. Estimated undiscounted future net cash flows from each mineral
        property are calculated using estimated future production, sales prices,
        operating capital and costs, and reclamations costs that will be in effect
        when the properties are in production. An impairment loss is recognized
        when the estimated future cash flows (undiscounted and without interest)
        expected to result from the use of an asset are less than the carrying
        amount of the asset. </div></TD>
  </TR>
  <TR>
    <TD colspan=2>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD> <div align="justify">The Company&#8217;s estimates of future cash flows
        are subject to risks and uncertainties. It is reasonably possible that
        changes in estimates could occur which may affect the expected recoverability
        of the Company&#8217;s investment in mineral properties. </div></TD>
  </TR>
  <TR>
    <TD colspan=2>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD> <div align="justify"><U>Goodwill</U> </div></TD>
  </TR>
  <TR>
    <TD colspan=2>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD> <div align="justify">Acquisitions of entities are accounted for using
        the purchase method whereby acquired assets and liabilities are recorded
        at fair value as of the date of acquisition. The excess of the purchase
        price over such fair value is recorded as goodwill. Pursuant to SFAS No.
        142 &#8220;Goodwill and Other Intangible Assets,&#8221; goodwill is assigned
        to assets acquired and is not amortized. Goodwill is subject to determination
        of fair value at least annually and at such times as events or circumstances
        indicate that an impairment has occurred. </div></TD>
  </TR>
</TABLE>
<P align="right"> 35</P>
<HR noshade align="center" width="100%" size=5 color="black" style="page-break-after:always;">
<A name="page_36" id="page_36"></A>
<P> <B><font size="3">New Jersey Mining Company </font></B><font size="3"><br>
  <I>(A Development Stage Company) </I><br>
  <B>Notes to Financial Statements </B></font></P>
<TABLE style="font-size:10pt;border-color:black;border-collapse:collapse;" cellpadding="0" cellspacing="0" width="100%" border="0">
  <TR>
    <TD width="5%" valign=top nowrap> <B>2.</B>&nbsp; &nbsp; &nbsp; </TD>
    <TD> <div align="justify"><B>Summary of Significant Accounting Policies, Continued:</B>
      </div></TD>
  </TR>
  <TR>
    <TD colspan=2>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD> <div align="justify"><U>Reclamation and Remediation</U> </div></TD>
  </TR>
  <TR>
    <TD colspan=2>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD> <div align="justify">The Company&#8217;s mineral properties have been
        and are subject to standards for mine reclamation that have been established
        by various governmental agencies. On January 1, 2003, the Company adopted
        SFAS No. 143 &#8220;Accounting for Asset Retirement Obligations,&#8221;
        which requires that the fair value of a liability for an asset retirement
        obligation be recognized in the period in which it is incurred. SFAS No.
        143 requires the Company to record a liability for the present value of
        estimated environmental remediation costs and the related asset created
        with it. The liability will be accreted and the asset will be depreciated
        over the life of the related assets. Adjustments for changes resulting
        from the passage of time and changes to either the timing or amount of
        the original present value estimate underlying the obligation will be
        made. If there is a current impairment of an asset&#8217;s carrying value
        and a decision is made to permanently close the property, changes to the
        liability will be recognized currently and charged to provision for closed
        operations and environmental matters. The adoption of these provisions
        had minimal effect on the Company&#8217;s financial statements. </div></TD>
  </TR>
  <TR>
    <TD colspan=2>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD> <div align="justify">Prior to adoption of SFAS 143, we accrued costs
        associated with environmental remediation obligations when it was probable
        that such costs would be incurred and they were reasonably estimable.
        Accruals for estimated losses from environmental remediation obligations
        have historically been recognized no later than completion of the remedial
        feasibility study for such facility and are charged to provision for closed
        operations and environmental matters. Costs of future expenditures for
        environmental remediation were not discounted to their present value unless
        subject to a contractually obligated fixed payment schedule. Such costs
        were based on management&#8217;s estimate of amounts expected to be incurred
        when the remediation work is performed within current laws and regulations.
        Recoveries of environmental remediation costs from other parties were
        recorded as assets when their receipt is deemed probable. </div></TD>
  </TR>
  <TR>
    <TD colspan=2>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD> <div align="justify">It is reasonably possible that, due to uncertainties
        associated with defining the nature and extent of environmental contamination
        and the application of laws and regulations by regulatory authorities
        and changes in reclamation or remediation technology, the ultimate cost
        of reclamation and remediation could change in the future. The Company
        periodically reviews accrued liabilities for such reclamation and remediation
        costs as evidence becomes available indicating that its liabilities have
        potentially changed. </div></TD>
  </TR>
</TABLE>
<P align="right"> 36</P>
<HR noshade align="center" width="100%" size=5 color="black" style="page-break-after:always;">
<A name="page_37" id="page_37"></A>
<P> <B><font size="3">New Jersey Mining Company </font></B><font size="3"><br>
  <I>(A Development Stage Company) </I><br>
  <B>Notes to Financial Statements </B></font></P>
<TABLE style="font-size:10pt;border-color:black;border-collapse:collapse;" cellpadding="0" cellspacing="0" width="100%" border="0">
  <TR>
    <TD width="5%" valign=top nowrap> <B>2.</B>&nbsp; &nbsp; &nbsp; </TD>
    <TD> <div align="justify"><B>Summary of Significant Accounting Policies, Continued</B>
      </div></TD>
  </TR>
  <TR>
    <TD colspan=2>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD> <div align="justify"><U>Common Stock Issued Other than for Cash</U> </div></TD>
  </TR>
  <TR>
    <TD colspan=2>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD> <div align="justify">All transactions in which goods or services are
        received for the issuance of shares of the Company&#8217;s common stock
        are accounted for based on the fair value of the consideration received
        or the fair value of the common stock issued, whichever is more reliably
        measurable. </div></TD>
  </TR>
  <TR>
    <TD colspan=2>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD> <div align="justify"><U>Reclassifications</U> </div></TD>
  </TR>
  <TR>
    <TD colspan=2>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD> <div align="justify">Certain comparative balances for 2003 have been
        reclassified to conform to the 2004 presentation. The reclassifications
        have no effect on net loss or accumulated deficit as previously reported.
      </div></TD>
  </TR>
  <TR>
    <TD colspan=2>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD> <div align="justify"><U>New Accounting Pronouncements</U> </div></TD>
  </TR>
  <TR>
    <TD colspan=2>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD> <div align="justify">In November 2002, the FASB issued FASB Interpretation
        No. 45, Guarantor&#8217;s Accounting for Disclosure Requirements for Guarantees,
        Including Indirect Guarantees of Indebtedness of Others, an interpretation
        of FASB Statements No. 5, 57 and 107 and rescission of FASB Interpretation
        No. 34, Disclosure of Indirect Guarantees of Indebtedness of Others (&#8220;FIN
        45&#8221;). The adoption of FIN 45 in 2003 did not have a material effect
        on the Company&#8217;s financial statements. </div></TD>
  </TR>
  <TR>
    <TD colspan=2>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD> <div align="justify">In January 2003, the FASB issued FASB Interpretation
        No. 46 (FIN 46) &#8220;Consolidation of Variable Interest Entities.&#8221;
        In December 2003, the FASB issued a revision to this interpretation (FIN
        46(r)). FIN 46(r) clarifies the application of Accounting Research Bulletin
        (ARB) No. 51, &#8220;Consolidated Financial Statements.&#8221; FIN 46
        clarifies the application of ARB No. 51 to certain entities in which equity
        investors do not have the characteristics of a controlling financial interest
        or do not have sufficient equity at risk for the entity to finance its
        activities without additional subordinated financial support from other
        parties. We adopted FIN 46 in 2003 for those provisions then in effect,
        which did not have a material effect on our consolidated financial statements.
        The Company adopted FIN 46(r) in 2004, which did not have a material effect
        on the financial statements. </div></TD>
  </TR>
</TABLE>
<P align="right"> 37</P>
<HR noshade align="center" width="100%" size=5 color="black" style="page-break-after:always;">
<A name="page_38" id="page_38"></A>
<P> <B><font size="3">New Jersey Mining Company </font></B><font size="3"><br>
  <I>(A Development Stage Company) </I><br>
  <B>Notes to Financial Statements </B></font></P>
<TABLE style="font-size:10pt;border-color:black;border-collapse:collapse;" cellpadding="0" cellspacing="0" width="100%" border="0">
  <TR>
    <TD width="5%" valign=top nowrap> <B>2.</B>&nbsp; &nbsp; &nbsp; </TD>
    <TD> <div align="justify"><B>Summary of Significant Accounting Policies, Continued</B>
      </div></TD>
  </TR>
  <TR>
    <TD colspan=2>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD> <div align="justify"><U>New Accounting Pronouncements, continued</U>
      </div></TD>
  </TR>
  <TR>
    <TD colspan=2>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD> <div align="justify">In November 2004, the FASB issued SFAS No. 151,
        &#8220;Inventory Costs, an Amendment of ARB No. 43, Chapter 4.&#8221;
        SFAS 151 amends ARB 43, Chapter 4, to clarify that abnormal amounts of
        idle facility expense, freight, handling costs and wasted materials (spoilage)
        be recognized as current period charges. It also requires that allocation
        of fixed production overheads to the costs of conversion be based on the
        normal capacity of the production facilities. SFAS 151 is effective for
        inventory costs incurred during fiscal years beginning after June 15,
        2005. The adoption of SFAS 151 did not have a material effect on the Company&#8217;s
        financial statements. </div></TD>
  </TR>
  <TR>
    <TD colspan=2>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD> <div align="justify">In December 2004, the FASB issued SFAS No. 153,
        &#8220;Exchanges of Nonmonetary Assets, an Amendment of APB Opinion No.
        29.&#8221; The guidance in APB Opinion No. 29, &#8220;Accounting for Nonmonetary
        Transactions,&#8221; is based on the principle that exchanges of nonmonetary
        assets should be measured based on the fair value of the assets exchanged.
        The guidance in APB Opinion No. 29, however, included certain exceptions
        to that principle. SFAS No. 153 amends APB Opinion No. 29 to eliminate
        the exception for nonmonetary exchanges of similar productive assets and
        replaces it with a general exception for exchanges of nonmonetary assets
        that do not have commercial substance. A nonmonetary exchange has commercial
        substance if the future cash flows of the entity are expected to change
        significantly as a result of the exchange. SFAS No. 153 is effective for
        nonmonetary asset exchanges in fiscal periods beginning after June 15,
        2005. The adoption of SFAS No. 153 is not expected to have a material
        effect on the Company&#8217;s financial statements. </div></TD>
  </TR>
  <TR>
    <TD colspan=2>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD> <div align="justify">In December 2004, the FASB issued SFAS No. 123(R),
        &#8220;Share-Based Payment.&#8221; This Statement is a revision to SFAS
        No. 123, &#8220;Accounting for Stock-Based Compensation,&#8221; and supersedes
        APB Opinion No. 25, &#8220;Accounting for Stock Issued to Employees.&#8221;
        SFAS No. 123(R) requires the measurement of the cost of employee services
        received in exchange for an award of equity instruments based on the grant-date
        fair value of the award. The cost will be recognized over the period during
        which an employee is required to provide service in exchange for the award.
        No compensation cost is recognized for equity instruments for which employees
        do not render service. When adopted, the Company will be required to recognize
        compensation cost as expense for the portion of outstanding unvested awards,
        based on the grant-date fair value of those awards calculated using an
        option pricing model. Statement 123(R) is effective for small business
        issuers at the beginning of the first interim or annual period beginning
        after December 15, 2005. The Company is currently evaluating the effect
        this new pronouncement will have on the financial statements. </div></TD>
  </TR>
</TABLE>
<P align="right"> 38</P>
<HR noshade align="center" width="100%" size=5 color="black" style="page-break-after:always;">
<A name="page_39" id="page_39"></A>
<P> <B><font size="3">New Jersey Mining Company </font></B><font size="3"><br>
  <I>(A Development Stage Company) </I><br>
  <B>Notes to Financial Statements </B></font></P>
<TABLE style="font-size:10pt;border-color:black;border-collapse:collapse;" cellpadding="0" cellspacing="0" width="100%" border="0">
  <TR>
    <TD width="5%" valign=top nowrap> <B>2.</B>&nbsp; &nbsp; &nbsp; </TD>
    <TD> <div align="justify"><B>Summary of Significant Accounting Policies, Continued</B>
      </div></TD>
  </TR>
  <TR>
    <TD colspan=2>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD> <div align="justify"><U>New Accounting Pronouncements, continued</U>
      </div></TD>
  </TR>
  <TR>
    <TD colspan=2>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD> <div align="justify">In April 2004, the Financial Accounting Standards
        Board (&#8220;FASB&#8221;) ratified Emerging Issues Task Force (&#8220;EITF&#8221;)
        Issue No. 04-2, which amends Statement of Financial Accounting Standards
        (&#8220;SFAS&#8221;) No. 141 &#8220;Business Combinations&#8221; to the
        extent all mineral rights are to be considered tangible assets for accounting
        purposes. There has been diversity in practice related to the application
        of SFAS No. 141 to certain mineral rights held by mining entities that
        are not within the scope of SFAS No. 19 &#8220;Financial Accounting and
        Reporting by Oil and Gas Producing Companies.&#8221; The SEC staff&#8217;s
        position previously was entities outside the scope of SFAS No. 19 should
        account for mineral rights as intangible assets in accordance with SFAS
        No. 142 &#8220;Goodwill and Other Intangible Assets.&#8221; The application
        of this EITF is not expected to have a material effect on the Company&#8217;s
        financial statements. </div></TD>
  </TR>
  <TR>
    <TD colspan=2>&nbsp;</TD>
  </TR>
  <TR>
    <TD nowrap valign=top> <B>3.</B>&nbsp; &nbsp; &nbsp; </TD>
    <TD> <div align="justify"><B>Acquisitions and Mergers</B> </div></TD>
  </TR>
  <TR>
    <TD colspan=2>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD> <div align="justify"><U>Plainview Mining Company</U> </div></TD>
  </TR>
  <TR>
    <TD colspan=2>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD> <div align="justify">In October 1997, the Company made an exchange offer
        for the outstanding common shares of Plainview Mining Company, Inc. (&#8220;Plainview&#8221;).
        The offer allowed Plainview&#8217;s stockholders to exchange each one
        of their shares of Plainview stock for two shares of the Company&#8217;s
        stock. At the time of the exchange Plainview was a minority shareholder
        of the Company holding 1,947,144 shares of the Company's common stock.
        Fred Brackebusch, president and a director of the Company, was also a
        director of Plainview at the time of the acquisition. In addition, the
        president of Plainview at the time of the acquisition, Charles F. Asher,
        is currently a director of the Company. </div></TD>
  </TR>
  <TR>
    <TD colspan=2>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD> <div align="justify">As a result of the exchange offer, a merger with
        Plainview was consummated through the exchange of 1,500,000 shares of
        Plainview (100%), for 3,000,000 shares of the Company&#8217;s stock. The
        Company accounted for the business combination using the purchase method
        prescribed in Accounting Principles Board Opinion No. 16, &#8220;Business
        Combinations,&#8221; whereby assets acquired and liabilities assumed are
        recorded at fair value at the date of acquisition. Allocation of the purchase
        price was based on an estimate of the fair value of the assets acquired
        at the purchase date. The estimated fair value of the Company&#8217;s
        shares issued in the exchange was determined to be &#36;0.10 per share,
        or &#36;300,000. </div></TD>
  </TR>
</TABLE>
<P align="right"> 39</P>
<HR noshade align="center" width="100%" size=5 color="black" style="page-break-after:always;">
<A name="page_40" id="page_40"></A>
<P> <B><font size="3">New Jersey Mining Company </font></B><font size="3"><br>
  <I>(A Development Stage Company) </I><br>
  <B>Notes to Financial Statements </B></font></P>
<TABLE style="font-size:10pt;border-color:black;border-collapse:collapse;" cellpadding="0" cellspacing="0" width="100%" border="0">
  <TR>
    <TD width="5%" valign=top nowrap> <B>3.</B>&nbsp; &nbsp; &nbsp; </TD>
    <TD> <div align="justify"><B>Acquisitions and Mergers</B> </div></TD>
  </TR>
  <TR>
    <TD colspan=2>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD> <div align="justify">The purchase price was allocated as follows: </div></TD>
  </TR>
</TABLE>
<br>
<TABLE style="font-size:10pt;border-color:black;border-collapse:collapse;" cellpadding="0" cellspacing="0" width="100%" border="0">
  <TR valign="bottom">
    <TD width=5% align=left>&nbsp;</TD>
    <TD width=5% align=left>&nbsp;</TD>
    <TD align=left bgcolor="#E6EFFF"> Cash&nbsp; </TD>
    <TD width=1% align=left bgcolor="#E6EFFF"> &#36;</TD>
    <TD width=15% align=right bgcolor="#E6EFFF"> 12,750&nbsp; </TD>
    <TD width=15% align=right>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD width=5% align=left>&nbsp;</TD>
    <TD width=5% align=left>&nbsp;</TD>
    <TD align=left> Mineral property-CAMP&nbsp; </TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=15% align=right> 30,000&nbsp; </TD>
    <TD width=15% align=right>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD width=5% align=left>&nbsp;</TD>
    <TD width=5% align=left>&nbsp;</TD>
    <TD align=left bgcolor="#E6EFFF"> Investment in ConSil Corporation&nbsp; </TD>
    <TD width=1% align=left bgcolor="#E6EFFF">&nbsp; </TD>
    <TD width=15% align=right bgcolor="#E6EFFF"> 90,000&nbsp; </TD>
    <TD width=15% align=right>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD width=5% align=left>&nbsp;</TD>
    <TD width=5% align=left>&nbsp;</TD>
    <TD align=left nowrap> Investment in New Jersey Mining Company&nbsp; </TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=15% align=left>&nbsp; </TD>
    <TD width=15% align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD width=5% align=left>&nbsp;</TD>
    <TD width=5% align=left>&nbsp;</TD>
    <TD align=left bgcolor="#E6EFFF"> &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;(1,947,144
      shares at &#36;0.07 per share)&nbsp; </TD>
    <TD width=1% align=left bgcolor="#E6EFFF">&nbsp; </TD>
    <TD width=15% align=right bgcolor="#E6EFFF"> 136,300&nbsp; </TD>
    <TD width=15% align=right>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD width=5% align=left>&nbsp;</TD>
    <TD width=5% align=left>&nbsp;</TD>
    <TD align=left> Goodwill&nbsp; </TD>
    <TD width=1% align=left style="border-bottom-width:1px;border-bottom-style:solid">&nbsp;
    </TD>
    <TD width=15% align=right style="border-bottom-width:1px;border-bottom-style:solid">
      30,950&nbsp; </TD>
    <TD width=15% align=right>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD width=5% align=left>&nbsp;</TD>
    <TD width=5% align=left>&nbsp;</TD>
    <TD align=left bgcolor="#E6EFFF"> &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Total
      purchase price&nbsp; </TD>
    <TD width=1% align=left bgcolor="#E6EFFF" style="border-bottom-width:4px;border-bottom-style:double">$</TD>
    <TD width=15% align=right bgcolor="#E6EFFF" style="border-bottom-width:4px;border-bottom-style:double">
      300,000&nbsp; </TD>
    <TD width=15% align=right>&nbsp;</TD>
  </TR>
</TABLE>
<br>
<table style="font-size: 10pt;" width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td width="5%" valign="top">&nbsp;</td>
    <td><P align="justify">The shares of the Company&#8217;s stock owned by Plainview
        were recorded as treasury stock (see Note 8). </P>
      <P align="justify"> During the third quarter of 2003, the Company's management
        determined that goodwill recorded as part of the Plainview merger was
        impaired in accordance with the tests of goodwill impairment set forth
        in SFAS 142, "Goodwill and Other Intangible Assets." As a result, all
        of the goodwill acquired in the Plainview merger was written off.</P>
      <P align="justify"> <U>Gold Run Gulch Mining Company</U> </P>
      <P align="justify"> During 2002, the Company acquired all of the outstanding
        shares of the Gold Run Gulch Mining Company (&#8220;Gold Run&#8221;).
        The acquisition allowed Gold Run&#8217;s stockholders to exchange each
        one of their shares of Gold Run stock for 0.875 shares of the Company&#8217;s
        stock. A total of 1,916,250 of the Company&#8217;s shares were issued
        in exchange for 100% of the outstanding shares of Gold Run. The Company
        accounted for the business combination using the purchase method prescribed
        in SFAS 141, &#8220;Business Combinations,&#8221; which became effective
        for business combinations initiated after June 30, 2001. Similar to APB
        16, this statement requires, among other things, that assets acquired
        and liabilities assumed be recorded at their fair value at the date of
        acquisition. The shares issued were valued at &#36;273,954 based upon
        an estimate of fair value of the assets received. The purchase price was
        allocated as follows: </P></td>
  </tr>
</table>
<br>
<TABLE style="font-size:10pt;border-color:black;border-collapse:collapse;" cellpadding="0" cellspacing="0" width="100%" border="0">
  <TR valign="bottom">
    <TD width=5% align=left>&nbsp;</TD>
    <TD width=5% align=left>&nbsp;</TD>
    <TD align=left bgcolor="#E6EFFF"> Cash&nbsp; </TD>
    <TD width=1% align=left bgcolor="#E6EFFF"> &#36;</TD>
    <TD width=15% align=right bgcolor="#E6EFFF"> 8,954&nbsp; </TD>
    <TD width=15% align=right>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD width=5% align=left>&nbsp;</TD>
    <TD width=5% align=left>&nbsp;</TD>
    <TD align=left> Mineral Property&#8211;Coleman&nbsp; </TD>
    <TD width=1% align=left style="border-bottom-width:1px;border-bottom-style:solid">&nbsp;
    </TD>
    <TD width=15% align=right style="border-bottom-width:1px;border-bottom-style:solid">
      265,000&nbsp; </TD>
    <TD width=15% align=right>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD width=5% align=center>&nbsp;</TD>
    <TD width=5% align=center>&nbsp;</TD>
    <TD align=left bgcolor="#E6EFFF"> &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;&nbsp;
      &nbsp; &nbsp; &nbsp; &nbsp;Total purchase price&nbsp; </TD>
    <TD width=1% align=left bgcolor="#E6EFFF" style="border-bottom-width:4px;border-bottom-style:double">
      &#36;</TD>
    <TD width=15% align=right bgcolor="#E6EFFF" style="border-bottom-width:4px;border-bottom-style:double">
      273,954&nbsp; </TD>
    <TD width=15% align=right>&nbsp;</TD>
  </TR>
</TABLE>
<P align="right"> 40</P>
<HR noshade align="center" width="100%" size=5 color="black" style="page-break-after:always;">
<A name="page_41" id="page_41"></A>
<P> <B><font size="3">New Jersey Mining Company </font></B><font size="3"><br>
  <I>(A Development Stage Company) </I><br>
  <B>Notes to Financial Statements </B></font></P>
<TABLE style="font-size:10pt;border-color:black;border-collapse:collapse;" cellpadding="0" cellspacing="0" width="100%" border="0">
  <TR>
    <TD width="5%" valign=top nowrap> <B>4.</B>&nbsp; &nbsp; &nbsp; </TD>
    <TD> <B>Building and Equipment</B> </TD>
  </TR>
  <TR>
    <TD colspan=2>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD> Building and equipment at December 31, 2004 and 2003 is comprised of
      the following: </TD>
  </TR>
</TABLE>
<br>
<TABLE style="font-size:10pt;border-color:black;border-collapse:collapse;" cellpadding="0" cellspacing="0" width="100%" border="0">
  <TR valign="bottom">
    <TD width=5% align=left>&nbsp;</TD>
    <TD width=5% align=left>&nbsp;</TD>
    <TD align=left>&nbsp; </TD>
    <TD width=1% align=left style="border-bottom-width:1px;border-bottom-style:solid">&nbsp;
    </TD>
    <TD width=15% align=center style="border-bottom-width:1px;border-bottom-style:solid">
      2004&nbsp; </TD>
    <TD width=2% align=left>&nbsp;</TD>
    <TD width=1% align=left style="border-bottom-width:1px;border-bottom-style:solid">&nbsp;
    </TD>
    <TD width=15% align=center style="border-bottom-width:1px;border-bottom-style:solid">
      2003&nbsp; </TD>
    <TD width=15% align=center>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD width=5% align=left>&nbsp;</TD>
    <TD width=5% align=left>&nbsp;</TD>
    <TD align=left bgcolor="#E6EFFF"> Mill building&nbsp; </TD>
    <TD width=1% align=left bgcolor="#E6EFFF"> &#36;</TD>
    <TD width=15% align=right bgcolor="#E6EFFF"> 51,223&nbsp; </TD>
    <TD width=2% align=left bgcolor="#E6EFFF">&nbsp;</TD>
    <TD width=1% align=left bgcolor="#E6EFFF">$</TD>
    <TD width=15% align=right bgcolor="#E6EFFF"> 35,910&nbsp; </TD>
    <TD width=15% align=right>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD width=5% align=left>&nbsp;</TD>
    <TD width=5% align=left>&nbsp;</TD>
    <TD align=left> Milling equipment&nbsp; </TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=15% align=right> 547,718&nbsp; </TD>
    <TD width=2% align=left>&nbsp;</TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=15% align=right> 222,011&nbsp; </TD>
    <TD width=15% align=right>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD width=5% align=left>&nbsp;</TD>
    <TD width=5% align=left>&nbsp;</TD>
    <TD align=left bgcolor="#E6EFFF"> Mine building and equipment&nbsp; </TD>
    <TD width=1% align=left bgcolor="#E6EFFF" style="border-bottom-width:1px;border-bottom-style:solid">&nbsp;
    </TD>
    <TD width=15% align=right bgcolor="#E6EFFF" style="border-bottom-width:1px;border-bottom-style:solid">
      58,945&nbsp; </TD>
    <TD width=2% align=left bgcolor="#E6EFFF">&nbsp;</TD>
    <TD width=1% align=left bgcolor="#E6EFFF" style="border-bottom-width:1px;border-bottom-style:solid">&nbsp;
    </TD>
    <TD width=15% align=right bgcolor="#E6EFFF" style="border-bottom-width:1px;border-bottom-style:solid">
      13,755&nbsp; </TD>
    <TD width=15% align=right>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD width=5% align=center>&nbsp;</TD>
    <TD width=5% align=center>&nbsp;</TD>
    <TD align=left> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total&nbsp;
    </TD>
    <TD width=1% align=left style="border-bottom-width:4px;border-bottom-style:double">$</TD>
    <TD width=15% align=right style="border-bottom-width:4px;border-bottom-style:double">
      657,886&nbsp; </TD>
    <TD width=2% align=left>&nbsp;</TD>
    <TD width=1% align=left style="border-bottom-width:4px;border-bottom-style:double">$</TD>
    <TD width=15% align=right style="border-bottom-width:4px;border-bottom-style:double">
      271,676&nbsp; </TD>
    <TD width=15% align=right>&nbsp;</TD>
  </TR>
</TABLE>
<BR>
<TABLE style="font-size:10pt;border-color:black;border-collapse:collapse;" cellpadding="0" cellspacing="0" width="100%" border="0">
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD> <div align="justify">No depreciation has been taken on the building and
        equipment as they have not yet been placed in service. </div></TD>
  </TR>
  <TR>
    <TD colspan=2>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD> <div align="justify">At December 31, 2004, included in milling equipment
        is &#36;75,000 which represents an asset under capital lease. No amortization
        has been recorded as it relates to this asset because it had not yet been
        placed in service as of December 31, 2004. Future minimum lease payments
        for the related obligation under capital lease are &#36;19,120 annually
        through 2008 and &#36;9,560 in 2009. </div></TD>
  </TR>
  <TR>
    <TD colspan=2>&nbsp;</TD>
  </TR>
  <TR>
    <TD nowrap valign=top> <B>5.</B>&nbsp; &nbsp; &nbsp; </TD>
    <TD> <div align="justify"><B>Mineral Properties and Deferred Development Costs</B>
      </div></TD>
  </TR>
  <TR>
    <TD colspan=2>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD> <div align="justify">Mineral properties and deferred development costs
        are as follows: </div></TD>
  </TR>
</TABLE>
<br>
<TABLE style="font-size:10pt;border-color:black;border-collapse:collapse;" cellpadding="0" cellspacing="0" width="100%" border="0">
  <TR valign="bottom">
    <TD width=5% align=left>&nbsp;</TD>
    <TD align=left>&nbsp; </TD>
    <TD width=1% align=left style="border-bottom-width:1px;border-bottom-style:solid">
    </TD>
    <TD colspan="7" align=center style="border-bottom-width:1px;border-bottom-style:solid">
      December 31, 2004 and 2003&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD width=5% align=left>&nbsp;</TD>
    <TD align=left>&nbsp; </TD>
    <TD width=1% align=left> </TD>
    <TD width=12% align=center>&nbsp; </TD>
    <TD width=2% align=center>&nbsp;</TD>
    <TD width=1% align=center>&nbsp; </TD>
    <TD width=12% align=center> Deferred&nbsp; </TD>
    <TD width=2% align=center></TD>
    <TD width=1% align=center> </TD>
    <TD width=12% align=center>&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD width=5% align=left>&nbsp;</TD>
    <TD align=left>&nbsp; </TD>
    <TD width=1% align=left style="border-bottom-width:1px;border-bottom-style:solid">
    </TD>
    <TD width=12% align=center style="border-bottom-width:1px;border-bottom-style:solid">
      Properties&nbsp; </TD>
    <TD width=2% align=center>&nbsp;</TD>
    <TD width=1% align=center style="border-bottom-width:1px;border-bottom-style:solid">&nbsp;
    </TD>
    <TD width=12% align=center style="border-bottom-width:1px;border-bottom-style:solid">
      Costs&nbsp; </TD>
    <TD width=2% align=center></TD>
    <TD width=1% align=center style="border-bottom-width:1px;border-bottom-style:solid">
    </TD>
    <TD width=12% align=center style="border-bottom-width:1px;border-bottom-style:solid">
      Total&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD width=5% align=left>&nbsp;</TD>
    <TD align=left> New Jersey Mine&nbsp; </TD>
    <TD width=1% align=left> </TD>
    <TD width=12% align=right>&nbsp; </TD>
    <TD width=2% align=left>&nbsp;</TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=12% align=right>&nbsp; </TD>
    <TD width=2% align=left></TD>
    <TD width=1% align=left> </TD>
    <TD width=12% align=right>&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD width=5% align=center>&nbsp;</TD>
    <TD align=left bgcolor="#E6EFFF"> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Grenfel&nbsp;
    </TD>
    <TD width=1% align=left bgcolor="#E6EFFF"> &#36;</TD>
    <TD width=12% align=right bgcolor="#E6EFFF"> 100,000&nbsp; </TD>
    <TD width=2% align=left bgcolor="#E6EFFF">&nbsp;</TD>
    <TD width=1% align=left bgcolor="#E6EFFF"> &#36;</TD>
    <TD width=12% align=right bgcolor="#E6EFFF"> 7,324&nbsp; </TD>
    <TD width=2% align=left bgcolor="#E6EFFF">&nbsp;</TD>
    <TD width=1% align=left bgcolor="#E6EFFF"> $</TD>
    <TD width=12% align=right bgcolor="#E6EFFF"> 107,324&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD width=5% align=center>&nbsp;</TD>
    <TD align=left> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Coleman&nbsp;
    </TD>
    <TD width=1% align=left> </TD>
    <TD width=12% align=right> 265,000&nbsp; </TD>
    <TD width=2% align=left>&nbsp;</TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=12% align=right> 221,446&nbsp; </TD>
    <TD width=2% align=left></TD>
    <TD width=1% align=left> </TD>
    <TD width=12% align=right> 486,446&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD width=5% align=left>&nbsp;</TD>
    <TD align=left bgcolor="#E6EFFF"> Silver Strand&nbsp; </TD>
    <TD width=1% align=left bgcolor="#E6EFFF"> </TD>
    <TD width=12% align=right bgcolor="#E6EFFF"> 74,704&nbsp; </TD>
    <TD width=2% align=left bgcolor="#E6EFFF">&nbsp;</TD>
    <TD width=1% align=left bgcolor="#E6EFFF">&nbsp; </TD>
    <TD width=12% align=right bgcolor="#E6EFFF"> 58,300&nbsp; </TD>
    <TD width=2% align=left bgcolor="#E6EFFF"></TD>
    <TD width=1% align=left bgcolor="#E6EFFF"> </TD>
    <TD width=12% align=right bgcolor="#E6EFFF"> 133,004&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD width=5% align=left>&nbsp;</TD>
    <TD align=left> CAMP&nbsp; </TD>
    <TD width=1% align=left> </TD>
    <TD width=12% align=right> 30,000&nbsp; </TD>
    <TD width=2% align=left>&nbsp;</TD>
    <TD width=1% align=left>&nbsp; </TD>
    <TD width=12% align=right>&nbsp; </TD>
    <TD width=2% align=left></TD>
    <TD width=1% align=left> </TD>
    <TD width=12% align=right> 30,000&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD width=5% align=left>&nbsp;</TD>
    <TD align=left bgcolor="#E6EFFF"> Roughwater&nbsp; </TD>
    <TD width=1% align=left bgcolor="#E6EFFF"> </TD>
    <TD width=12% align=right bgcolor="#E6EFFF"> 25,500&nbsp; </TD>
    <TD width=2% align=left bgcolor="#E6EFFF">&nbsp;</TD>
    <TD width=1% align=left bgcolor="#E6EFFF">&nbsp; </TD>
    <TD width=12% align=right bgcolor="#E6EFFF">&nbsp; </TD>
    <TD width=2% align=left bgcolor="#E6EFFF"></TD>
    <TD width=1% align=left bgcolor="#E6EFFF"> </TD>
    <TD width=12% align=right bgcolor="#E6EFFF"> 25,500&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD width=5% align=left>&nbsp;</TD>
    <TD align=left nowrap> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Lost
      Eagle&nbsp; </TD>
    <TD width=1% align=left style="border-bottom-width:1px;border-bottom-style:solid">
    </TD>
    <TD width=12% align=right style="border-bottom-width:1px;border-bottom-style:solid">
      5,000&nbsp; </TD>
    <TD width=2% align=left>&nbsp;</TD>
    <TD width=1% align=left style="border-bottom-width:1px;border-bottom-style:solid">&nbsp;
    </TD>
    <TD width=12% align=right style="border-bottom-width:1px;border-bottom-style:solid">&nbsp;
    </TD>
    <TD width=2% align=left></TD>
    <TD width=1% align=left style="border-bottom-width:1px;border-bottom-style:solid">
    </TD>
    <TD width=12% align=right style="border-bottom-width:1px;border-bottom-style:solid">
      5,000&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD width=5% align=center>&nbsp;</TD>
    <TD align=left bgcolor="#E6EFFF"> Total&nbsp; </TD>
    <TD width=1% align=left bgcolor="#E6EFFF" style="border-bottom-width:4px;border-bottom-style:double">
      &#36;</TD>
    <TD width=12% align=right bgcolor="#E6EFFF" style="border-bottom-width:4px;border-bottom-style:double">
      500,204&nbsp; </TD>
    <TD width=2% align=left bgcolor="#E6EFFF">&nbsp;</TD>
    <TD width=1% align=left bgcolor="#E6EFFF" style="border-bottom-width:4px;border-bottom-style:double">&#36;</TD>
    <TD width=12% align=right bgcolor="#E6EFFF" style="border-bottom-width:4px;border-bottom-style:double">
      287,070</TD>
    <TD width=2% align=left bgcolor="#E6EFFF">&nbsp;</TD>
    <TD width=1% align=left bgcolor="#E6EFFF" style="border-bottom-width:4px;border-bottom-style:double">
      &#36;</TD>
    <TD width=12% align=right bgcolor="#E6EFFF" style="border-bottom-width:4px;border-bottom-style:double">
      787,274 </TD>
  </TR>
</TABLE>
<br>
<table style="font-size: 10pt;" width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td width="5%" valign="top">&nbsp;</td>
    <td><div align="justify">Since the Company's mineral properties are not yet
        in production, no amortization or depreciation has been recognized. </div></td>
  </tr>
</table>
<P align="right"> 41</P>
<HR noshade align="center" width="100%" size=5 color="black" style="page-break-after:always;">
<A name="page_42" id="page_42"></A>
<P> <B><font size="3">New Jersey Mining Company </font></B><font size="3"><br>
  <I>(A Development Stage Company) </I><br>
  <B>Notes to Financial Statements </B></font></P>
<TABLE style="font-size:10pt;border-color:black;border-collapse:collapse;" cellpadding="0" cellspacing="0" width="100%" border="0">
  <TR>
    <TD width="5%" valign=top nowrap> <B>5.</B>&nbsp; &nbsp; &nbsp; </TD>
    <TD> <div align="justify"><B>Mineral Properties and Deferred Development Costs,
        Continued:</B> </div></TD>
  </TR>
  <TR>
    <TD colspan=2>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD> <div align="justify"><U>Grenfel</U> The Company's Grenfel property is
        a leasehold interest covering the mineral rights of 68 acres located at
        the New Jersey Mine. The lease was acquired from Mine Systems Design ("MSD")
        in 2001 in exchange for 1,000,000 shares of the Company&#8217;s common
        stock (see Note 1). The 1,000,000 shares issued were valued at &#36;0.10
        per share, which approximated the market price for the restricted common
        stock on the date of the lease. MSD is also a major shareholder of the
        Company and is owned by Fred Brackebusch and Grant Brackebusch, officers
        and directors of the Company. The lease has a fifteen year term, and includes
        a 3% Net Smelter Return ("NSR") royalty that will be paid to MSD on any
        production achieved from the property. Deferred development costs at December
        31, 2004 and 2003 consist primarily of drilling and tunnel development
        expenditures. </div></TD>
  </TR>
  <TR>
    <TD colspan=2>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD> <div align="justify"><U>Coleman</U> The Coleman property is located at
        the New Jersey Mine and consists of 62 acres of patented mining claims,
        mineral rights to 108 acres of fee land, and approximately 130 acres of
        unpatented mining claims. The Coleman property was acquired in October
        2002 with the acquisition of Gold Run Gulch Mining Company (see Note 4).
        Deferred development costs at December 31, 2004 and 2003 consist primarily
        of drilling and tunnel development expenditures. </div></TD>
  </TR>
  <TR>
    <TD colspan=2>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD> <div align="justify"><U>Silver Strand</U> The Silver Strand mine consists
        of 15 unpatented claims and was acquired from Trend Mining Company (&#8220;Trend&#8221;)
        in 2000. The property was purchased in exchange for 50,000 shares of the
        Company&#8217;s common stock and a 1.5% NSR royalty initially capped at
        &#36;50,000 and then decreasing to 0.5%. In July of 2001, MSD assumed
        Trend&#8217;s position in the agreement, and retained the NSR royalty
        interest. The Company valued the property at &#36;74,704 which represented
        the estimated market value of the property at the date of acquisition.
        Deferred development costs at December 31, 2004 and 2003 consist primarily
        of drilling and permitting expenditures. </div></TD>
  </TR>
  <TR>
    <TD colspan=2>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD> <div align="justify"><U>CAMP</U> The CAMP property was acquired as part
        of the Company&#8217;s acquisition of Plainview in 1997 (see Note 4).
        The CAMP property covers approximately 380 acres and is an underground
        exploration project. The Company holds a 17.75% interest in the CAMP property;
        the remaining ownership is held by various other mining companies, including
        Coeur d&#8217;Alene Mines Corporation, which acts as the operator. The
        Company receives a &#36;100 monthly advance royalty payment and will receive
        a 7.1% net profits interest if the property is put into production. </div></TD>
  </TR>
</TABLE>
<P align="right"> 42</P>
<HR noshade align="center" width="100%" size=5 color="black" style="page-break-after:always;">
<A name="page_43" id="page_43"></A>
<P> <B><font size="3">New Jersey Mining Company </font></B><font size="3"><br>
  <I>(A Development Stage Company) </I><br>
  <B>Notes to Financial Statements </B></font></P>
<TABLE style="font-size:10pt;border-color:black;border-collapse:collapse;" cellpadding="0" cellspacing="0" width="100%" border="0">
  <TR>
    <TD width="5%" valign=top nowrap> <B>5.</B>&nbsp; &nbsp; &nbsp; </TD>
    <TD> <div align="justify"><B>Mineral Properties and Deferred Development Costs,
        Continued:</B> </div></TD>
  </TR>
  <TR>
    <TD colspan=2>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD> <div align="justify"><U>Roughwater</U> The Roughwater property is an
        exploration project consisting of 180 acres in nine unpatented lode claims.
        In 2001, the Company purchased the property through the issuance of 255,000
        shares of its common stock to Roughwater Mining Company. The shares were
        valued at &#36;0.10 per share, for a total acquisition cost of &#36;25,500.
        At the time of the acquisition, Fred Brackebusch, the Company's president
        and a director, was the president of Roughwater Mining Company and MSD
        was its majority stockholder. </div></TD>
  </TR>
  <TR>
    <TD colspan=2>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD> <div align="justify"><U>Lost Eagle</U> Lost Eagle is a gold and silver
        exploration project consisting of five claims covering 100 acres of federal
        land administered by the U.S. Forest Service. In 2001, the Company issued
        50,000 shares of stock to an individual to acquire the property. The shares
        were valued at &#36;0.10 for a total acquisition cost of &#36;5,000. </div></TD>
  </TR>
  <TR>
    <TD colspan=2>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD> <div align="justify"><U>Wisconsin Teddy</U> The Wisconsin Teddy is an
        exploration project that lies north of the New Jersey Mine and covers
        83 acres of unpatented claims on federal land administered by the U.S.
        Bureau of Land Management. The project has no carrying value. </div></TD>
  </TR>
  <TR>
    <TD colspan=2>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD> <div align="justify"><U>Zanetti Mining Lease</U> The Company has been
        assigned a mining lease with William Zanetti. The lease provides for the
        Company's exploration, development and mining of minerals on fee land
        through October 2008 and thereafter, as long as mining operations are
        deemed continuous. The lease provides for production royalties of 5% of
        net sales of ores or concentrates. Additional production royalties of
        1% to 5% are due if gold exceeds a certain price per troy ounce as adjusted
        annually by the Consumer Price Index. At December 31, 2004, the gold price
        that would cause additional production royalties to be payable was &#36;632
        per troy ounce. Also, advance royalties of &#36;500 are required annually
        under the lease. These advance royalties are charged to expense as incurred,
        but are still accumulated and will be credited against production royalty
        obligations if and when production ensues. The lessors may terminate the
        lease upon the Company's failure to perform under the terms of the lease;
        the Company has the right to terminate the lease at any time. </div></TD>
  </TR>
</TABLE>
<P align="right"> 43</P>
<HR noshade align="center" width="100%" size=5 color="black" style="page-break-after:always;">
<A name="page_44" id="page_44"></A>
<P> <B><font size="3">New Jersey Mining Company </font></B><font size="3"><br>
  <I>(A Development Stage Company) </I><br>
  <B>Notes to Financial Statements </B></font></P>
<TABLE style="font-size:10pt;border-color:black;border-collapse:collapse;" cellpadding="0" cellspacing="0" width="100%" border="0">
  <TR>
    <TD width="5%" valign=top nowrap> <B>5.</B>&nbsp; &nbsp; &nbsp; </TD>
    <TD> <div align="justify"><B>Mineral Properties and Deferred Development Costs,
        Continued:</B> </div></TD>
  </TR>
  <TR>
    <TD colspan=2>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD> <div align="justify"><U>Golden Chest Exploration Leases</U> </div></TD>
  </TR>
  <TR>
    <TD colspan=2>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD> <div align="justify">On September 5, 2003, the Company entered into an
        exploration agreement and lease option with Paymaster Resources, Inc.
        (&#8220;Paymaster&#8221;) to explore the Golden Chest property. The exploration
        agreement with option to lease was subsequently assigned to Metaline Contact
        Mines (&#8220;Metaline&#8221;) in February 2004. The term of the exploration
        agreement was 2&frac12; years, commencing June 13, 2003. Pursuant to the
        terms of the agreement, the Company conducted an economic study of the
        Golden Chest open pit resource. As consideration for the agreement, the
        Company issued Paymaster or Metaline 10,000 shares of its common stock
        during every six- month period of the exploration agreement. Under this
        exploration agreement, 20,000 shares were issued in both 2004 and 2003.
        During 2004 and 2003, the Company recorded &#36;12,000 and &#36;8,000,
        respectively of exploration expense in connection with these issuances
        based upon its estimate of the fair value of the shares of common stock
        issued. </div></TD>
  </TR>
  <TR>
    <TD colspan=2>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD> <div align="justify">On November 7, 2003, the Company signed an exploration
        agreement and lease option with Prichard Creek Resource Partners LLC (&#8220;Prichard&#8221;)
        to explore Prichard&#8217;s property, which is adjacent to the Golden
        Chest. The term of the exploration agreement is 2&frac12; years commencing
        June 13, 2003. </div></TD>
  </TR>
  <TR>
    <TD colspan=2>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD> <div align="justify">Subsequent to year end, on January 3, 2005, the
        Company exercised the Option to Lease the Golden Chest mine in accordance
        with the exploration agreements with Metaline and Prichard, thus terminating
        the exploration agreements. The terms of both lease agreements are 15
        years. The Company issued 130,000 shares of restricted common stock upon
        the signing of these leases. Each lease requires the Company to pay either
        Metaline or Prichard, depending on which claims the production came from,
        a royalty of 3% of net smelter returns. Both leases also have an additional
        net smelter royalty of up to another 3% tied to a sliding scale gold price
        indexed to the June 2003 Consumer Price Index (CPI). Using the December
        2004 CPI, the gold trigger prices for additional net smelter royalties
        were as follows: less than &#36;415 = no additional royalty, &#36;415
        to &#36;467 = 1.0%, &#36;467 to &#36;519 = 1.5%, &#36;519 to &#36;570
        = 2.0%, and greater than &#36;570 = 3.0%. Thus, the maximum net smelter
        royalty that can be paid is 6%. </div></TD>
  </TR>
  <TR>
    <TD colspan=2>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD> <div align="justify">In addition to the royalty, the Company is obligated
        to pay 50,000 shares of its common stock to Metaline after each successive
        increment of 10,000 troy ounces of gold sold from the property and a one-time
        payment of 30,000 shares to Prichard upon commencement of commercial production.
      </div></TD>
  </TR>
</TABLE>
<P align="right"> 44</P>
<HR noshade align="center" width="100%" size=5 color="black" style="page-break-after:always;">
<A name="page_45" id="page_45"></A>
<P> <B><font size="3">New Jersey Mining Company </font></B><font size="3"><br>
  <I>(A Development Stage Company) </I><br>
  <B>Notes to Financial Statements </B></font></P>
<TABLE style="font-size:10pt;border-color:black;border-collapse:collapse;" cellpadding="0" cellspacing="0" width="100%" border="0">
  <TR>
    <TD width="5%" valign=top nowrap> <B>6.</B>&nbsp; &nbsp; &nbsp; </TD>
    <TD> <div align="justify"><B>Income Taxes</B> </div></TD>
  </TR>
  <TR>
    <TD colspan=2>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD> <div align="justify">The Company did not record an income tax provision
        for the years ended December 31, 2004 or 2003, as it had no taxable income.
        At December 31, 2004 and 2003, the Company had net operating loss carry
        forwards available for income tax purposes of approximately &#36;1,500,000
        and &#36;525,000, respectively, which will expire through 2024, and associated
        deferred tax assets of approximately &#36;615,000 and &#36;218,500, respectively.
        The deferred tax assets have been fully reserved for as management believes
        it is more likely than not that the deferred tax assets will not be utilized.
      </div></TD>
  </TR>
  <TR>
    <TD colspan=2>&nbsp;</TD>
  </TR>
  <TR>
    <TD nowrap valign=top> <B>7.</B>&nbsp; &nbsp; &nbsp; </TD>
    <TD> <div align="justify"><B>Common Stock</B> </div></TD>
  </TR>
  <TR>
    <TD colspan=2>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD> <div align="justify">At December 31, 2002 and during all prior periods,
        the Company had one class of no par value common stock with 20,000,000
        shares authorized. Effective September 25, 2003, the Company amended its
        articles of incorporation to increase the number of authorized shares
        to 50,000,000. In addition, the Company has authorized 1,000,000 shares
        of no par preferred stock, none of which had been issued at December 31,
        2004 and 2003. </div></TD>
  </TR>
  <TR>
    <TD colspan=2>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD> <div align="justify"><U>Private Placements</U> </div></TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD> <div align="justify">In May 2002, the Company completed a brokered private
        placement pursuant to Rule 506 of Regulation D of the Securities Act of
        1933, as amended (&#8220;Rule 506&#8221;). A total of 1,700,000 units
        at a price of &#36;0.15 per unit were sold, yielding net proceeds of &#36;229,500.
        Each unit consisted of one share of restricted common stock plus a common
        stock purchase warrant exercisable at &#36;0.25 per share until May 1,
        2004. </div></TD>
  </TR>
  <TR>
    <TD colspan=2>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD> <div align="justify">In November 2003, the Company began offering for
        sale units consisting of shares of its common stock and common stock purchase
        warrants, in a non-brokered private placement, and only to certain investors
        pursuant to Rule 506. The offering was for the sale of 2,000,000 units
        at &#36;0.40 per unit. Each unit consisted of one share of the Company's
        restricted common stock and a one-half stock purchase warrant whereby
        each one whole warrant may purchase one share of the Company's restricted
        common stock at &#36;0.70 per share until April 1, 2005. Through December
        31, 2004, 795,000 units had been sold generating net proceeds of &#36;318,000.
        On February 19, 2004, the Company completed this placement, resulting
        in the sale of an additional 932,500 units that generated additional proceeds
        of approximately &#36;372,000. </div></TD>
  </TR>
</TABLE>
<P align="right"> 45</P>
<HR noshade align="center" width="100%" size=5 color="black" style="page-break-after:always;">
<A name="page_46" id="page_46"></A>
<P> <B><font size="3">New Jersey Mining Company </font></B><font size="3"><br>
  <I>(A Development Stage Company) </I><br>
  <B>Notes to Financial Statements </B></font></P>
<TABLE style="font-size:10pt;border-color:black;border-collapse:collapse;" cellpadding="0" cellspacing="0" width="100%" border="0">
  <TR>
    <TD width="5%" valign=top nowrap> <B>7.</B>&nbsp; &nbsp; &nbsp; </TD>
    <TD> <div align="justify"><B>Common Stock, continued</B> </div></TD>
  </TR>
  <TR>
    <TD colspan=2>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD> <div align="justify"><U>Exercise of Warrants</U> </div></TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD> <div align="justify">During 2004 and 2003, common stock purchase warrants
        were exercised by warrant holders that had purchased units of common stock
        and common stock purchase warrants during the Company's 2002 private placement
        offering. During 2004 and 2003, the Company issued 1,437,500 and 810,000
        shares, respectively, of its restricted common stock at prices ranging
        from &#36;0.25 to &#36;.70 per share, generating net proceeds of &#36;398,750
        and &#36;200,750, respectively, pursuant to the exercise of these warrants.
      </div></TD>
  </TR>
  <TR>
    <TD colspan=2>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD> <div align="justify"><U>Stock Purchase Warrants Outstanding</U> </div></TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD> <div align="justify">Transactions in common stock purchase warrants are
        as follows: </div></TD>
  </TR>
</TABLE>
<br>
<TABLE style="font-size:10pt;border-color:black;border-collapse:collapse;" cellpadding="0" cellspacing="0" width="100%" border="0">
  <TR valign="bottom">
    <TD width=5% align=left>&nbsp;</TD>
    <TD align=left>&nbsp; </TD>
    <TD width=15% align=center> Number of </TD>
    <TD width=2% align=center>&nbsp; </TD>
    <TD width=15% align=center> Exercise&nbsp; </TD>
    <TD width=15% align=right>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD width=5% align=left>&nbsp;</TD>
    <TD align=left>&nbsp; </TD>
    <TD width=15% align=center style="border-bottom-width:1px;border-bottom-style:solid">
      Warrants </TD>
    <TD width=2% align=center>&nbsp; </TD>
    <TD width=15% align=center style="border-bottom-width:1px;border-bottom-style:solid">
      Prices&nbsp; </TD>
    <TD width=15% align=right>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp; </TD>
    <TD width="15%" align="right">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="15%" align="right">&nbsp;</TD>
    <TD width="15%" align="right">&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD width=5% align=left>&nbsp;</TD>
    <TD align=left bgcolor="#E6EFFF"> Balance, December 31, 2002&nbsp; </TD>
    <TD width=15% align=right bgcolor="#E6EFFF"> 1,700,000 </TD>
    <TD width=2% align=left bgcolor="#E6EFFF">&nbsp; </TD>
    <TD width=15% align=right bgcolor="#E6EFFF"> 0.25&nbsp; </TD>
    <TD width=15% align=right>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD width=5% align=left>&nbsp;</TD>
    <TD align=left> &nbsp; &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;Issued in connection
      with warrants exercised<SUP>(1)</SUP>&nbsp; </TD>
    <TD width=15% align=right> 460,000 </TD>
    <TD width=2% align=left>&nbsp; </TD>
    <TD width=15% align=right> 0.25&nbsp; </TD>
    <TD width=15% align=right>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD width=5% align=left>&nbsp;</TD>
    <TD align=left bgcolor="#E6EFFF"> &nbsp; &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;Issued
      in connection with private placement&nbsp; </TD>
    <TD width=15% align=right bgcolor="#E6EFFF"> 397,500 </TD>
    <TD width=2% align=left bgcolor="#E6EFFF">&nbsp; </TD>
    <TD width=15% align=right bgcolor="#E6EFFF"> 0.70&nbsp; </TD>
    <TD width=15% align=right>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD width=5% align=left>&nbsp;</TD>
    <TD align=left> &nbsp; &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;Exercised&nbsp; </TD>
    <TD width=15% align=right style="border-bottom-width:1px;border-bottom-style:solid">
      (810,000 </TD>
    <TD width=2% align=left> )&nbsp; </TD>
    <TD width=15% align=right> 0.25&nbsp; </TD>
    <TD width=15% align=right>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD width=5% align=left>&nbsp;</TD>
    <TD align=left bgcolor="#E6EFFF"> Balance, December 31, 2003&nbsp; </TD>
    <TD width=15% align=right bgcolor="#E6EFFF"> 1,747,500 </TD>
    <TD width=2% align=left bgcolor="#E6EFFF">&nbsp; </TD>
    <TD width=15% align=right bgcolor="#E6EFFF"> 0.25-0.70&nbsp; </TD>
    <TD width=15% align=right>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD width=5% align=left>&nbsp;</TD>
    <TD align=left nowrap> &nbsp; &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;Issued in connection
      with warrants exercised<SUP>(1)</SUP>&nbsp; </TD>
    <TD width=15% align=right> 547,500 </TD>
    <TD width=2% align=left>&nbsp; </TD>
    <TD width=15% align=right> 0.70&nbsp; </TD>
    <TD width=15% align=right>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD width=5% align=left>&nbsp;</TD>
    <TD align=left bgcolor="#E6EFFF"> &nbsp; &nbsp; &nbsp;&nbsp; &nbsp;&nbsp;Issued
      in connection with private placement&nbsp; </TD>
    <TD width=15% align=right bgcolor="#E6EFFF"> 731,475 </TD>
    <TD width=2% align=left bgcolor="#E6EFFF">&nbsp; </TD>
    <TD width=15% align=right bgcolor="#E6EFFF"> 0.60-0.85&nbsp; </TD>
    <TD width=15% align=right>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD width=5% align=left>&nbsp;</TD>
    <TD align=left> &nbsp; &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;Exercised&nbsp; </TD>
    <TD width=15% align=right> (1,437,500 </TD>
    <TD width=2% align=left> )&nbsp; </TD>
    <TD width=15% align=right> 0.25-0.70&nbsp; </TD>
    <TD width=15% align=right>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD width=5% align=left>&nbsp;</TD>
    <TD align=left bgcolor="#E6EFFF"> &nbsp; &nbsp;&nbsp; &nbsp;&nbsp; &nbsp;Cancelled&nbsp;
    </TD>
    <TD width=15% align=right bgcolor="#E6EFFF" style="border-bottom-width:1px;border-bottom-style:solid">
      (83,750 </TD>
    <TD width=2% align=left bgcolor="#E6EFFF"> )&nbsp; </TD>
    <TD width=15% align=right bgcolor="#E6EFFF"> 0.60-0.70&nbsp; </TD>
    <TD width=15% align=right>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD width=5% align=left>&nbsp;</TD>
    <TD align=left> Balance, December 31, 2004&nbsp; </TD>
    <TD width=15% align=right style="border-bottom-width:4px;border-bottom-style:double">
      1,505,225 </TD>
    <TD width=2% align=left valign="top"> <SUP>(2)</SUP>&nbsp; </TD>
    <TD width=15% align=right> 0.60-0.85&nbsp; </TD>
    <TD width=15% align=right>&nbsp;</TD>
  </TR>
</TABLE>
<BR>
<TABLE style="font-size:10pt;border-color:black;border-collapse:collapse;" cellpadding="0" cellspacing="0" width="100%" border="0">
  <TR>
    <TD width="5%" valign=top nowrap>&nbsp;</TD>
    <TD width="5%" valign=top nowrap> (1)&nbsp; &nbsp; &nbsp; </TD>
    <TD> <div align="justify">During 2004 and 2003 the Company issued 547,500
        and 460,000 stock purchase warrants, respectively, to investors as an
        inducement to exercise warrants previously granted. The Company recorded
        no value for the warrants issued as their fair value was not determinable
        at the date of issue. </div></TD>
  </TR>
  <TR>
    <TD colspan=3>&nbsp;</TD>
  </TR>
  <TR>
    <TD nowrap valign=top>&nbsp;</TD>
    <TD nowrap valign=top> (2)&nbsp; &nbsp; &nbsp; </TD>
    <TD> <div align="justify">These warrants expire as follows: </div></TD>
  </TR>
</TABLE>
<br>
<TABLE width="60%" border="0" align="center" cellpadding="0" cellspacing="0" style="font-size:10pt;border-color:black;border-collapse:collapse;">
  <TR valign="bottom">
    <TD width=30% align=right style="border-bottom-width:1px;border-bottom-style:solid">
      Shares&nbsp; </TD>
    <TD width=5% align=center>&nbsp;</TD>
    <TD width=30% align=center style="border-bottom-width:1px;border-bottom-style:solid">
      Price&nbsp; </TD>
    <TD width=5% align=left>&nbsp;</TD>
    <TD align=left style="border-bottom-width:1px;border-bottom-style:solid">
      Expiration Date&nbsp; </TD>
  </TR>
  <TR valign="bottom" bgcolor="#E6EFFF">
    <TD width=30% align=right> 781,875&nbsp; </TD>
    <TD width=5% align=center>&nbsp;</TD>
    <TD width=30% align=center> $0.70</TD>
    <TD width=5% align=left>&nbsp;</TD>
    <TD align=left> October 1, 2005&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD width=30% align=right> 50,000&nbsp; </TD>
    <TD width=5% align=center>&nbsp;</TD>
    <TD width=30% align=center> &nbsp;0.60</TD>
    <TD width=5% align=left>&nbsp;</TD>
    <TD align=left> November 2, 2005&nbsp; </TD>
  </TR>
  <TR valign="bottom" bgcolor="#E6EFFF">
    <TD width=30% align=right> 125,850&nbsp; </TD>
    <TD width=5% align=center>&nbsp;</TD>
    <TD width=30% align=center> &nbsp;0.85</TD>
    <TD width=5% align=left>&nbsp;</TD>
    <TD align=left> April 1, 2006&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD width=30% align=right style="border-bottom-width:1px;border-bottom-style:solid">
      547,500&nbsp; </TD>
    <TD width=5% align=center>&nbsp;</TD>
    <TD width=30% align=center> &nbsp;0.70</TD>
    <TD width=5% align=left>&nbsp;</TD>
    <TD align=left> September 1, 2006&nbsp; </TD>
  </TR>
  <TR valign="bottom" bgcolor="#E6EFFF">
    <TD width=30% align=right style="border-bottom-width:4px;border-bottom-style:double">
      1,505,225&nbsp; </TD>
    <TD width=5% align=center>&nbsp;</TD>
    <TD width=30% align=center>&nbsp; </TD>
    <TD width=5% align=left>&nbsp;</TD>
    <TD align=left>&nbsp; </TD>
  </TR>
</TABLE>
<P align="right"> 46</P>
<HR noshade align="center" width="100%" size=5 color="black" style="page-break-after:always;">
<A name="page_47" id="page_47"></A>
<P> <B><font size="3">New Jersey Mining Company </font></B><font size="3"><br>
  <I>(A Development Stage Company) </I><br>
  <B>Notes to Financial Statements </B></font></P>
<TABLE style="font-size:10pt;border-color:black;border-collapse:collapse;" cellpadding="0" cellspacing="0" width="100%" border="0">
  <TR>
    <TD width="5%" valign=top nowrap> <B>7.</B>&nbsp; &nbsp; &nbsp; </TD>
    <TD> <div align="justify"><B>Common Stock, continued</B> </div></TD>
  </TR>
  <TR>
    <TD colspan=2>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD> <div align="justify"><U>Common Stock Issued for Equipment</U> </div></TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD> <div align="justify">During 2004 and 2003, the Company issued 28,650
        and 5,000 shares of its restricted common stock to vendors for equipment
        purchased. The Company recorded &#36;16,476 and &#36;3,000, respectively,
        based upon the value of the equipment purchased and shares issued. </div></TD>
  </TR>
  <TR>
    <TD colspan=2>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD> <div align="justify"><U>Common Stock Issued for Services</U> </div></TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD> <div align="justify">During 2004 and 2003, the Company issued 26,750
        and 21,915 shares of its restricted common stock for services rendered
        the Company. The Company recorded &#36;14,550 and &#36;7,262, respectively,
        based upon the value of the services rendered and the shares issued. </div></TD>
  </TR>
  <TR>
    <TD colspan=2>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD> <div align="justify"><U>Cancellation of Treasury Stock</U> </div></TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD> <div align="justify">Effective December 31, 2003, the Company's board
        of directors resolved to cancel 1,947,144 shares of treasury stock the
        Company had acquired during its merger with Plainview Mining Company (see
        Note 4). As a result, the treasury shares were added to the Company's
        authorized common stock for issue at December 31, 2003. </div></TD>
  </TR>
  <TR>
    <TD colspan=2>&nbsp;</TD>
  </TR>
  <TR>
    <TD nowrap valign=top> <B>8.</B>&nbsp; &nbsp; &nbsp; </TD>
    <TD> <div align="justify"><B>Related Party Transactions</B> </div></TD>
  </TR>
  <TR>
    <TD colspan=2>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD> <div align="justify">Fred Brackebusch is president, treasurer, and a
        director of the Company. Grant Brackebusch, Fred Brackebusch's son, is
        the vice-president and a director of the Company. Grant Brackebusch's
        wife, Tina Brackebusch, is the Company's corporate secretary. Fred Brackebusch
        and Grant Brackebusch own 89.6% and 10.4%, respectively of Mine Systems
        Design, Inc. ("MSD"), a firm that has various related party transactions
        with the Company. </div></TD>
  </TR>
  <TR>
    <TD colspan=2>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD> <div align="justify">In addition to the related party transactions described
        in notes 1, 4 and 6, the Company had the following transactions with related
        parties: </div></TD>
  </TR>
</TABLE>
<br>
<TABLE style="font-size:10pt;border-color:black;border-collapse:collapse;" cellpadding="0" cellspacing="0" width="100%" border="0">
  <TR valign="bottom">
    <TD width=5% align=left valign="top">&nbsp;</TD>
    <TD width=5% align=left valign="top">&#8226; </TD>
    <TD align=left> <div align="justify">During the year ended December 31, 2004
        and 2003, the Company issued 75,700 and 179,133 shares, respectively,
        of its restricted common stock valued at &#36;48,617 and &#36;67,501,
        respectively, to Fred Brackebusch, and 7,760 and 184,067 shares, respectively,
        of its restricted common stock valued at &#36;4,656 and &#36;69,625, respectively,
        to Grant Brackebusch for management services. Of the shares issued in
        2004, 19,191 shares valued at &#36;11,519 were earned during the year
        ended 2003 and were accrued at December 31, 2003.</div></TD>
  </TR>
  <TR>
    <TD width="5%" valign="top">&nbsp;</TD>
    <TD width="5%" valign="top">&nbsp; </TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD width=5% align=left valign="top">&nbsp;</TD>
    <TD width=5% align=left valign="top">&#8226; </TD>
    <TD align=left> <div align="justify">During 2004, the Company issued 10,000
        shares of its restricted common stock to Tina Brackebusch for services
        with a value of &#36;7,000.</div></TD>
  </TR>
</TABLE>
<P align="right"> 47</P>
<HR noshade align="center" width="100%" size=5 color="black" style="page-break-after:always;">
<A name="page_48" id="page_48"></A>
<P> <B><font size="3">New Jersey Mining Company </font></B><font size="3"><br>
  <I>(A Development Stage Company) </I><br>
  <B>Notes to Financial Statements </B></font></P>
<TABLE style="font-size:10pt;border-color:black;border-collapse:collapse;" cellpadding="0" cellspacing="0" width="100%" border="0">
  <TR>
    <TD width="5%" valign=top nowrap> <B>8.</B>&nbsp; &nbsp; &nbsp; </TD>
    <TD> <B>Related Party Transactions, continued:</B> </TD>
  </TR>
</TABLE>
<br>
<TABLE style="font-size:10pt;border-color:black;border-collapse:collapse;" cellpadding="0" cellspacing="0" width="100%" border="0">
  <TR valign="bottom">
    <TD width=5% align=left valign="top">&nbsp;</TD>
    <TD width=5% align=left valign="top">&#8226; </TD>
    <TD align=left> <div align="justify">During the years ended December 31, 2004
        and 2003, the Company issued 70,000 and 18,000 shares, respectively, of
        its restricted common stock to members of the Board of Directors for their
        services as directors. These stock awards were recorded as directors'
        fees of &#36;49,000 and &#36;7,200, respectively, based upon the estimated
        value of the shares issued and services rendered.</div></TD>
  </TR>
  <TR>
    <TD width="5%" align="left" valign="top">&nbsp;</TD>
    <TD width="5%" align="left" valign="top">&nbsp; </TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD width=5% align=left valign="top">&nbsp;</TD>
    <TD width=5% align=left valign="top">&#8226; </TD>
    <TD align=left> <div align="justify">At December 31, 2003, the Company accrued
        non current liabilities due to Fred and Grant Brackebusch of &#36;6,863
        and &#36;4,656, respectively, for management services rendered, which
        were paid in shares of the Company's stock during 2004.</div></TD>
  </TR>
  <TR>
    <TD width="5%" align="left" valign="top">&nbsp;</TD>
    <TD width="5%" align="left" valign="top">&nbsp; </TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD width=5% align=left valign="top">&nbsp;</TD>
    <TD width=5% align=left valign="top">&#8226; </TD>
    <TD align=left> <div align="justify">During the year ended December 31, 2004,
        the Company paid MSD &#36;2,000 for equipment and &#36;4,000 for rental
        of office equipment. The Company also issued MSD 9,200 shares of its restricted
        common stock valued at &#36;5,520 for a vehicle.</div></TD>
  </TR>
  <TR>
    <TD width="5%" align="left" valign="top">&nbsp;</TD>
    <TD width="5%" align="left" valign="top">&nbsp; </TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD width=5% align=left valign="top">&nbsp;</TD>
    <TD width=5% align=left valign="top">&#8226; </TD>
    <TD align=left> <div align="justify">During the year ended December 31, 2003,
        the Company paid MSD &#36;20,000 for engineering services. At December
        31, 2003, the Company had an account payable due MSD of &#36;2,000.</div></TD>
  </TR>
</TABLE>
<BR>
<TABLE style="font-size:10pt;border-color:black;border-collapse:collapse;" cellpadding="0" cellspacing="0" width="100%" border="0">
  <TR>
    <TD width="5%" valign=top nowrap> <B>9.</B>&nbsp; &nbsp; &nbsp; </TD>
    <TD> <B>Environmental Matters</B> </TD>
  </TR>
  <TR>
    <TD colspan=2>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD> <div align="justify">At December 31, 2004 and 2003, the Company has accrued
        &#36;12,500 relating to a reclamation liability at the New Jersey Mine
        site based on management's estimate of the disturbed area existing at
        the property and the related costs to reclaim the area. It is likely that
        in the near-term the Company will become responsible for additional reclamation
        liabilities as it continues in the development of its properties and eventually
        begins commercial production. </div></TD>
  </TR>
  <TR>
    <TD colspan=2>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD> <div align="justify">The Company owns or leases several mineral properties
        located in the Coeur d&#8217;Alene River Basin. In recent years, certain
        other companies involved in mining activities on property interests upland
        of the Coeur d' Alene River Basin have been identified as potentially
        responsible parties under the Comprehensive Environmental Response, Compensation,
        and Liability Act of 1980 (CERCLA), and have entered into consent decrees
        with the Environmental Protection Agency and the state of Idaho, concerning
        environmental remediation obligations and damages to or loss of natural
        resources in the Coeur d' Alene River Basin. The Company has not received
        any notification of a pending action or proceeding against the Company
        relating to environmental claims or assessments as the amounts, if any,
        are not estimable. It is possible, however, that the Company&#8217;s obligation
        could change in the near or longer term, and the resultant liability or
        claim for damages could have a material adverse effect on the Company.</div></TD>
  </TR>
</TABLE>
<P align="right"> 48</P>
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<A name="page_49" id="page_49"></A>
<P align="center"> <B>ITEM 8. </B></P>
<P align="center"> <B>CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON <br>
  ACCOUNTING AND FINANCIAL DISCLOSURE </B></P>
<P> On December 10, 2003, the Company filed an 8-K report concerning a Change
  in Certifying Accountant. An amended 8-K/A concerning the same topic was filed
  on February 2, 2004. The text of the amended 8-K/A follows: </P>
<P> Effective December 10, 2003, the Board of Directors of New Jersey Mining Company
  recommended and directed: </P>
<P> (a) The dismissal of Nathan Wendt, CPA ("Wendt") as the Company's independent
  accountant and the engagement of DeCoria, Maichel &amp; Teague P.S. ("DM&amp;T")
  as the Company's independent accountants to audit the Company's financial statements
  for the year ending December 31, 2003. </P>
<P> The report of Wendt on the Company's financial statements for the past two
  years did not contain an adverse opinion or a disclaimer of opinion and was
  not qualified or modified as to audit scope or accounting principles. Wendt
  did modify its report as to the uncertainty of the Company's ability to continue
  as a going concern. </P>
<P> In connection with the audits of the Company's financial statements for each
  of the two years ended December 31, 2002 and 2001, and in the subsequent interim
  periods, there were no disagreements between the Company and Wendt on any matters
  of accounting principles or practices, financial statement disclosure, or auditing
  scope or procedures that, if not resolved to the satisfaction of Wendt, would
  have caused Wendt to make reference to the subject matter of the disagreement(s)
  in its report. During the two years ended December 31, 2002 and 2001, and through
  December 10, 2003, there have been no reportable events (as defined in Securities
  and Exchange Commission Regulation SK Item 304(a)(1)(iv)). </P>
<P> (b) The Company provided a copy of the disclosure contained in this Current
  Report on Form 8-K to Wendt and requested it to furnish it a letter addressed
  to the Securities and Exchange Commission stating whether it agrees with the
  disclosures made therein. </P>
<P align="right"> 49</P>
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<A name="page_50" id="page_50"></A>
<P align="center"> <B>ITEM 8A.</B></P>
<P align="center"> <B>CONTROLS AND PROCEDURES </B></P>
<P align="left"> An evaluation was performed by the Company's president and principal
  accounting officer of the effectiveness of the design and operation of the Company&#8217;s
  disclosure controls and procedures. Based on that evaluation, the president
  and principal accounting officer concluded that disclosure controls and procedures
  were effective as of December 31, 2004, in ensuring that all material information
  required to be filed in this annual report has been made known to them in a
  timely fashion. </P>
<P align="left"> There has been no change in our internal control over financial
  reporting during the year ended December 31, 2004 that has materially affected,
  or is reasonably likely to materially affect, the Company&#8217;s our internal
  control over financial reporting. </P>
<P align="center"> [The balance of this page has been intentionally left blank.]</P>
<P align="center"> 50</P>
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<A name="page_51" id="page_51"></A>
<P align="center"> <B>PART III </B></P>
<P align="center"> <B>ITEM 9. </B></P>
<P align="center"> <B>DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
  <br>
  COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT </B></P>
<TABLE width="100%" border="2" cellpadding="3" cellspacing="0" bordercolor="#000000" style="font-size:10pt;border-color:black;border-collapse:collapse;">
  <TR valign="bottom">
    <TD align=left valign="top"> <B>Name &amp; Address</B>&nbsp; </TD>
    <TD width=10% align=left valign="top"> <B>Age</B>&nbsp; </TD>
    <TD width=30% align=left valign="top"> <B>Position</B>&nbsp; </TD>
    <TD width=30% align=left valign="top"> <B>Date First Elected</B>&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left valign="top"> Fred W. Brackebusch&nbsp; <br>
      P.O. Box 1019&nbsp; <br>
      Kellogg, Idaho 83837&nbsp; <br> </TD>
    <TD width=10% align=left valign="top"> 60&nbsp; </TD>
    <TD width=30% align=left valign="top"> President, Director &amp; Treasurer&nbsp;
    </TD>
    <TD width=30% align=left valign="top"> 7/18/1996&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left valign="top"> Grant A. Brackebusch&nbsp; <br>
      P.O. Box 131&nbsp; <br>
      Silverton, ID 83867&nbsp; <br> </TD>
    <TD width=10% align=left valign="top"> 35&nbsp; </TD>
    <TD width=30% align=left valign="top"> Vice President &amp; Director&nbsp;
    </TD>
    <TD width=30% align=left valign="top"> 7/18/1996&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left valign="top"> Charles F. Asher&nbsp; <br>
      P.O. Box&nbsp; <br>
      Pinehurst, ID 83850&nbsp; <br> </TD>
    <TD width=10% align=left valign="top"> 81&nbsp; </TD>
    <TD width=30% align=left valign="top"> Director&nbsp; </TD>
    <TD width=30% align=left valign="top"> 1/1/1997&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left valign="top"> Ivan R. Linscott&nbsp; <br>
      7150 Burke Road&nbsp; <br>
      Wallace, ID 83873&nbsp; <br> </TD>
    <TD width=10% align=left valign="top"> 62&nbsp; </TD>
    <TD width=30% align=left valign="top"> Director&nbsp; </TD>
    <TD width=30% align=left valign="top"> 9/21/2004&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left valign="top"> William C. Rust (1)&nbsp; <br>
      P.O. Box 648&nbsp; <br>
      Wallace, ID 83873&nbsp; <br> </TD>
    <TD width=10% align=left valign="top"> 58&nbsp; </TD>
    <TD width=30% align=left valign="top"> Director&nbsp; </TD>
    <TD width=30% align=left valign="top"> 9/21/2004&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left valign="top"> M. Kathleen Sims (1)&nbsp; <br>
      2745 Seltice Way&nbsp; <br>
      Coeur d&#8217;Alene, ID 83814&nbsp; <br> </TD>
    <TD width=10% align=left valign="top"> 60&nbsp; </TD>
    <TD width=30% align=left valign="top"> Director&nbsp; </TD>
    <TD width=30% align=left valign="top"> 9/25/2003&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left valign="top"> Tina C. Brackebusch&nbsp; <br>
      P.O. Box 131&nbsp; <br>
      Silverton, ID 83867&nbsp; </TD>
    <TD width=10% align=left valign="top"> 35&nbsp; </TD>
    <TD width=30% align=left valign="top"> Secretary&nbsp; </TD>
    <TD width=30% align=left valign="top"> 1/1/1997&nbsp; </TD>
  </TR>
</TABLE>
(1) Member of the Audit Committee
<P> Directors are elected by shareholders at each annual shareholders meeting
  to hold office until the next annual meeting of shareholders or until their
  respective successors are elected and qualified. </P>
<P> <B>Fred W. Brackebusch, P.E.</B> is the President and a Director of the Company.
  He has a B.S. and an M.S. in Geological Engineering both from the University
  of Idaho. He is a consulting engineer with extensive experience in mine development,
  mine backfill, mine management, permitting, process control and mine feasibility
  studies. He has over 25 years of experience in the Coeur d'Alene Mining District
  principally with Hecla Mining Co. He has been the principal owner of Mine Systems
  Design, Inc., a mining consulting business, since 1987. Mr. Brackebusch is also
  on the Board of Directors of Mascot Silver-Lead Mines, Inc. </P>
<P> <B>Grant A. Brackebusch, P.E.</B> is the Vice President and a Director of
  the Company. He holds a B.S. in Mining Engineering from the University of Idaho.
  He worked for Newmont Gold Co. in open pit mine planning and pit supervision
  for 3 years. Since that time he has worked with Mine Systems Design performing
  various engineering and geotechnical tasks. He supervises the daily operations
  of New Jersey Mining Co. which include mine operations, mill operations, management
  of contractors, construction, engineering, and is also responsible for the Company&#8217;s
  SEC reporting, environmental monitoring and permitting. </P>
<P align="right"> 51</P>
<HR noshade align="center" width="100%" size=5 color="black" style="page-break-after:always;">
<A name="page_52" id="page_52"></A>
<P> <B>Charles Asher</B> is a Director of the Company. He is also a Director of
  Mascot Silver-Lead Mines Inc. He was formerly President of Plainview Mining
  Co., Silver Trend Mining Co., and Mascot Silver-Lead Mines, Inc. Mr. Asher has
  extensive experience as an underground mine operator in the Coeur d'Alene Mining
  District. </P>
<P> <B>Ivan R. Linscott, PhD </B>is a physicist at Stanford University. He is
  a Senior Research Associate for radioscience spacecraft instrument development
  and is Co-Investigator and Science Team Member for the New Horizons Mission
  to encounter the planet Pluto. Dr. Linscott has a strong interest in doing research
  on exploration techniques in the Coeur d&#8217;Alene Mining District.</P>
<P> <B>William C. Rust </B>is a metallurgical engineer with extensive experience
  in the Silver Valley. He worked for Asarco as Chief Metallurgist. Later he worked
  for CoCa mines at Grouse Creek in Central Idaho and for McCulley, Frick and
  Gilman, an environmental consulting firm. His last assignment was with Getchell
  Gold Inc. in Nevada where he was Mill Manager and Senior Metallurgist for a
  3,200 ton/day gold plant. Mr. Rust is a member of the Audit Committee. </P>
<P> <B>M. Kathleen Sims</B> is a Director of the Company. She is a successful
  businesswoman who is majority owner of a car dealership. She is a former State
  Senator in the Idaho Legislature. She is a former member of the State of Idaho
  Human Rights Commission and is active in the Idaho Republican Party. She has
  extensive experience in starting a business with all the necessary experience
  in financing, business plans and management. Ms. Sims is a member of the Audit
  Committee. </P>
<P> <B>Tina C. Brackebusch </B>is Secretary of the Company. She has served as
  Office Manager for the Company. She holds a B.S. in Secondary Education from
  the University of Idaho. </P>
<P> Family Relationships </P>
<P> Fred W. Brackebusch is the father of Grant A. Brackebusch. Tina C. Brackebusch
  is the wife of Grant A. Brackebusch. </P>
<P> Legal Proceedings </P>
<P> No Director or Officer has been involved in any legal action involving the
  Company for the past five years. </P>
<P> <B>Section 16(a) Beneficial Ownership Reporting Compliance </B></P>
<P> Based solely upon a review of forms 3 and 4 and amendments thereto furnished
  to the Registrant pursuant to Section 240.16a -3 during the most recent fiscal
  year, and Form 5 and amendments thereto furnished to the Registrant with respect
  to the most recent fiscal year, no person who at any time during the fiscal
  year was a director, officer, or beneficial owner or more than ten percent of
  any class of equity securities of the Registrant registered pursuant to Section
  12 of the Exchange Act, or any other person subject to Section 16 of the Exchange
  Act with respect to the Registrant because of the requirements of Section 30
  of the Investment Company Act or Section 17 of the Public Utility Holding Company
  Act (A reporting person) failed to file on a timely basis, as disclosed in the
  above Forms, reports required by Section 16(a) of the Exchange Act during the
  most recent fiscal year or prior fiscal years, except <I>Fred W. Brackebusch
  (one report, 1 transaction), Grant A. Brackebusch (one report, 1 transaction),
  William C. Rust (one report, 1 transaction), and Ivan R. Linscott (one report,
  1 transaction). </I></P>
<P align="right"> 52</P>
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<A name="page_53" id="page_53"></A>
<P> <B>Code Of Ethics </B></P>
<P> The Company adopted a Code of Ethics at a Board of Directors meeting on December
  9, 2003, that applies to the Company's executive officers. It can be found at
  the Company&#8217;s website www.newjerseymining.com</P>
<P> <B>Board Committee </B></P>
<P> At a Board of Directors meeting on September 21, 2004, the Directors approved
  an audit committee comprised of William C. Rust and M. Kathleen Sims. Each member
  of the audit committee is deemed to be an independent director as that term
  is defined in Rule 4200(a)(14) of the NASD&#8217;s listing standards. M. Kathleen
  Sims is the Audit Committee Financial Expert as defined by Section 407 of the
  Sarbanes-Oxley Act. The Board adopted an audit committee pre-approval policy.
  The audit committee is required to pre-approve the audit and non-audit services
  performed by the independent auditor in order to assure that the provision of
  such services do not impair the auditor&#8217;s independence.</P>
<P align="center"> <B>ITEM 10. </B></P>
<P align="center"> <B>EXECUTIVE COMPENSATION </B></P>
<P align="center"> <B>SUMMARY COMPENSATION TABLE</B> </P>
<TABLE width="100%" border="2" cellpadding="3" cellspacing="0" bordercolor="#000000" style="font-size:10pt;border-color:black;border-collapse:collapse;">
  <TR valign="top">
    <TD align=left> Name &amp;&nbsp; <br>
      Principal&nbsp; <br>
      Position&nbsp; <br> </TD>
    <TD width=11% align=center> Year</TD>
    <TD width=11% align=center> Salary<br>
      (&#36;)</TD>
    <TD width=11% align=center> Bonus<br>
      (&#36;) </TD>
    <TD width=11% align=center> Other<br>
      Annual<br>
      Comp. (&#36;)</TD>
    <TD width=11% align=center> Restricted<br>
      Stock<br>
      Awards (&#36;)</TD>
    <TD width=11% align=center> Securities<br>
      Underlying<br>
      Options (#)</TD>
    <TD width=11% align=center> LTIP<br>
      Payouts<br>
      (&#36;)</TD>
    <TD width=11% align=center> All Other<br>
      Compensation<br>
      (&#36;)</TD>
  </TR>
  <TR valign="top">
    <TD rowspan="3" align=left> Fred&nbsp; <br>
      Brackebusch&nbsp; <br>
      President&nbsp; <br> </TD>
    <TD width=11% align=center> 2002&nbsp; </TD>
    <TD width=11% align=center> 0&nbsp; </TD>
    <TD width=11% align=center> 0&nbsp; </TD>
    <TD width=11% align=center> 0&nbsp; </TD>
    <TD width=11% align=center> 450&nbsp; </TD>
    <TD width=11% align=center> 0&nbsp; </TD>
    <TD width=11% align=center> 0&nbsp; </TD>
    <TD width=11% align=center> 0&nbsp; </TD>
  </TR>
  <TR valign="top">
    <TD width=11% align=center> 2003&nbsp; </TD>
    <TD width=11% align=center> 0&nbsp; </TD>
    <TD width=11% align=center> 0&nbsp; </TD>
    <TD width=11% align=center> 0&nbsp; </TD>
    <TD width=11% align=center> 75,564&nbsp; </TD>
    <TD width=11% align=center> 0&nbsp; </TD>
    <TD width=11% align=center> 0&nbsp; </TD>
    <TD width=11% align=center> 0&nbsp; </TD>
  </TR>
  <TR valign="top">
    <TD width=11% align=center> 2004&nbsp; </TD>
    <TD width=11% align=center> 36,000&nbsp; </TD>
    <TD width=11% align=center> 0&nbsp; </TD>
    <TD width=11% align=center> 0&nbsp; </TD>
    <TD width=11% align=center> 41,754&nbsp; </TD>
    <TD width=11% align=center> 0&nbsp; </TD>
    <TD width=11% align=center> 0&nbsp; </TD>
    <TD width=11% align=center> 0&nbsp; </TD>
  </TR>
  <TR valign="top">
    <TD rowspan="3" align=left> Grant&nbsp; <br>
      Brackebusch&nbsp; <br>
      Vice&nbsp; <br>
      President&nbsp; <br> </TD>
    <TD width=11% align=center> 2002&nbsp; </TD>
    <TD width=11% align=center> 0&nbsp; </TD>
    <TD width=11% align=center> 0&nbsp; </TD>
    <TD width=11% align=center> 0&nbsp; </TD>
    <TD width=11% align=center> 450&nbsp; </TD>
    <TD width=11% align=center> 0&nbsp; </TD>
    <TD width=11% align=center> 0&nbsp; </TD>
    <TD width=11% align=center> 0&nbsp; </TD>
  </TR>
  <TR valign="top">
    <TD width=11% align=center> 2003&nbsp; </TD>
    <TD width=11% align=center> 0&nbsp; </TD>
    <TD width=11% align=center> 0&nbsp; </TD>
    <TD width=11% align=center> 0&nbsp; </TD>
    <TD width=11% align=center> 75,481&nbsp; </TD>
    <TD width=11% align=center> 0&nbsp; </TD>
    <TD width=11% align=center> 0&nbsp; </TD>
    <TD width=11% align=center> 0&nbsp; </TD>
  </TR>
  <TR valign="top">
    <TD width=11% align=center> 2004&nbsp; </TD>
    <TD width=11% align=center> 72,000&nbsp; </TD>
    <TD width=11% align=center> 0&nbsp; </TD>
    <TD width=11% align=center> 0&nbsp; </TD>
    <TD width=11% align=center> 7,000&nbsp; </TD>
    <TD width=11% align=center> 0&nbsp; </TD>
    <TD width=11% align=center> 0&nbsp; </TD>
    <TD width=11% align=center> 0&nbsp; </TD>
  </TR>
  <TR valign="top">
    <TD rowspan="3" align=left> Charles. F.&nbsp; <br>
      Asher&nbsp; <br>
      Director&nbsp; <br> </TD>
    <TD width=11% align=center> 2002&nbsp; </TD>
    <TD width=11% align=center> 0&nbsp; </TD>
    <TD width=11% align=center> 0&nbsp; </TD>
    <TD width=11% align=center> 0&nbsp; </TD>
    <TD width=11% align=center> 450&nbsp; </TD>
    <TD width=11% align=center> 0&nbsp; </TD>
    <TD width=11% align=center> 0&nbsp; </TD>
    <TD width=11% align=center> 0&nbsp; </TD>
  </TR>
  <TR valign="top">
    <TD width=11% align=center> 2003&nbsp; </TD>
    <TD width=11% align=center> 0&nbsp; </TD>
    <TD width=11% align=center> 0&nbsp; </TD>
    <TD width=11% align=center> 0&nbsp; </TD>
    <TD width=11% align=center> 1,200&nbsp; </TD>
    <TD width=11% align=center> 0&nbsp; </TD>
    <TD width=11% align=center> 0&nbsp; </TD>
    <TD width=11% align=center> 0&nbsp; </TD>
  </TR>
  <TR valign="top">
    <TD width=11% align=center> 2004&nbsp; </TD>
    <TD width=11% align=center> 0&nbsp; </TD>
    <TD width=11% align=center> 0&nbsp; </TD>
    <TD width=11% align=center> 0&nbsp; </TD>
    <TD width=11% align=center> 7,000&nbsp; </TD>
    <TD width=11% align=center> 0&nbsp; </TD>
    <TD width=11% align=center> 0&nbsp; </TD>
    <TD width=11% align=center> 0&nbsp; </TD>
  </TR>
  <TR valign="top">
    <TD rowspan="3" align=left> Ivan R.&nbsp; <br>
      Linscott&nbsp; <br>
      Director&nbsp; <br> </TD>
    <TD width=11% align=center> 2002&nbsp; </TD>
    <TD width=11% align=center> N/A&nbsp; </TD>
    <TD width=11% align=center> N/A&nbsp; </TD>
    <TD width=11% align=center> N/A&nbsp; </TD>
    <TD width=11% align=center> N/A&nbsp; </TD>
    <TD width=11% align=center> N/A&nbsp; </TD>
    <TD width=11% align=center> N/A&nbsp; </TD>
    <TD width=11% align=center> N/A&nbsp; </TD>
  </TR>
  <TR valign="top">
    <TD width=11% align=center> 2003&nbsp; </TD>
    <TD width=11% align=center> N/A&nbsp; </TD>
    <TD width=11% align=center> N/A&nbsp; </TD>
    <TD width=11% align=center> N/A&nbsp; </TD>
    <TD width=11% align=center> N/A&nbsp; </TD>
    <TD width=11% align=center> N/A&nbsp; </TD>
    <TD width=11% align=center> N/A&nbsp; </TD>
    <TD width=11% align=center> N/A&nbsp; </TD>
  </TR>
  <TR valign="top">
    <TD width=11% align=center> 2004&nbsp; </TD>
    <TD width=11% align=center> 0&nbsp; </TD>
    <TD width=11% align=center> 0&nbsp; </TD>
    <TD width=11% align=center> 0&nbsp; </TD>
    <TD width=11% align=center> 7,000&nbsp; </TD>
    <TD width=11% align=center> 0&nbsp; </TD>
    <TD width=11% align=center> 0&nbsp; </TD>
    <TD width=11% align=center> 0&nbsp; </TD>
  </TR>
  <TR valign="top">
    <TD rowspan="3" align=left> William C.&nbsp; <br>
      Rust&nbsp; <br>
      Director&nbsp; <br> </TD>
    <TD width=11% align=center> 2002&nbsp; </TD>
    <TD width=11% align=center> N/A&nbsp; </TD>
    <TD width=11% align=center> N/A&nbsp; </TD>
    <TD width=11% align=center> N/A&nbsp; </TD>
    <TD width=11% align=center> N/A&nbsp; </TD>
    <TD width=11% align=center> N/A&nbsp; </TD>
    <TD width=11% align=center> N/A&nbsp; </TD>
    <TD width=11% align=center> N/A&nbsp; </TD>
  </TR>
  <TR valign="top">
    <TD width=11% align=center> 2003&nbsp; </TD>
    <TD width=11% align=center> N/A&nbsp; </TD>
    <TD width=11% align=center> N/A&nbsp; </TD>
    <TD width=11% align=center> N/A&nbsp; </TD>
    <TD width=11% align=center> N/A&nbsp; </TD>
    <TD width=11% align=center> N/A&nbsp; </TD>
    <TD width=11% align=center> N/A&nbsp; </TD>
    <TD width=11% align=center> N/A&nbsp; </TD>
  </TR>
  <TR valign="top">
    <TD width=11% align=center> 2004&nbsp; </TD>
    <TD width=11% align=center> 0&nbsp; </TD>
    <TD width=11% align=center> 0&nbsp; </TD>
    <TD width=11% align=center> 0&nbsp; </TD>
    <TD width=11% align=center> 7,000&nbsp; </TD>
    <TD width=11% align=center> 0&nbsp; </TD>
    <TD width=11% align=center> 0&nbsp; </TD>
    <TD width=11% align=center> 0&nbsp; </TD>
  </TR>
  <TR valign="top">
    <TD rowspan="3" align=left> M. Kathleen&nbsp; <br>
      Sims&nbsp; <br>
      Director&nbsp; <br> </TD>
    <TD width=11% align=center> 2002&nbsp; </TD>
    <TD width=11% align=center> N/A&nbsp; </TD>
    <TD width=11% align=center> N/A&nbsp; </TD>
    <TD width=11% align=center> N/A&nbsp; </TD>
    <TD width=11% align=center> N/A&nbsp; </TD>
    <TD width=11% align=center> N/A&nbsp; </TD>
    <TD width=11% align=center> N/A&nbsp; </TD>
    <TD width=11% align=center> N/A&nbsp; </TD>
  </TR>
  <TR valign="top">
    <TD width=11% align=center> 2003&nbsp; </TD>
    <TD width=11% align=center> 0&nbsp; </TD>
    <TD width=11% align=center> 0&nbsp; </TD>
    <TD width=11% align=center> 0&nbsp; </TD>
    <TD width=11% align=center> 1,200&nbsp; </TD>
    <TD width=11% align=center> 0&nbsp; </TD>
    <TD width=11% align=center> 0&nbsp; </TD>
    <TD width=11% align=center> 0&nbsp; </TD>
  </TR>
  <TR valign="top">
    <TD width=11% align=center> 2004&nbsp; </TD>
    <TD width=11% align=center> 0&nbsp; </TD>
    <TD width=11% align=center> 0&nbsp; </TD>
    <TD width=11% align=center> 0&nbsp; </TD>
    <TD width=11% align=center> 7,000&nbsp; </TD>
    <TD width=11% align=center> 0&nbsp; </TD>
    <TD width=11% align=center> 0&nbsp; </TD>
    <TD width=11% align=center> 0&nbsp; </TD>
  </TR>
  <TR valign="top">
    <TD rowspan="3" align=left> Tina C.&nbsp; <br>
      Brackebusch&nbsp; <br>
      Secretary&nbsp; </TD>
    <TD width=11% align=center> 2002&nbsp; </TD>
    <TD width=11% align=center> 0&nbsp; </TD>
    <TD width=11% align=center> 0&nbsp; </TD>
    <TD width=11% align=center> 0&nbsp; </TD>
    <TD width=11% align=center> 450&nbsp; </TD>
    <TD width=11% align=center> 0&nbsp; </TD>
    <TD width=11% align=center> 0&nbsp; </TD>
    <TD width=11% align=center> 0&nbsp; </TD>
  </TR>
  <TR valign="top">
    <TD width=11% align=center> 2003&nbsp; </TD>
    <TD width=11% align=center> 0&nbsp; </TD>
    <TD width=11% align=center> 0&nbsp; </TD>
    <TD width=11% align=center> 0&nbsp; </TD>
    <TD width=11% align=center> 1,200&nbsp; </TD>
    <TD width=11% align=center> 0&nbsp; </TD>
    <TD width=11% align=center> 0&nbsp; </TD>
    <TD width=11% align=center> 0&nbsp; </TD>
  </TR>
  <TR valign="top">
    <TD width=11% align=center> 2004&nbsp; </TD>
    <TD width=11% align=center> 2,070&nbsp; </TD>
    <TD width=11% align=center> 0&nbsp; </TD>
    <TD width=11% align=center> 0&nbsp; </TD>
    <TD width=11% align=center> 7,000&nbsp; </TD>
    <TD width=11% align=center> 0&nbsp; </TD>
    <TD width=11% align=center> 0&nbsp; </TD>
    <TD width=11% align=center> 0&nbsp; </TD>
  </TR>
</TABLE>
<P align="right"> 53</P>
<HR noshade align="center" width="100%" size=5 color="black" style="page-break-after:always;">
<A name="page_54" id="page_54"></A>
<P> At a Board of Directors meeting on December 9, 2003, the Directors approved
  a compensation plan for the Board of Directors and Management. For the Directors
  and the Secretary it was approved to increase the annual compensation to 10,000
  common shares of restricted stock, commencing in 2004. Also, as a result of
  the need for full time management the following salaries were approved for 2004
  by the Directors: Fred W. Brackebusch, &#36;3,000 per month for management,
  Grant A. Brackebusch, &#36;6,000 per month for management and Tina C. Brackebusch,
  &#36;12 per hour for secretarial work.</P>
<P> Officers and Directors were paid for their services with 3,000 shares of restricted
  common stock per year for the years 2002 and 2003 and 10,000 shares of restricted
  common stock in 2004. A value of &#36;0.15 per share was ascribed to the shares
  in 2002, &#36;0.40 per share in 2003, and &#36;0.70 per share in 2004. </P>
<P align="center"> <B>ITEM 11. </B></P>
<P align="center"> <B>SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND <br>
  MANAGEMENT</B> </P>
<P> The following table sets forth information on the ownership of the Company's
  voting securities by Officers, Directors and major shareholders as those who
  own beneficially more than five percent of the Company's common stock through
  the most current date - March 10, 2004.</P>
<B>Security Ownership of Certain Beneficial Owners and Management </B>
<TABLE width="100%" border="2" cellpadding="3" cellspacing="0" bordercolor="#000000" style="font-size:10pt;border-color:black;border-collapse:collapse;">
  <TR align="center" valign="top">
    <TD width=23%> Title of Class</TD>
    <TD> Name and Address Of<br>
      Beneficial Owner</TD>
    <TD width=23%> Amount and Nature of<br> &nbsp;Beneficial Owner</TD>
    <TD width=23%> Percent of Class (1)</TD>
  </TR>
  <TR valign="top">
    <TD width=23% align=left> Common&nbsp; </TD>
    <TD align=left> Fred W. Brackebusch&nbsp; <br>
      P.O. Box 1019&nbsp; <br>
      Kellogg, Idaho 83837&nbsp; <br> </TD>
    <TD width=23% align=right valign="middle"> 7,899,315 indirect (a)&nbsp;<br>
      292,800 direct&nbsp; </TD>
    <TD width=23% align=center valign="middle"> 37.79% </TD>
  </TR>
  <TR valign="top">
    <TD width=23% align=left> Common&nbsp; </TD>
    <TD align=left> Grant A. Brackebusch&nbsp; <br>
      P.O. Box 131&nbsp; <br>
      Silverton, ID 83837&nbsp; <br> </TD>
    <TD width=23% align=right valign="middle"> 916,885 indirect (b)&nbsp;<br>
      249,136 direct&nbsp; </TD>
    <TD width=23% align=center valign="middle"> 5.38% </TD>
  </TR>
  <TR valign="top">
    <TD width=23% align=left> Common&nbsp; </TD>
    <TD align=left> Terry &amp; Marguerite Tyson&nbsp; <br>
      County Road U&nbsp; <br>
      Lipscomb, TX 79056&nbsp; <br> </TD>
    <TD width=23% align=right valign="middle"> 1,380,000 direct&nbsp; <br>
      883,000 indirect&nbsp; </TD>
    <TD width=23% align=center valign="middle"> 10.44% </TD>
  </TR>
  <TR valign="top">
    <TD width=23% align=left> Common&nbsp; </TD>
    <TD align=left> Charles F. Asher&nbsp; <br>
      P.O. Box 444&nbsp; <br>
      Pinehurst, ID 83850&nbsp; <br> </TD>
    <TD width=23% align=right valign="middle"> 74,000&nbsp; </TD>
    <TD width=23% align=center valign="middle"> 0.34% </TD>
  </TR>
  <TR valign="top">
    <TD width=23% align=left> Common&nbsp; </TD>
    <TD align=left> Ivan R. Linscott&nbsp; <br>
      7150 Burke Road&nbsp; <br>
      Wallace, ID 83873&nbsp; <br> </TD>
    <TD width=23% align=right valign="middle"> 10,000&nbsp; </TD>
    <TD width=23% align=center valign="middle"> 0.05% </TD>
  </TR>
  <TR valign="top">
    <TD width=23% align=left> Common&nbsp; </TD>
    <TD align=left> William C. Rust&nbsp; <br>
      P.O. Box 648&nbsp; <br>
      Wallace, ID 83873&nbsp; <br> </TD>
    <TD width=23% align=right valign="middle"> 10,000&nbsp; </TD>
    <TD width=23% align=center valign="middle"> 0.05% </TD>
  </TR>
  <TR valign="top">
    <TD width=23% align=left> Common&nbsp; </TD>
    <TD align=left> M. Kathleen Sims&nbsp; <br>
      2745 Seltice Way&nbsp; <br>
      Coeur d&#8217;Alene, ID 83814&nbsp; <br> </TD>
    <TD width=23% align=right valign="middle"> 13,000&nbsp; </TD>
    <TD width=23% align=center valign="middle"> 0.06% </TD>
  </TR>
  <TR valign="top">
    <TD width=23% align=left> Common&nbsp; </TD>
    <TD align=left> Tina C. Brackebusch&nbsp; <br>
      P.O. Box 131&nbsp; <br>
      Silverton, ID 83867&nbsp; <br> </TD>
    <TD width=23% align=right valign="middle"> 28,000&nbsp; </TD>
    <TD width=23% align=center valign="middle"> 0.13% </TD>
  </TR>
  <TR valign="top">
    <TD width=23% align=left> Common&nbsp; </TD>
    <TD align=left> All Directors and Officers as&nbsp; <br>
      a group (7 individuals)&nbsp; </TD>
    <TD width=23% align=right valign="middle"> 9,493,136&nbsp; </TD>
    <TD width=23% align=center valign="middle"> 43.79% </TD>
  </TR>
</TABLE>
<P align="right"> 54</P>
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<A name="page_55" id="page_55"></A>
<P> (1)Based upon 21,679,070 outstanding shares of common stock at March 10, 2004.
</P>
<P> (a) Fred Brackebusch owns 89.6% of Mine Systems Design, Inc.(MSD) which is
  a Subchapter S corporation that owns 8,816,200 common shares of the Company.
  Neither MSD nor Fred Brackebusch have the right to acquire any securities pursuant
  to options, warrants, conversion privileges or other rights. </P>
<P> (b) Grant Brackebusch owns 10.4% of Mine Systems Design, Inc.(MSD) which is
  a Subchapter S corporation that owns 8,816,200 common shares of the Company.
  Neither MSD nor Grant Brackebusch have the right to acquire any securities pursuant
  to options, warrants, conversion privileges or other rights.</P>
<P> None of the directors or officers have the right to acquire any securities
  pursuant to options, warrants, conversion privileges or other rights. </P>
<P align="center"> <B>ITEM 12. </B></P>
<P align="center"> <B>CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS </B></P>
<P> During the years ended December 31, 2004 and 2003, the Company issued 70,000
  and 18,000 shares, respectively, of its restricted common stock to members of
  the Board of Directors for their services as directors. These stock awards were
  recorded as directors' fees of &#36;49,000 and &#36;7,200, respectively, based
  upon the estimated value of the shares issued and services rendered. </P>
<P> During the year ended December 31, 2004 and 2003, the Company issued 75,700
  and 179,133 shares, respectively, of its restricted common stock valued at &#36;48,617
  and &#36;67,501, respectively, to Fred Brackebusch, and 7,760 and 184,067 shares,
  respectively, of its restricted common stock valued at &#36;4,656 and &#36;69,625,
  respectively, to Grant Brackebusch for management services. Of the shares issued
  in 2004, 19,191 shares valued at &#36;11,519 were earned during the year ended
  2003 and were accrued at December 31, 2003. </P>
<P> Additionally during 2004, the Company issued 10,000 shares of its restricted
  common stock to Tina Brackebusch for services, with a value of &#36;7,000. </P>
<P> At December 31, 2003, the Company accrued noncurrent liabilities due to Fred
  and Grant Brackebusch of &#36;6,863 and &#36;4,656, respectively, for management
  services rendered, which were paid in shares of the Company's stock during the
  first quarter of 2004. </P>
<P> During 2004, the Company issued 9,200 shares of its common stock to MSD for
  a pickup valued at &#36;5,520. The Company also paid MSD &#36;2,000 for equipment
  and &#36;4,000 for rent in 2004. During 2003, the Company paid MSD &#36;20,000
  for engineering services. At December 31, 2003, the Company had an account payable
  due MSD of &#36;2,000. </P>
<P align="center"> <B>ITEM 13. </B></P>
<P align="center"> <B>EXHIBITS AND REPORTS ON FORM 8-K </B></P>
<TABLE width="100%" border="2" cellpadding="3" cellspacing="0" bordercolor="#000000" style="font-size:10pt;border-color:black;border-collapse:collapse;">
  <TR valign="bottom">
    <TD width=10% align=left valign="top"> (3)(i) </TD>
    <TD align=left> Articles of Incorporation - Filed as an exhibit to the registrant's
      registration statement on Form 10-SB (Commission File No. 000-28837) and
      incorporated by reference herein.</TD>
  </TR>
</TABLE>
<P align="right"> 55</P>
<HR noshade align="center" width="100%" size=5 color="black" style="page-break-after:always;">
<A name="page_56" id="page_56"></A> <br>
<TABLE width="100%" border="2" cellpadding="3" cellspacing="0" bordercolor="#000000" style="font-size:10pt;border-color:black;border-collapse:collapse;">
  <TR valign="bottom">
    <TD width=10% align=left valign="top"> (3)(ii) </TD>
    <TD align=left valign="top"> Bylaws - Filed as an exhibit to the registrant's
      registration statement on Form 10-SB (Commission File No. 000-28837) and
      incorporated by reference herein.</TD>
  </TR>
  <TR valign="bottom">
    <TD width=10% align=left valign="top"> (10)(1) </TD>
    <TD align=left valign="top"> Lease Agreement with William Zanetti - Filed
      as an exhibit to the registrant's registration statement on Form 10-SB (Commission
      File No. 000-28837) and incorporated by reference herein.</TD>
  </TR>
  <TR valign="bottom">
    <TD width=10% align=left valign="top"> (10)(2) </TD>
    <TD align=left valign="top"> Articles of Merger For Plainview Mining Company
      Inc. and New Jersey Mining Co. - Filed as an exhibit to the registrant's
      registration statement on Form 10-SB (Commission File No. 000-28837) and
      incorporated by reference herein.</TD>
  </TR>
  <TR valign="bottom">
    <TD width=10% align=left valign="top"> (10)(3) </TD>
    <TD align=left valign="top"> Lease Agreement with Mine Systems Design, Inc.
      - Filed as an exhibit to the registrant's annual report on Form 10-KSB for
      the year ended December 31, 2001 and incorporated by reference herein.</TD>
  </TR>
  <TR valign="bottom">
    <TD width=10% align=left valign="top"> (10)(4) </TD>
    <TD align=left valign="top"> Articles of Merger for Gold Run Gulch Mining
      Company and New Jersey Mining Co. Filed as an exhibit to the registrant's
      annual report on Form 10-KSB for the year ended December 31, 2002 and incorporated
      by reference herein.</TD>
  </TR>
  <TR valign="bottom">
    <TD width=10% align=left valign="top"> (10)(5) </TD>
    <TD align=left valign="top"> Exploration Agreement and Option to Lease between
      Paymaster Resources, Inc. and New Jersey Mining Company with the approval
      of J.W. Beasley Interests LLC. Filed as an exhibit to the registrant&#8217;s
      annual report on Form 10-KSB for the year ended December 31, 2003 and incorporated
      by reference herein.</TD>
  </TR>
  <TR valign="bottom">
    <TD width=10% align=left valign="top"> (10)(6) </TD>
    <TD align=left valign="top"> Exploration Agreement and Option to Lease between
      Prichard Creek Resource Partners LLC and New Jersey Mining Company. Filed
      as an exhibit to the registrant&#8217;s annual report on Form 10-KSB for
      the year ended December 31, 2003 and incorporated by reference herein.</TD>
  </TR>
  <TR valign="bottom">
    <TD width=10% align=left valign="top"> (14) </TD>
    <TD align=left valign="top"> Code of Ethics. Filed as an exhibit to the registrant&#8217;s
      annual report on Form 10-KSB for the year ended December 31, 2003, and incorporated
      by reference herein.</TD>
  </TR>
  <TR valign="bottom">
    <TD width=10% align=left valign="top"> (16) </TD>
    <TD align=left valign="top"> Letter on Change in Certifying Accountant. Filed
      as an 8-K report on December 10, 2003 and later filed as an 8-K/A on February
      2, 2004, and incorporated by reference herein.</TD>
  </TR>
  <TR valign="bottom">
    <TD width=10% align=left valign="top"> (31)</TD>
    <TD align=left valign="top"> Rule 13a-14(a)/15d-14(a) Certifications</TD>
  </TR>
  <TR valign="bottom">
    <TD width=10% align=left valign="top"> <a href="exhibit31-1.htm">(31)(i)</a>
    </TD>
    <TD align=left valign="top"> <a href="exhibit31-1.htm">Certification of Fred
      W. Brackebusch</a></TD>
  </TR>
  <TR valign="bottom">
    <TD width=10% align=left valign="top"> (32) </TD>
    <TD align=left valign="top"> Section 1350 Certifications</TD>
  </TR>
  <TR valign="bottom">
    <TD width=10% align=left valign="top"> <a href="exhibit32-1.htm">(32)(i)</a>
    </TD>
    <TD align=left valign="top"> <a href="exhibit32-1.htm">Certification of Fred
      W. Brackebusch</a></TD>
  </TR>
  <TR valign="bottom">
    <TD width=10% align=left valign="top"> (99)(i) </TD>
    <TD align=left valign="top"> Audit Committee Pre-Approval Policies. Filed
      as an exhibit to the registrant&#8217;s annual report on Form 10-KSB for
      the year ended December 31, 2003 and incorporated by reference herein.</TD>
  </TR>
</TABLE>
<P> <B>Reports on Form 8-K</B></P>
<P> On October 6, 2005, the Company filed a Form 8-K report that referenced a
  press release announcing the retirement of Director Ronald Eggart and the appointment
  of two new Directors to the Board of Directors &#8211; William C. Rust and Ivan
  R. Linscott. </P>
<P> On December 17, 2004, the Company filed a Form 8-K report that referenced
  a press release announcing that the Company&#8217;s Board of Directors had approved
  exercising a mining lease at the Golden Chest mine. </P>
<P align="right"> 56</P>
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<A name="page_57" id="page_57"></A>
<P align="center"> <B>ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES </B></P>
<P> The Board of Directors has adopted an audit committee pre-approval policy.
  The audit committee is required to pre-approve the audit and non-audit services
  performed by the independent auditor in order to assure that the provision of
  such services do not impair the auditor&#8217;s independence. </P>
<P> Audit Fees </P>
<P> The aggregate fees billed for professional services rendered by the Company&#8217;s
  principal accountant for the audit of the Company&#8217;s annual financial statements
  for the fiscal years ended December 31, 2004 and 2003 and the review for the
  financial statements included in the Company&#8217;s quarterly reports on Form
  10-QSB during those fiscal years were &#36;20,000 and &#36;17,648 respectively.
</P>
<P> Audit Related Fees </P>
<P> The Company incurred no fees during the last two fiscal years for assurance
  and related services by the Company&#8217;s principal accountant that were reasonably
  related to the performance of the audit or review of the Company&#8217;s financial
  statements, and not reported under &#8220;Audit Fees&#8221; above. </P>
<P> Tax Fees </P>
<P> The Company incurred no fees during the last two fiscal years for professional
  services rendered by the Company&#8217;s principal accountant for tax compliance,
  tax advice and tax planning. </P>
<P> All Other Fees </P>
<P> The Company incurred other no fees during the last two fiscal years for products
  and services rendered by the Company&#8217;s principal accountant. </P>
<P align="right"> 57</P>
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<A name="page_58" id="page_58"></A>
<P align="center"> <b>SIGNATURES</b></P>
<P> In accordance with the Exchange Act, this report has been signed below by
  the following persons on behalf of the registrant and in the capacities and
  on the dates indicated. </P>
<P> New Jersey Mining Company </P>
<TABLE style="font-size:10pt;border-color:black;border-collapse:collapse;" cellpadding="0" cellspacing="0" width="100%" border="0">
  <TR valign="bottom">
    <TD width=40% align=left> Date:
      June&nbsp; 3, 2005 </TD>
    <TD width=4% align=left>&nbsp;</TD>
    <TD align=left> <U>By:&nbsp;&nbsp;/s/ FRED W. BRACKEBUSCH</U>&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD width=40% align=left>&nbsp; </TD>
    <TD width=4% align=left>&nbsp;</TD>
    <TD align=left>Fred W. Brackebusch, President, Treasurer &amp; Director&nbsp;
    </TD>
  </TR>
  <TR>
    <TD width="40%">&nbsp; </TD>
    <TD width="4%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD width=40% align=left> Date: June&nbsp;
      3, 2005 </TD>
    <TD width=4% align=left>&nbsp;</TD>
    <TD align=left><U>By /s/ GRANT A. BRACKEBUSCH</U>&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD width=40% align=left>&nbsp; </TD>
    <TD width=4% align=left>&nbsp;</TD>
    <TD align=left>Grant A. Brackebusch, Vice President &amp; Director&nbsp; </TD>
  </TR>
  <TR>
    <TD width="40%">&nbsp; </TD>
    <TD width="4%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD width=40% align=left> Date: June&nbsp;
      3, 2005 </TD>
    <TD width=4% align=left>&nbsp;</TD>
    <TD align=left> <U>By:&nbsp;&nbsp;/s/ CHARLES F. ASHER</U>&nbsp; </TD>
  </TR>
  <TR align="left" valign="bottom">
    <TD width=40%>&nbsp; </TD>
    <TD width=4%>&nbsp;</TD>
    <TD>Charles F. Asher, Director </TD>
  </TR>
  <TR>
    <TD width="40%">&nbsp; </TD>
    <TD width="4%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD width=40% align=left> Date: June&nbsp;
      3, 2005 </TD>
    <TD width=4% align=left>&nbsp;</TD>
    <TD align=left> <U>By:&nbsp;&nbsp;/s/ IVAN R. LINSCOTT</U>&nbsp; </TD>
  </TR>
  <TR align="left" valign="bottom">
    <TD width=40%>&nbsp; </TD>
    <TD width=4%>&nbsp;</TD>
    <TD>Ivan R. Linscott, Director </TD>
  </TR>
  <TR>
    <TD width="40%">&nbsp; </TD>
    <TD width="4%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD width=40% align=left> Date: June&nbsp;
      3, 2005 </TD>
    <TD width=4% align=left>&nbsp;</TD>
    <TD align=left> <U>By:&nbsp;&nbsp;/s/ WILLIAM C. RUST</U>&nbsp; </TD>
  </TR>
  <TR align="left" valign="bottom">
    <TD width=40%>&nbsp; </TD>
    <TD width=4%>&nbsp;</TD>
    <TD>William C. Rust, Director </TD>
  </TR>
  <TR>
    <TD width="40%">&nbsp; </TD>
    <TD width="4%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD width=40% align=left> Date: June&nbsp;
      3, 2005 </TD>
    <TD width=4% align=left>&nbsp;</TD>
    <TD align=left> <U>By:&nbsp;&nbsp;/s/ M. KATHLEEN SIMS</U>&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD width=40% align=left>&nbsp; </TD>
    <TD width=4% align=left>&nbsp;</TD>
    <TD align=left>M. Kathleen Sims, Director&nbsp; </TD>
  </TR>
</TABLE>
<BR>
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<P align="right"> 58</P>
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<DOCUMENT>
<TYPE>EX-31.1
<SEQUENCE>3
<FILENAME>exhibit31-1.htm
<DESCRIPTION>SECTION 302 CERTIFICATION OF THE CEO AND CFO
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   <TITLE>Filed by Automated Filing Services Inc. (604) 609-0244 - New Jersey Mining Company - Exhibit 31.1</TITLE>

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<B>Exhibit 31.1 </B></P>
<P align="center">
<B>Certification </B></P>
<P align="left"> I, Fred W. Brackebusch, certify that: </P>
<P align="left"> (1)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; I have reviewed
  this annual report on Form 10-KSB of New Jersey Mining Company. </P>
<P align="left"> (2) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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;</P>
<P align="left"> (3) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 small business issuer as of, and for, the periods
  presented in this report;</P>
<P align="left"> (4) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;I am responsible
  for establishing and maintaining disclosure controls and procedures (as defined
  in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the small business issuer
  and have: </P>
<p style="margin-left:5%">(a) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Designed
  such disclosure controls and procedures, or caused such disclosure controls
  and procedures to be designed under my supervision, to ensure that material
  information relating to the small business issuer, including its consolidated
  subsidiaries, is made known to me by others within those entities, particularly
  during the period in which this report is being prepared;</p>
<p style="margin-left:5%">(b) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Not required;</p>
<p style="margin-left:5%">(c) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Evaluated
  the effectiveness of the small business issuer'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 </p>
<p style="margin-left:5%">(d) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Disclosed
  in this report any change in the small business issuer's internal control over
  financial reporting that occurred during the small business issuer's most recent
  fiscal quarter (the small business issuer's fourth fiscal quarter in the case
  of an annual report) that has materially affected, or is reasonably likely to
  materially affect, the small business issuer's internal control over financial
  reporting; and</p>
<P align="left"> (5) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;I have disclosed,
  based on my most recent evaluation of
  internal control over financial reporting , to the small business issuer's
  auditors and the audit committee of the small business issuer's board of directors
  (or persons performing the equivalent functions):</P>
<p style="margin-left:5%">(a) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 small business issuer's ability to record, process, summarize and report
  financial information; and</p>
<p style="margin-left:5%">(b) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any fraud,
  whether or not material, that involves management or other employees who have
  a significant role in the small business issuer's internal control over financial
  reporting.</p>
<P align="left"> Date: June
  3, 2005 </P>
<P align="left"> <U>By /s/ FRED W. BRACKEBUSCH</U> <br>
  Fred W. Brackebusch, President, Treasurer &amp; Director </P>
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<DOCUMENT>
<TYPE>EX-32.1
<SEQUENCE>4
<FILENAME>exhibit32-1.htm
<DESCRIPTION>SECTION 906 CERTIFICATION OF THE CEO AND CFO
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   <TITLE>Filed by Automated Filing Services Inc. (604) 609-0244 - New Jersey Mining Company - Exhibit 32.1</TITLE>

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<B>Exhibit 32.1 </B></P>
<P align="center"> <B>CERTIFICATION PURSUANT TO<br>
  18 U.S.C. SECTION 1350, <br>
  AS ADOPTED PURSUANT TO </B><br>
  <B>SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 </B></P>
<P align="justify"> In connection with the Annual Report of New Jersey Mining
  Company, (the "Company") on Form 10-KSB for the period ending December 31, 2004,
  as filed with the Securities and Exchange Commission on the date hereof (the
  "Report"), I, Fred W. Brackebusch, President, Treasurer and Director of New
  Jersey Mining Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted
  pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that: </P>
<TABLE style="font-size:10pt;border-color:black;border-collapse:collapse;" cellpadding="0" cellspacing="0" width="100%" border="0">
  <TR>
    <TD width="5%" valign=top nowrap> (1)&nbsp; &nbsp; &nbsp; </TD>
    <TD> <div align="justify">The Report fully complies with the requirements
        of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
      </div></TD>
  </TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="5%" valign=top nowrap> (2)&nbsp; &nbsp; &nbsp; </TD>
    <TD> <div align="justify">The information contained in the Report fairly presents,
        in all material respects, the financial condition and results of operations
        of the Company. </div></TD>
  </TR>
</TABLE>
<P> Date:  <u>June 3, 2005</u>
</P>
<P> <U>By /s/ FRED W. BRACKEBUSCH</U> <br>
  Fred W. Brackebusch, President, Treasurer &amp; Director </P>
<P>&nbsp;</P>
<P align="center"> [The balance of this page has been intentionally left blank.]
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end
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</DOCUMENT>
<DOCUMENT>
<TYPE>CORRESP
<SEQUENCE>6
<FILENAME>filename6.htm
<TEXT>
<!DOCTYPE HTML PUBLIC "response">


<HTML>
<HEAD>
   <TITLE>Filed by Automated Filing Services Inc. (604) 609-0244 - New Jersey Mining Company - Response Letter</TITLE>

</HEAD>

<BODY bgcolor="#FFFFFF" style="font-size: 10pt;">
<A name="page_1"></A>
<hr noshade align="center" width="100%" size=3 color="black">
<p align="center"> <B><font size="5">New Jersey Mining Company </font></B><br>
  P.O. BOX 1019 <br>
  KELLOGG, ID 83837<br>
  (208) 783-3331 [PHONE OR FAX] </p>
<P align="right"> June 3, 2005 </P>
<P>H. Roger Schwall, Assistant Director<br>
  United States Securities and Exchange Commission <br>
  450 Fifth Street, N.W., Stop 4-5 <br>
  Washington, D.C. 20549 </P>
<P>
Dear Director Schwall: </P>
<P align="justify"> Following are responses to SEC comments on the Company&#8217;s
  2004 Form 10-KSB which were faxed to our office on 18 May 2005. Our auditors
  and I have communicated with Ms. Regina Balderas by telephone on 25 May. We
  have not been able to contact Mr. George K. Schuler, Mining Engineer by phone.
  I believe we have responded fully to the comments made by SEC. A marked filing
  of the proposed revisions to the Form 10-KSB is included for reference. </P>
<P>
<B><U>Report of Independent Registered Public Accounting firm, page 24</U></B><B> </B></P>
<TABLE style="font-size:10pt;border-color:black;border-collapse:collapse;" cellpadding="0" cellspacing="0" width="100%" border="0">
  <TR>
    <TD width="5%" valign=top nowrap> <B><I>1.</I></B>&nbsp; &nbsp; &nbsp; </TD>
    <TD> <div align="justify"><B><U>Comment</U></B><B><I>: We note that you present
        the cumulative results of operations, changes in stockholders&#8217; equity
        and statements of cash flows for the period from inception on July 18,
        1996 to December 31, 2004 as audited. However, your auditors indicate
        in their report that they did not audit the portion of those cumulative
        totals for the period from inception on July 18, 1996 to December 31,
        2002. Since there is no disclosure or labeling to suggest the information
        related to the period from inception on July 18, 1996 to December 31,
        2002, is unaudited, it will be necessary to amend your filing to include
        the other auditor&#8217;s report, provided that auditor is willing to
        reissue the opinion, or to otherwise label such information as unaudited
        until you are able to make other arrangements. Please contact us, along
        with you independent auditors, to discuss the requested items above prior
        to submitting your response.</I></B> </div></TD>
  </TR>
  <TR>
    <TD colspan=2>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD> <div align="justify"><B><U>Response</U></B>: The statements of operations,
        changes in stockholders&#8217; equity and cash flows have been amended
        to label cumulative results as unaudited. </div></TD>
  </TR>
</TABLE>
<P>
<B><U>Statement of Changes in Stockholders&#8217; Equity, page 28</U></B><B> </B></P>
<TABLE style="font-size:10pt;border-color:black;border-collapse:collapse;" cellpadding="0" cellspacing="0" width="100%" border="0">
  <TR>
    <TD nowrap valign=top> <B>2.</B>&nbsp; &nbsp; &nbsp; </TD>
    <TD> <B><U>Comment</U></B><B>: </B><B><I>With regard to transaction reflected
      in the line item &#8220;Issuance of common stock for services&#8221; during
      the year ended December 31, 1999, tell us the reasons there was no change
      in common stock amount pertaining to the 79,300 shares issued.</I></B> </TD>
  </TR>
</TABLE>

<br>
<HR noshade align="center" width="100%" size=5 color="black" style="page-break-after:always;">
<A name="page_2"></A> <br>
<TABLE style="font-size:10pt;border-color:black;border-collapse:collapse;" cellpadding="0" cellspacing="0" width="100%" border="0">
  <TR valign="bottom">
    <TD width=5% align=left>&nbsp;</TD>
    <TD align=left> <div align="justify"><B><U>Response</U></B>: These shares
        of common stock issued for services should have been&nbsp; valued with
        a corresponding expense recognized in the year ended December 31,&nbsp;
        1999. Restatement of prior year financial statements for this error is
        not considered&nbsp; necessary, however, because the associated dollar
        amount of the shares is not material&nbsp; to the financial statements
        presented in the 2004 Form 10KSB. The value of the&nbsp; shares based
        upon the average market price in 1999 of &#36;0.10 is &#36;7,930 which
        is 0.5%&nbsp; of accumulated deficit at December 31, 2004. The average
        market price is used to&nbsp; value these shares because it is more readily
        determinable than the value of the&nbsp; services provided.&nbsp; </div></TD>
  </TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD width=5% align=left>&nbsp;</TD>
    <TD align=left> <div align="justify">In SAB 32 (SAB Topic 5-F) "Accounting
        Changes Not Retroactively Applied Due to&nbsp; Immateriality," the SEC
        staff has indicated that when prior periods are not restated&nbsp; for
        an error because the effects on all periods, and the cumulative effect,
        are&nbsp; immaterial, the cumulative effect of change should be included
        in the results of&nbsp; operations for the period that the change is made.
        Therefore, the Registrant will&nbsp; record this cumulative change in
        its 10QSB for the quarter ended June 30, 2005.&nbsp; </div></TD>
  </TR>
</TABLE>
<P>
<B><U>Statements of Cash Flows, page 30</U></B><B> </B></P>
<TABLE style="font-size:10pt;border-color:black;border-collapse:collapse;" cellpadding="0" cellspacing="0" width="100%" border="0">
  <TR>
    <TD width="5%" valign=top nowrap> <B><I>3.</I></B>&nbsp; &nbsp; &nbsp; </TD>
    <TD> <div align="justify"><B><U>Comment</U></B><B>: </B><B><I>Under paragraph
        14 of SFAS 95, you are required to classify cash receipts and cash payments
        as resulting from investing, financing, or operating activities. As such,
        please revise your statement of cash flows to classify in the appropriate
        sections the amounts included in the line item &#8220;cash of acquired
        companies&#8221; for the period from inception on July 18, 1996, through
        December 31, 2004.</I></B> </div></TD>
  </TR>
  <TR>
    <TD colspan=2>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD> <div align="justify"><B><U>Response</U></B><B>: </B>The statement of
        cash flows has been amended to classify &#8220;cash of acquired companies&#8221;
        as an investing activity. </div></TD>
  </TR>
</TABLE>
<P>
<B><U>Exhibit 31.1</U></B><B> </B></P>
<TABLE style="font-size:10pt;border-color:black;border-collapse:collapse;" cellpadding="0" cellspacing="0" width="100%" border="0">
  <TR>
    <TD nowrap valign=top> <B><I>4.</I></B>&nbsp; &nbsp; &nbsp; </TD>
    <TD> <div align="justify"><B><U>Comment</U></B><B>: </B><B><I>We note the
        certification you provide appears to be inconsistent with the requirements
        of Item 601(b)(31) of Regulation S-B. Please revise paragraph 5 of the
        certification to tread &#8220;based on my most recent evaluation of internal
        control over financial reporting&#8221; if this would properly reflect
        the nature of the evaluation that you performed.</I></B> </div></TD>
  </TR>
  <TR>
    <TD colspan=2>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD> <div align="justify"><B><U>Response</U></B>: Exhibit 31.1 has been amended
        to revise paragraph 5 of the certification to be in accordance with the
        requirements of Item 601(b)(31) of Regulation S-B. </div></TD>
  </TR>
</TABLE>

<br>
<HR noshade align="center" width="100%" size=5 color="black" style="page-break-after:always;">


<A name="page_3"></A>

<P>
<B><U>Engineering Comments</U></B><B> </B></P>
<P> <B><U>General</U></B></P>
<TABLE style="font-size:10pt;border-color:black;border-collapse:collapse;" cellpadding="0" cellspacing="0" width="100%" border="0">
  <TR>
    <TD width="5%" valign=top nowrap> <B>5.</B> </TD>
    <TD> <B><U>Comment:</U></B><B><I> Insert a small-scale map showing the location,
      transportation corridors, and access to the properties. Note that SEC&#8217;s
      EDGAR program now accepts digital maps, so please include these in any future
      amendments that are uploaded to EDGAR. It is relatively easy to include
      automatic links at the appropriate locations within the document to GIF
      or JPEG files, which will allow the figures and/or diagrams to appear in
      the right location when the document is viewed on the Internet. For more
      information, please consult the EDGAR manual, and for additional assistance,
      please call Filer Support at 202-942-8900.</I></B> <B><I>Otherwise, provide
      the map to the staff for review.</I></B> </TD>
  </TR>
  <TR>
    <TD colspan=2>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD> <B><U>Response:</U></B> A digital map has been added to the amended 10-KSB.
    </TD>
  </TR>
  <TR>
    <TD colspan=2>&nbsp;</TD>
  </TR>
  <TR>
    <TD nowrap valign=top> <B>6.</B> </TD>
    <TD> <B><U>Comment</U></B><B><I>: The filing refers to mines and other mineral
      properties that exist in the area of the property. This may allow investors
      to infer that the company&#8217;s property may have commercial mineralization,
      because of its proximity to these mines and properties. Remove information
      about mines, prospects, or companies operating in or near to the property.
      Focus the disclosure on the company&#8217;s property.</I></B> </TD>
  </TR>
  <TR>
    <TD colspan=2>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD> <div align="justify"><B><U>Response: </U></B>Only one such reference
        to nearby mines was noted, and that was with respect to the CAMP property.
        The CAMP property is, in fact, part of the Galena and Coeur mines which
        are operated as a unit. Nevertheless, reference to those two mines and
        the Sunshine mine have been eliminated. </div></TD>
  </TR>
  <TR>
    <TD colspan=2>&nbsp;</TD>
  </TR>
  <TR>
    <TD nowrap valign=top> <B><I>7.</I></B> </TD>
    <TD> <div align="justify"><B><U>Comment: </U></B><B><I>To the extent that
        the web site contains disclosure about adjacent or other properties on
        which the company has no right to explore or mine, include the following
        language along with the following cautionary note, including the bolding
        and indenting:</I></B> </div></TD>
  </TR>
  <TR>
    <TD colspan=2>&nbsp;</TD>
  </TR>
</TABLE>
<TABLE style="font-size:10pt;border-color:black;border-collapse:collapse;" cellpadding="0" cellspacing="0" width="100%" border="0">
  <TR valign="bottom">
    <TD width=10% align=left>&nbsp;</TD>
    <TD align=left> <div align="justify"><B>&#8220;This web site also
        contains information about adjacent properties on which</B>&nbsp; <B>we
        have no right to explore or mine. We advise U.S. investors that the SEC&#8217;s</B>&nbsp;
        <B>mining guidelines strictly prohibit information of this type in documents
        filed</B>&nbsp; <B>with the SEC. U.S. investors are cautioned that mineral
        deposits on adjacent</B>&nbsp; <B>properties are not indicative of mineral
        deposits on our properties.&#8221;</B></div></TD>
  </TR>
</TABLE>
<BR>
<TABLE style="font-size:10pt;border-color:black;border-collapse:collapse;" cellpadding="0" cellspacing="0" width="100%" border="0">
  <TR valign="bottom">
    <TD width=5% align=left>&nbsp; </TD>
    <TD align=left> <B><U>Response:</U></B>&nbsp; The language and cautionary
      note have been added in two locations on the&nbsp; web site.&nbsp; </TD>
  </TR>
</TABLE>
<BR>
<TABLE style="font-size:10pt;border-color:black;border-collapse:collapse;" cellpadding="0" cellspacing="0" width="100%" border="0">
  <TR>
    <TD width="5%" valign=top nowrap> <B>8.</B>&nbsp; &nbsp; &nbsp; </TD>
    <TD> <div align="justify"><B><U>Comment: </U></B><B><I>Since the cutoff grade
        concept is important to understanding the potential of the mineral properties,
        disclose the &#8220;cutoff&#8221; grade or tenor used to define the reserves.
        In establishing this cut-off grade, disclose the operating parameters
        and assumptions that realistically reflect the location, deposit scale,</I></B>
      </div></TD>
  </TR>
</TABLE>

<br>
<HR noshade align="center" width="100%" size=5 color="black" style="page-break-after:always;">
<A name="page_4"></A> <br>
<TABLE style="font-size:10pt;border-color:black;border-collapse:collapse;" cellpadding="0" cellspacing="0" width="100%" border="0">
  <TR valign="bottom">
    <TD width=5% align=left>&nbsp;</TD>
    <TD align=left> <div align="justify"><B><I>continuity, assumed mining method,
        metallurgical processes, costs, and reasonable</I></B>&nbsp; <B><I>metal
        prices.</I></B>&nbsp; </div></TD>
  </TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD width=5% align=left>&nbsp;</TD>
    <TD align=left> <div align="justify"><B><U>Response: </U></B>Cutoff grades
        were in fact disclosed for two of the three properties where&nbsp; the
        company has calculated reserves. In the amended 10-KSB the cutoff for
        the third&nbsp; property has been added and the basis for the cutoff has
        been added to all three&nbsp; property descriptions.&nbsp; </div></TD>
  </TR>
</TABLE>
<P> <B><U>Golden Chest, page 14</U></B><B> </B><br>
  <B><U>Present Condition and Work Completed on the Property, page 15</U></B><B>
  </B></P>
<TABLE style="font-size:10pt;border-color:black;border-collapse:collapse;" cellpadding="0" cellspacing="0" width="100%" border="0">
  <TR>
    <TD width="5%" valign=top nowrap> <B><I>9.</I></B>&nbsp; &nbsp; &nbsp; </TD>
    <TD> <div align="justify"><B><U>Comment: </U></B><B><I>The third paragraph
        of the section refers to material within a preliminary pit design constructed
        using a &#36;500/oz. Gold price. However, the spot price of gold has not
        reached the &#36;500 level for a considerable amount of time and Industry
        Guide 7 requires that the reserves be economic and legally accessible
        at the time of the reserve determination. Revise this disclosure using
        more recent cost estimates and historical prices. The staff believes that
        the historic three-year average price is more appropriate. It is the staffs&#8217;
        position that proven or probable &#8220;reserves&#8221; for a mineral
        property cannot be designated unless:</I></B> </div></TD>
  </TR>
</TABLE>
<br>
<table style="font-size: 10pt;border-color:#000000;" width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td width="5%" valign="top">&nbsp;</td>
    <td><ul>
        <LI>
          <div align="justify"><B><I>Competent professional engineers conduct
            a detailed engineering and</I></B> <B><I>economic feasibility study,
            and the study demonstrates that a mineral</I></B> <B><I>deposit can
            be mined at a commercial rate and a profit made. This is the</I></B>
            <B><I>&#8220;final&#8221; or &#8220;bankable&#8221; feasibility study
            that is required to meet the</I></B> <B><I>requirements to designate
            reserves under Industry Guide 7.</I></B></div>
        </LI>
        <LI>
          <div align="justify"><B><I>An appropriate historic metal price such
            as the historic three-year average</I></B> <B><I>price is used in
            any reserve or cash flow analysis to designate reserves.</I></B></div>
        </LI>
        <LI>
          <div align="justify"><B><I>The company has demonstrated that the mineral
            property will receive its</I></B> <B><I>governmental permits, and
            the primary environmental document has been</I></B> <B><I>filed with
            the appropriate governmental authorities.</I></B></div>
        </LI>
      </ul></td>
  </tr>
</table>
<br>
<table style="font-size: 10pt;border-color:#000000;" width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td width="5%" valign="top">&nbsp;</td>
    <td><B><I>Industry Guide 7 can be reviewed on the Internet at:<br>
      </I></B><B><I><U><FONT color="#333365">www.sec.gov/divisions/corpfin/forms/industry.htm#secguide7</FONT></U></I></B><B>
      </B></td>
  </tr>
  <tr>
    <td valign="top">&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td valign="top">&nbsp;</td>
    <td><B><U>Response:</U></B> The company does not claim any open pitable reserves
      at the Golden Chest mine. The paragraph has been revised to be more clear
      and not to mislead the reader. </td>
  </tr>
</table>
<P>
<B><U>Silver Button Prospect, page 18</U></B><B> </B></P>
<TABLE style="font-size:10pt;border-color:black;border-collapse:collapse;" cellpadding="0" cellspacing="0" width="100%" border="0">
  <TR>
    <TD width="5%" valign=top nowrap> <B><I>10.</I></B>&nbsp; &nbsp; &nbsp; </TD>
    <TD> <B><U>Comment:</U></B><B><I> As a general checklist, when reporting
      the results of sampling and chemical analyses:</I></B> </TD>
  </TR>
</TABLE>
<br>
<table style="font-size: 10pt;border-color:#000000;" width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td width="5%" valign="top">&nbsp;</td>
    <td><ul>
        <LI> <B><I>Disclose only weight-average sample analyses associated with
          a measured</I></B> <B><I>length or a substantial volume.</I></B></LI>
        <LI> <B><I>Eliminate all analyses from &#8220;grab&#8221; or &#8220;dump&#8221;
          samples, unless the sample is of</I></B> <B><I>a substantial and disclosed
          weight.</I></B></LI>
        <LI> <B><I>Eliminate all disclosure of the highest values or grades of
          sample sets.</I></B></LI>
      </ul></td>
  </tr>
</table>
<br>
<HR noshade align="center" width="100%" size=5 color="black" style="page-break-after:always;">
<A name="page_5"></A> <br>
<table style="font-size: 10pt;border-color:#000000;" width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td width="5%" valign="top">&nbsp;</td>
    <td><ul>
        <LI> <B><I>Eliminate grades disclosed as &#8220;up to&#8221; or &#8220;as
          high as.&#8221;</I></B></LI>
        <LI> <B><I>Eliminate statements containing grade and/or sample-width ranges.</I></B></LI>
        <LI> <B><I>Aggregated sample values from related locations should be aggregated
          based on</I></B> <B><I>a weighted average of lengths of the samples.</I></B></LI>
        <LI> <B><I>Generally, use tables to improve readability of sample and
          drilling data.</I></B></LI>
        <LI> <B><I>Soil samples may be disclosed as a weighted average value over
          some area.</I></B></LI>
        <LI> <B><I>Refrain from reporting single soil sample values.</I></B></LI>
        <LI> <B><I>Convert all ppb quantities to ppm quantities for disclosure.</I></B></LI>
      </ul></td>
  </tr>
</table>
<br>
<TABLE style="font-size:10pt;border-color:black;border-collapse:collapse;" cellpadding="0" cellspacing="0" width="100%" border="0">
  <TR valign="bottom">
    <TD width=5% align=left>&nbsp;</TD>
    <TD align=left> <B><I>Revise the text accordingly.</I></B>&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left><B><U>Response:</U></B> The checklist is helpful in disclosing
      accurate information. Language in the description of the Silver Button prospect
      has been appropriately revised. </TD>
  </TR>
</TABLE>
<P>Sincerely, </P>
<P>&nbsp;</P>
<P> Fred W. Brackebusch, <br>
  President </P>

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