Edgar Filing: THUNDER MOUNTAIN GOLD INC

Thunder Mountain Gold, Inc.

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended September 30, 2013

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

For the transition period from to

Commission File Number: 001-08429

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THUNDER MOUNTAIN GOLD, INC.

(Exact name of Registrant as specified in its charter)


Nevada		91-1031015
(State or other jurisdiction of incorporation or organization)		(IRS identification No.)

5248 W. Chinden Blvd
Boise, Idaho		83714
(Address of Principal Executive Offices)		(Zip Code)

(208) 658-1037
(Registrant’s Telephone Number, including Area Code)

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. x Yes ¨ No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). x Yes ¨ No

Indicate by check mark whether the Registrant is ¨ a large accelerated filer, ¨ an accelerated file, ¨ a non-accelerated filer, or x a smaller reporting company (as defined in Rule 12b-2 of the Exchange Act)

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

¨ Yes x No

Number of shares of issuer’s common stock outstanding at September 30, 2013: 30,167,549

TABLE OF CONTENTS

PART I – FINANCIAL INFORMATION

Item 1: Financial Statements (Unaudited)

Item 2. Management's Discussion and Analysis or Plan of Operation

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Item 4. Controls and Procedures

PART II – OTHER INFORMATION

Item 1. Legal Proceedings.

Item 1 A. Risk Factors.

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

Item 3. Defaults Upon Senior Securities.

Item 4. Mine Safety Disclosures

Item 5. Other Information

Item 6. Exhibits

SIGNATURES

PART I – FINANCIAL INFORMATION

Item 1: Financial Statements


Thunder Mountain Gold, Inc.
(An Exploration Stage Company)
Consolidated Balance Sheets				(Unaudited)
September 30, 2013 and December 31, 2012				September 30,	December 31,
				2013	2012
ASSETS

Current assets:
	Cash and cash equivalents			$ 6,240	$ 166,505
	Prepaid expenses and other assets			5,425	53,320
		Total current assets		11,665	219,825

Property, equipment and mining claims:
Equipment, net of accumulated depreciation				-	109
		Total property, equipment and mining claims		-	109

Other assets:
	Investment in Owyhee Gold Trust LLC joint venture			479,477	479,477
			Total assets	$ 491,142	$ 699,411

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
	Accounts payable and other accrued liabilities			$ 82,100	$ 56,765
	Note payable Related Party (Note 5)			20,000	-
	Convertible Note Payable (Note 5)			15,288	-
		Total current liabilities		117,388	56,765

	Derivative warrant liabilities			-	508,012
		Total liabilities		117,388	564,777

Commitments (Note 3)

Stockholders' equity :
	Preferred stock; $0.0001 par value, 5,000,000
		shares authorized; no shares issued or outstanding		-	-
	Common stock; $0.001 par value; 200,000,000 shares
		authorized; 30,167,549 shares issued and outstanding		30,168	30,168
	Additional paid-in capital			3,367,079	3,268,616
		Less: 11,700 shares of treasury stock, at cost		(24,200)	(24,200)
	Deficit accumulated prior to 1991			(212,793)	(212,793)
	Accumulated deficit during the exploration stage			(2,786,500)	(2,927,157)
		Total stockholders' equity		373,754	134,634
			Total liabilities and stockholders' equity	$ 491,142	$ 699,411

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


Thunder Mountain Gold, Inc. (An Exploration Stage Company) Consolidated Statements of Operations and Comprehensive Income (Loss) (Unaudited)
									During
									Exploration
									Stage
									1991
			Three Months Ended			Nine Months Ended			Through
			September 30,			September 30,			September 30,
			2013		2012	2013		2012	2013
Revenue:
	Royalties, net		$ -		$ -	$ -		$ -	$ 328,500
	Joint venture management fee income		-		-	53,203		-	113,353
	Gain on sale of property and mining claims		-		-	-		-	2,576,112
		Total revenue	-		-	53,203		-	3,017,965

Expenses:
	Exploration expenses		51,290		20,096	87,129		116,921	2,224,505
	Legal and accounting		15,106		88,430	84,872		176,346	1,213,492
	Management and administrative		104,705		61,135	170,459		213,020	3,392,926
	Directors' fees and professional services-(Note 6)		-		-	89,038		-	1,012,093
	Gain on sale of equipment		(10,000)		-	(15,000)		-	(17,815)
	Depreciation and depletion		-		2,139	109		6,418	145,658
		Total expenses	161,101		171,800	416,607		512,705	7,970,859

Other income (expense):
	Interest and dividend income		-		-	762		-	284,752
	Interest expense		(4,713)		(21,591)	(4,713)		(563,529)	(428,763)
	Gain (loss) change in fair value of
		warrant liabilities (Note 2)	111,763		219,978	508,012		27,658	1,803,277
	Loss on common stock and warrants		-		-	-		-	(271,587)
	Gain on change in fair value of conversion
		option liability	-		-	-		34,599	108,032
	Financing expense		-		-	-		-	(17,945)
	Debt forgiveness		-		-	-		-	1,000,000
	Gain on sale of securities		-		-	-		-	166,116
	Impairment of investments		-		-	-		-	(52,299)
		Total other income (expense)	107,050	-	198,387	504,061	-	(501,272)	2,591,583

Net income (loss) before income taxes			(54,051)		26,587	140,657		(1,013,977)	(2,351,311)
	(Provision) for income taxes		-		-	-		-	(151,496)
Net income (loss)			(54,051)		26,587	140,657		(1,013,977)	(2,512,807)
	Treasury stock cancelled		-		-	-		-	(273,694)

Comprehensive income (loss)			$ (54,051)		$ 26,587	$ 140,657		$(1,013,977)	$(2,786,500)

Net income (loss) per common
	share-basic and diluted		$ Nil		$ Nil	$ Nil		$ (0.03)	$ (0.20)

Weighted average common
	shares outstanding-basic and diluted		30,167,549		30,167,549	30,167,549		29,881,761	13,865,841

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


Thunder Mountain Gold, Inc.
(An Exploration Stage Company)						During
Consolidated Statements of Cash Flows						Exploration
(Unaudited)						Stage
						1991
				Nine Months Ended		Through
				September 30,		September 30,
				2013	2012	2013
Cash flows from operating activities:
	Net income (loss)			$ 140,657	$ (1,013,977)	$ (2,512,807)
	Adjustments to reconcile net income (loss) to net cash
		used by operating activities:
		Depreciation and depletion		109	6,418	145,658
		Gain on sales of equipment		(15,000)	-	(17,815)
		Stock-based compensation		89,038	10,000	904,304
		Adjustment for anti-dilution provisions		-	-	86,084
		Conversion option liability eliminated		-	-	(15,000)
		Debt forgiveness		-	-	(1,000,000)
		Amortization of directors' fees prepaid
			with common stock	-	-	53,400
		Amortization of deferred financing costs		-	138,370	231,015
		Amortization of Notes Payable discounts		4,713	395,214	124,799
		Compensation expense for stock issued		-	-	76,500
		Gain on sale of mining claims and other assets		-	-	(2,736,550)
		Impairment loss on securities		-	-	52,335
		Gain on change in fair value of warrant liability		(508,012)	(27,658)	(1,803,277)
		Loss on common stock and warrants		-	-	271,587
		Gain on change in fair value of conversion option liability		-	(48,231)	(108,032)
		Financing expense		-	-	17,945
	Change in:				-
		Prepaid expenses and other assets		47,895	(12,308)	(5,425)
		Accounts payable and other liabilities		25,335	(121,645)	88,532
		Receivables		-	-	124,955
			Net cash used by operating activities	(215,265)	(673,817)	(6,021,793)

Cash flows from investing activities:
	Proceeds from sale of property and mining claims			-.	-	5,500,000
	Purchase of Dewey Mining Co. mining claims			-	-	(2,923,888)
	Purchase of investments			-	-	(354,530)
	Purchase of South Mountain Mines			-	-	(357,497)
	Purchase of mining leaseholds			-	(35,900)	(121,980)
	Purchase of equipment			-	-	(168,577)
	Proceeds from disposition of investments			-	-	642,645
	Proceeds from sales of equipment			5,000	-	59,310
			Net cash provided (used) by investing activities	5,000	(35,900)	2,275,483

Cash flows from financing activities:
	Proceeds from sale of common stock and warrants, net			-	150,000	2,400,406
	Proceeds from exercise of stock options and warrants			-	-	508,600
	Acquisition of treasury stock			-	-	(376,755)
	Borrowing on related party note payable			30,000	5,000	606,500
	Payments on related party note payable			-	(150,000)	(572,000)
	Borrowing on notes payable			20,000	1,000,000	1,070,000
	Payments on note payable			-	-	(50,000)
			Net cash provided by financing activities	50,000	1,005,000	3,586,751

Net increase (decrease) in cash and cash equivalents				(160,265)	295,283	(159,559)
Cash and cash equivalents, beginning of period				166,505	83	165,799
Cash and cash equivalents, end of period				$ 6,240	$ 295,366	$ 6,240


Thunder Mountain Gold, Inc.
(An Exploration Stage Company)
Consolidated Statements of Cash Flows (continued)
(Unaudited)

					During Exploration
					Stage
					1991
			Nine Months Ended		Through
			September 30,		September 30,
			2013	2012	2013

Non-cash investing and financing activities:

	Stock issued to acquire equipment from related party		$ -	$ -	$ 11,850

	Stock issued for mining contract		$ -	$ -	$ 50,000

	Stock issued for payment of accounts payable		$ -	$ -	$ 29,250

	Stock issued for payments on related party note
		payable	$ -	$ -	$ 4,500

	Fair value of warrants issued in private placement
		classified as liabilities	$ -	$ -	$ 1,795,587

	Note proceeds allocated to conversion option at
		inception	$ -	$ -	$ 123,031

	Stock issued for deferred compensation		$ -	$ -	$ 21,000

	Beneficial conversion feature in note payable		$ 9,425	$ 375,000	$ 384,425

	Mineral Properties transferred to investment		$ -	$ -	$ 479,477

	Equipment exchanged for related party note payable		$ 10,000	$ -	$ 10,000

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

Thunder Mountain Gold, Inc.

(An Exploration Stage Company)

Notes to Consolidated Financial Statements

Summary of Significant Accounting Policies and Business Operations

Business Operations

Thunder Mountain Gold, Inc. (“Thunder Mountain” or “the Company”) was originally incorporated under the laws of the State of Idaho on November 9, 1935, under the name of Montgomery Mines, Inc. In April 1978, the Montgomery Mines Corporation was obtained by a group of the Thunder Mountain property holders and changed its name to Thunder Mountain Gold, Inc., with the primary goal to further develop their holdings in the Thunder Mountain Mining District, located in Valley County, Idaho. Thunder Mountain Gold, Inc. takes its name from the Thunder Mountain Mining District, where its principal lode mining claims was located. For several years, the Company’s activities were restricted to maintaining its property position and exploration activities. During 2005, the Company sold its holdings in the Thunder Mountain Mining District. During 2007, the Company acquired the South Mountain Mines property in southwest Idaho and initiated exploration activities on that property, which continue today.

Basis of Presentation

The unaudited financial statements have been prepared by the Company in accordance with accounting principles generally accepted in the United States of America for interim financial information, as well as the instructions to Form 10-Q. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. In the opinion of the Company’s management, all adjustments (consisting of only normal recurring accruals) considered necessary for a fair presentation of the interim financial statements have been included. Operating results for the three and nine months ended September 30, 2013 are not necessarily indicative of the results that may be expected for the full year ending December 31, 2013.

For further information, refer to the financial statements and footnotes thereto in the Company’s Annual Report on Form 10-K for the year ended December 31, 2012.

Going Concern

The accompanying consolidated financial statements have been prepared under the assumption that the Company will continue as a going concern. The Company is an exploration stage company and has incurred losses since its inception and does not have sufficient cash at September 30, 2013 to fund normal operations for the next 12 months. The Company has no recurring source of revenue and its ability to continue as a going concern is dependent on the Company’s ability to raise capital to fund its future exploration and working capital requirements. The Company’s plans for the long-term return to and continuation as a going concern include financing the Company’s future operations through sales of its common stock and/or debt and the eventual profitable exploitation of its mining properties. Additionally, the current capital markets and general economic conditions in the United States are significant obstacles to raising the required funds. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The Company is currently investigating a number of alternatives for raising additional capital with potential investors, lessees and joint venture partners.

The consolidated financial statements do not include any adjustments that might be necessary should the Company be unable to continue as a going concern. If the going concern basis was not appropriate for these financial statements, adjustments would be necessary in the carrying value of assets and liabilities, the reported expenses and the balance sheet classifications used.

Convertible Debt

From time to time, the Company enters into transactions which contain conversion privileges, the settlement of which may entitle the holder or the Company to settle obligations by issuance of Company securities. When the Company enters transactions which allow obligations to be settled by the issuance of Company securities, beneficial computed value is estimated under appropriate accounting literature.

Thunder Mountain Gold, Inc.

(An Exploration Stage Company)

Notes to Consolidated Financial Statements

Summary of Significant Accounting Policies and Business Operations, continued

Reclassifications

Certain reclassifications have been made to conform prior year’s data to the current presentation. These reclassifications have no effect on the results of reported operations or stockholders’ equity.

Income Taxes

The Company recognizes deferred income tax liabilities or assets at the end of each period using the tax rate expected to be in effect when the taxes are actually paid or recovered. A valuation allowance is recognized on deferred tax assets when it is more likely than not that some or all of the deferred tax assets will not be realized. The Company has evaluated all tax positions for open years and has concluded that it has no material unrecognized tax benefits. Management estimates their effective tax rate for the year ended December 31, 2013 will be 0%.

Fair Value Measures

ASC 820 requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. ASC prioritizes the inputs into three levels that may be used to measure fair value:

Level 1: Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.

Level 2: Level 2 applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data.

Level 3: Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.

Our financial instruments consist principally of cash and warrant liabilities. The table below sets forth our assets and liabilities measured at fair value whether recurring or non-recurring and basis and the fair value calculation input hierarchy level that we have determined applies to each asset and liability category.


	Balance September 30, 2013	Balance December 31, 2012	Input Hierarchy level
Recurring:
Cash and cash equivalents	$ 6,240	$ 166,505	Level 1
Derivative warrant liabilities	$ Nil	$ (508,012)	Level 2

Net Income (Loss) Per Share

The Company is required to have dual presentation of basic earnings per share (“EPS”) and diluted EPS. Basic EPS is computed as net income divided by the weighted average number of common shares outstanding for the period. Diluted EPS is calculated based on the weighted average number of common shares outstanding during the period plus the effect of potentially dilutive common stock equivalents, including warrants to purchase the Company’s common stock.

Thunder Mountain Gold, Inc.

(An Exploration Stage Company)

Notes to Consolidated Financial Statements

Summary of Significant Accounting Policies and Business Operations, continued

As of September 30, 2013 and 2012, the remaining potentially dilutive common stock equivalents not included in the calculation of diluted earnings per share as their effect would have been anti-dilutive are:


	Sept. 30,	Sept. 30,
For periods ended	2013	2012
Convertible debt	440,771	12,500,000
Stock options	2,990,000	2,000,000
Warrants	1,308,800	8,616,271
Total possible dilution	4,739,571	23,116,271

Stockholders’ Equity

The Company’s common stock is at $0.001 par value with 200,000,000 shares authorized. The Company also has 5,000,000 authorized shares of preferred stock with a par value of $0.0001. No preferred shares have been issued. Three of the warrant issuances in prior years had provisions that necessitated accounting for them as derivative liabilities, and at December 31, 2012 these warrants had a total fair value recorded in the consolidated balance sheet for $508,012. As of September 31, 2013 two of those warrant issuances had expired, and the last one had a fair value determined using a Black-Scholes model of $nil. Therefore, for the three and nine months ended September 30, 2013 a gain on change in fair value of warrant liabilities of $111,763 and $508,012, respectively, has been reported in the consolidated statement of operations and comprehensive income (loss).

The following is a summary of warrants as of September 30, 2013.


	Share Equivalent Warrants	Exercise Price	Expiration Date
Warrants:
Warrants issued September 24, 2010	6,683,271	$ 0.30	September 30, 2013
Warrants issued June 26, 2011	1,000,000	0.20	November 8, 2013
Warrants issued September 30, 2011	200,000	0.20	November 8, 2013
Warrants issued October 28, 2011	108,000	0.20	October 28, 2013
Warrants issued February 17, 2012	625,000	0.20	February 17, 2013
Total warrants outstanding at December 31, 2012	8,616,271	0.28
Warrants expired thru September 30, 2013	(7,308,271)	0.29
	1,308,000	$ 0.20

Commitments

On November 30, 2011, (“Effective Date”) Thunder Mountain Resources, Inc., entered into a mining lease with option to purchase with Richard C. and Carol Ann Fox for the exclusive rights to conduct exploration, feasibility work, development, mining and processing of minerals on certain mining claims in Lemhi County, Idaho. The initial term is for thirty years and the lease grants successive, additional fifteen year terms so long as the Company is in compliance with the lease. The Company is obligated to pay advance minimum royalty payments, the first of which was in the amount of $25,000 which was paid during 2011. $75,000 was paid in 2012 and additional payments are due as follows:


Amount		Due Date

$ 75,000		On or before the 2^nd anniversary of the Effective Date
100,000		On or before the 3^rd anniversary of the Effective Date
100,000		On or before the 4^th anniversary of the Effective Date and each anniversary date thereafter

All advance minimum royalties paid will be credited against any production royalties that accrue. If no minerals are produced from the premises, the lessor has no obligation to refund the advance minimum royalties. These properties are adjacent to and part of the properties in the joint venture (See Note 4).

Thunder Mountain Gold, Inc.

(An Exploration Stage Company)

Notes to Consolidated Financial Statements

Commitments, continued

On March 21, 2011, the Company signed an exploration agreement with Newmont Mining Corporation on the Trout Creek Project that significantly expands the Trout Creek target area. Newmont’s private mineral package added to the Project surrounds the Company’s claim group and consists of about 9,565 acres within a thirty-square mile Area of Influence defined in the agreement. Under the terms of the agreement, the Company is responsible for conducting the exploration program and is obligated to expend a minimum of $150,000 over the ensuing two years, with additional expenditures possible in future years. Newmont agreed to extend the date for completion of the work commitment to June 22, 2013. The Company has expended $160,314 on this project through September 30, 2013.

Joint Venture

On November 8, 2012, the Company and Idaho State Gold Company, LLC (“ISGC”) formed the Owyhee Gold Trust, LLC, (“OGT”) a limited liability company. The Company’s contribution for its membership units is its South Mountain Mine property and related mining claims located in southwestern Idaho in Owyhee County. As its initial contribution to OGT, ISGC will fund operations totaling $18 million; or $8 million if the Company exercises its option to participate pro-rata after ISGC expends $8 million. The Agreement specifies that the members have initial Ownership Interests (as defined) as 25% for the Company and 75% for ISGC. ISGC is also the manager of the joint venture. Upon payment of $3 million of qualifying expenditures not later than December 31, 2014, ISGC will receive 2,000 units representing a vested 25% ownership. The Company accounts for its investment in the joint venture by the cost method as it does not have control or significant influence over the affairs of the joint venture.

The Company recorded $53,203 in management fee income from the joint venture during the nine months ended September 30, 2013.

Notes Payable

On June 6, 2013, the Company received funds of $20,000 from Jim Collord, a director. In accordance with the terms of the note, the Company pays Mr. Collord 1% per month for interest. Principle and interest are due in full on November 30, 2013. In July of 2013, a company vehicle with zero book value was transferred to Mr. Collord in agreed-upon satisfaction of $10,000 of the principal. During August 2013, Mr. Collord advanced an additional $10,000 to the Company, under similar terms.

On July 31, 2013 the Company received $20,000 from Rolf Hess, a stockholder, under a convertible promissory note. Terms of the note call for interest at 1% per month, with the entire balance of principle and interest due in full on December 1, 2013.

The convertible promissory note contains the option for the holder to convert any portion of the principle and interest into Company common stock at 75% of the average closing bid price of the stock for the twenty trading days ending the day prior to the conversion. At inception, management determined the conversion price would have been $0.054. On that date, the market price for the Company’s common stock exceeded the conversion price as calculated. The convertible note contains a beneficial conversion feature of $9,425 which was recognized as a discount on the note on the date of issuance. The discount is being amortized over the note term using the straight-line method, which approximates the effective interest method. For the three months ended September 30, 2013, the Company recorded $4,713 in interest expense related to the amortization of the discount. As of September 30, 2013, the outstanding balance of the convertible note was $15,288, which is net of the remaining discount of $4,712.

Stock Options Granted

The Company has established a Stock Option Incentive Plan to authorize the granting of stock options up to 10 percent of the total number of issued and outstanding shares of common stock (3,016,755 shares as of September 30, 2013) to employees, directors and consultants. Upon exercise of options, shares are issued from the available authorized shares of the Company. Option awards are generally granted with an exercise price equal to the fair market value of the Company’s stock at the date of grant.

Thunder Mountain Gold, Inc.

(An Exploration Stage Company)

Notes to Consolidated Financial Statements

Stock Options Granted, continued.

During 2013, the Company granted 990,000 non-qualified stock options to certain officers, directors and outside consultants with an exercise price of $0.09. Shareholder approval for the award was granted on April 30, 2013. The options immediately vested. Management valued the options as of the date of grant using a Black-Scholes option pricing model resulting in $89,038 expense being recorded.

The fair value of each option award was estimated on the date of grant using the assumptions noted in the following table:



Stock price	$0.09
Exercise price	$0.09
Expected volatility	302.9%
Expected dividends	-
Expected term (in years)	5.0
Risk-free rate	0.68%
Expected forfeiture rate	-

The following is a summary of the Company’s options issued under the Stock Option Incentive Plan:


	Shares		Weighted Average Exercise Price
Outstanding at December 31, 2012	2,000,000	$	0.27
Granted	990,000		0.09
Exercised	-		-
Expired	-		-
Outstanding at September 30, 2013	2,990,000	$	0.21
Exercisable at September 30, 2013	2,990,000	$	0.21
Weighted average fair value of options granted during the period ended September 30, 2013		$	0.09

The average remaining contractual term of the options outstanding and exercisable at September 30, 2013 was 3.5 years. There were no options exercised during the nine months ended September 30, 2013 and 2012.

Total compensation cost charged against operations under the plan for directors and consultants was $89,038 and none for the nine months ended September 30, 2013 and 2012, respectively. These costs are classified under Director’s fees and professional services.

7. Subsequent Events

On October 3, 2013, the Board of Directors approved a Private Placement financing of up to 5,000,000 units of the Company (each, a “Unit”) at a price of US$0.05 per Unit for gross proceeds of up to US$250,000 (the “Private Placement”). Each Unit will consist of one share of the Company’s common stock (each, a “Common Share”) and one-half of one common share purchase warrant (each whole warrant, a “Warrant”). Each Warrant will entitle the holder to purchase one additional share of common stock of the Company at a price of US$0.15 for a period of 18 months from the closing of the Private. The proceeds raised pursuant to the Private Placement will be used for exploration and for general working capital.

The Company has entered into a selling agreement (the “Selling Agreement”) with a selling agent (the “Agent”) to market the Units on a non-exclusive basis.

Thunder Mountain Gold, Inc.

(An Exploration Stage Company)

Notes to Consolidated Financial Statements

7. Subsequent Events, continued

Pursuant to the Selling Agreement, the Agent has agreed to sell the Units on a non-exclusive, best efforts basis, and will be entitled to compensation in the following form: (a) a cash commission equal to 10% of the price of the Units sold by the Agent; (b) an additional cash commission of 10% of gross proceeds received from the exercise of Warrants issued as part of such Units or any other equity investment made by investors introduced by the Agent within a 24 month period following closing; and (c) non-transferable broker warrants to purchase a number of additional Units equal to 5% of Units sold by the Agent in the initial offering (the “Agent Warrants”). The Agent Warrants will have the same exercise price and otherwise be on the same terms as the Warrants. The Agent has not committed to purchase any Units and accordingly there is no assurance that the offering will be completed.

The Private Placement remains subject to the approval of the TSX Venture Exchange. The securities issued in the Private Placement will be subject to a four-month hold period in accordance with the policies of the TSX Venture Exchange and applicable Canadian securities legislation.

Item 2. Management's Discussion and Analysis or Plan of Operation

FORWARD LOOKING STATEMENTS: The following discussion may contain forward-looking statements that involve a number of risks and uncertainties. Factors that could cause actual results to differ materially include the following: inability to locate property with mineralization, lack of financing for exploration efforts, competition to acquire mining properties; risks inherent in the mining industry, and risk factors that are listed in the Company's reports and registration statements filed with the Securities and Exchange Commission.

Management's discussion and analysis is intended to be read in conjunction with the Company's unaudited financial statements and the integral notes thereto for the quarter ending September 30, 2013. The following statements may be forward-looking in nature and actual results may differ materially.

The following Management’s Discussion and Analysis of Financial Condition and Results of Operation (“MD&A”) is intended to help the reader understand our financial condition. MD&A is provided as a supplement to, and should be read in conjunction with, our financial statements and the accompanying integral notes (“Notes”) thereto. The following statements may be forward-looking in nature and actual results may differ materially.

The Company employed two full-time, salaried management – E. James Collord and Eric T. Jones –had a reduced salary of $1 per month during the quarter, and was able to meet its immediate financial obligations. The Company maintains its office in the Boise, Idaho. This is the primary headquarters for the South Mountain Project.

South Mountain Project, Owyhee County, Idaho (South Mountain Mines, Inc.)

The Company’s land package at South Mountain consists of a total of approximately 1,158 acres, consisting of (i) 17 patented claims (326 acres) the Company owns outright; (ii) lease on private ranch land (542 acres); and, (iii) 21 unpatented lode mining claims on BLM managed land (290 acres). The Company is negotiating for additional private land surrounding the existing land package. We also have applied for leases on Idaho State Lands for approximately 3,100 acres, expected to be finalized during 2013. All holdings are located in the South Mountain Mining District, Owyhee County, Idaho.

The property is located approximately 70 air miles southwest of Boise, Idaho and approximately 24 miles southeast of Jordan Valley, Oregon. It is accessible by highway 95 driving south to Jordan Valley Oregon, then by traveling southeast approximately 22 miles back into Idaho, via Owyhee County road that is dirt and improved to within 4 miles of the base camp. The last 4 miles up the South Mountain Mine road are unimproved county dirt road. The property is accessible year-round to within 4 miles of the property, where the property is accessible from May thru October without plowing snow. There is power to within 4 miles of the site as well. Power generation by generator is required at this time. The climate is considered high desert. The Company has water rights on the property, and there is a potable spring on the property that once supplied water to the main camp.

A detailed list of the claims is as follows:

Patented land owned by Thunder Mountain Gold. Seventeen (17) patented mining claims totaling 326 acres:

Patent No. 32995 dated September 17, 1900 (Mineral Survey No. 1446)


Illinois	Massachusetts
Michigan	Washington
New York	Maine
Tennessee	Idaho
Oregon	Vermont

Patent No. 32996 dated September 17, 1900 (Mineral Survey No. 1447)


Texas	Virginia
Florida	Mississippi
Alabama

Patent No. 1237144 dated October 27, 1964 (Mineral Survey No. 3400)


Queen	Kentucky

Unpatented Ground 100% controlled by Thunder Mountain Gold. Twenty one (21) unpatented mining claims totaling 290 acres:


Claim Name	Owyhee County Instrument No.	BLM: IMC Serial No.

SM-1	262582	192661
SM-2	262578	192662
SM-3	262581	192666
SM-4	262579	192665
SM-5	262580	192669
SM-6	262577	192664
SM-7	262576	192663
SM-8	262575	192670
SM-9	262574	192671
SM-10	262573	192668
SM-11	262572	192672
SM-12	262571	192667
SM-13	262570	192673
SM-14	262569	192674
SM-15	266241	196559
SM-16	266242	196560
SM-17	266243	196561
SM-18	266244	196562
SM-19	266245	196563
SM-20	266246	196564
SM-21	266247	196565

The claim maintenance fees and assessment for these claims is financed by the Company through sales of unregistered common stock .

The leased private land also includes all surface rights. There is a 3% net smelter return royalty payable to the landowners. The parcels are leased for 20 years with the right to renew and the option to purchase outright. Annual expenses for the leases and claims are as follows:


Owner	Agreement Date	Amount	Acres
Lowry	October 10, 2008	$20/acre $30/acre starting in 7th year	376
Acree	June 20, 2008	$20/acre $30/acre starting in 7th year	113
Herman	April 23, 2009	$20/acre $30/acre starting in 7th year	56

The historic production peaked during World War II when, based on smelter receipts, the production of direct shipped ore totaled 53,653 tons containing 3,118 ounces of gold, 566,439 ounces of silver, 13,932 pounds of copper, 2,562,318 pounds of lead and 15,593,061 pounds of zinc. In addition to the direct-ship ore, a flotation mill was constructed and operated during the late-1940s and early-1950s. There is no production information available on the tons, grade and concentrate associated with that phase of the operation, but it is estimated that between 30,000 and 40,000 tons of ore were mined and process based on the estimated tonnage of mill tailings.

South Mountain Mines controlled the patented claims from 1975 to the time the Company purchased the entity in 2007. They conducted extensive exploration work including extending the Sonneman Level by approximately 1,500 feet to intercept the downdip extension of the Texas sulfide mineralization mined on the Laxey Level some 300 feet above the Sonneman. High grade sulfide mineralization was intercepted on the Sonneman Extension. In 1985 they did a feasibility study based on polygonal ore blocks exposed in the underground workings and drilling. This resulted in a historic resource of approximately 470,000 tons containing 23,500 ounces of gold, 3,530,000 ounces of silver, 8,339,000 pounds of copper, 13,157,000 pounds of lead and 91,817,000 lbs of zinc. Although they determined positive economics, the project was shut down and placed into care and maintenance.

In 2008, the Company engaged Kleinfelder West, Inc., a nationwide engineering and consulting firm, to complete a technical report “Resources Data Evaluation, South Mountain Property, South Mountain Mining District, Owyhee County, Idaho”. The technical report was commissioned by Thunder Mountain Resources, Inc. to evaluate all the existing data available on the South Mountain property. Kleinfelder utilized a panel modeling method using this data to determine potential mineralized material remaining and to make a comparison with the resource determined by South Mountain Mines in the mid-1980s.

Additional drilling and sampling will be necessary before the resource can be classified as a mineable reserve, but Kleinfelder West’s calculations provided a potential resource number that is consistent with South Mountain Mines’ (Bowes 1985) reserve model.

During the 2008 field season two core drill holes were drilled to test the downdip extension of the sulfide mineralization in the main mine area, one on the DMEA2 ore shoot and one on the Texas ore shoot. The DMEA 2 target was successful, with two distinct sulfide zones totaling 30 feet being encountered in an overall altered and mineralized intercept of approximately 73 feet. The samples over the entire intercept were detail sampled over the entire 73 feet resulting in a total of 34 discrete sample intervals ranging from 0.5 to 3.7 feet. The samples cut at the Company’s office in Garden City, Idaho and Company personnel delivered the samples to ALS Chemex preparation lab in Elko, Nevada. The analytical results showed two distinct zones of strong mineralization.

Interval

Weighted Average

Gold

Fire Assay

(ounce per ton)

Silver

Fire Assay

(ounce per ton)

Zinc

(%)

Copper

( %)

Lead

( %)

657 - 669.5

(12.5 feet)

0.066

1.46

7.76

0.276

0.306

687 – 704.5

(17.5 feet)

0.129

1.89

2.18

0.183

0.152

These intercepts are down dip approximately 300 feet below of the DMEA 2 mineralized zone encountered in Sonneman Level tunnel, and 600 feet below the DMEA 2 zone on the Laxey Level tunnel. The tenor of mineralization the DMEA 2 on the Sonneman is similar to that intercepted in the core hole, including two distinct zones with differing grades.

The second drill hole, TX-1, was designed to test the Texas Ore Shoot approximately 300 feet down dip of the Sonneman Level. The small core hole achieved a depth of 1250 feet, but deviated parallel to the bedding and the targeted carbonate horizon was not intercepted.

Late in 2009, the Company contracted with Gregory P. Wittman (a Qualified Person under Canadian regulations) of Northwestern Groundwater & Geology to incorporate all the new drill and sampling data into an NI 43-101 Technical Report. This report was needed as part of the Company’s efforts to obtain a listing on the TSX Venture Exchange in 2010. The NI 43-101 can be reviewed on the Company`s website at www.thundermountaingold.com, or on www.SEDAR.com.

A multi-lithic intrusive breccia outcrop was identified and sampled in 2008 on property leased by the Company. This large area, approximately one mile long and one-half a mile wide, is located several thousand feet south of the main mine area. The intrusive breccia is composed of rounded to sub-rounded fragments of altered intrusive rock and silicified fragments of altered schist and marble. Initial rock chip samples from the outcrop area ranged from 0.49 ppm to 1.70 ppm gold, and follow-up outcrop and float sampling in 2009 yielded gold values ranging from 0.047 ppm to 5.81 ppm. A first pass orientation soil survey completed in 2008 was conducted near the “discovery’ breccia outcrop at a spacing of 100 feet over a distance of 800 feet east/west and 1,000 feet north/south. The soil assays ranged from a trace to 0.31 ppm Gold. Surface mapping indicates that the intrusive breccia covers an area of approximately 5,000 feet x 1,500 feet.

The 2010 drilling focused primarily the breccia gold zone. Centra Consulting completed the storm water plan needed for the exploration road construction on private land, and it was accepted by the Environmental Protection Agency. Road construction started on August 1, 2010 by Warner Construction and a total of 3.2 miles of access and drill site roads were completed through the end of September.

A campaign of road cut sampling was undertaken on the new roads as they were completed. Three sets of samples were obtained along the cut bank of the road. Channel samples were taken on 25-foot, 50-foot or 100-foot intervals, depending upon the nature of the material cut by the road with the shorter spaced intervals being taken in areas of bedrock. A total of 197 samples were collected and sent to ALS Chemex labs in Elko, Nevada. A majority of the samples contained anomalous gold values and in addition to confirming the three anomalies identified by soils sampling, the road cuts added a fourth target that yielded a 350-foot long zone that averaged 378 parts per billion gold (0.011 ounce per ton). Follow up sampling on a road immediately adjacent to this zone yielded a 100-foot sample interval that ran 5.91 parts per million gold (0.173 ounce per ton).

Drilling on the intrusive breccia target commenced on October 1, 2010 with a Schramm reverse circulation rig contracted through Drill Tech of Winnemucca, Nevada. Five widely-spaced holes on the four significant gold anomalies in the intrusive breccia target were completed with the following results:

Intrusive Breccia 2010 Drill Results


Hole Number	Depth (ft)	Average Gold Value (opt) – Entire Hole	Highest Grade 5 ft Interval (opt)	Comments
LO-1	625	0.0034	0.015	All 5 foot intervals had detectable gold. Discovery outcrop area – highly altered intrusive breccia with sulfides.
LO-2	845	0.001	0.016	95% of the intervals had detectable gold. Highly altered intrusive breccia with sulfides.
LO-3	940	0.0033	0.038	95% of the intervals had detectable gold. Mixed altered intrusive breccia and skarn; abundant sulfides (15 to 20% locally). West end of anomaly.
LO-4	500	0.002	0.0086	Entire hole had detectable gold. Altered intrusive breccia with sulfides. East end of anomaly.
LO-5	620	0.0037	0.036	Entire hole had detectable gold. Altered intrusive breccia with sulfides. East end of anomaly.

Management believes that the “first-pass” drill results from the intrusive breccia target proves the existence of a significant gold system in an intrusive package that is related to the polymetallic mineralization in the carbonate in the historic mine area. Additional work is planned for 2011, including a draped aeromagnetic, resistivity and IP surveys to isolate potential feeder structures and to evaluate the contact between the metasediments and the gold-bearing intrusive.

In addition to the drilling completed in on the Intrusive Breccia target, two reverse circulation drill holes were completed targeting the down dip extension of the polymetallic zones in an effort to confirm continuity of the ore zones to a greater depth. Vertical drill hole LO 6 was placed to intercept the down dip extension of the DMEA 2 ore shoot exposed on both the Laxey and Sonneman levels of the underground workings, as well as the 2008 core hole drilled by the Company that extended the zone 300 feet down dip of the Sonneman level. Drillhole LO 6 cut a thick zone of skarn alteration and polymetallic mineralization at 760 feet to 790 feet. The intercept contained 30 feet of 3.55% zinc, 1.87 ounce per ton silver, and 0.271% copper. Internal to this zone was 15 feet of 0.060 OPT gold and 20 feet of 0.21% lead. Importantly, this intercept proves the continuity of the ore zone an additional 115 feet down dip of the 2008 drill hole, or 415 feet below the Sonneman level. It remains open at depth.

Drill hole LO-7 was placed to test the down dip extension of the Laxey ore zone, the zone that produced a majority of the silver, zinc, copper, lead and gold during the World War II period. A portion of the ore zone was intercepted approximately 180 feet below the bottom of the Laxey Shaft which mined the zone over an 800-foot length. This hole intercepted 25 feet (600-625 feet) of 8.56% zinc and 1.15 ounce per ton (opt) silver. This intercept proves the extension of the Laxey ore zone approximately 120 feet below the maximum depth previously mined when over 51,000 tons of sulfide ore were mined and direct shipped to the Anaconda smelter in Utah. The grade of this ore mined over the 800 feet of shaft and stope mining was 15% zinc, 10 opt silver, 0.06 opt gold, 2.3% lead and 0.7% copper.

This property is without known reserves and the proposed program is exploratory in nature according to Instruction 3 to paragraph (b)(5) of Industry Guide 7. There are currently no permits required for conducting exploration in accordance with the Company`s current board approved exploration plan.

Trout Creek Claim Group, Lander County, Nevada

The Trout Creek pediment exploration target is located in Lander County, Nevada in T.29N. R44E. The property consists of 60 unpatented mining claims totaling approximately 1,200 acres that are located along the western flank of the Shoshone Range in the Eureka-Battle Mountain mineral trend.

During June 2012 a 189 station ground gravity survey was completed by Magee Geophysical Services LLC over the eastern portion of the Trout Creek joint venture area. Jim Wright of Wright Geophysical, Inc. interpreted the survey data and formalized it in the accompanying report. This interpretive report incorporated the relevant geophysical data supplied to Thunder Mountain Gold by Newmont

The purpose of the survey was to assist in determining the depth to bedrock in the target area, and to see if there is any indication of the paleo-channel patterns in the bedrock that would mimic the mineralized trend evident in the lower slopes of the east side of the Shoshone Range. Both goals were achieved and the target within Section 14 was enhanced significantly. The Wright report details these findings and makes recommendations.

Initial drill targets can be placed based on the findings of this survey with the goal of testing the bedrock below the estimated 150m of valley-fill gravel along the trend of the mineralized structure at or near the previously identified major structural intersection in the pediment.

The survey covered a portion of public land Section 24 lode claims controlled by Barrick Gold; permission was granted to conduct the survey by Kevin Creel of Barrick and the raw data covering their claims will be provided to them.

All those certain unpatented lode claims situated in Lander County, Nevada, more particularly described as follows below:


Name of Claim	Lander Co. Doc. No.	BLM NMC No.
TC-1	0248677	965652
TC-2	0248678	965653
TC-3	0248679	965654
TC-4	0248680	965655
TC-5	0248681	965656
TC-6	0248682	965657
TC-7	0248683	965658
TC-8	0248684	965659
TC-9	0248685	965660
TC-10	0248686	965661
TC-11	0248687	965662
TC-12	0248688	965663
TC-31	0248707	965682
TC-32	0248708	965683
TC-51	0248727	965702
TC-52	0248728	965703
TC-53	0248729	965704
TC-54	0248730	965705
TC-55	0248731	965706
TC-56	0248732	965707
TC-57	0248733	965708
TC-58	0248734	965709
TC-59	0251576	988946
TC-60	0251577	988947
TC-61	0251578	988948
TC-62	0251579	988949
TC-63	0251580	988950
TC-64	0251581	988951
TC-65	0251582	988952
TC-66	0251583	988953
TC-67	0251584	988954
TC-68	0251585	988955
TC-69	0251586	988956
TC-70	0251587	988957
TC-71	0251588	988958
TC-72	0251589	988959
TC-73	0251590	988960
TC-74	0251591	988961


Name of Claim	Lander Co. Doc. No.	BLM NMC No.
TC-75	0251592		988962
TC-76	0251593	988963
TC-77	0251594	988964
TC-78	0251595	988965
TC-79	0251596	988966
TC-80	0251597	988967
TC-81	0251598	988968
TC-82	0251599	988969
TC-83	0251600	988970
TC-84	0251601	988971
TC-85	0251602	988972
TC-86	0251603	988973
TC-87	0251604	988974
TC-88	0251605	988975
TC-89	0251606	988976
TC-90	0251607	988977
TC-91	0251608	988978
TC-92	0251609	988979
TC-93	0251610	988980
TC-94	0251611	988981
TC-95	0251612	988982
TC-96	0251613	988983

The Trout Creek property is located approximately 155 air miles northeast of Reno, Nevada, or approximately 20 miles SW of Battle Mountain, Nevada, in Sections 10, 11, 14, 16, 21, 22, 27; T.29N.; R.44E. Mount Diablo Baseline & Meridian, Lander County, Nevada. Latitude: 40 23’ 36” North, Longitude: 117 00’ 58” West. The property is accessible by traveling south from Battle Mountain Nevada on state highway 305, which is paved. After traveling approximately 20 miles, turn east off the highway on an unimproved public dirt road, and travel approximately 2 miles to the claims. The property is generally accessible year round. There is no power, no water other than seasonal surface precipitation, and there are no improvements on the property.

The 60 unpatented claims are 100% owned by Thunder Mountain Gold, and located along a northwest structural tend which projects into the Battle Mountain mining district to the northwest and into the Goat Ridge window and the Gold Acres, Pipeline, and Cortez area to the southeast. Northwest trending mineralized structures in the Battle Mountain mining district are characterized by elongated plutons, granodiorite porphyry dikes, magnetic lineaments, and regional alignment of mineralized areas. The Trout Creek target is located at the intersection of this northwest trending mineral belt and north-south trending extensional structures.

The Trout Creek target is based on a regional gravity anomaly on a well-defined northwest-southeast trending break in the alluvial fill thickness and underlying bedrock. Previous geophysical work in the 1980s revealed an airborne magnetic anomaly associated with the same structure, and this was further verified and outlined in 2008 by Company personnel using a ground magnetometer. The target is covered by alluvial fan deposits of unknown thickness shed from the adjacent Shoshone Range, a fault block mountain range composed of Paleozoic sediments of both upper and lower plate rocks of the Roberts Mountains thrust. The geophysical anomaly could define a prospective and unexplored target within a well mineralized region.

The ongoing exploration field work, including claim maintenance and assessment, is financed by the Company through sales of unregistered common stock funded by the Company through private placements with accredited investors. Future work will be funded in the same manner, or through a strategic partnership with another mining company. The Company is attempting to consolidate the land package to cover a larger area of the positive geophysical target in the pediment by acquiring and/or joint venturing adjoining mineral property. There are currently no environmental permits required for the planned exploration work on the property. In the future, a notice of intent may be required with the Bureau of Land Management. This property is without known reserves and the proposed program is exploratory in nature according to Instruction 3 to paragraph (b)(5) of Industry Guide 7.

Clover Mountain Claim Group, Owyhee County, Idaho

The Company`s Clover Mountain property is located approximately 60 air miles SW of Boise, Idaho and approximately 30 miles SW of Grandview, Idaho in Sections 24, 25; T.8S.; R.1W. , and Sections 19, 30; T.8S.; R.1E. Boise Meridian, Owyhee County, Idaho. Latitude: 42 42’ 34” North Longitude: 116 24’ 10” West

Access to the property is by traveling one mile southeast on paved state highway 78. Take the Mud Flat road to the south, and travel approximately 25 miles on improved dirt road to the property. The property is on the west next to the Mud Flat Road. The landscape is high desert, with sagebrush and no trees. There is no power, no water other than seasonal surface precipitation, and there are no improvements on the property.

LIST of UNPATENTED MINING CLAIMS at Clover Mountain


CLAIM	OWYHEE COUNTY INSTRUMENT #	BLM# / (IMC)
PC-1	259673	190708
PC-2	259672	190709
PC-3	259671	190710
PC-4	259670	190711
PC-5	259669	190712
PC-6	259668	190713
PC-7	259667	190714
PC-8	259666	190715
PC-9	259665	190716
PC-10	259664	190717
PC-11	259663	190718
PC-12	259662	190719
PC-13	259661	190720
PC-14	259660	190721
PC-15	259659	190722
PC-16	259658	190723
PC-17	259657	190724
PC-18	259656	190725
PC-19	259655	190726
PC-20	259654	190727
PC-21	259653	190728
PC-22	259652	190729
PC-23	259651	190730
PC-24	259650	190731
PC-25	259649	190732
PC-26	259648	190733
PC-27	259647	190734
PC-28	259646	190735
PC-29	259645	190736
PC-30	259644	190737


CLAIM	OWYHEE COUNTY INSTRUMENT #	BLM# / (IMC)
PC-31	259643	190738
PC-32	259642	190739
PC-33	259641	190740
PC-34	259640	190741
PC-35	259639	190742
PC-36	259638	190743
PC-37	259637	190744
PC-38	259636	190745
PC-39	259635	190746
PC-40	259634	190747

These Claims are 100% owned by Thunder Mountain Gold Inc.

A geologic reconnaissance program in the fall of 2006 identified anomalous gold, silver, and other base metals in rock chips and soils at Clover Mountain. In February 2007 the Company located the Clover Mountain claim group consisting of 40 unpatented lode mining claims totaling approximately 800 acres. Mineralization appears to be associated with stockwork veining in a granitic stock which has been intruded by northeast and northwest-trending rhyolitic dikes. The property is overlain by locally silicified rhyolitic tuff.

Follow-up rock chip sampling within the area of the anomaly has identified quartz veining with gold values ranging from 3.6 part per million (ppm) to 16.5 ppm. A soil sample program consisting of 215 samples was conducted on 200’x 200’ grid spacing which defined two northeast tending soil anomalies with gold values ranging from 0.020 ppm to 0.873 ppm Au. The gold anomalies are approximately 1,000’ in length and approximately 300’ in width. The gold anomalies are associated with northeast trending structures with accompanying quartz stockwork veining in an exposure of Cretaceous/Tertiary granite. A 2,500’ base metal soil anomaly is observed trending northwest proximal to rhyolite and rhyodacitic dikes which intrude the granitic stock. No significant work was completed on the claim group in 2010, but additional field work is warranted in the future that may include backhoe trenching and sampling in the significantly anomalous area followed by exploration drilling.

During brief field work in 2010, the presence of visible free gold was noted by panning in the area of the strong soil anomaly. The ongoing exploration field work, including claim maintenance and assessment fees, is funded by the Company through private placements with accredited investors. Future work will be funded in the same manner, or through a strategic partnership with another mining company.

There are currently no environmental permits required for the planned exploration work on the property. In the future, a notice of intent or plan of operations may be required with the Bureau of Land Management. This property is without known reserves and the proposed program is exploratory in nature according to Instruction 3 to paragraph (b)(5) of Industry Guide 7.

Results of Operations:

The Company had revenues of $53,203 and no production for the nine months ended September 30, 2013, compared to no revenue and no production for the same period in 2012. Expenses for the three months ended September 30, 2013 decreased by $ 10,699 or 6%, compared with $171,800 for the three months ended September 30, 2012. The decrease is a result of lower expenditures for legal expenses. The company focused on financing and joint venture activities for the South Mountain Joint Venture. Exploration expense for the quarter increased $31,194 to $51,290, as management continues to focus on financing, and the completion of the South Mountain Joint Venture with Idaho State Gold Co. Management and administrative expenses increased by $43,570 to $104,705 for the quarter due to consultation fees being paid by the Owyhee Gold Trust, LLC. The Company incurred Legal and accounting fees during the quarter (legal and accounting) of $ 15,106 which decreased by $ 73,324 when compared to the quarter ending September 30, 2012.

The Company recognized a Gain on fair value of warrant liabilities from the long-term liability of $111,763 related to the warrants derivative liabilities. Total other income/(loss) for the three months ended September 30, 2013 was $107,050, a decrease of $ 91,337 from total other income of $ 198,387 over the same period last year. The increase in other income is attributable to the gain recognized on the fair value of the warrant liability recorded on the balance sheet during the first quarter of 2013.

Liquidity and Capital Resources:

On September 30, 2013, the Company had total current liabilities of $117,388. Current liabilities increased by $60,623 compared to current liabilities of $56,765 at year end December 31, 2012 primarily due to accounts payable, and related party notes.

Total liabilities decreased during the quarter due to a decrease from the derivative warrant liabilities. The Company has accounted for the warrants as derivative instruments which have been valued using a Black Scholes fair value model. The Company has decreased the long-term liability of $508,012 related to the warrants as all warrants were deemed expired by management.

For the six month period ended September 30, 2013, net cash used by operating activities was $ 215,265, consisting of our year to date net income of $140,657, less non non-cash expenses for depreciation, amortization of deferred financing costs, changes in the fair value of the warrant liability and accounts payable and other accrued liabilities. This compares with $ 673,817 used by operating activities for the nine months ended September 30, 2012. There were no cash flows from investing activities. There was a notes payable issued to Rolfe Hess in the amount of $ 20,000 disclosed in the cash flow under financing activities for the six month period ended September 30, 2013.

We are an exploration stage company and have incurred losses since our inception. The notes to our financial statements for the year ended December 31, 2012, together with the opinion of our independent auditors included “going concern” explanatory paragraphs.

Management actions in addressing the “going concern”:

Management believes that the Company currently has cash sufficient to support an exploration program as outlined in Managements Discussion & Analysis above based on the following:

As of September 30, 2013, the Company currently has $ 6,240 of cash in our bank accounts, with $ 5,425 in pre-paid expenses.

On January 2, 2012, the Company entered into a subscription agreement with two individuals whereby the company sold 1,350,000 units at US$0.12 per unit. Each unit consists of one share of common stock, and one-half warrant exercisable for 1 year at $0.20. The Company issued 1,350,000 shares under this agreement.

Management and the Board have not undertaken plans or commitments that exceed the cash available to the Company. We do not include in this consideration any additional investment funds mentioned above.

Management will manage expenses of all types so as to not exceed the on-hand cash resources of the Company at any point in time, now or in the future.

Management is committed to proper management and spending restraint such that the Company is believed to be able to weather current disruptions in investment markets and continue to attract investment dollars in coming months and years.

The Company’s future liquidity and capital requirements will depend on many factors, including timing, cost and progress of its exploration efforts, evaluation of, and decisions with respect to, its strategic alternatives, and costs associated with the regulatory approvals. Additional financing may be required to meet our exploration and corporate expenses incurred during the next 12 months.

As of September 30, 2013, the Company owns outright the South Mountain Mine property in Owyhee County, Idaho that consists of 17 patented mining claims totaling approximately 326 acres, for which Management has recorded the property in the Company’s financial statements for $479,477.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Not required for smaller reporting companies.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

At the end of the period covered by this report, an evaluation was carried out under the supervision of, and with the participation of, the Company’s Management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Rule 13a – 15(e) and Rule 15d – 15(e) of the Securities and Exchange Act of 1934, as amended).

Changes in Internal Controls over Financial Reporting

During the quarter covered by this report, there have been no changes in the Company’s internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II – OTHER INFORMATION

Item 1. Legal Proceedings.

None.

Item 1A. Risk Factors.

Not required for smaller reporting companies.

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

On February 12, 2012, the Company initiated a Non-Brokered Private Placement to accredited investors in Europe, the U.S., and such other jurisdictions as may be agreed to by the Company, for up to 8.3M Units at US$0.12 per Unit. Each Unit consists of one share of THMG/THM common stock, and one-half share purchase warrant - to purchase the common stock at $0.20 per share, valid for 12 months after the close of the financing.

The net proceeds of the Offering shall be used primarily to complete the acquisition of the Iron Creek Cobalt Gold project, initiation of the exploration on the Thunder Mountain Gold/Newmont Mining Trout Creek Joint Venture, and general corporate purposes for the completion of the Green River Energy merger.

The Company shall obtain any regulatory approval and any other consents that may be required to permit the Offering, including the approval of the TSX Venture Exchange. The securities offered hereby have not and will not be registered under the United States Securities Act of 1933 (the “1933 Act”) and may not be offered or sold in the United States or to U.S. persons (as defined in Regulation S under the 1933 Act) unless the securities have been registered under the 1933 Act, or are otherwise exempt from such registration.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures

Pursuant to Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act”), issuers that are operators, or that have a subsidiary that is an operator, of a coal or other mine in the United States are required to disclose in their periodic reports filed with the SEC information regarding specified health and safety violations, orders and citations, related assessments and legal actions, and mining-related fatalities.

During the quarter ended June 30, 2013, the Company did not have any operating mines and therefore had no such specified health and safety violations, orders or citations, related assessments or legal actions, mining-related fatalities, or similar events in relation to the Company’s United States operations requiring disclosure pursuant to Section 1503(a) of the Dodd-Frank Act.

Item 5. Other Information

None.

Item 6. Exhibits

(a)

Documents which are filed as a part of this report:

Exhibits:

31.1 – Certification Required by Rule 13a-14(a) or Rule 15d-14(a). Jones

31.2 – Certification Required by Rule 13a-14(a) or Rule 15d-14(a). Thackery

32.1 – Certification required by Rule 13a-14(a) or Rule 15d-14(b) and section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350. Jones

32.2 – Certification required by Rule 13a-14(a) or Rule 15d-14(b) and section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350. Thackery

101*

The following financial information from our Quarterly Report on Form 10-Q for the quarter ended September 30, 2013 formatted in Extensible Business Reporting Language (XBRL): (i) the Balance Sheets, (ii) the Statements of Operations, (iii) the Statements of Cash Flows, and (v) Notes to Financial Statements

_____________________

In accordance with Rule 406T of Regulation S-T, the XBRL information in Exhibit 101 to this quarterly report on Form 10-Q shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (“Exchange Act”), or otherwise subject to the liability of that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(b) of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf of the undersigned, thereunto duly authorized.

THUNDER MOUNTAIN GOLD, INC.

By /s/ Eric T. Jones

Eric T. Jones

President and Chief Executive Officer

Date: November 19, 2013

Pursuant to the requirements of the Securities Act of 1934 this report signed below by the following person on behalf of the Registrant and in the capacities on the date indicated.

By /s/ Larry Thackery

Larry Thackery

Chief Financial Officer

Date: November 19, 2013