**UNITED STATES****SECURITIES AND EXCHANGE COMMISSION**WASHINGTON, D.C. 20549

**FORM 10-K**

 [X]  ANNUAL REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934  Forthe fiscal year ended September 30, 2010

 [  ]   TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF1934Forthe transition period from _______ to _________

Commissionfile number 000-31184

**SHOSHONE SILVER MINING COMPANY**  (Name of registrant in its charter)

| Idaho                                                           | 82-0304993                          |
|-----------------------------------------------------------------|-------------------------------------|
| (State or other jurisdiction of incorporation or  organization) | (I.R.S. Employer Identification No. |

| 3714 W Industrial Loop., Coeur d’Alene, ID | 83815     |
|--------------------------------------------------|-----------|
| (Address of principal executive offices)         | (Zip Code |

| Issuer’s telephone number:  (208) 664-0620 |
|--------------------------------------------------|

Securities registered underSection 12(b) of the Exchange Act:

| Title of each class | Name of each exchange on which registered |
|---------------------|-------------------------------------------|
| None                |                                      |

Securities registered under Section 12(g) of theExchange Act: Common Stock, par value $0.10(Title of Class)

 Indicate bycheck mark if the registrant is a well-known seasoned issuer, as defined inRule 405 of the Securities Act.Yes  [  ]   No  [X] 

Indicate by checkmark if the registrant is not required to file reports pursuant toSection 13 or Section 15(d) of theAct.Yes  [  ]   No  [X] 

Checkwhether the issuer: (1) filed all reports required to be filed by Section 13 or15(d) of the Exchange Act during the past 12 months (or for such shorter periodthat the registrant was required to file such reports), and (2) has beensubject to such filing requirements for the past 90 days.Yes  [X]   No  [  ]  

Checkif there is no disclosure of delinquent filers in response to Item 405 ofRegulation S-K is not contained in this form, and no disclosure will becontained, to the best of registrant’s knowledge, in definitive proxy orinformation statements incorporated by reference in Part III of this Form 10-K orany amendment to this Form 10-K. [  ]  

Indicate by check markwhether the Registrant is a large accelerated filer, an accelerated filer, anon-accelerated filer or a smaller reporting company. See the definitions of“large accelerated filer,” “accelerated filer” and “smaller reporting company”in Rule 12b-2 of the Exchange Act.

| Large accelerated filer [  ]                                                        | Accelerated  filer  [  ]   |
|----------------------------------------------------------------------------------------------------|------------------------------------------------|
| Non-accelerated filer [  ]  (Do not check if a smaller reporting company) | Smaller reporting company  [X]  |

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Indicate by check mark whether the registrant is ashell company (as defined in Rule 12b-2 of the Act). Yes  [  ]   No  [X] 

Theaggregate market value of the voting and non-voting common equity held bynon-affiliates of the registrant on March 31, 2010, the last business day ofthe registrant’s most recently completed second quarter, based on the last reportedtrading price of the registrant’s common stock on the Over the Counter BulletinBoard was $6,130,656.

There were 43,175,037shares of the registrant’s $0.10 par value common stock outstanding on December20, 2010. 

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**F**ORM******10-K****For the Fiscal Year Ended September 30, 2010**

**TABLE OF CONTENTS**

Page#

| **PART I**                                                                                                                                    | 4      |
|-----------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                                          |   |
| Item 1.  Business                                                                                                                        | 4      |
|                                                                                                                                          |   |
| Item 1A.  Risk Factors                                                                                                                   | 27     |
|                                                                                                                                          |   |
| Item 1B.  Unresolved Staff       Comments                                                                                                | 27     |
|                                                                                                                                          |   |
| Item 2.  Properties                                                                                                                      | 28     |
|                                                                                                                                          |   |
| Item 3.  Legal Proceedings                                                                                                               | 28     |
|                                                                                                                                          |   |
| **PART II**                                                                                                                                   | 29     |
|                                                                                                                                          |   |
| Item 5.    Market for Registrant’s Common Equity,       Related Stockholder Matters and Issuer Purchases of Equity Securities | 29     |
|                                                                                                                                          |   |
| Item 6.   Selected Financial       Data                                                                                                  | 30     |
|                                                                                                                                          |   |
| Item 7.   Management’s       Discussion and Analysis of Financial Condition and Results of Operations                              | 30     |
|                                                                                                                                          |   |
| Item 7A. Quantitative and       Qualitative Disclosures About Market Risk                                                                     | 35     |
|                                                                                                                                          |   |
| Item 8.  Consolidated       Financial Statements and Supplementary Data                                                                  | 36     |
|                                                                                                                                          |   |
| Item 9.   Changes in and       Disagreements with Accountants on Accounting and Financial Disclosure                                | 59     |
|                                                                                                                                          |   |
| Item 9A(T).  Controls and       Procedures                                                                                               | 59     |
|                                                                                                                                          |   |
| Item 9B.  Other Information                                                                                                              | 60     |
|                                                                                                                                          |   |
| **PART III**                                                                                                                                  | 61     |
|                                                                                                                                          |   |
| Item 10. Directors and       Executive Officers of the Registrant                                                                             | 61     |
|                                                                                                                                          |   |
| Item 11.  Executive       Compensation                                                                                                   | 61     |
|                                                                                                                                          |   |
| Item 12. Security       Ownership of Certain Beneficial Owners and Management and Related Stockholder       Matters                           | 61     |
|                                                                                                                                          |   |
| Item 13.  Certain Relationships and Related       Transactions and Director Independence                                                 | 62     |
|                                                                                                                                          |   |
| Item 14.        Principal Accounting Fees and Services                                                                                   | 62     |
|                                                                                                                                          |   |
| **PART IV**                                                                                                                                   | 63     |
|                                                                                                                                          |   |
| Part 15.  Exhibits, Financial       Statement Schedules                                                                                  | 63     |

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**PARTI**

**ITEM1. BUSINESS**

Asused in this registration statement, "Shoshone Mining,""Shoshone," "our Company," "the Company,” "we,"and "our" refer to Shoshone Silver Mining Company. 

***Overview***

Shoshone Silver Mining Company is an Idaho corporationfounded as Sunrise Mining Company on August 4, 1969. We subsequently changed ourname to Shoshone Silver Mining Company on January 22. 1970.  Shoshone wasformed to explore, develop and produce precious metals with a focus on northern Idaho and Canada.  In the late 1990's, we were unable to productively utilize ourLakeview (Idaho) property and we elected to expand our exploration activities throughout Idaho and also increasingly in other western states and Mexico.  

Weare an exploration stage company, and our activities have been limited toexploring and acquiring rights to explore properties which we believe are prospectivefor silver, gold, platinum group and base metals along with uranium. We haveidentified and commenced prospecting efforts in several areas in Idaho, Montana and Arizona. There can be no assurance that any of our properties contain acommercially viable ore body or reserves. None of our properties are inproduction.  The limited revenues we are reporting is from the processing ofpreviously stockpiled mineralized material.

**EXPLORATION PROPERTIES**

|                                 |             |                           |             |                                                                       |             | **Claims**                                                                                                   |             |
|--------------------------------------|------------------|--------------------------------|------------------|----------------------------------------------------------------------------|------------------|--------------------------------------------------------------------------------------------------------------|------------------|
| **Project**                          |  ** ** | **Location**                   |  ** ** | **Acres**                                                                  |  ** ** | **Patented**                                                                                                 |             | **Unpatented** |   |
| ** **                           |  ** ** |  ** **               |  ** ** |  ** **                                                           |  ** ** |  ** **                                                                                             |             |  ** ** |   |
| **Idaho Lakeview District**          |             | **Bonner County****, Idaho**   |  ** ** |  ** **                                                           |  ** ** |  ** **                                                                                             |             |  ** ** |   |
| Idaho Lakeview & Keep Cool  |             |                           |             | 780                                                                        |             | 15                                                                                                           |             | 24 |   |
| Millsite                             |             |                           |             | 13                                                                         |             |                                                                                                         |             |   |   |
| Drumheller                           |             |                           |             | 111                                                                        |             | 6                                                                                                            |             |   |   |
| Auxer                                |             |                           |             | 40                                                                         |             | -                                                                                                            |             | 2 |   |
| Talache                              |             |                           |             | 40                                                                         |             | -                                                                                                            |             | 2 |   |
| **Subtotal**                         |             |                           |             |  **           984** |  ** ** |  **              21**                  |  ** ** |  **              28** |   |
| ** **                           |             |  ** **               |             |  ** **                                                           |  ** ** |  ** **                                                                                             |  ** ** |  ** ** |   |
| **Silver****Valley**                 |             | **Shoshone County****, Idaho** |             |                                                                       |             |                                                                                                         |             |   |   |
| Shoshone                             |             |                           |             | 96                                                                         |             | 5                                                                                                            |             | - |   |
| Bullion                              |             |                           |             | 138                                                                        |             | 7                                                                                                            |             | - |   |
| Camp Project                         |             |                           |             | 630                                                                        |             | 35                                                                                                           |             |   |   |
| **Subtotal**                         |             |                           |             |  **           864** |  ** ** |  **              47**                  |  ** ** |  **               -  ** |   |
|                                 |             |                           |             |                                                                       |             |                                                                                                         |             |   |   |
| **Central Idaho**                    |             |                           |             |                                                                       |             |                                                                                                         |             |   |   |
| Rescue                               |             |                           |             | 1,720                                                                      |             | -                                                                                                            |             | 84 |   |
| Iola                                 |             |                           |             | 70                                                                         |             | 5                                                                                                            |             | - |   |
| Silver King                          |             |                           |             | 174                                                                        |             | 12                                                                                                           |             | - |   |
| Kimberly                             |             |                           |             | 480                                                                        |             | -                                                                                                            |             | 24 |   |
| **Subtotal**                         |             |                           |             |  **        2,444**                 |  ** ** |  **              17**                  |  ** ** |  **           108** |   |
|                                 |             |                           |             |  ** **                                                           |  ** ** |  ** **                                                                                             |  ** ** |  ** ** |   |
| **North Idaho**                      |             | **Boundary County****, Idaho** |             |                                                                       |             |                                                                                                         |             |   |   |
| Montgomery                           |             |                           |             | 500                                                                        |             | -                                                                                                            |             | 25 |   |
| Regal                                |             |                           |             | 80                                                                         |             | -                                                                                                            |             | 4 |   |
|                                 |             |                           |             |  **           580** |  ** ** |  **               -  ** |  ** ** |  **29** |   |
|                                 |             |                           |             |                                                                       |             |                                                                                                         |             |   |   |
| **Montana**                          |  ** ** | **Montana**                    |  ** ** |                                                                       |             |                                                                                                         |             |   |   |
| Stillwater Extension Claims          |             | Stillwater County              |             | 200                                                                        |             | -                                                                                                            |             | 10 |   |
| Princeton Gulch  Group               |             | Granite County                 |             | 120                                                                        |             | -                                                                                                            |             | 6 |   |
| **Subtotal**                         |             |                           |             |  **           320** |  ** ** |  **               -  ** |  ** ** |  **16** |   |
|                                 |             |                           |             |                                                                       |             |                                                                                                         |             |   |   |
| **Arizona****Gold**                  |  ** ** | **Arizona**                    |  ** ** |                                                                       |             |                                                                                                         |             |   |   |
| Western Gold                         |             | Mohave County                  |             | 240                                                                        |             | -                                                                                                            |             | 13 |   |
| Gold Road                            |             | Mohave County                  |             | 320                                                                        |             | -                                                                                                            |             | 16 |   |
| Cerro Colorado                       |             | Pima County                    |             | 60                                                                         |             | -                                                                                                            |             | 3 |   |
| **Subtotal**                         |             |                           |             |  **           620** |  ** ** |  **               -  ** |  ** ** |  **32** |   |
|                                 |             |                           |             |                                                                       |             |                                                                                                         |             |   |   |
| **Washington******                   |             |                           |             |                                                                       |             |                                                                                                         |             |   |   |
| Shaft Claims                         |             |                           |             |  **           380** |  ** ** |  **               -  ** |  ** ** |  **19** |   |
| ** **                           |             |                           |             |                                                                       |             |                                                                                                         |             |   |   |
| **Mexico****Properties**             |  ** ** | **Mexico**                     |  ** ** |                                                                       |             |                                                                                                         |             |   |   |
| Other Mexican  Properties            |             | State of Sonora, Mexico        |             |  N/A                                                                  |             |  N/A                                                                                                    |             |  N/A |   |

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**Idaho LakeviewDistrict Holdings**

We have a group of patented and unpatented propertieslocated in Bonner County near the Shoshone milling facility commonly referredto as the Idaho Lakeview District Properties.  This group includes the IdahoLakeview, Weber, Keep Cool, Auxer and Talache properties.

**Conjecture**

During2004, we entered into a 25-year lease agreement for 6 unpatented lode miningclaims and 6 patented lode mining claims in Bonner County.  Yearly leasepayments on the property were 100,000 shares of common stock. In April 2010, wecancelled the lease agreement and, under the terms of the agreement, paid tothe lessor 50,000 shares of our common stock (valued at $9,000) and a royaltyfee $259.

Details of the original lease agreement may be found inthe exhibit 10.2 which was filed as an exhibit to our Annual Report on Form 10-KSBfiled with the Commission on August 3, 2006.

**Idaho****Lakeview, Keep Cool and Weber**

The Idaho Lakeview, Weber and Keep Cool groups arelocated contiguously around an area of Bonner County near our Idaho LakeviewMill.

Location and Access:

The claims are in Sections 15, 22, 26, 27, 28, 29, 32,33, 34, and 35 of Township 53 North, Range 1 West.  From the city of Coeur d'Alene, Idaho, the claims can be reached via 36 miles of paved and well-gradedgravel roads. Approximately 16 miles north of Coeur d'Alene near the town of Athol on U.S. Highway 95 is the intersection with Bunco Road, which becomes U.S. Forest Service Road #332.  Bunco Road traverses the Lakeview Mining District 18-22miles from the highway.  Many secondary roads lead from Bunco Road to the minesand prospects of the Lakeview Mining District.  Commercial electricity isavailable on the property.  Water is supplied via wells and through waterrights to a nearby creek.

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A map of the Idaho Lakeview, Keep Cool and Weberproperties is contained in Exhibit 99.1 which was filed as an exhibit to our Annual Report on Form 10-KSB/A filed with the Commission on December 3, 2007, File No.000-31184. 

Land Status:

The Idaho Lakeview and Keep Cool Groups comprise 9patented and 14 unpatented lode mining claims.  The Weber Group is comprised of6 patented and 10 unpatented lode mining claims. The Idaho Lakeview Millsite consists of a mill and water treatmentfacility on 12.5 patented acres.    

Inorder to retain title to the Idaho Lakeview, Weber and Keep Cool, we must payannually assessed property taxes to Bonner County, Idaho on the 15 patentedclaims within the group and annual Bureau of Land Management Maintenance Feestotaling $3,360 ($140 per claim, for the24 unpatented claims)

Geology:

These properties lie within the Lakeview MiningDistrict. The Lakeview mining district is predominantly underlain byPrecambrian metasedimentary rocks of the Belt Super-group represented by theWallace Formation. The Wallace formation consists of black or grey, very thinlylaminated argillites and siltites containing interbedded blue-grey dolomite orlimestone horizons. Total thickness of the Wallace formation is in excess of5,000 ft.

The property currently is without known reserves.

Exploration History:

Initial discoveries of mineralization in the LakeviewDistrict were made in 1888 near the site of the Weber Mine. Additionaldiscoveries were made throughout the Pend Oreille Lake region and the LakeviewDistrict was at that time included in the Pend Oreille Mining district, andearly production records are unknown.

In 1924, the Venezwela Group of claims was taken over bythe Hewer Mining Company and became what is now known as the Lakeview Mine. Aninternal shaft was eventually sunk to the 1,400 ft level and between 1923 and1943 the Lakeview mine produced 24,500 tons of ore.

In 1962, Sunshine Mining Company signed an agreementwith Idaho Lakeview Mines, the successor to Hewer Mining Company, and acquireda 50% interest in the Keep Cool and Idaho Lakeview mines. The combinedproperties became the Lakeview Consolidated Silver Mines, Inc.

Sunshine, in order to maintain its interest, conductedassessment work on the properties, including surface excavations, drill holesand underground work.

In 1978, a bulldozer trenching discovered anothersurface zone of mineralization 2,000 ft northeast of the Weber Pit. It exposeda vein 10-12 ft wide and 135 ft long. This vein was mined during the early1980’s.

In 1987, we rehabilitated the Keep Cool Mine, and drove200 ft of new workings towards a vein drilled by Sunshine Mining Company in1970.

A limited amount of material was removed from the WeberPit in the late 1970’s, early 1980’s. Exact quantities are unknown.

We conducted exploration drilling from the surface in2008

Development Activities:

6

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In 2008, we completed the refurbishment of the LakeviewMill.  This refurbishment included repairs and updates to the existingequipment and electrical infrastructure and installation of a new watermanagement system.  The mill has since been processing previously mined andstockpiled mineralized material.  Concentrates from milling activities arebeing stored at the mill facility.  During 2010, we entered into an agreementto sell silver concentrate produced at our Lakeview property to a smelter forrefining.  To date, from our test runs, we have generated revenues of $20,111from the sale of concentrate to the smelter.  

Exploration and Development Plans: ** **

During 2008, we conducted trenching and sampling on aportion of the Weber Shear between the Weber and Keep Cool Mines.  Also, during2008, we conducted exploration drilling from the surface over a portion of theproperties. 

ProductionPlans:

Wewill continue milling previously mined and stockpiled mineralized materials in2010 when snow no longer makes the roads impassable.  Additionally, Shoshoneplans to engage in limited surface mining in the Weber shear as it extends fromthe Weber to the Keep Cool on its patented ground provided initial drillingsubstantiates the continued mineralization of the shear at or near thesurface.  

Mineralizedmaterial that may be obtained from this mining activity will be processed atthe Lakeview Mill. We will be stockpiling concentrates from milling at itsfacilities until a sufficient quantity of concentrates are held to makeshipping and smelting economically advantageous.  Planned production activitieswill continue while roads are passable by heavy equipment.

Impairment:

During 2006, we paid fees to make improvements to theland to be more accessible as well as usable.  The total amount of $68,472 wascapitalized.

We believe that, when compared to the market value ofthe property, the deferred costs of $334,690 have not suffered impairment.Accordingly, at September 30, 2010, we did not consider a write-down to thecarrying cost necessary.

**Drumheller Group**

We own 6 patented claims consisting of 111 acres whichare adjoining and lying south of the Idaho Lakeview claims on a extension ofthe Hewer vein.  We issued 109,141 shares of its common stock to acquire theseclaims in February 1984.

**Auxer Group**

The Auxer Mine is a formerly producing precious metalmine located in Bonner County, Idaho.

Location and Access:

The Auxer Mine property is located in Bonner County, Idaho, about 3.5 miles northeast of East Hope, Idaho and about 10 miles north of Clark Fork,   Idaho within Sections 20, 29, Township 57 North, Range 02 East.

The property can be accessed by logging roads leadingnorth from Clark Fork, Idaho along Lightning Creek for 11 miles; then by fourmiles of logging roads and mine access road to the headwaters of WellingtonCreek.  The property can also be accessed by five miles of gravel roads leadingnorth from East Hope, Idaho along Strong Creek.  The current electrical andwater supply to the land are unknown.  

A map showing the Auxer Property may be found in Exhibit99.3 which was filed as an exhibit to our Annual Report on Form 10-KSB/A filed with the Commission on December 3, 2007, File No.000-31184. 

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Land Status:

The area covered by the Auxer claims is under Bureau ofLand Management (BLM) jurisdiction.  The Auxer property consists of 2contiguous unpatented mining claims covering 40 acres.  Title to the property is maintained by annual paymentof BLM Maintenance Fees of $280.  We have not made improvements to the property.

Geology:

The Auxer Mines area is located on the north slope ofthe Auxer Basin, a glacial cirque, at elevations that range from 5,200 to 6,000feet above sea-level.  Vegetation consists of dense stands of conifers, withareas of talus cover on the northwesterly portions of the claim area.  Soildepth on the property ranges from bedrock exposure to roughly ten inches deep. 

Argillaceous quartzites of the Pre-Cambrian Belt Seriesintruded by granodiorite underlie the claims.  The Prichard formation isexposed in talus material along the northwesterly boundary of the claims.

There are two main gold bearing quartz veins, the Boston and Chicago Veins.  The Boston Vein can be traced for several thousand feet on thesurface.  It is a 14-15 foot wide shear zone at the surface, but widens to 25feet at a depth of 200 feet.  The quartz vein contains gold, associated withthe pyrite.  

The Chicago Vein is located 500 feet south of the BostonShaft and occurs within a shear zone parallel to the Boston Vein.  The vein isof the same character as the Boston Vein, but has not been explored on thesurface.  A 40 inch wide channel sample was taken on the surface by John Platsin 1936, assaying 0.60 oz/t gold.

The property is currently without known reserves and theproposed program, as defined below, is exploratory in nature.

Exploration History:

E.U. Philbrick staked the main Auxer claims in 1905.  In1925, Auxer Gold Mines was organized, and by 1933 most of the Auxer claims weredeeded to Auxer Gold Mines.

In 1968, Auxer Gold Mines was purchased by SpokaneNational Mines, Inc.  In 1972, the property was sold to Idora Silver Mines,Inc. and later relinquished its interest.  Ashington Mining Company staked twoclaims in 1999.

In September 2003, we acquired the property fromAshington Mining Company for $7,500.

Exploration Plans:

The following are recommended for the exploration of theAuxer claims:

- Surface geological mapping of surface exposure of     veins;
- Geochemical sampling of surface and underground     vein exposures;
- Underground geological mapping of mine workings (if     accessible);
- Systematic sampling of underground vein exposures     (if accessible); and
- Location of surface and underground drill sites.

No timetable for exploration has been set and costs forthe recommended exploration have not been determined.

Impairment:

e believe that, when compared to the market value of the property, thedeferred costs of $7,500 have not suffered impairment. Accordingly, at September 30, 2010, we did not consider a write-down to the carrying cost necessary.

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**Talache Group**

Location and Access:

The Talache silver-gold property is located in Bonner County, in Sections 1 and 6, Township 55 North, Range 1 West.  These holdings arelocated approximately 1 mile northwest of Talache Landing, and 12 milessoutheast of Sandpoint, via U.S. Highway 95 and Mirror Lake Road.  The currentstatus of electric and water supply to the property are unknown.  

A map showing the Talache Group may be found in Exhibit99.4 which was filed as an exhibit to our Annual Report on Form 10-KSB/A filed with the Commission on December 3, 2007, File No.000-31184. 

Land Status:

The property consists of 2 unpatented mining claimscovering 40 acres of Bureau of Land Management (BLM) land.    Title to theproperty is maintained by annual payment of BLM Maintenance Fees of $280. We have not improved the property.

Geology:

Steep slopes that are heavily timbered characterize thetopography of the area.  Altitudes vary from 2,060 feet on the shore of Pend Oreille Lake to more than 4,100 feet in the northwestern portion of theproperty.  The property is dominated by coniferous forest, with large areas ofopen meadow grassland in areas where soil cover is too thin to support conifertrees.

The rocks exposed in the vicinity of the propertyconsist of argillites, silites, and quartizes of the Precambrian BeltSuper-group.  In the vicinity of the Talache Group property, the rocks displayan overall tendency to become less calcareous and more clastic with depth.  Theproperty is situated on the west limb of a syncline whose axis strikes nearlydue north.  Two prominent fracture directions are observed within the propertyboundaries.  These include a set that strikes nearly north-south and dips from80 degrees west to 45 degrees east and a set which strikes approximatelyeast-west and dips from 45 degrees south to 45 degrees north.  Most of theprominent mineralization in the area follows north-striking fractures.

Mineralization of economic significance occurs as veinscontained in numerous faults and shear zones within the area.  The veins occuras lenses and pipes that shoot within the faults and vary considerably in size,grade, and continuity.  They improve in width and grade where they are cut andoffset by east-west striking cross faults. 

Exploration History:

The first claims were staked in the area in the early1890’s.  In 1922, the Talache Mine was developed and production was initiatedand continued until late 1926.  Although no accurate record exists of totalproduction, it has been estimated that the Talache Mine produced approximatelytwo million ounces of silver and some gold, lead, and copper.  Zinc, althoughpresent, was not recovered.  The operation may have ceased due to thedecreasing silver price and the fact that the mineralized zone was found toextend off of the Talache property along strike.

In 1964, the Silver Butte Mining Co. was formed toexplore the Talache area, and approximately 2,300 feet of drifting andcross-cutting and 2,400 feet of diamond drilling were carried out approximately1 mile to the north of the current Talache Group Claims.

In 1969, Silver Butte and Imperial Silver leased theproperty to Cominco American, Inc.  Cominco held the properties through 1971and completed approximately 5,000 feet of diamond drilling.  Subsequently allclaims were dropped.

In 1999, two claims covering 40 acres were staked forAshington Mining Corporation.

In 2003, we acquired the property from Ashington for$22,500.

The property is currently without known reserves and theproposed program is exploratory in nature.

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Exploration Plans:

The following are recommended actions for the TalacheProperty:

- Rehabilitate the Talache 400 level portal;
- Conduct systematic channel sampling of vein     exposures on the Talache 400 level;
- Underground geological mapping of the Talache 400     level;
- Surface geological mapping to identify surface     expression of faults and veins;
- Surface sampling of vein and fault exposures to     extend laterally the mineralization; and
- Locate potential reverse circulation and diamond     drill hole locations for surface drilling.

No timetable for exploration has been set and costs forthe recommended exploration have not been determined.

Impairment:

We believe that, when compared to the market value ofthe property, the deferred costs of $22,500 have not suffered impairment.Accordingly, at September 30, 2010, we did not consider a write-down to thecarrying cost necessary.

**Silver****Valley****Holdings**

Shoshone has three holdings in Idaho’s Silver Valley: the Shoshone, Bullion and North Osburn Groups.

**Shoshone Group**

We have a group of patented lode claims commonlyreferred to as the Shoshone Group located contiguously around an area withinthe St. Joe Mining District in Shoshone County, Idaho.

Location and Access:

The claims are in Sections 13, 14, and 15 of Township 47North, Range 5 East.  From the city of Coeur d'Alene, Idaho, travelapproximately 45 miles East on Interstate 90, to Exit # 63. Turn south onto Willow Creek Road. Travel south of Willow Creek Road for 1 mile. Several secondary roadsaccess this property.  Commercial power is available on Willow Creek Road.  Thecurrent status of the water supply is unknown.     

A map showing the Shoshone Group may be found in Exhibit99.2 which was filed as an exhibit to our Annual Report on Form 10-KSB/A filed with the Commission on December 3, 2007, File No.000-31184. 

Land Status:

The Shoshone Group consists of 5 patented lode claimstotaling 96 acres in the St. Joe Mining District.  Title to the property ismaintained by payment of annually assessed property taxes to Shoshone County, Idaho.  During 2010, we paid $61in property taxes on this property.** **We have not made improvements to the property.

Geology:

The rocks in the claim group belong to the Precambrianlower Wallace formation, consisting of light-grey dolomitic quartziteinter-bedded with greenish-grey argillites. Ripple marks and mud cracks arevisible on bedding surfaces. The rocks are intruded by Tertiary aged diabasedikes.

The claim group is located within a fault block boundedby the Osburn Fault to the north and the Placer Creek Fault to the south, andcovers three vein structures known as the Champion, Helena and Link Veins.

The Champion Vein extends from the Springfield Mine tothe Bullion Mine six miles to the east, passing through both the Shoshone andBullion properties.

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Exploration History:

The Shoshone Group is located in the St. Joe MiningDistrict of eastern Shoshone County, along the Montana border.  This propertycovers several prospect pits and other historic mine workings. 

The Shoshone Group was the subject of considerableinterest and speculation in the early 1980’s as Anaconda Minerals drilled theproperty.  Surface outcrop, including a vein structure 7,000 feet long and upto 80 feet wide, along with “enormous geological anomalies” shown in soil andvegetation sampling by the USGS, led geologists to believe that substantialsilver mineralization might be found at depth. 

Anaconda drilled four exploratory holes near theproperty boundary shared with Stevens Peak Mining, in an effort to locate asite for deeper drilling.  One of the holes was sufficiently encouraging tojustify its continuation and was planned to extend to depths reaching 6,000feet, targeting the Champion Vein, deep in the Revett formation.  However, theplanned hole was collared at just over 3,000 feet and although core samplesconfirmed earlier projections about geology and structure at depth, the programwas never completed.

Bear Creek Mining Company leased the Shoshone Group in1981.  We conducted surface geological and geo-chemical surveying. 

The property is currently without known reserves and theproposed program is exploratory in nature.

Exploration Plans:

There are currently no plans to conduct exploration on ourShoshone properties.

Impairment:

The deferred costs of this property totaled $17,500,which was written-off in prior years as an exploration expense.

**BullionGroup**

We have a group of patented properties commonly referredto as the Bullion Group located contiguously within the St. Joe Mining Districtin eastern Shoshone County, Idaho.

Location and Access:

The claims are in Sections 20 and 21 of Township 47North, Range 6 East. From the city of Coeur d'Alene, Idaho, travelapproximately 50 miles east on Interstate 90, to Exit # 1 (TAFT Exit). Turnonto USFS Road 507, following it for 7 miles.  The Bullion Group is accessed bynewly cut logging roads from USFS Road 507.  Current electrical and watersupplies are unknown.   

A map showing the Bullion Group may be found in Exhibit99.2 which was filed as an exhibit to our Annual Report on Form 10-KSB/A filed with the Commission on December 3, 2007, File No.000-31184. 

Land Status:

The Bullion Group consists of 7 patented lode claimstotaling 138 acres**.** Title to the property is maintained by payment ofannually assessed property taxes to Shoshone County, Idaho.  During 2010, wepaid $100 in property taxes on this property.  We have notmade improvements to the property.    

Geology:

The rocks in the Bullion Group are the same geologicsetting as for the Shoshone Group of claims belonging to the Precambrian lowerWallace formation.

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The Bullion Group, as is the case of the Shoshone Group,is located within a fault block bounded by the Osburn Fault to the north andthe Placer Creek Fault to the south, and covers three vein structures known asthe Champion, Helena and Link Veins.

The Bullion Group covers the Bullion Mine workingslocated on the Champion Vein. 

Exploration History:

The Bullion Group is located in the St. Joe MiningDistrict of eastern Shoshone County, along the Montana Border.  The twounpatented Bullion Group claims totaling 40 acres have been leased to SterlingMining Company.  Lease terms stipulate a 4 year exploration program commencingwithin five years of the lease date.  Shoshone will receive 10% net profit fromany mined minerals.  

This lease agreement may be found in Exhibit 10.4 whichwas filed as an exhibit to ourAnnual Report on Form 10-KSB filed withthe Commission on December 4, 2006.

Bear Creek Mining Company leased the Bullion Group in1981.  We conducted surface geological and geo-chemical surveying.

The property is currently without known reserves and theproposed program is exploratory in nature.

Exploration Plans:

There are no plans to conduct exploration on theShoshone’s Bullion Group until a due diligence study is completed. 

Impairment:

This property was acquired as part of a settlement of apromissory note owed to us.  The cost of the property was included as anexploration expense in a prior year.

**Camp****Project**

We have leased from Merger Mines Corporation a group ofpatented properties commonly referred to as the Camp Project situated in thecenter of the “silver belt” of the Coeur d’Alene Mining District located in Shoshone County, Idaho.  The Camp Project claims lie west of the Coeur and Galena Mines andeast of the Sunshine Mine.  The 15 year lease was obtained on December 14, 2009for consideration of Shoshone common stock, a net smelter return, and annualadvance royalty payments.  A copy of the lease may be found in Exhibit 10.10.

Location and Access:

The Camp Project claim group is located in Shoshone County, Idaho in portions of sections 23, 24, 25, 26, Township 48 North, Range 3East, Boise Meridian.  East from Coeur d’Alene 43.4 miles on I-90 to theOsburn, Idaho exit #57.  Turn right off the exit #57 ramp and proceed southapprox. 0.02 miles to Yellowstone Ave.  Turn right on Yellowstone Ave. andproceed approx. 1.75 miles to Terror Gulch Road.   Turn left (south) on TerrorGulch Road approx. 0.02 miles, cross the railroad tracks and then proceed onapprox. 0.03 miles to Mining Road.  Follow Mining Road approx. 1 mile south tothe location of the Camp Project Claims.

A map showing the Camp Project claim group may be foundin Exhibit 99.16.

Land Status:

The Camp Project group consists of 35 patented lodeclaims totaling 630 acres in the Coeur d’Alene Mining District.

Geology:

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Geology of the Camp Project group of claims is similarto that of the Silver Summit (ConSil) portion of the Sunshine Mine.  Prominentfault structures that have hosted millions of ounces of silver productionselsewhere, such as the Polaris fault, the Silver Summit vein fault and the Chester fault all trend through the Camp Project claims area.  The north limb of the BigCreek anticline, which hosts some of the major silver deposits in the district,also trends through the Camp Project area.  Results of 13,200 feet ofexploration geophysics performed during 2005 indicate a highchargeability/low-resistivity anomaly indicative of sulfide mineralization. This anomaly extended from near the surface to the maximum sensitivity of thetest instrumentation in a generally east-west orientation and appears toincrease in depth to the east.  The Silver Summit, Chester, Wire Silver, “D”,and Chester-Polaris “Hook” Veins all originate in or extend into the CampProject claims at depth.

Exploration History:

The claims have received little exploration work, eventhough numerous mineralized structures originate in or strike through thearea.  A future exploration program will include geochemical sampling,expansion of geophysics and/or surface diamond drilling.

**North Osburn Group**

We owned a group of 15 unpatented propertiesknown as the North Osburn Group located within the Silver Valley in Shoshone County, Idaho.  During fiscal 2010, weentered into the sale of these claims to an unrelated party.  Since we hadpreviously expensed the approximately $10,000 cost to acquire and maintain thisproperty, the entire proceeds were accounted for as gain and presented underthe caption “net gain on the sale of lode claim” on our Consolidated Statementsof Operations.

**Central Idaho****Holdings**

**Warren****District**

**Rescue Gold Mine**

Location and Access:

From Coeur d’Alene, Idaho, drive south on State Highway 95 to New Meadows, Idaho.  Turn onto State Highway 55;drive south on State Highway 55 to McCall, Idaho, you will enter the town of McCall on its northern edge.  As you enter the city, there will be a highway sign on theright that says Warren Wagon Road and an arrow directing you to turn left. Turn left as directed and you will be on a paved road that runs along the northside of Payette Lake.  This paved road extends into the Payette National Forest for a distance of 28 miles.  At the end of the pavement is a U.S. F.S. signwith directions to Burgdorf, Secesh, Warren and several other areas ofinterest.  The road to Warren is a wide, graveled road that is easy to follow. From the end of pavement to Warren is a distance of 17 miles plus.  Aftertraveling 16 miles, you will come to a wide area, with roads forking off inseveral directions.  Stay on the better road and cross Warren Creek on a single lane concrete bridge. 

As you enter Warren, the road makes a 90 degree left turn, goes one short block and makes a 90 degreeright turn.  Continue through Warren on this road.  You will pass the BackCountry Bed & Board on your left and very quickly pass a small saw mill onyour right.  Slow down, because as soon as you pass the little sawmill, youwill leave the main road and turn right onto the access road to the mine.  Asyou turn right, straight ahead you will see a gated bridge over Warren Creek, and a large 4’ x 8’ sign advertising Shoshone Silver Mining Company.  Signsposted will direct you to the mill office.  

A map of the Rescue Gold Mineis contained in Exhibit 99.14 which wasfiled as an exhibit to our Annual Report onForm 10-K filed with the Commission on January 10, 2010, FileNo.000-31184.

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Land Status:

We hold 82 unpatented miningclaims and 2 unpatented mill-site claims covering 1,720 acres in central Idaho.  There is a 120 ton per day mill complete with a Knelson Gold Concentrator on themill-site claims.  There is a 43-101 Report which was completed in 2008.

Exploration andDevelopment plans

During2009, we conducted certain exploration activities before temporarily suspendingwork at this site.  Work at the Rescue Mine resumed in June, 2010.  The firstpriority has been to finish upgrading and renovating the mill.  Once this millwork is completed, the mill will be started up and test runs on stockpiled orewill be conducted.  The 200 level portal is scheduled to be reopened so thatmine development can resume.  This work will require some ground support,general clean up, the installation of a refuge station and the addition of airand water lines.  A new decline portal has been planned to access the Rescuevein 1,000 feet east of the mill.  Road work, site preparation and collaringoff for the new decline portal should be accomplished this summer.  This newdecline portal will provide access to unmined portions of the Rescue vein and,when completed, will serve as the secondary escape-way from the mine as well asthe exhaust ventilation drift for the mine ventilation system.  At this time weare setting up to complete a seven-hole drilling program to establish our planof operation.

Electrical work, which included installationof electrical panels, lights and power outlets, was completed in the largestaging building, which was erected next to the Rescue Mill portal last summerto service operations in the Rescue Mine.  The new building is now fully MSHA compliant. Additionally, a diesel generator was installed to provide power to the RescueMine as part of Shoshone’s ongoing preparations to bring the Rescue Mine andmill back into productions.

Impairment:

We believe that, when compared to the marketvalue of the property, the deferred costs of $757,531 have not sufferedimpairment.  Accordingly, at September 30, 2010, we did not consider awrite-down to the carrying cost necessary.

**Iola Claims**

Welease 5 patented mining claims in central Idaho covering 70 acres.  A map of the Iola Claims are contained in Exhibit 99.14 which was filed asan exhibit to our Annual Report on Form 10-K filedwith the Commission on January 10, 2010, File No.000-31184. 

**Silver King Claims**

Welease 12 patented mining claims in central Idaho covering 174 acres.  A map of the Silver King Claims are contained in Exhibit 99.14 which was filed asan exhibit to our Annual Report on Form 10-K filedwith the Commission on January 10, 2010, File No.000-31184. 

**Marshall Mountain District**

**Kimberly Gold Mine**

Location and Access:

Following the directions toreach the Rescue Mine, at the end of pavement will be a U.S.F.S. sign thatdirects you to turn left on a good gravel road to Burgdorf.  Approximately 5miles past Burgdorf will be a U.S.F.S. sign that directs you to turn right toreach the Kimberly Mine.  This Forest Service road is best traveled in a highclearance vehicle and is identified on U.S.F.S. maps as road #318.  Aftertraveling 8 plus miles, a small sign on the right hand side of the road willsay “Sherman Howe Mine”, turn right and stay on the main road and in 3⁄4 of amile you will be in the old Kimberly mine camp.  As a warning, very fewU.S.F.S. roads are identified with their numerical designation. 

A map of theKimberly Gold Mine is contained in Exhibit99.14 which was filed as an exhibit to ourAnnual Report on Form 10-KSB filed with the Commission on January 10, 2010, File No.000-31184. 

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Land Status:

We hold 24 unpatented miningclaims covering 480 acres in central Idaho.  The mine consists of 10 separatetunnels which explore 8,798 feet of previously producing workings.  There is a43-101 Report which was completed in 2008.

Geology:

The gold bearing quartz veins in the minearea are hosted in a large monzonite intrusive known as the Idaho Batholith. The quartz monzonite is typically medium grained and light grey with quartz,feldspar and biotite as the predonimnate minerals.

Exploration History:

Gold mineralization was discovered on theKimberly property in 1900 by George Conners and W.A. Scott.  In 1940 a 50 tonper day mill was constructed.  The mines produced until 1941 when the WarProduction Board Limitation Order L-208 closed the mine.  Between 1955 and 1958the mill was expanded to 100 tons per day.  By 1964 there were 8,798 feet ofunderground workings on the property.  Limited surface  and underground diamonddrilling has been conducted in recent years.

Exploration and Development Plans:

Outcrops, old trenches and other indicationsof the vein need to be cleaned out, sampled, surveyed and mapped.  A surfacediamond drill program should be undertaken to probe the depth and extent ofknown ore shoots.  Rehabilitation of old underground workings must be done toprovide access to the vein to allow for sampling along strike.  Test mining isneeded to determine a mining method, ore dilution, ground support, cut offgrade and to provide bulk samples for milling tests.

Impairment:

We believe that, when compared to the marketvalue of the property, the deferred costs of $927,595 have not sufferedimpairment.  Accordingly, at September 30, 2010, we did not consider awrite-down to the carrying cost necessary.

**North Idaho****Holdings**

We have two holdings in Boundary County, Idaho:  the Regal and Montgomery Mines.

**Regal Mine**

The Regal Mine is a formerly producing base and preciousmetal mine located in the Moyie-Yaak Mining District, Boundary County, Idaho.

Location and Access:

The Regal Mine property is located 10 miles north ofBonners Ferry, Idaho, and 0.5 miles northeast of Camp Nine on Meadow Creek,Section 31, 64N, R2E, Boise Meridian.  

The property can be accessed by traveling 7.5 milesnorth on Highway 95 from Bonners Ferry, then taking USFS Road 397 six miles toan access road that leads to the mine.  The property is accessible year round. The current electrical and water supply to the property is unknown.   

A map showing the Regal Mine may be found in Exhibit99.5 which was filed as an exhibit to our Annual Report on Form 10-KSB/A filed with the Commission on December 3, 2007, File No.000-31184. 

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Land Status:

The Regal property consists of 4 contiguous unpatentedmining claims that cover 80 acres of BLM property in the Moyie-Yaak MiningDistrict, Boundary County, Idaho.  Title to the property is maintained byannual payment of BLM Maintenance Fees of $560.  We have made no improvementsto the property, and the state of historic underground workings is unknown.

Geology:

The Regal Mine is located on the west slope of Wall Mountain (elevation 5,160 feet).  The topography is mountainous with steep sidedvalleys.  Elevations within the property range from 3,500 to 4,400 feet abovesea-level.  The property is largely covered by coniferous forest, with largeareas of meadow grassland.  Soil depth on the property ranges from bedrockexposure to roughly ten inches deep.  

The Regal property is underlain by the Pre-cambrian BeltGroup, which is intruded by a series of dioritic sills.  Both the sills and theBelt rocks have been folded and faulted and subsequently intruded by granitesof the Nelson Batholith of British Columbia.  The Regal gold-silver-lead-zincveins are exposed in granite rocks of the Nelson Batholith, which is locallyfractured by regional structures.

There are two parallel N 60-70 degrees E striking veinson the Regal property, the North Vein and the South Vein.  Both veins dipbetween 50-60 degrees southeasterly.  Vein minerals are galena, sphalerite,pyrite, arsenopyrite, siderite and quartz.  The gold mineralization appears tobe associated with pyrite and arsenopyrite.  The mineralization resembleslead-zinc-siderite veins of the Coeur d’Alene Mining District; the maindifference is that the Regal Mine veins also contain considerable arsenopyritewith important gold values introduced during the later stages ofmineralization.  The Regal Mine is developed on 3 main levels connected by avertical shaft.  The upper most levels (No. 1 and No. 2) are accessible fromthe surface.  Total development exceeds 3,800 feet.  There is no indication ofmining below the lowermost (No. 3) level.  However, old mine maps indicate thatboth the north and south mineral zones continue to depth.

The property is currently without known reserves and theproposed program is exploratory in nature.

Exploration History:

The Regal Mine was known as the Commercial Mine until1935 when it was leased to Silver Crescent Mining Company.  Silver Crescentperformed exploration and development work on the property through 1945,including construction of a 100 ton per day flotation mill that wassubsequently sold in 1948.

In 1968, an unknown amount of ore was sent to the BunkerHill Smelter.  The assay results indicated 0.47 oz/t gold, 15.51 oz/t silver,32.5% lead, 29.8% zinc, and 0.42% copper.

In 1971, Silver Dollar Mining Company submitted a 39.8 -ton (wet weight) shipment to the East Helena Smelter, Montana.  The concentratesample assayed 0.41 oz/t gold, 4.8 oz/t silver, 6.6% lead, and 6.7% zinc.  Theproperty has been largely inactive since that time except for a widening of theNumber 2 adit level and re-timbering of the portal in the early 1990’s.

We acquired the claims in 2003 for $15,000.

Exploration Plans:

The Regal Mine has the potential to host economicallyextractable ore containing gold, silver, lead and zinc on a modest scale. Historical mine maps indicate high-grade mineralization continuing below theNumber 3 level.  Surface geological mapping will identify any lateral extent ofthe mineralization, and if there are any parallel mineralized structures.

The following are recommended actions for therehabilitation of the Regal Mine:

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- Rehabilitate the surface shaft opening and cover     all open workings to prevent water access;
- Rehabilitate Number 2 level portal to drain the     number 2 level workings;
- Stabilize mine workings with rock bolting and roof     support in essential areas;
- Conduct systematic channel sampling of vein     exposures on the Number 1 and 2 levels (if accessible);
- Perform underground geological mapping of the     Number 2 level;
- Perform surface geological mapping to identify     surface expression of faults and veins;
- Conduct surface stream sediment sampling program to     identify additional areas of mineralization;
- Conduct ground magnetic survey to identify possible     veins and structures;
- Stake additional claims to cover lateral extensions     of mineralized structures;
- Locate potential RC and diamond drill-hole     locations for surface drilling; and
- Reconnaissance work on prospects located along     strike of the structures controlling mineralization in the Regal Mine.

No timetable for exploration has been set and costs forthe recommended exploration have not been determined.

Impairment:

We believe that when compared to the market value of theproperty, the deferred costs of $15,000 have not suffered impairment.Accordingly, at September 30, 2010, we did not consider a write-down to thecarrying cost necessary.

**MontgomeryMine Group**

We control unpatented claims that cover and surround theMontgomery Mine near Copeland in Boundary County, Idaho.

Location and Access:

The claims are in Section 30, Township 65 North, Range 1East. A geographic reference point for the claims is 48°57’ 19” North and 116°23’ 02” West. 

The property is reached via 2 miles of access road fromCounty Road 49 3.7 miles north on State Highway 1 from the intersection ofState Highway 1 and U.S. Highway 95, approximately 12 miles north of BonnersFerry, Idaho. The Montgomery Mine is accessible year round.    

A map showing the Montgomery Mine may be found inExhibit 99.7 which was filed as an exhibit to our Annual Report on Form 10-KSB/A filed with the Commission on December 3, 2007, File No.000-31184. 

Land Status:

Montgomery Mine claim group consists of 25 unpatentedlode claims covering 500 acres of BLM land. The claims are located on thesouthwest slope of Hall Mountain with approximately 1,800 feet of relief in theclaim group.  No additional claims are staked in the area.  The claims aremaintained by annual payment of BLM Maintenance Fees of $3,500. We have not made improvements to the property.   Commercial power isavailable on County Road 49.  Water access is unknown.

Geology:

The property is polymetallic in nature.  There are twotypes of mineralization present.  There is a low-grade, high volume copper,nickel, platinum group elements mineralization present in the basic sills, anda high-grade, low volume polymetallic (copper, lead, gold and silver) veinrunning through the sill.

The area is underlain by the Prichard and Allrichformations of the lower Belt series. The quartzites and impure quartzites ofthe Prichard and Allrich formations have been locally intruded by dioritesills.  These sills strike northwest across the property and dip gently to thenortheast.

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The Diorite sills exhibit anomalous Platinum GroupMetals (PGM) values that may have economic potential. The sills also hostprominent quartz veins that exhibit significant copper, lead, silver, and goldvalues that provide an additional economic potential to the property.

The property is currently without known reserves and theproposed program is exploratory in nature.

Exploration History:

The property has been explored by means of approximately3,500 feet of drift development in 3 primary tunnels and 4 smaller tunnels.This development appears to establish lateral continuity of the sills andveins.  In addition to drifting there have been several diamond drill holescompleted and at least one surface geophysics survey has been run on theproperty. 

Records from this historic work are incomplete orunavailable, therefore results from this work are considered unreliable forresource analysis or interpretation.

In the past, this property has been explored by diamonddrilling, IP (induced polarization) testing, and with a magnetometer study. The results of these past tests will form the blueprint for furtherexploration.

Exploration Plans:

These claims require the rehabilitation of the 3 primarytunnels. The current condition of these tunnels is unknown. Once access isavailable the sills and veins will be mapped and sampled underground. Inaddition the property should have a new surface geophysics survey performed. 

Results from these efforts will be analyzed and used todevelop a comprehensive drill program. Completion of these activities couldproduce a mineralized material resource that can then be subjected to afeasibility study prior to production development.

No timetable for exploration has been set and costs ofthe recommended exploration have not been determined.

Impairment:

The acquisition costsof $43,557 were included in exploration expenses in a prior year.

**Montana****Holdings**

We have two property groups in Montana:  the StillwaterExtension Claims and the Princeton Gulch Group.

**Stillwater****Extension Claims**

The Stillwater Extension property consists of 10 unpatentedlode claims covering 200 acres of the Stillwater Complex of south central Montana.  The Stillwater Complex is a mafic-ultramafic layered intrusive that includes the28-mile long J-M Reef, which hosts Platinum Group Metals (PGM).

Location and Access:

The Stillwater Extension claims are locatedapproximately five miles southeast of the Stillwater Mine and cover a projectedeastern extension of J-M Reef.  The claims are located in Sections 2, 3, 11,T6S, R16E.    

A map showing the Stillwater Extension Claims may befound in Exhibit 99.6 which was filed as an exhibit to our Annual Report on Form 10-KSB/A filed with the Commission on December 3, 2007, File No.000-31184. 

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Land Status:

In 2003, we purchased the Stillwater Claims for$15,000.  The claims are maintained by annual payment of BLM Maintenance Feesof $1,400. We have made no improvements to the property. Power and water status are unknown.

Geology:

The Stillwater Extension Claims are located within the Stillwater mafic-ultramafic layered intrusive complex.  The uniquely PGM-enriched J-M Reefand its characteristic host rock package represent one such layer in thesequence.  The PGM in the J-M Reef consist primarily of palladium, platinum anda minor amount of rhodium.  The reef also contains approximately 3 percentiron, copper and nickel sulfides, plus trace amounts of gold and silver.

The property currently is without known reserves and theproposed program is exploratory in nature.

Exploration History:  

The Johns Manville Corporation discovered palladium andplatinum along the J-M Reef of the Stillwater Complex in the early 1970’s.  In1979, a Manville subsidiary partnered with Chevron to develop the property. Underground operations at the Stillwater Mine commenced in 1986.

Exploration Plans:

We plan to conduct an evaluation program includinggeologic mapping, rock chip and soil geochemical surveys, and interpretation ofpublic domain geophysical data.  The program will be conducted to determine thesuitability of a joint venture partner.  No timetable for exploration has beenset and costs for the recommended evaluation program have not been determined.

Impairment:

The deferred costs of $15,000 were included inexploration expenses in a prior year.

**Princeton Gulch****Group**

We control unpatented claims that cover and surround thePrinceton Gulch placer in Granite County in south central Montana.

Location and Access:

The Princeton Gulch claims are located in Sections 20& 21 of Township 8 North, Range 12 West, 7 miles northeast of the town of Maxville, Montana.  Access is provided by county roads east of State Highway 10A at Maxville, Montana. Turn east on the Maxville/Princeton Road at Maxville for 4.5 miles. Turnnortheast on County Road 1500 for 2.5 miles. The claim group occupies themountain valley running to the east from this point.   

A map showing the Princeton Gulch Group may be found inExhibit 99.10 which was filed as an exhibit to our Annual Report on Form 10-KSB/A filed with the Commission on December 3, 2007, File No.000-31184. 

Land Status:

This claim group consists of 4 unpatented placer claimscovering 80 acres and 2 unpatented load claims covering 40 acres, for a totalof 120 acres.  The claims are maintained by annual payment of BLM MaintenanceFees of $840.  We have not improved the property.  Electrical status isunknown.  Water is available via streams running through the property.  Three holding/settling ponds, approved by the State of Montana as harmless to Bull Trout found in the area, have been constructed.  

Geology:

This claim group lies in mountainous terrain on the eastslope of the Deerlodge Range. The country rocks are folded and faulted marbles,phyllites and quartzites of Jurassic/Cretaceous age. The Royal stock outcropsless than 1 mile east of this claim group. The metamorphism is a result of theemplacement of the Royal stock and other nearby stocks and batholiths.

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The claims host placer deposits within 18” of bedrockalong the floor of the gulch. The load claims could potentially host fissure veinsfound and exploited on adjacent claims and properties; however, there are noreports of veining on this property.

The property is currently without known reserves and theproposed program is exploratory in nature.

Exploration History:

The claims have been worked sporadically by small scaleowner/operators for a number of years. The claims have only been placer minedin the valley bottom. No additional exploration work has been done. ThePrinceton Mining District has had several past producers, both lode and placerin the late 1800’s and first half of the 1900’s. 

Exploration Plans:

The claim group will benefit from detailed geologicmapping, sampling and trenching.  Beyond this basic exploration, moderngeophysics and remote sensing should be applied to the claim group.  Notimetable for exploration has been set and costs of the recommended explorationhave not been determined.

Impairment:

The acquisition costs of $13,000 were included in theexploration expenses in a prior year.

**Arizona****Gold Holdings**

We hold two claim groups in the Oatman Mining District: the Western Gold and Gold Road Claims along with the Cerro Colorado Group in Pima County, AZ.

**Western Gold Claims**

The Western Gold property consists of 13 unpatented lodeclaims covering 240 acres within the Oatman Mining District of Mohave County, Arizona.

Location and Access:

The Western Gold claims are located approximately 1 mileWest of Gold Road Mine & 1 mile North of United Western Mine.    

A map showing the Western Gold Claims may be found inExhibit 99.8 which was filed as an exhibit to our Annual Report on Form 10-KSB/A filed with the Commission on December 3, 2007, File No.000-31184. 

Land Status:

The Oatman District lies on the western flank of the Black Mountains, a fault-bounded tertiary volcanic series.  In 2003, we acquired theWestern Gold Claims for $15,000.  The claims are maintained by annual paymentof BLM Maintenance Fees of $1,820.******We have made no improvements to the property.  Power andwater sources are unknown.

Geology:

Gold deposition appears to be a late feature associatedwith the Moss porphyry intrusion.  The gold bearing ore bodies of the OatmanDistrict are located along northwest trending veins and faults.  The mainmineralized structures within the property are the United and Middle veins. These veins were mined at the United Western and United Eastern Mines.

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Electrum is the predominant ore mineral.  Gangueminerals include quartz, calcite, adularia, minor fluorite, and trace amountsof pyrite, marcasite, and chalcopyrite.

The property is currently without known reserves and theproposed program is exploratory in nature.

Exploration History:

Gold was first discovered in the Oatman District in1863.  Between 1897 and 1942, the Oatman District produced 2.2 million ouncesof gold and 800,000 ounces of silver at an average grade of 0.58 opt gold and0.17 opt silver.

From 1979 to 1982, Hecla Mining Company and CanadianNatural Resources conducted exploration.  Extensive geological mapping anddiamond drilling was conducted on the Tom Reed Vein System before the projectwas terminated in 1982.

Exploration Plans:

The exploration plans for the Arizona Project are toconduct surface geological mapping, surface soil and rock sampling programs andconduct IP and magnetic surveys of the claim areas to identify orientation ofthe sub-surface United Western Vein.

No timetable for exploration has been set and costs ofthe recommended exploration have not been determined.

Impairment:

The deferred costs of $15,000 were included inexploration expenses in a prior year.

**Gold Road Claims**

The Arizona property consists of 16 unpatented lodeclaims located in Mohave County, Arizona covering 320 acres of the Oatman mining district of northwest Arizona.

Location and Access:

The Gold Road claims are divided into two groups.  TheKO group of 7 claims is located in S14 T19N R20W approximately 3000 ftsouthwest of the Western Gold claims, approximately 0.9 miles west of the GoldRoad Mine and 0.8 miles north of the United Western Mine.  The TS group of 9claims is located in S12 T19N R20W approximately 6000 ft east of the ArizonaGold field claims and 5000 feet east northeast of the KO group of claims. County Hwy 10 travels through the TS group.   

A map showing the Western Gold Claims may be found inExhibit 99.8 which was filed as an exhibit to our Annual Report on Form 10-KSB/A filed with the Commission on December 3, 2007, File No.000-31184. 

Land Status:

In 2003, we acquired the Arizona Claims for $1,500.  Theclaims are maintained by annual payment of BLM Maintenance Fees of $2,240. We have not improved the property.  Power and water sources areunknown.

Geology:

The KO group follows the easterly trend of the MalloryFault line and covers the down dip extension of the Kokomo vein.  The TS groupfollows the southeasterly extension of the Gold Ore Vein.

The property is currently without known reserves and theproposed program is exploratory in nature.

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Exploration Plans:

We anticipate developing exploration plans in fiscal 2011.

Impairment:

The deferred costs of $1,500 were included inexploration expenses in a prior year.

**Cerro Colorado****Group**

We control 3 unpatented claims covering 60 acres in theCerro Colorado Mining District 35 miles southwest of Tucson, Arizona.

Location and Access:

From Tucson take I-19 south towards Nogalesapproximately 33 miles to Exit 48. The claim group is 15 miles west on Arivaca Rd from Exit 48.  The claims are in Section 22, Township 20S, Range 10E. Ageographic reference point for the claims is 31°39'32"North,111°16'19"West.    

A map of the property may be found in Exhibit 99.11which was filed as an exhibit to our Annual Report on Form 10-KSB/A filed with the Commission on December 3, 2007, File No.000-31184. 

Land Status:

The claim group is located in the Cerro Colorado miningdistrict in the Cerro Colorado Mountains of Southwest Arizona.   The claims aremaintained by annual payment of BLM Maintenance Fees of $420.  We have not improved the property.  Power and water sources areunknown.

Geology:

Mineralizationin the district is epithermal quartz-fissure veins with minor base metalsulfides and mercury-bearing tetrahedrite. Silver and gold enrichment occur inoxidized zones. Host rocks are a complex of Cretaceous quartz latite andandesite porphyry flows and tuff with some interbedded sedimentary beds,invaded by Laramide andesite porphyry, rhyolite and dioritic plugs and dikes.

The property is currently without known reserves and theproposed program is exploratory in nature.

Exploration History:

This mining district is one of the oldest producingareas in Arizona with scattered small, and relatively shallow, mines andprospects active intermittently from at least the 1770's to about 1950.  Totalestimated and recorded production has been some 4,500 tons of ore containingapproximately 376,000 ounces silver, 460 ounces gold and small amounts ofcopper and lead.

Exploration Plans:

These claims and the area around them will begeologically mapped. This mapping will emphasize vein intensity, rock type, andalteration. In addition to the mapping, limited ground magnetic surveys shouldbe run to help identify any geophysical anomalies. The results of this initialwork will guide follow up geophysics and/or drilling.

No timetable for exploration has been set and costs ofthe recommended exploration have not been determined.

Impairment:

Thedeferred costs of $1,500 were included in exploration expenses in a prior year.

22

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**Washington****Holdings**

Wecontrol 19 unpatented mining claims covering 380 acres in the heart of theWenatchee Gold Belt located in central Washington.

**ShaftClaims**

Locationand Access:

EnteringWenatchee from the north, you will be traveling south on State Route #2 and#97, at the stop light on the northern edge of town, SR #2 and #97 veers to theright and crosses the Columbia River, you will continue south, or straightahead, on SR #28 until you reach exit 285 N and then turn right and cross theColumbia River on the old bridge span.  After crossing the Columbia River, youwill travel about 0.5 mile and will come to Mission Street, turn left on Mission Street for 1.5 miles.  At this point Mission Street becomes Squilchuck Road and youwill continue on Squilchuck Road for another 3.5 miles when you will encountera road sign directing you to take a left hand turn onto Cranmer Drive and alsobe heading to the Wenatchee heights subdivision.  Travel less that 1 mile on Cranmer Drive and you will come to the Wenatchee Heights Road, turn left on Wenatchee Heights Road and travel 1 mile until you come to a fork in the road, take the lefthand fork and you will be on Loop Road.  The Shaft claims are located to theeast of Loop Road.  

A map showing theShaft Claims is contained in Exhibit 99.15which was filed as an exhibit to our AnnualReport on Form 10-KSB filed with the Commission on January 10, 2010, File No.000-31184. 

LandStatus:

Wehold 19 unpatented mining claims covering 380 acres in central Washington.   The claims are located within the heart of the Wenatchee Gold Belt.  We have not improved theproperty.  Power and water sources are unknown.

**Mexico****Properties**

**Other MexicanExploration Properties**

We have an interest inseveral other Mexican exploration projects which we do not currently considerto be material.

*La Vibora*

La Vibora is a gold-silver prospect in which Shoshoneacquired a 25% interest in the property in the year 2000. No exploration hasbeen conducted on the property since our acquisition. The property is locatedseven miles west of Mexican Highway 17, approximately 22 miles south of thecity of Esquida.  We have made no improvements to the property.  Power andwater status is unknown.

Geology:

The project area is underlain by granodiorites andquartz monzonites of upper Cretaceous age.  Mineralization is associated withthe granites.

The property covers three sub-parallel veins that havean apparent length of approximately 1,000 ft.  The veins are fracture-filling,dipping approximately 70 degrees to the SW and are characterized by thepresence of sulfides (dominantly pyrite) that have been locally oxidized. Gangue is dominated by quartz and calcite.

Sampling conducted in 1994 reported a 75 foot wide bulksample that had an average grade of 0.20 oz/t gold.  Four samples that were takenon the No. 1 vein, over a 5 foot (adjusted) width averaged 0.29 oz/t gold.

23

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The property is currently without known reserves and theproposed program is exploratory in nature.

Exploration Plans:

We currently have no exploration plans for La Vibora.

*The La Morena Placer*

The property is located adjacent to the La Viboraprospect south of the city of Esquida in the State of Sonora. The property is agold silver placer deposit. There has been no systematic exploration of the LaMorena Placer. Shoshone acquired a 25% interest in the property in 2000.  We havenot made improvements to the property.  Power and water supplies are unknown.

Exploration History:

Distal from the La Vibora property is the La MorenaPlacer.  This property has had limited auger and assaying returning averagegrades of 0.03 oz/t gold.  No resource estimate has been completed and theproperty is currently without known reserves.

Exploration Plans:

We currently have no exploration plans for La MorenaPlacer.

**OUREXPLORATION PROCESS**

Ourexploration program is designed to acquire, explore and evaluate explorationproperties in an economically efficient manner. We have not at this timeidentified or delineated any metals reserves on any of our properties.  

Ourcurrent focus is primarily on the acquisition of additional explorationproperties. Subject to our ability to raise the necessary funds, we intend toimplement an exploration program that may cover some or all of our otherproperties at various times as we deem prudent.

Weexpect our exploration work on a given property to proceed generally in threephases. 

Thefirst phase is intended to determine whether a prospect warrants furtherexploration and involves:

-  researching    the available geologic literature;
-  interviewing    geologists, mining engineers and others familiar with the prospect sites;
-  conducting    geologic mapping, geophysical testing and geochemical testing; 
-  examining any    existing workings, such as trenches, prospect pits, shafts or tunnels; 
- digging 150    foot long and 10-to-20 foot wide trenches that allow for an examination of    surface vein structure as well as for efficient reclamation, re-contouring and    re-seeding of disturbed areas; and
- analyzing    samples for minerals that are known to have occurred in the test area.

24

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Subjectto obtaining the necessary permits in a timely manner, the first phase cantypically be completed on an individual property in several months at a cost ofless than $200,000. We have completed research on and examination of each ofour properties, and have commenced geophysical work and sampling on some of ourproperties.  

Thesecond phase is intended to identify any mineral deposits of potential economicimportance and would involve:

-  examining    underground characteristics of mineralization that were previously identified;
- conducting    more detailed geologic mapping;
-  conducting    more advanced geochemical and geophysical surveys;
-  conducting    more extensive trenching; and
- conducting    exploratory drilling.

Subjectto obtaining the necessary permits in a timely manner, the second phase cantypically be completed on an individual property in six to nine months at acost of less than $1 million. None of our properties has reached the secondphase.  

Thethird phase is intended to precisely define depth, width, length, tonnage andvalue per ton of any deposit that has been identified and would involve:

- drilling to    develop the mining site;
- conducting    metallurgical testing; and
-  obtaining    other pertinent technical information required to define an ore reserve and    complete a feasibility study. 

Dependingupon the nature of the particular deposit, the third phase on any one propertycould take one to five years or more and cost up to $20,000,000 or more.  Noneof our properties has reached the third phase.  

Weintend to explore and develop our properties ourselves, although our planscould change depending on the terms and availability of financing and the termsor merits of any joint venture proposals.

**ENVIRONMENTAL COMPLIANCE**

Ourprimary cost of complying with applicable environmental laws during explorationis likely to arise in connection with the reclamation of drill holes and accessroads. Drill holes typically can be reclaimed for nominal costs, although theBLM recently promulgated new surface management regulations which maysignificantly increase those costs on BLM lands. Access road reclamation maycost up to $50,000 to $100,000 if road building has been done, and those costs,too, are likely to increase as the result of the new BLM regulations.  As weare currently in the exploration stage on all of our properties, reclamationcosts have not yet been incurred, and cannot be reasonably estimated for eachproperty. 

**EMPLOYEES**

At September 30, 2010, we had 10 employees, four of whom are both officers anddirectors.

**GLOSSARYOF TERMS**

AMPHIBOLITE:granular metamorphic rocks.

ANOMALY:a deviation from uniformity or regularity in geophysical or geochemicalquantities.

ANTICLINE:layered rock formations structurally folded into a convex structure with a corethat hosts the oldest rocks.

ARCHEAN:geologic age older than 2,500,000 years.

BATHOLITH: a large emplacement of igneous intrusive or plutonic rock that forms fromcooled magma within the Earth's crust.

BLEBS:a vesicle, blister or bubble.

BRECCIA:rock in which angular fragments are surrounded by a mass of fine-grainedminerals.

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CHALCOPYRITE:the main copper ore, which is widely occurring and found mainly in veins.

CIRCULATIONDRILL: a rotary drill or rotary percussion drill in which the drilling fluidand cuttings return to the surface through the drill pipe, minimizingcontamination.

CRETACEOUSAGE: the geologic age period dating from approximately 68 million years to 142million years.

CROSSCUTS: a horizontal opening driven from a shaft and (or near) right angles tothe strike of a vein or other ore body.

DIAMONDDRILL: a type of rotary drill in which the cutting is done by abrasion ratherthan by percussion. The hollow bit of the drill cuts a core of rock, which isrecovered in long cylindrical sections.

DISSEMINATED:fine particles of mineral dispensed through the enclosing rock.

DEVELOPMENT:work carried out for the purpose of opening up a mineral deposit and making theactual extraction possible.

DIKES:a tabular igneous intrusion that cuts across the structures of surroundingrock.

DIP:the angle at which a vein, structure or rock bed is inclined from thehorizontal as measured at right angles to the strike.

DRIFTS:a horizontal passage underground that follows along the length of a vein ormineralized rock formation.

EXPLORATION:work involved in searching for ore by geological mapping, geochemistry,geophysics, drilling and other methods.

GABBRO:Dark colored basic intrusive rocks. Intrusive equivalent of volcanic basalt.

GEOCHEMISTRY:study of variation of chemical elements in rocks or soils.

GEOPHYSICS:study of the earth by quantitative physical methods.

GNEISS:a layered or banded crystalline metamorphic rock the grains of which arealigned or elongated into a roughly parallel arrangement.

HYDROTHERMAL:pertaining to hot water, especially with respect to its action in dissolving,re-depositing, and otherwise producing mineral changes within the earth'scrust.

INTRUSION/INTRUSIVE:a volume of igneous rock that was injected, while still molten, into theearth's crust or other rocks.

LITHOLOGY:The character of a rock described in terms of its structure, color, mineralcomposition, grain size and arrangement of its component parts.

MAFIC:Pertaining to or composed dominantly of the ferromagnesian rock-formingsilicates; used to describe some igneous rocks and their constituent minerals.

METAMORPHISM:The mineralogical and structural changes in solid rock that have been caused byheat and pressure at depth over time.

MINERALIZATION:the concentration of metals and their compounds in rocks, and the processesinvolved therein.

NORITE:a course grained igneous rock formed at great depth.

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ORE: material that can beeconomically mined and processed.

ORE BODY: a continuous, well-definedmass of material of sufficient ore content to make extraction economicallyfeasible.

OUTCROP:the part of a rock formation that appears at the earth's surface, oftenprotruding above the surrounding ground.

PYRITE:the most widespread sulfide mineral.

PYROXENITE:any group of minerals.

QUARTZITE:a sedimentary rock consisting mostly of silica sand grains that have beenwelded together by heat and compaction.

RECLAMATION:the restoration of a site after exploration activity or mining is completed.

SCHIST:a foliated metamorphic rock the grains of which have a roughly parallelarrangement.

SEDIMENTARYROCKS/SEDIMENTS: rocks resulting from the consolidation of loose sediments ofolder rock transported from its source and deposited.

SHEAROR SHEARING: The deformation of rocks by lateral movement along numerousparallel planes, generally resulting from pressure and producing suchmetamorphic structures as cleavage and schistosity.

SILLS:a near horizontal flat-bedded stratum of intrusive rock.

SKARN: the formation resulting from the reaction of two adjacent rock types exchangingelements and fluids during regional and/or contact metamorphosis.

SULFIDE:a metallic mineral containing reduced sulphur.

STRIKE:the course or bearing of a vein or a layer of rock.

ULTRAMAFIC:said of an igneous rock composed chiefly of mafic materials.

UNPATENTEDMINING CLAIM: a parcel of property located on federal lands pursuant to theU.S. General Mining Law of 1872 and the requirements of the state in which theunpatented claim is located, the paramount title of which remains with thefederal government. The holder of a valid, unpatented lode mining claim isgranted certain rights including the right to explore and mine such claim.

VEIN:an epigenetic mineral filling the fault or other fracture, in tabular or sheetlike form, often with associated replacement of the host rock, or a mineraldeposit of this form or origin.

**ITEM 1A.  RISK FACTORS**

Weare a smaller reporting company as defined by the Exchange Act and are notrequired to provide the information required under this item.

**ITEM 1B.  UNRESOLVED STAFF COMMENTS**

Weare a smaller reporting company as defined by the Exchange Act and are notrequired to provide the information required under this item.

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**ITEM 2.  PROPERTIES**

Ourinterests in its exploration properties are described in Item 1.

Weown a 50% unencumbered interest in a commercial office building in Coeur d’Alene, Idaho.  This building contains our executive offices and is located at 3714W Industrial Loop, Coeur d’Alene, ID, 83815. Our telephone number is (208) 664-0620. 

Weplaced into service our refurbished Lakeview Mill on October 1, 2008. Our Lakeview Mill is an on-site, 100 tons,expandable to 350 tons per day, flotation mill that we currently use to produceconcentrates from stockpiled ore.  This property is owned without encumbrance.

Weown a mill at our Rescue Mine which we purchased from Kimberly Gold Mines, Inc.on March 12, 2009. We are currently in the process of refurbishing this millwhich we expect to complete by July 2011 at a total cost of $$10,000. We estimate that this refurbished mill will have a capacity of 120 tons perday. This property is owned without encumbrance.

**ITEM 3.  LEGAL PROCEEDINGS**

Weare, from time to time, involved in various legal proceedings incidental to theconduct of business. In the opinion of management, our gross liability, if any,and without any consideration given to the availability of insurance or otherindemnification, under any pending litigation or administrative proceedings,including that discussed below, would not materially affect our consolidatedfinancial position, results of operations or cash flows. 

On November 17, 2008, the United States Environmental Protection Agency (EPA) fileda civil action against us in the United States District Court for the Districtof Idaho.  The civil action seeks recovery of funds paid by the EPA in responseto alleged releases of hazardous substances at the Company’s Idaho Lakeviewmine and mill site in Bonner County, Idaho.  We and the EPA have reached anagreement whereby we must pay $50,000 and will not to conduct activities on theminimal amount of ground that would disturb the cleanup work in place at theproperties subject to the civil action.  On August 4, 2010, we paid this liability in full.

**ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITYHOLDERS**

None.

**EXECUTIVE OFFICERS OF THE REGISTRANT**

Thefollowing table sets forth information concerning our directors and executiveofficers.

| NAME            | AGE | POSITION                             |
|-----------------|-----|--------------------------------------|
| Lex Smith       | 58  | President and Director               |
| Carol Stephan   | 69  | Secretary and Chairman of  the Board |
| Melanie Farrand | 55  | Treasurer and Director               |
| Don Rolfe       | 73  | Vice President and Director          |
| Edward Lehman   | 53  | Director                             |

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Setforth below is certain additional information with respect to the directors andexecutive officers. 

***Lex Smith*** holds a BA in political science from Drake University, an associate degree in business systems management and an associatedegree in paralegal studies.  Additionally, for the last 13 years, he has beena business consultant and project manager in the United States for the Lehman,Lee & Xu Law Firm in Beijing, China, and has served as a consultant to theFirm’s Mining Law Department for the past 2 years.  Mr. Smith entered themining business in 1993 as the field manager and owner of multiple miningclaims in Montana and has subsequently been closely involved with severalmining companies and mining projects in the Pacific Northwest.  Further, Mr.Smith has served as the President of the Silver Valley Mining Association since2003, and currently also serves as President of Natural Resources EducationOutreach, an Idaho non-profit corporation.

***Carol Stephan*** has over 30 years of experience in the mining andtimber industries.  She currently serves as a Director and Secretary ofShoshone, as well as Secretary and Treasurer of several small miningcompanies.  In addition, Ms. Stephan currently owns and operates severalsuccessful businesses in Idaho.

***Melanie Farrand*** has been working in the miningindustry for the past six years as an administrative secretary and bookkeeper. She also serves on the Board of Directors of several mining companies. Previously she was the office manager for a Land Surveying company for tenyears, responsible for payroll, bookkeeping and research.  Ms. Farrand iscurrently serving as a Director and Officer of Shoshone Silver Mining Company.

***Don Rolfe*******brings awealth of knowledge and experience with him.  Don is a graduate of the MontanaSchool of Mines, and a seasoned mine engineer with over 30 years of industrymanagement experience.  He has extensive experience with a variety of minerals;including silver, gold, bentonite clay, phosphate, uranium and tungsten, builtduring his tenure with some of the leading US mining companies, includingAnaconda, Hecla, Union Carbide, Homestake, and most recently served asPresident and Director of Kimberly Gold Mines, Inc.

***EdwardLehman*** is the Managing Directorof Lehman, Lee & Xu Law Firm (www.lehmanlaw.com), one of the top 3commercial law firms in China, with offices throughout mainland China and branches in Hong Kong, Macau, and Mongolia. Based in Beijing, Mr. Lehman specializes inthe legal aspects of doing business in China. He advises foreign companies onjoint ventures, wholly owned subsidiaries and holding companies, technology,licensing, engineering and construction projects, and the financing of suchprojects, as well as the protection of intellectual property rights intransactions and projects in China, and on mining law. Among other degrees andcertificates, Mr. Lehman holds a Juris Doctor degree from Loyola University ofChicago. Mr. Lehman was admitted to the Illinois bar in 1986, and has beenadmitted to the Illinois Supreme Court; U.S. Court of International Trade; U.S.Court of Appeals for the Armed Forces; U.S. Tax Court; U.S. Supreme Court, U.S.District Court, and U.S. Court of Appeals.

**PART  II**

**ITEM5.  MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS ANDISSER PURCHASES OF EQUITY SECURITIES**

Our shares are traded on the OTC Pink Sheets operated bythe National Association of Securities Dealers, Inc. (NASD) under the tradingsymbol SHSH.OB.   Summary trading by quarter for fiscal 2010 and 2009 are asfollows:

| **Fiscal Quarter** |   | **High (a)**     |   |   | **Low (a)**      |   |
|--------------------|--------|------------------|--------|--------|------------------|--------|
| ** **         |   |  ** ** |   |   |  ** ** |   |
| **2010**           |   |  ** ** |   |   |  ** ** |   |
| Fourth  Quarter    | $      | 0.15             |   | $      | 0.08             |   |
| Third  Quarter     | $      | 0.18             |   | $      | 0.11             |   |
| Second  Quarter    | $      | 0.20             |   | $      | 0.13             |   |
| First  Quarter     | $      | 0.24             |   | $      | 0.13             |   |
| ** **         |   |  ** ** |   |   |  ** ** |   |
| **2009**           |   |  ** ** |   |   |  ** ** |   |
| Fourth  Quarter    | $      | 0.18             |   | $      | 0.08             |   |
| Third  Quarter     | $      | 0.12             |   | $      | 0.07             |   |
| Second  Quarter    | $      | 0.15             |   | $      | 0.05             |   |
| First  Quarter     | $      | 0.18             |   | $      | 0.04             |   |

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(a)These quotations reflect inter-dealer prices, without retail mark-up, mark-downor commissions and may not represent actual transactions.

Asof September 30, 2010, we had approximately 1,649 holders of record of ourcommon stock.  

TheCompany has not paid any dividends since our inception and do not anticipatepaying any dividends on its common stock in the foreseeable future. There areno restrictions which preclude the payment of dividends.

TheCompany has no equity compensation plan or plans.

***Unregistered Sales of Equity Securities***

None.

***Purchases of Equity Securities by the Issuer***

None.

**ITEM6.  SELECTED FINANCIAL DATA**

Weare a smaller reporting company as defined by the Exchange Act and are notrequired to provide the information required under this item.

**ITEM7.  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OFOPERATIONS**

***Thisreport contains forward-looking statements***

Fromtime to time, Shoshone and its senior managers have made and will makeforward-looking statements within the meaning of the Private SecuritiesLitigation Reform Act of 1995.  Such statements are contained in thisreport and may be contained in other documents that Shoshone files with theSecurities and Exchange Commission.  Such statements may also be made byShoshone and its senior managers in oral or written presentations to analysts,investors, the media and others.  Forward-looking statements can beidentified by the fact that they do not relate strictly to historical orcurrent facts.  Also, forward-looking statements can generally beidentified by words such as “may,” “could,” “should,” “would,” “believe,”“anticipate,” “estimate,” “seek,” “expect,” “intend,” “plan” and similarexpressions.

Forward-lookingstatements provide our expectations or predictions of future conditions, eventsor results.  They are not guarantees of future performance.  By theirnature, forward-looking statements are subject to risks anduncertainties.  As such, our actual future results, performance orachievements may differ materially from the results expressed in, or impliedby, our forward-looking statements. 

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Ourforward-looking statements speak only as of the date they are made.  We donot undertake to update forward-looking statements to reflect the impact ofcircumstances or events that arise after the date the forward-lookingstatements were made.  

Management’sDiscussion and Analysis of Financial Condition and Results of Operations shouldbe read in conjunction with the Consolidated Financial Statements and Notespresented elsewhere in this report. 

**Plan of Operation**

LakeviewProperty

During 2010, weentered into an agreement to sell silver concentrate produced at our Lakeviewproperty to a smelter for refining.  To date, from our test runs we have generatedrevenues of $20,111 from the sale of concentrate to the smelter.  Our long-termgoal is to mine and mill both silver and gold at our Lakeview property. 

Rescue  Mine Property

Workat the Rescue Mine resumed in June 2010 after a temporary cessation forinclement weather.  Our first priority has been the upgrading and renovatingthe mill.  Once this work is completed, test runs on stockpiled ore will beconducted.  

Minedevelopment will require some ground support, general clean up, theinstallation of a refuge station and the addition of air and water lines.  Anew decline portal has been planned to access the Rescue vein 1,000 feet eastof the mill.  Road work, site preparation and collaring off for the new declineportal will be accomplished next summer.  This new decline portal will provide accessto un-mined portions of the Rescue vein and, when completed, will serve as thesecondary escape-way from the mine as well as the exhaust ventilation.  At thistime, we are setting up to complete a seven-hole drilling program to establish amore detailed plan of operation.

Electrical work, which included installation ofelectrical panels, lights and power outlets, was completed in the large stagingbuilding, which was erected next to the Rescue Mill portal last summer toservice operations in the Rescue Mine.   The new building is fully MSHAcompliant.  Additionally, a diesel generator was installed to provide power tothe Rescue Mine as part of our ongoing preparations to bring the Rescue Mineand mill back into productions.

Pleaserefer to our discussion regarding our ability to continue as a going concernbelow for further details.

***Going Concern***

Asshown in the accompanying financial statements, we have limited cash and limitedrevenues and incurred an accumulated deficit of $2,583,524 from inceptionthrough September 30, 2010.  These factors raise substantial doubt about ourability to continue as a going concern.  We intend to seek additional capitalfrom new equity securities offerings that will provide funds needed to increaseliquidity and fully implement our business plan.  The financial statements donot include any adjustments relating to the recoverability and classificationof recorded assets, or the amounts and classification of liabilities that mightbe necessary in the event we cannot continue in existence.

Historically,we have generally funded our operations with proceeds from the sale ofmarketable securities, royalty and option agreement payments, and from the saleof our common stock.  Should we be unable to raise capital through any of theseavenues, our business, financial position, results of operations and cash flowwill likely be materially adversely impacted.  As such, substantial doubt as toour ability to continue as a going concern remains as of the date of thesefinancial statements.****

Thefinancial statements do not include any adjustments relating to therecoverability and classification of recorded assets, or the amounts andclassification of liabilities that might be necessary in the event we cannotcontinue in existence.  An estimated $1,000,000 is believed necessary tocontinue operations and increase development through the next twelve months.Currently, we anticipate raising the majority of the $1,000,000 through theissuance of common stock to private investors.  The timing and amount ofcapital requirements will depend on a number of factors, including demand forproducts and services, capital expenditures and revenues generated.  

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**Comparisonof fiscal 2010 to fiscal 2009:**

**Resultsof Operations**

Thefollowing table sets forth certain information regarding the components of ourConsolidated Statements of Operations for fiscal 2010 as compared to fiscal2009.  This table is provided to assist in assessing differences in our overallperformance:

| ** **             |                                            |                         |      | **Fiscal Year Ended** |             |             |      |             |
|------------------------|-------------------------------------------------|------------------------------|-----------|-----------------------|------------------|------------------|-----------|------------------|
| ** **             |                                            |                         |      |  **2010**        |  ** ** |  **2009**   |      | **$ Change**     |   | **% Change** |
| ** **             |                                            |                         |      |                  |             |             |      |             |   |   |
| Revenues               | $                                               | 20,111                       | $         | -                     | $                | 20,111           |      | 100.0%           |
| Cost of Revenues       |                                            | -                            |      | -                     |             | -                |      | 100.0%           |
| Gross Profit           |                                            | 20,111                       |      | -                     |             | 20,111           |      | 100.0%           |
|                   | General and administrative                      |                         | 536,656   |                  | 491,324          |             | 45,332    |             | 9.2% |
|                   | Professional fees                               |                         | 123,445   |                  | 286,369          |             | (162,924) |             | -56.9% |
|                   | Depreciation                                    |  ** **             | 178,804   |                  | 130,743          |  ** ** | 48,061    |  ** ** | 36.8% |
|                   | Mining and exploration  expenses                |                         | 542,724   |                  | 841,519          |             | (298,795) |             | -35.5% |
|                   | Net gain on sale of load  claim                 |                         | (175,000) |                  | -                |             | (175,000) |             | 100.0% |
|                   |                                            | Total Operating Expenses     |      | 1,206,629             |             | 1,749,955        |      | (543,326)        |   | -31.0% |
| Loss from Operations   |                                            | (1,186,518)                  |      | (1,749,955)           |             | 563,437          |      | -32.2%           |
| Other Income (Expense) |                                            |                         |      |                  |             |             |      |             |
|                   | Dividend and interest income                    |                         | 73,467    |                  | 115,022          |  ** ** | (41,555)  |  ** ** | -36.1% |
|                   | Gain on sale of fixed asset                     |                         | 5,000     |                  | -                |  ** ** | 5,000     |  ** ** | 100.0% |
|                   | Interest expense                                |                         | (4,242)   |                  | (2,398)          |             | (1,844)   |             | 76.9% |
|                   | Net gain (loss) on sale of  securities          |  ** **             | 1,036     |                  | 2,225            |  ** ** | (1,189)   |  ** ** | -53.4% |
|                   | Other income (expense)                          |                         | 142       |                  | (43,391)         |             | 43,533    |             | -100.3% |
|                   | Other-than-temporary  impairment of investments |  ** **             | (47,800)  |                  | (101,479)        |  ** ** | 53,679    |  ** ** | -52.9% |
|                   | Bad debt recovery                               |  ** **             | 47,008    |                  | -                |  ** ** | 47,008    |  ** ** | 100.0% |
|                   | Cancellation of debt income                     |  ** **             | 69,418    |                  | -                |  ** ** | 69,418    |  ** ** | 100.0% |
|                   |                                            | Total Other Income (Expense) |      | 144,029               |             | (30,021)         |      | 57,624           |   | -191.9% |
| Net (Loss) Income      | $                                               | (1,042,489)                  | $         | (1,779,976)           | $                | 737,487          |      | -41.4%           |

**Overview of OperatingResults**

Thedecrease in net loss in fiscal 2010 was primarily due to decreases in virtuallyall administrative expenses.  Also contributing to the decrease in net loss infiscal 2010 was the sale of a lode claim, a significant reduction in legal feesand the recovery of a previously allowed for receivable.  Partially, offsettingthese positive impacts on fiscal 2010 was the issuance of common stock todirectors valued at $200,000.

Also,during fiscal 2010, we entered into an agreement to sell silver concentrateproduced at our Lakeview property to a smelter for refining.  During fiscal2010 we generated revenues of $20,111 from the sale of concentrate to thesmelter.  We expect that revenues from this source will be limited in the nearterm due to the continuing depletion of our stockpiled ore reserves.  

**Operating Expenses**

Operatingexpenses decreased in fiscal 2010 as we reduced expenditures to align ouroperations with our sources of capital.  This action primarily included thetemporary cessation of operations at our Lakeview property, the temporarylaying off of all employees starting in the month of March 2010 andacross-the-board reductions in non-essential expenditures.   In June 2010, weresumed limited operations at our Lakeview property and re-hired sevenemployees.  Going forward we expect our administrative expenses to remain nearfiscal 2010 levels.

32

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InJune 2010, we sold our North Osburn claims in the Silver Valley to an unrelatedparty for $175,000.  Since we had previously expensed the approximately $10,000cost to acquire and maintain this property, the entire proceeds were accountedfor as gain on the sale of lode claim and was recorded as a component ofoperating expenses.

Alsocontributing to the decrease in operating expenses was a reduction of over$150,000 in legal fees.  During fiscal 2009, we acquired certain assets fromKimberly Gold Mines, Inc. in exchange for 12,145,306 of our common stock.  Inconnection with this acquisition, we incurred significant one-time legal fees.

Partiallyoffsetting these positive impacts was the issuance of 1,250,000 common sharesto four directors in exchange for services valued at $200,000.

**Other Income (Expenses)**

Other income (expenses)improved from a net expense of $30,021 in fiscal 2009 to a net income of$27,603 during fiscal 2010.  This improvement was primarily due to animpairment charge of $101,479 in fiscal 2009 compared with $47,800 in fiscal2010.  Also contributing to this improvement was a charge we incurred in fiscal2009 related to a civil action filed by the United States EnvironmentalProtection Agency and the recovery of prior year’s bad debt.  Partiallyoffsetting these positive impacts was a $41,554 reduction in interest income.

At September 30, 2010, we determined that certain of our available-for-salesecurities had experienced an impairment that was other-than-temporary.  Keyfactors used in determining whether or not the impairment wasother-than-temporary included the length of time and the extent to which themarket value of the securities had been below their cost.  In connection withthis determination, we recognized an impairment charge of $47,800.  

On November 17, 2008, the EPA filed a civil action against Shoshone in the UnitedStates District Court for the District of Idaho.  The civil action soughtrecovery of funds paid by the EPA in response to alleged releases of hazardoussubstances at our Idaho Lakeview mine and mill site in Bonner County, Idaho.  We reached an agreement with the EPA whereby we must pay $50,000 and we areprohibited from conducting activities on the minimal amount of ground thatwould disturb the cleanup work in place at the properties subject to the civilaction.  On August 4, 2010, we paid this liability in full.

During2009, we created an allowance for a related party receivable in the amount of$53,548.  We created the allowance when this related party filed a voluntarypetition for reorganization relief under Chapter 11 of the United StatesBankruptcy Code in the United States Bankruptcy Court for the District ofIdaho.  In September 2010, the Company received a payment of $47,008 on thisreceivable.  The remaining amount owed of $6,540 remains in the allowanceaccount as its collection is doubtful. 

Duringfiscal 2010, we determined that thebalance of $69,418 remaining in the accounts payable we assumed with theacquisition of Kimberly Gold Mines, Inc. was not going to be settled. Accordingly, we made an entry to remove the accounts payable and to recordcancellation of debt income of $69,418.  See “Note 15. Kimberly Gold Mines,Inc.” to our consolidated financial statements for further details.

Partially offsetting these positive impacts was our having threeadditional interest bearing notes receivable during most of fiscal 2009compared with none during fiscal 2010.  At varying times during fiscal 2009,these three notes were settled in exchange for various assets.  To a lesserextent, a reduction of $18,338 in the imputed interest income associated with anon-interest bearing note receivable was also a mitigating factor.

**Overview of FinancialPosition**

AtSeptember 30, 2010, we had cash of $55,853 and total liabilities of $260,216.  During2010, we raised $705,155 in net proceeds from the issuance of 7,051,550 sharesof our common stock.  Also, In June 2010, we sold our North Osburn claims inthe Silver Valley for $175,000.  Theseproceeds were used primarily to continuelimited exploration activities at our Lakeview property, to continue refiningour milling process at that same location and to continue refurbishing ournewly acquired mill building at our Rescue mine.  

33

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**Property, Plant and Equipment**

At September 30, 2010, property, plant and equipment before accumulateddepreciation totaled $3,459,443, an increase of $73,173, from $3,386,270 at September 30, 2009.  The increase related primarilyto land improvements and equipment purchases at our Rescue Gold Mine.  

See“Note 6. Property, Plant and Equipment” to our consolidated financialstatements for further details.

**Notes Receivable**

On September 30, 2010, we had short-and long-term notes receivable, net of discount, of $1,537,944 compared with $1,464,709at September 30, 2009.  The increase related entirely to the amortization ofthe discount into interest income.

See “Note 8. Notes Receivable”to our consolidated financial statements for further details.

**Investments**

Ourinvestment portfolio at September 30, 2010, was $132,430, a decrease of$134,508 from the September 30, 2009, balance of $266,938.  This decrease wasprimarily due to falling share prices of the investments in our portfolio and,to a lesser extent, the sale of 250,000 shares of common stock and 1,848 ouncesof silver during fiscal 2010.  Also contributing to this decrease was a $47,800other-than-temporary impairment charge we recorded during fiscal 2010.

See“Note 9:  Investments” to our consolidated financial statements for furtherdetails.

**Accounts Payable**

Ouraccounts payable were $242,915 at September 30, 2010, an increase of $83,292 from the September 30, 2009, balance of $159,623.  The balance at the end offiscal 2010 is comprised almost entirely of a payable related to exploratorywork being conducted at our Rescue Mine.  

Also,during fiscal 2010, we determined thatthe balance of $69,418 remaining in the accounts payable we assumed with theacquisition of Kimberly Gold Mines, Inc. was not going to be settled.  Accordingly,we made an entry to remove the accounts payable and to record cancellation ofdebt income of $69,418.  

See“Note 15: Kimberly Gold Mines, Inc.” to our consolidated financial statementsfor further details.  

**Accrued Expenses**

Ouraccrued expenses were $13,022 at September 30, 2010, compared with $79,151 at September 30, 2009.  The decrease was primarily due to the fiscal 2009 accrualof $50,000 related a civil action filedby the United States Environmental Protection Agency (EPA).  This civil actionseeks recovery of funds paid by the EPA in response to alleged releases ofhazardous substances at our Idaho Lakeview mine and mill site in Bonner County, Idaho.  On August 4, 2010, we paid this liability in full.

See“Note 16: Commitments & Contingencies – *Civil Action Filed*” to ourconsolidated financial statements for further details.  

34

----

**Stockholders’ Equity**

Ourtotal stockholders’ equity was $5,573,624 at September 30, 2010, a decrease of$141,173 from $5,714,797 at September 30, 2009.  The decrease in totalstockholders’ equity was primarily due a net loss of $1,111,907 incurred duringfiscal 2010.  Partially offsetting this negative impact was the issuance of7,051,550 shares of our common stock to eighteen investors which raised a totalof $705,155.  

See“Note 9: Investments” to our consolidated financial statements for furtherdetails.  

**Liquidityand Capital Resources**

*Operating Activities*

Duringfiscal 2010, our operating activities used $796,743 and used $1,587,167 duringfiscal 2009.  This improvement was primarily the result of the realization of anet loss of $1,779,976 during fiscal 2009 period compared to a net loss of $1,082,328realized during fiscal 2010.  

*Investing Activities*

Duringfiscal 2010, our investing activities provided $151,412 and provided $94,370during fiscal 2009.  This increase was primarily our spending only $73,173 onfixed assets during fiscal 2010 compared with $293,351 during fiscal 2009. Alsocontributing to the improvement was the sale of our North Osburn claims in theSilver Valley to an unrelated party for a total of $175,000 during fiscal 2010compared with no such income during fiscal 2009.  Partially mitigating thesepositive impacts was the receipt of $452,808 in payments on notes receivableduring fiscal 2009 compared with none during fiscal 2010.

*Financing Activities*

Duringfiscal 2010, our financing activities provided $677,618 and used $53,703 duringfiscal 2009.  This was primarily due to net proceeds of $705,155 received fromthe issuance of common stock duringfiscal 2010, compared with none duringfiscal 2009.    

**Off-Balance SheetArrangements**

TheCompany is not currently a party to any off-balance sheet arrangements as theyare defined in the regulations promulgated by the Securities and ExchangeCommission.

**ITEM7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK**

Notapplicable

35

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**ITEM  8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA**

36

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**Tothe Board of Directors and StockholdersShoshoneSilver Mining Company**

REPORT OFINDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Wehave audited the accompanying consolidated balance sheets of Shoshone SilverMining Company and subsidiaries as of September 30, 2010 and 2009, and therelated consolidated statements of operations and comprehensive income (loss),stockholders’ equity and cash flows for the years ended September 30, 2010 and2009 and for the period from January 1, 2000 (inception of exploration stage)to September 30, 2010. These financial statements are the responsibility of theCompany’s management. Our responsibility is to express an opinion on thesefinancial statements based on our audits.

Weconducted our audits in accordance with the standards of the Public CompanyAccounting Oversight Board (United States). Those standards require that weplan and perform the audit to obtain reasonable assurance about whether thefinancial statements are free of material misstatement. The Company is notrequired to have, nor were we engaged to perform, an audit of its internalcontrol over financial reporting. Our audits included consideration of internalcontrol over financial reporting as a basis for designing audit procedures thatare appropriate in the circumstances, but not for the purpose of expressing anopinion on the effectiveness of the Company’s internal control over financialreporting. Accordingly, we express no such opinion. An audit includesexamining, on a test basis, evidence supporting the amounts and disclosures inthe financial statements. An audit also includes assessing the accountingprinciples used and significant estimates made by management, as well asevaluating the overall financial statement presentation. We believe that ouraudits provide a reasonable basis for our opinion.

Inour opinion, the financial statements referred to above present fairly, in allmaterial respects, the financial position of Shoshone Silver Mining Company andsubsidiaries as of September 30, 2010 and 2009, and the results of itsoperations and its cash flows for the years ended September 30, 2010 and 2009and for the period from January 1, 2000 (inception of exploration stage) toSeptember 30, 2010 in conformity with accounting principles generally acceptedin the United States of America.

Theaccompanying consolidated financial statements have been prepared assuming thatthe Company will continue as a going concern. As discussed in Note 2 to theconsolidated financial statements, the Company’s accumulated deficit and lackof revenues raise substantial doubt about its ability to continue as a goingconcern. Management’s plans regarding the resolution of this issue are alsodiscussed in Note 2. The consolidated financial statements do not include anyadjustments that might result from the outcome of this uncertainty.

/s/BehlerMickPS

***BehlerMick PS***

  Spokane,  Washington   December  23, 2010

37

----

| **SHOSHONE SILVER MINING COMPANY** |
|------------------------------------|
| **(an Exploration Stage Company)** |
| **CONSOLIDATED BALANCE SHEETS**    |

|                                               |                               |                                                               |                                         |       | **September 30,** |      |       | **September 30,** |   |
|-----------------------------------------------|------------------------------------|--------------------------------------------------------------------|----------------------------------------------|------------|-------------------|-----------|------------|-------------------|--------|
|                                               |                               |                                                               |                                         |       | **2010**          |      |       | **2009**          |   |
|                                               |                               |                                                               |                                         |       |              |      |       |              |   |
| **ASSETS**                                    |                               |                                                               |                                         |       |              |      |       |
|                                               |                               |                                                               |                                         |       |              |      |       |              |   |
|                                               | CURRENT      ASSETS                |                                                               |                                         |       |              |      |       |
|                                               |                               | Cash      and cash equivalents                                     | $                                            | 55,853     |              | $         | 23,566     |              |
|                                               |                               | Note      receivable (net of discount) - current portion           |                                         | -          |              |      | 426,765    |              |
|                                               |                               | Deposits      and prepaids                                         |                                         | 3,616      |              |      | 4,375      |              |
|                                               |                               | Supplies      inventory                                            |                                         | 1,957      |              |      | 2,195      |              |
|                                               |                               |                                                               | Total      Current Assets                    |       | 61,426            |      |       | 456,901           |   |
|                                               |                               |                                                               |                                         |       |              |      |       |              |   |
|                                               | PROPERTY,      PLANT AND EQUIPMENT |                                                               |                                         |       |              |      |       |
|                                               |                               | Property,      plant and equipment                                 |                                         | 3,459,443  |              |      | 3,386,270  |              |
|                                               |                               | Accumulated      depreciation                                      |                                         | (1,553,772 | )                 |      | (1,374,968 | )                 |
|                                               |                               |                                                               | Total      Property Plant and Equipment      |       | 1,905,671         |      |       | 2,011,302         |   |
|                                               |                               |                                                               |                                         |       |              |      |       |              |   |
|                                               | MINERAL      AND MINING PROPERTIES |                                                               | 2,196,369                                    |       |              | 2,196,369 |       |
|                                               |                               |                                                               |                                         |       |              |      |       |              |   |
|                                               | OTHER      ASSETS                  |                                                               |                                         |       |              |      |       |
|                                               |                               | Notes      receivable (net of discount)                            |                                         | 1,537,944  |              |      | 1,037,944  |              |
|                                               |                               | Investments                                                        |                                         | 132,430    |              |      | 266,938    |              |
|                                               |                               |                                                               | Total      Other Assets                      |       | 1,670,374         |      |       | 1,304,882         |   |
|                                               |                               |                                                               |                                         |       |              |      |       |              |   |
|                                               |                               |                                                               | **TOTAL      ASSETS**                        | $          | 5,833,840         |      | $          | 5,969,454         |   |
|                                               |                               |                                                               |                                         |       |              |      |       |              |   |
|                                               |                               |                                                               |                                         |       |              |      |       |              |   |
| **LIABILITIES      AND STOCKHOLDERS' EQUITY** |                               |                                                               |                                         |       |              |      |
|                                               |                               |                                                               |                                         |       |              |      |       |              |   |
|                                               | CURRENT      LIABILITIES           |                                                               |                                         |       |              |      |       |
|                                               |                               | Accounts      payable                                              | $                                            | 242,915    |              | $         | 159,623    |              |
|                                               |                               | Accrued      expenses                                              |                                         | 13,022     |              |      | 79,151     |              |
|                                               |                               | Notes      payable - current portion                               |                                         | 4,279      |              |      | 11,615     |              |
|                                               |                               |                                                               | Total      Current Liabilities               |       | 260,216           |      |       | 250,389           |   |
|                                               |                               |                                                               |                                         |       |              |      |       |              |   |
|                                               |                               | Note      payable - noncurrent portion                             |                                         | -          |              |      | 4,268      |              |
|                                               |                               |                                                               | Total      Liabilities                       |       | 260,216           |      |       | 254,657           |   |
|                                               |                               |                                                               |                                         |       |              |      |       |              |   |
|                                               | COMMITMENTS      AND CONTINGENCIES |                                                               | -                                            |       |              | -         |       |
|                                               |                               |                                                               |                                         |       |              |      |       |              |   |
|                                               | STOCKHOLDERS'      EQUITY          |                                                               |                                         |       |              |      |       |
|                                               |                               | Common      stock, 200,000,000 shares authorized, $0.10 par value; |                                         |       |              |      |       |              |
|                                               |                               |  42,659,037 and 34,302,487 shares issued and outstanding      |                                         | 4,265,904  |              |      | 3,430,249  |              |
|                                               |                               | Additional      paid-in capital                                    |                                         | 4,148,550  |              |      | 4,089,450  |              |
|                                               |                               | Treasury      stock                                                |                                         | (206,253   | )                 |      | (252,653   | )                 |
|                                               |                               | Accumulated      earnings in exploration stage                     |                                         | (916,042   | )                 |      | 126,447    |              |
|                                               |                               | Accumulated      deficit prior to exploration stage                |                                         | (1,667,482 | )                 |      | (1,667,482 | )                 |
|                                               |                               | Accumulated      other comprehensive loss                          |                                         | (51,053    | )                 |      | (11,214    | )                 |
|                                               |                               |                                                               | Total      Stockholders' Equity              |       | 5,573,624         |      |       | 5,714,797         |   |
|                                               |                               |                                                               |                                         |       |              |      |       |              |   |
|                                               |                               |                                                               | **TOTAL      LIABILITIES AND STOCKHOLDERS'** |       |              |      |       |              |   |
|                                               |                               |                                                               |      **EQUITY**          | $          | 5,833,840         |      | $          | 5,969,454         |   |

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

38

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| **SHOSHONE SILVER MINING COMPANY**                                             |
|--------------------------------------------------------------------------------|
| **(an Exploration Stage Company)**                                             |
| **CONSOLIDATED STATEMENTS OF OPERATIONS      AND COMPREHENSIVE INCOME (LOSS)** |

|                                                  |                                                  |                               |                                |             |                   |             |                      |        |                |      |   |
|--------------------------------------------------|-------------------------------------------------------|------------------------------------|-------------------------------------|------------------|------------------------|------------------|---------------------------|-------------|---------------------|-----------|--------|
|                                                  |                                                  |                               |                                |             |                   |             |                      |        |                |      |   |
|                                                  |                                                  |                               |                                |             |                   |             |                      |        |                |      |   |
|                                                  |                                                  |                               |                                |             |                   |             |                      |        | **Period from**     |
|                                                  |                                                  |                               |                                |             |                   |             |                      |        | **January 1, 2000** |
|                                                  |                                                  |                               |                                |             |                   |             |                      |        | **(beginning of**   |
|                                                  |                                                  |                               | **Fiscal Year Ended September 30,** |             | **exploration stage)** |
|                                                  |                                                  |                               |  **2010**                      |             |  **2009**         |             | **to September 30, 2010** |
|                                                  |                                                  |                               |  **  **              |             |  **  ** |             |  **  **    |
|                                                  |                                                  |                               |                                |             |                   |             |                      |        |                |      |   |
| REVENUES                                         | $                                                     | 20,111                             |                                | $                | -                      |             | $                         | 161,700     |                |
|                                                  |                                                  |                               |                                |             |                   |             |                      |        |                |      |   |
| COST      OF REVENUES                            |                                                  | -                                  |                                |             | -                      |             |                      | 228,828     |                |
|                                                  |                                                  |                               |                                |             |                   |             |                      |        |                |      |   |
| GROSS      PROFIT                                |                                                  | 20,111                             |                                |             | -                      |             |                      | (67,128)    |                |
|                                                  |                                                  |                               |                                |             |                   |             |                      |        |                |      |   |
| OPERATING      EXPENSES                          |                                                  |                               |                                |             |                   |             |                      |        |                |
|                                                  | General      and administrative                       |                               | 536,656                             |             |                   | 491,324          |                      |        | 1,211,118           |      |
|                                                  | Professional      fees                                |                               | 123,445                             |             |                   | 286,369          |                      |        | 1,182,310           |      |
|                                                  | Depreciation                                          |                               | 178,804                             |             |                   | 130,743          |                      |        | 642,843             |      |
|                                                  | Mining      and exploration expenses                  |                               | 542,724                             |             |                   | 841,519          |                      |        | 4,235,732           |      |
|                                                  | Net      gain on sale of load claim                   |                               | (175,000)                           |             |                   | -                |                      |        | (368,907)           |      |
|                                                  |                                                  | Total      Operating Expenses      |                                | 1,206,629        |                   |             | 1,749,955                 |        |                | 6,903,096 |   |
|                                                  |                                                  |                               |                                |             |                   |             |                      |        |                |      |   |
| LOSS      FROM OPERATIONS                        |                                                  | (1,186,518)                        |                                |             | (1,749,955)            |             |                      | (6,970,224) |                |
|                                                  |                                                  |                               |                                |             |                   |             |                      |        |                |      |   |
| OTHER      INCOME (EXPENSES)                     |                                                  |                               |                                |             |                   |             |                      |        |                |
|                                                  | Dividend      and interest income                     |                               | 73,467                              |             |                   | 115,022          |                      |        | 279,789             |      |
|                                                  | Gain      on sale of fixed asset                      |                               | 5,000                               |             |                   | -                |                      |        | 17,200              |      |
|                                                  | Gain      on sale of Mexican mining concession        |                               | -                                   |             |                   | -                |                      |        | 4,363,353           |      |
|                                                  | Gain      on settlement of note receivable            |                               | -                                   |             |                   | -                |                      |        | 64,206              |      |
|                                                  | Interest      expense                                 |                               | (4,242)                             |             |                   | (2,398)          |                      |        | (11,548)            |      |
|                                                  | Lease      income                                     |                               | -                                   |             |                   | -                |                      |        | 444,044             |      |
|                                                  | Loss      on abandonment of asset                     |                               | -                                   |             |                   | -                |                      |        | (20,000)            |      |
|                                                  | Net      gain on sale of investments                  |                               | 1,036                               |             |                   | 2,225            |                      |        | 1,133,469           |      |
|                                                  | Other      income (expense)                           |                               | 142                                 |             |                   | (43,391)         |                      |        | 197,349             |      |
|                                                  | Other-than-temporary      impairment of investments   |                               | (47,800)                            |             |                   | (101,479)        |                      |        | (149,279)           |      |
|                                                  | Bad      debt recovery                                |                               | 47,008                              |             |                   | -                |                      |        | 47,008              |      |
|                                                  | Cancellation      of debt income                      |                               | 69,418                              |             |                   | -                |                      |        | 69,418              |      |
|                                                  | Unrealized      holding loss on marketable securities |                               | -                                   |             |                   | -                |                      |        | (380,827)           |      |
|                                                  |                                                  | Total      Other Income (Expenses) |                                | 144,029          |                   |             | (30,021)                  |        |                | 6,054,182 |   |
|                                                  |                                                  |                               |                                |             |                   |             |                      |        |                |      |   |
| INCOME      (LOSS) BEFORE INCOME TAXES           |                                                  | (1,042,489)                        |                                |             | (1,779,976)            |             |                      | (916,042)   |                |
|                                                  |                                                  |                               |                                |             |                   |             |                      |        |                |      |   |
| INCOME      TAXES                                |                                                  | -                                  |                                |             | -                      |             |                      | 124,826     |                |
| DEFERRED      TAX GAIN                           |                                                  | -                                  |                                |             | -                      |             |                      | (124,826)   |                |
|                                                  |                                                  |                               |                                |             |                   |             |                      |        |                |      |   |
| NET      INCOME (LOSS)                           |                                                  | (1,042,489)                        |                                |             | (1,779,976)            |             |                      | (916,042)   |                |
|                                                  |                                                  |                               |                                |             |                   |             |                      |        |                |      |   |
| OTHER      COMPREHENSIVE INCOME (LOSS)           |                                                  |                               |                                |             |                   |             |                      |        |                |
|                                                  | Unrealized      holding gain (loss) on investments    |                               | (39,839)                            |             |                   | 5,557            |                      |        | (98,853)            |      |
|                                                  |                                                  |                               |                                |             |                   |             |                      |        |                |      |   |
|                                                  |                                                  |                               |                                |             |                   |             |                      |        |                |      |   |
| NET      COMPREHENSIVE INCOME (LOSS)             | $                                                     | (1,082,328)                        |                                | $                | (1,774,419)            |             | $                         | (1,014,895) |                |
|                                                  |                                                  |                               |                                |             |                   |             |                      |        |                |      |   |
|                                                  |                                                  |                               |                                |             |                   |             |                      |        |                |      |   |
| NET      INCOME (LOSS) PER COMMON SHARE, BASIC   | $                                                     | (0.03)                             |                                | $                | (0.06)                 |             |                      |        |                |
|                                                  |                                                  |                               |                                |             |                   |             |                      |        |                |      |   |
| NET      INCOME (LOSS) PER COMMON SHARE, DILUTED | $                                                     | (0.03)                             |                                | $                | (0.06)                 |             |                      |        |                |
|                                                  |                                                  |                               |                                |             |                   |             |                      |        |                |      |   |
| WEIGHTED      AVERAGE NUMBER OF                  |  ** **                                      |                               |                                |  ** ** |                   |             |                      |        |                |
|                                                  | COMMON      STOCK SHARES OUTSTANDING, BASIC           |  ** **                   | 38,982,098                          |             |  ** **       | 28,478,030       |                      |        |                |      |
|                                                  |                                                  |                               |  ** **                    |             |                   |  ** ** |                      |        |                |      |   |
| WEIGHTED      AVERAGE NUMBER OF                  |  ** **                                      |                               |                                |  ** ** |                   |             |                      |        |                |
|                                                  | COMMON      STOCK SHARES OUTSTANDING, DILUTED         |  ** **                   | 38,982,098                          |             |  ** **       | 28,478,030       |                      |        |                |      |

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

39

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| **SHOSHONE SILVER MINING COMPANY**        |
|-------------------------------------------|
| **(an Exploration Stage Company)**        |
| **CONSOLIDATED STATEMENTS OF CASH FLOWS** |

|                                                   |                                                                                                             |                                                                      |        |      |                                |        |                   |    |                      |        | **Period from** |
|---------------------------------------------------|------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------|-------------|-----------|-------------------------------------|-------------|------------------------|---------|---------------------------|-------------|-----------------|
|                                                   |                                                                                                             |                                                                      |        |      |                                |        |                   |    | **January 1, 2000**       |
|                                                   |                                                                                                             |                                                                      |        |      |                                |        |                   |    | **(beginning of**         |
|                                                   |                                                                                                             |                                                                      |        |      | **Fiscal Year Ended September 30,** |        | **exploration stage)** |
|                                                   |                                                                                                             |                                                                      |        |      |  **2010**                      |        |  **2009**         |    | **to September 30, 2010** |
|                                                   |                                                                                                             |                                                                      |        |      |  ** **                    |        |  ** **       |    |  ** **          |
| CASH      FLOWS FROM OPERATING ACTIVITIES         |                                                                                                             |                                                                      |        |      |                                |        |                   |    |                      |
|                                                   | Net      income (loss)                                                                                           | $                                                                         | (1,042,489) |      | $                                   | (1,779,976) |                   | $       | (916,042)                 |        |
|                                                   | Adjustments      to reconcile net income (loss) to net                                                           |                                                                      |        |      |                                |        |                   |    |                      |        |
|                                                   |                                                                                                             | Adjustment      to balance of note receivable                             |        | -         |                                |        | (766)                  |    |                      | (766)       |            |
|                                                   |                                                                                                             | Amortization      of note receivable discount                             |        | (73,235)  |                                |        | (91,573)               |    |                      | (172,581)   |            |
|                                                   |                                                                                                             | Available-for-sale      securities issued in exchange for services        |        | -         |                                |        | -                      |    |                      | 135,140     |            |
|                                                   |                                                                                                             | Available-for-sale      silver investment issued in exchange for services |        | 3,320     |                                |        | 240                    |    |                      | 3,560       |            |
|                                                   |                                                                                                             | Bad      debt expense                                                     |        | -         |                                |        | 9,624                  |    |                      | 9,624       |            |
|                                                   |                                                                                                             | Cash      used by operations:                                             |        |      |                                |        |                   |    |                      |        |            |
|                                                   |                                                                                                             | Cancellation      of debt income                                          |        | (69,418)  |                                |        | -                      |    |                      | (69,418)    |            |
|                                                   |                                                                                                             | Common      stock issued for mining and exploration expenses              |        | 9,000     |                                |        | -                      |    |                      | 294,500     |            |
|                                                   |                                                                                                             | Common      stock issued for services                                     |        | 200,900   |                                |        | 9,900                  |    |                      | 404,486     |            |
|                                                   |                                                                                                             | Common      stock issued in settlement of agreement with former CEO       |        | -         |                                |        | -                      |    |                      | 20,000      |            |
|                                                   |                                                                                                             | Depreciation      and amortization expense                                |        | 201,257   |                                |        | 130,743                |    |                      | 665,296     |            |
|                                                   |                                                                                                             | Discount      given on early payment on note receivable                   |        | -         |                                |        | 50,000                 |    |                      | 50,000      |            |
|                                                   |                                                                                                             | Gain      on sale of fixed asset                                          |        | (5,000)   |                                |        | -                      |    |                      | (17,200)    |            |
|                                                   |                                                                                                             | Gain      on settlement of note receivable                                |        | -         |                                |        | -                      |    |                      | (64,206)    |            |
|                                                   |                                                                                                             | Impairment      of mining expenses                                        |        | -         |                                |        | -                      |    |                      | 413,000     |            |
|                                                   |                                                                                                             | Loss      on abandonment of investment                                    |        | -         |                                |        | -                      |    |                      | 20,000      |            |
|                                                   |                                                                                                             | Loss      recognized on other-than-termporary impairment of investments   |        | 47,800    |                                |        | 101,479                |    |                      | 149,279     |            |
|                                                   |                                                                                                             | Net      gain on sale of lode claim                                       |        | (175,000) |                                |        | -                      |    |                      | (368,907)   |            |
|                                                   |                                                                                                             | Net      gain on sale of Mexican mining concession                        |        | -         |                                |        | -                      |    |                      | (4,363,353) |            |
|                                                   |                                                                                                             | Net      loss (gain) on sale of investments                               |        | (1,036)   |                                |        | (2,225)                |    |                      | (1,133,469) |            |
|                                                   |                                                                                                             | Treasury      stock issued for services                                   |        | 26,100    |                                |        | 7,000                  |    |                      | 53,420      |            |
|                                                   |                                                                                                             | Unrealized      holding loss on marketable securities                     |        | -         |                                |        | -                      |    |                      | 380,827     |            |
|                                                   | Changes      in assets and liabilities:                                                                          |                                                                      |        |      |                                |        |                   |    |                      |        |
|                                                   |                                                                                                             | Change      in other current assets                                       |        | -         |                                |        | -                      |    |                      | (14,443)    |            |
|                                                   |                                                                                                             | Change      in deposits and prepaids                                      |        | (5,761)   |                                |        | 16,370                 |    |                      | 21,248      |            |
|                                                   |                                                                                                             | Change      in supplies inventory                                         |        | 238       |                                |        | 626                    |    |                      | 10,775      |            |
|                                                   |                                                                                                             | Change      in accrued interest receivable                                |        | -         |                                |        | (9,516)                |    |                      | (20,255)    |            |
|                                                   |                                                                                                             | Change      in accrued liabilities                                        |        | (66,129)  |                                |        | 68,863                 |    |                      | 9,038       |            |
|                                                   |                                                                                                             | Change      in accounts payable                                           |        | 152,710   |                                |        | (97,956)               |    |                      | 161,669     |            |
|                                                   |                                                                                                             | Change      in stock to issue                                             |        | -         |                                |        | -                      |    |                      | 230,680     |            |
|                                                   |                                                                                                             | Net      cash used in operating activities                                |        | (796,743) |                                |        | (1,587,167)            |    |                      | (4,108,098) |            |
|                                                   |                                                                                                             |                                                                      |        |      |                                |        |                   |    |                      |        |            |   |   |
| CASH      FLOWS FROM INVESTING ACTIVITIES         |                                                                                                             |                                                                      |        |      |                                |        |                   |    |                      |
|                                                   |                                                                                                             | Advances      on notes receivable                                         |        | -         |                                |        | (15,000)               |    |                      | (111,022)   |            |
|                                                   |                                                                                                             | Advances      to related party                                            |        | -         |                                |        | -                      |    |                      | (395,000)   |            |
|                                                   |                                                                                                             | Issuance      of note receviable from related party                       |        | -         |                                |        | -                      |    |                      | (243,000)   |            |
|                                                   |                                                                                                             | Payments      received on notes receivable                                |        | -         |                                |        | 452,808                |    |                      | 582,846     |            |
|                                                   |                                                                                                             | Payments      received on notes receivable from related party             |        | -         |                                |        | -                      |    |                      | 332,498     |            |
|                                                   |                                                                                                             | Proceeds      from sale of fixed assets                                   |        | 5,000     |                                |        | -                      |    |                      | 17,200      |            |
|                                                   |                                                                                                             | Proceeds      from sale of investments                                    |        | 44,585    |                                |        | 10,682                 |    |                      | 4,627,485   |            |
|                                                   |                                                                                                             | Proceeds      from sale of lode claim                                     |        | 175,000   |                                |        | -                      |    |                      | 188,907     |            |
|                                                   |                                                                                                             | Proceeds      from sale of Mexican mining concession                      |        | -         |                                |        | -                      |    |                      | 2,497,990   |            |
|                                                   |                                                                                                             | Proceeds      from short-term loans                                       |        | -         |                                |        | -                      |    |                      | 160,760     |            |
|                                                   |                                                                                                             | Purchase      of fixed assets                                             |        | (73,173)  |                                |        | (293,351)              |    |                      | (1,080,482) |            |
|                                                   |                                                                                                             | Purchase      of mineral and mining properties                            |        | -         |                                |        | (8,000)                |    |                      | (76,472)    |            |
|                                                   |                                                                                                             | Purchases      of investments                                             |        | -         |                                |        | (52,769)               |    |                      | (4,059,939) |            |
|                                                   |                                                                                                             | Net      cash provided by investing activities                            |        | 151,412   |                                |        | 94,370                 |    |                      | 2,441,771   |            |
|                                                   |                                                                                                             |                                                                      |        |      |                                |        |                   |    |                      |        |            |   |   |
| CASH      FLOWS FROM FINANCING ACTIVITIES         |                                                                                                             |                                                                      |        |      |                                |        |                   |    |                      |
|                                                   |                                                                                                             | Common      shares repurchased for treasury                               |        | -         |                                |        | (20,000)               |    |                      | (41,220)    |            |
|                                                   |                                                                                                             | Net      proceeds from sale of common stock                               |        | 705,155   |                                |        | -                      |    |                      | 1,947,725   |            |
|                                                   |                                                                                                             | Payment      made on long-term note payable                               |        | (27,537)  |                                |        | (33,703)               |    |                      | (264,539)   |            |
|                                                   |                                                                                                             | Payment      of common stock subscriptions                                |        | -         |                                |        | -                      |    |                      | 20,225      |            |
|                                                   |                                                                                                             | Net      cash (used in) provided by financing activities                  |        | 677,618   |                                |        | (53,703)               |    |                      | 1,662,191   |            |
|                                                   |                                                                                                             |                                                                      |        |      |                                |        |                   |    |                      |        |            |   |   |
| Net      increase (decrease) in cash              |                                                                                                             | 32,287                                                                    |        |      | (1,546,500)                         |        |                   | (4,136) |                      |
|                                                   |                                                                                                             |                                                                      |        |      |                                |        |                   |    |                      |        |            |   |   |
| Cash,      beginning of period                    |                                                                                                             | 23,566                                                                    |        |      | 1,570,066                           |        |                   | 59,989  |                      |
|                                                   |                                                                                                             |                                                                      |        |      |                                |        |                   |    |                      |        |            |   |   |
| Cash,      end of period                          | $                                                                                                                | 55,853                                                                    |        | $         | 23,566                              |        | $                      | 55,853  |                      |
|                                                   |                                                                                                             |                                                                      |        |      |                                |        |                   |    |                      |        |            |   |   |
|                                                   |                                                                                                             |                                                                      |        |      |                                |        |                   |    |                      |        |            |   |   |
| SUPPLEMENTAL      CASH FLOW DISCLOSURES:          |                                                                                                             |                                                                      |        |      |                                |        |                   |    |                      |
|                                                   | Interest      expense paid                                                                                       | $                                                                         | 2,698       |      | $                                   | 2,398       |                   | $       | 10,004                    |        |
|                                                   | Income      taxes paid                                                                                           | $                                                                         | -           |      | $                                   | -           |                   | $       | -                         |        |
|                                                   |                                                                                                             |                                                                      |        |      |                                |        |                   |    |                      |        |            |   |   |
| NON-CASH      INVESTING AND FINANCING ACTIVITIES: |                                                                                                             |                                                                      |        |      |                                |        |                   |    |                      |
|                                                   | Accounts      payable issued in exchange for partial payment on office building                                  | $                                                                         | -           |      | $                                   | -           |                   | $       | 50,000                    |        |
|                                                   | Common      stock issued for services, accounts payable, finder's fee and mining & exploration      expenses | $                                                                         | -           |      | $                                   | -           |                   | $       | 539,333                   |        |
|                                                   | Common      stock issued for purchase of equipment and mining properties                                         | $                                                                         | -           |      | $                                   | -           |                   | $       | 140,340                   |        |
|                                                   | Deposit      utilized to purchase fixed asset                                                                    | $                                                                         | -           |      | $                                   | -           |                   | $       | 5,000                     |        |
|                                                   | Equipment      received in exchange for settlement of note recievable                                            | $                                                                         | -           |      | $                                   | 4,139       |                   | $       | 4,139                     |        |
|                                                   | Marketable      securities received in lieu of note receivable                                                   | $                                                                         | -           |      | $                                   | -           |                   | $       | 104,273                   |        |
|                                                   | Mill      building acquired in exchange for common stock and other consideration                                 | $                                                                         | -           |      | $                                   | 224,475     |                   | $       | 224,475                   |        |
|                                                   | Mineral      properties acquired in exchange for common stock and other consideration                            | $                                                                         | -           |      | $                                   | 1,677,126   |                   | $       | 1,677,126                 |        |
|                                                   | Mineral      property reacquired upon default                                                                    | $                                                                         | -           |      | $                                   | 131,553     |                   | $       | 131,553                   |        |
|                                                   | Mining      equipment acquired in exchange for common stock and other consideration                              | $                                                                         | -           |      | $                                   | 260,000     |                   | $       | 260,000                   |        |
|                                                   | Note      issued in exchanged for vehicle, equipment and prepaid asset                                           | $                                                                         | 15,933      |      | $                                   | 22,939      |                   | $       | 108,156                   |        |
|                                                   | Note      receivable (net of discount) in connection with sale of Mexcian Mining      Concession                 | $                                                                         | -           |      | $                                   | -           |                   | $       | 1,865,363                 |        |
|                                                   | Note      receivable in connection with sale of lode claim                                                       | $                                                                         | -           |      | $                                   | -           |                   | $       | 120,000                   |        |
|                                                   | Office      equipment acquired in exchange for common stock and other consideration                              | $                                                                         | -           |      | $                                   | 15,525      |                   | $       | 15,525                    |        |
|                                                   | Stock      received in exchange for lode claim                                                                   | $                                                                         | -           |      | $                                   | -           |                   | $       | 60,000                    |        |
|                                                   | Treasury      stock acquired through sale of investment                                                          | $                                                                         | -           |      | $                                   | -           |                   | $       | 296,296                   |        |
|                                                   | Treasury      stock issued in exchange for fixed asset                                                           | $                                                                         | -           |      | $                                   | 7,500       |                   | $       | 7,500                     |        |

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

40

----

| **SHOSHONE SILVER MINING COMPANY**                    |
|-------------------------------------------------------|
| **(an Exploration    Stage Company)**                 |
| **CONSOLIDATED    STATEMENT OF STOCKHOLDERS' EQUITY** |

|                                                                                             |  Common Stock |   |    |   |                  |   |     |   |          |   | Accumulated   |   | Other       |   | Total         |
|--------------------------------------------------------------------------------------------------|--------------------|--------|---------|--------|-----------------------|--------|----------|--------|---------------|--------|---------------|--------|-------------|--------|---------------|
|                                                                                             |  Number       |   |    |   | Additional            |   | Treasury |   |          |   | Subscriptions |   | Accumulated |   | Comprehensive |   | Stockholders' |
|                                                                                             |  of Shares    |   | Amount  |   |  Paid-in Capital |   | Stock    |   | Stock Options |   | Receivable    |   | Deficit     |   | Income        |   | Equity |
|                                                                                             |               |   |    |   |                  |   |     |   |          |   |          |   |        |   |          |   |   |
| Balance      December 31, 1999 as originally stated                                              | 9,030,660          | $      | 903,066 | $      | 1,597,425             | $      | (65,733) | $      | -             | $      | -             | $      | 21,834      | $      | -             | $ | 2,456,592 |
|                                                                                             |               |   |    |   |                  |   |     |   |          |   |          |   |        |   |          |   |   |
| Net      adjustments for the following:                                                          |               |   |    |   |                  |   |     |   |          |   |          |   |        |   |          |   |   |
|                                                                                             |               |   |    |   |                  |   |     |   |          |   |          |   |        |   |          |   |   |
|            Overstated      mining property investments                  | -                  |   | -       |   | -                     |   | -        |   | -             |   | -             |   | (905,981)   |   | -             |   | (905,981) |
|                                                                                             |               |   |    |   |                  |   |     |   |          |   |          |   |        |   |          |   |   |
|            Understated      property, net of depreciation               | -                  |   | -       |   | 990,000               |   | -        |   | -             |   | -             |   | (345,465)   |   | -             |   | 644,535 |
|                                                                                             |               |   |    |   |                  |   |     |   |          |   |          |   |        |   |          |   |   |
|       Repaid      loan incorrectly written off to expenses              | -                  |   | -       |   | -                     |   | -        |   | -             |   | -             |   | 50,000      |   | -             |   | 50,000 |
|                                                                                             |               |   |    |   |                  |   |     |   |          |   |          |   |        |   |          |   |   |
|       Treasury      stock, not properly recognized                      | 533,669            |   | 53,367  |   | -                     |   | -        |   | -             |   | -             |   | (53,367)    |   | -             |   | - |
|                                                                                             |               |   |    |   |                  |   |     |   |          |   |          |   |        |   |          |   |   |
|       Stock      issuances not recorded                                 | 410,000            |   | 41,000  |   | 48,500                |   | -        |   | -             |   | -             |   | (89,500)    |   | -             |   | - |
|                                                                                             |               |   |    |   |                  |   |     |   |          |   |          |   |        |   |          |   |   |
|       Stock      options and payables for unrecorded attorney      fees | -                  |   | -       |   | -                     |   | -        |   | 12,221        |   | -             |   | (22,221)    |   | -             |   | (10,000) |
|                                                                                             |               |   |    |   |                  |   |     |   |          |   |          |   |        |   |          |   |   |
|       Cost      of mining properties expensed                           | -                  |   | -       |   | -                     |   |     |   |          |   |          |   | (491,282)   |   |          |   | (491,282) |
|                                                                                             |               |   |    |   |                  |   |     |   |          |   |          |   |        |   |          |   |   |
|       Note      receivable not recorded, net of accrued interest        | -                  |   | -       |   | -                     |   | -        |   | -             |   | -             |   | 168,500     |   | -             |   | 168,500 |
|                                                                                             |               |   |    |   |                  |   |     |   |          |   |          |   |        |   |          |   |   |
| Balance      December 31, 1999, as restated                                                      | 9,974,329          | $      | 997,433 | $      | 2,635,925             | $      | (65,733) | $      | 12,221        | $      | -             | $      | (1,667,482) | $      | -             | $ | 1,912,364 |
|                                                                                             |               |   |    |   |                  |   |     |   |          |   |          |   |        |   |          |   |   |
| Issuance      of stock for services at a price      of $0.20 per share                           | 5,000              |   | 500     |   | 500                   |   | -        |   | -             |   | -             |   | -           |   | -             |   | 1,000 |
|                                                                                             |               |   |    |   |                  |   |     |   |          |   |          |   |        |   |          |   |   |
| Net      loss for year ending December 31, 2000                                                  | -                  |   | -       |   | -                     |   | -        |   | -             |   | -             |   | (212,048)   |   | -             |   | (212,048) |
|                                                                                             |               |   |    |   |                  |   |     |   |          |   |          |   |        |   |          |   |   |
| Balance,      December 31, 2000, as restated                                                     | 9,979,329          | $      | 997,933 | $      | 2,636,425             | $      | (65,733) | $      | 12,221        | $      | -             | $      | (1,879,530) | $      | -             | $ | 1,701,316 |
|                                                                                             |               |   |    |   |                  |   |     |   |          |   |          |   |        |   |          |   |   |
| Net      loss for year ending December 31, 2001                                                  | -                  |   | -       |   | -                     |   | -        |   | -             |   | -             |   | (228,159)   |   | -             |   | (228,159) |
|                                                                                             |               |   |    |   |                  |   |     |   |          |   |          |   |        |   |          |   |   |
| Balance,      January 1, 2002                                                                    | 9,979,329          | $      | 997,933 | $      | 2,636,425             | $      | (65,733) | $      | 12,221        | $      | -             | $      | (2,107,689) | $      | -             | $ | 1,473,157 |
|                                                                                             |               |   |    |   |                  |   |     |   |          |   |          |   |        |   |          |   |   |
| Treasury      stock issued for services at a      price of $0.10 per share                       | -                  |   | -       |   | (1,080)               |   | 11,880   |   | -             |   | -             |   |        |   | -             |   | 10,800 |

|                                                                                     |               |   |         |   |                  |   |           |   |                |   |                |   |              |   |  Accumulated  |   |                |
|------------------------------------------------------------------------------------------|--------------------|--------|--------------|--------|-----------------------|--------|----------------|--------|---------------------|--------|---------------------|--------|-------------------|--------|-------------------------|--------|---------------------|
|                                                                                     |  Common Stock |   |         |   |                  |   |           |   |                |   |                |   |  Other  |   |  Total             |
|                                                                                     |  Number       |   |         |   |  Additional      |   |  Treasury |   |                |   |  Subscriptions |   |  Accumulated |   |  Comprehensive     |   |  Stockholders' |
|                                                                                     |  of Shares    |   |  Amount |   |  Paid-in Capital |   |  Stock    |   |  Stock Options |   |  Receivable    |   |  Deficit     |   |  Income            |   |  Equity        |
| Treasury      stock issued for services at a      price of $0.10 per share               | -                  |   | -            |   | (195)                 |   | 495            |   | -                   |   | -                   |   |              |   | -                       |   | 300                 |
|                                                                                     |               |   |         |   |                  |   |           |   |                |   |                |   |              |   |                    |   |                |
| Issuance      of stock for services at a price of $0.03      per share                   | 800,000            |   | 80,000       |   | (53,066)              |   | -              |   | -                   |   | -                   |   |              |   | -                       |   | 26,934              |
|                                                                                     |               |   |         |   |                  |   |           |   |                |   |                |   |              |   |                    |   |                |
| Issuance      of stock for legal fees at a price of $0.10      per share                 | 100,000            |   | 10,000       |   | -                     |   | -              |   | -                   |   | -                   |   |              |   | -                       |   | 10,000              |
|                                                                                     |               |   |         |   |                  |   |           |   |                |   |                |   |              |   |                    |   |                |
| Net      loss for year ending December 31, 2002                                          | -                  |   | -            |   | -                     |   | -              |   | -                   |   | -                   |   | (641,951)         |   | -                       |   | (641,951)           |
|                                                                                     |               |   |         |   |                  |   |           |   |                |   |                |   |              |   |                    |   |                |
| Balance,      January 1, 2003                                                            | 10,879,329         | $      | 1,087,933    | $      | 2,582,084             | $      | (53,358)       | $      | 12,221              | $      | -                   | $      | (2,749,640)       | $      | -                       | $      | 879,240             |
|                                                                                     |               |   |         |   |                  |   |           |   |                |   |                |   |              |   |                    |   |                |
| Stock      issued for cash at $0.03 per share                                            | 2,902,778          |   | 290,278      |   | (204,278)             |   | -              |   | -                   |   | -                   |   |              |   | -                       |   | 86,000              |
|                                                                                     |               |   |         |   |                  |   |           |   |                |   |                |   |              |   |                    |   |                |
| Issuance      of stock for services at a price of $0.10      per share                   | 620,833            |   | 62,083       |   | -                     |   | -              |   | -                   |   | -                   |   |              |   | -                       |   | 62,083              |
|                                                                                     |               |   |         |   |                  |   |           |   |                |   |                |   |              |   |                    |   |                |
| Issuance      of stock for mining properties at a price      of $0.15 per share          | 510,000            |   | 51,000       |   | 25,500                |   | -              |   | -                   |   | -                   |   |              |   | -                       |   | 76,500              |
|                                                                                     |               |   |         |   |                  |   |           |   |                |   |                |   |              |   |                    |   |                |
| Stock      issued for cash at $0.10 per share                                            | 119,000            |   | 11,900       |   | -                     |   | -              |   | -                   |   | -                   |   |              |   | -                       |   | 11,900              |
|                                                                                     |               |   |         |   |                  |   |           |   |                |   |                |   |              |   |                    |   |                |
| Unrealized      holding gain in investments                                              | -                  |   | -            |   | -                     |   | -              |   | -                   |   | -                   |   |              |   | 1,328,462               |   | 1,328,462           |
|                                                                                     |               |   |         |   |                  |   |           |   |                |   |                |   |              |   |                    |   |                |
| Net      loss for year ending December 31, 2003                                          | -                  |   | -            |   | -                     |   | -              |   | -                   |   | -                   |   | (99,292)          |   | -                       |   | (99,292)            |
|                                                                                     |               |   |         |   |                  |   |           |   |                |   |                |   |              |   |                    |   |                |
| Balance,      December 31, 2003                                                          | 15,031,940         | $      | 1,503,194    | $      | 2,403,306             | $      | (53,358)       | $      | 12,221              | $      | -                   | $      | (2,848,932)       | $      | 1,328,462               | $      | 2,344,893           |
|                                                                                     |               |   |         |   |                  |   |           |   |                |   |                |   |              |   |                    |   |                |
| Stock      issued for cash and warrants at $0.35 per share,      net of costs of $64,465 | 1,861,857          |   | 186,186      |   | 400,999               |   | -              |   | -                   |   | -                   |   |              |   | -                       |   | 587,185             |
|                                                                                     |               |   |         |   |                  |   |           |   |                |   |                |   |              |   |                    |   |                |
| Issuance      of stock for services at an average price      of $0.14 per share          | 25,000             |   | 2,500        |   | 1,000                 |   | -              |   | -                   |   | -                   |   |              |   | -                       |   | 3,500               |
|                                                                                     |               |   |         |   |                  |   |           |   |                |   |                |   |              |   |                    |   |                |
| Issuance      of stock for services at price of $0.35      per share                     | 25,000             |   | 2,500        |   | 6,250                 |   | -              |   | -                   |   | -                   |   |              |   | -                       |   | 8,750               |
|                                                                                     |               |   |         |   |                  |   |           |   |                |   |                |   |              |   |                    |   |                |
| Issuance      of stock for mining property lease at a price      of $0.35 per share      | 350,000            |   | 35,000       |   | 87,500                |   | -              |   | -                   |   | -                   |   |              |   | -                       |   | 122,500             |
|                                                                                     |               |   |         |   |                  |   |           |   |                |   |                |   |              |   |                    |   |                |
| Issuance      of stock for mining properties at a price      of $0.35 per share          | 100,000            |   | 10,000       |   | 25,000                |   | -              |   | -                   |   | -                   |   |              |   | -                       |   | 35,000              |
|                                                                                     |               |   |         |   |                  |   |           |   |                |   |                |   |              |   |                    |   |                |
| Treasury      stock issued for mining properties at a price      of $0.35 per share      | -                  |   | -            |   | 24,000                |   | 11,000         |   | -                   |   | -                   |   |              |   | -                       |   | 35,000              |

|                                                                                       |               |   |         |   |                  |   |           |   |                |   |                |   |              |   |  Accumulated  |   |                |
|--------------------------------------------------------------------------------------------|--------------------|--------|--------------|--------|-----------------------|--------|----------------|--------|---------------------|--------|---------------------|--------|-------------------|--------|-------------------------|--------|---------------------|
|                                                                                       |  Common Stock |   |         |   |                  |   |           |   |                |   |                |   |  Other  |   |  Total             |
|                                                                                       |  Number       |   |         |   |  Additional      |   |  Treasury |   |                |   |  Subscriptions |   |  Accumulated |   |  Comprehensive     |   |  Stockholders' |
|                                                                                       |  of Shares    |   |  Amount |   |  Paid-in Capital |   |  Stock    |   |  Stock Options |   |  Receivable    |   |  Deficit     |   |  Income            |   |  Equity        |
|                                                                                       |               |   |         |   |                  |   |           |   |                |   |                |   |              |   |                    |   |                |
| Treasury      stock issued for subscriptions receivable at a price      of $0.35 per share | -                  |   | -            |   | 9,101                 |   | 11,124         |   | -                   |   | (20,225)            |   |              |   | -                       |   | -                   |
|                                                                                       |               |   |         |   |                  |   |           |   |                |   |                |   |              |   |                    |   |                |
| Treasury      stock issued for services at a price      of $0.35 per share                 | -                  |   | -            |   | 9,600                 |   | 4,400          |   | -                   |   | -                   |   |              |   | -                       |   | 14,000              |
|                                                                                       |               |   |         |   |                  |   |           |   |                |   |                |   |              |   |                    |   |                |
| Unrealized      holding loss in investments                                                | -                  |   | -            |   | -                     |   | -              |   | -                   |   | -                   |   |              |   | (594,605)               |   | (594,605)           |
|                                                                                       |               |   |         |   |                  |   |           |   |                |   |                |   |              |   |                    |   |                |
| Net      loss for year ending December 31, 2004                                            | -                  |   | -            |   | -                     |   | -              |   | -                   |   | -                   |   | (567,085)         |   | -                       |   | (567,085)           |
|                                                                                       |               |   |         |   |                  |   |           |   |                |   |                |   |              |   |                    |   |                |
| Balance,      December 31, 2004                                                            | 17,393,797         | $      | 1,739,380    | $      | 2,966,756             | $      | (26,834)       | $      | 12,221              | $      | (20,225)            | $      | (3,416,017)       | $      | 733,857                 | $      | 1,989,138           |
|                                                                                       |               |   |         |   |                  |   |           |   |                |   |                |   |              |   |                    |   |                |
| Issuance      of stock for accounts payable at      a price $0.35 per share                | 650,000            |   | 65,000       |   | 162,500               |   | -              |   | -                   |   | -                   |   | -                 |   | -                       |   | 227,500             |
|                                                                                       |               |   |         |   |                  |   |           |   |                |   |                |   |              |   |                    |   |                |
| Issuance      of stock for mining property expenses at      a price $0.20 per share        | 100,000            |   | 10,000       |   | 10,000                |   | -              |   | -                   |   | -                   |   | -                 |   | -                       |   | 20,000              |
|                                                                                       |               |   |         |   |                  |   |           |   |                |   |                |   |              |   |                    |   |                |
| Treasury      stock issued for services at a price of $0.20      per share                 | -                  |   | -            |   | 4,950                 |   | 6,050          |   | -                   |   | -                   |   | -                 |   | -                       |   | 11,000              |
|                                                                                       |               |   |         |   |                  |   |           |   |                |   |                |   |              |   |                    |   |                |
| Treasury      stock issued for cash and services  at      price of $0.10 per share    | -                  |   | -            |   | (1,900)               |   | 20,900         |   | -                   |   | -                   |   | -                 |   | -                       |   | 19,000              |
|                                                                                       |               |   |         |   |                  |   |           |   |                |   |                |   |              |   |                    |   |                |
| Treasury      stock acquired by sale of investments                                        | -                  |   | -            |   | -                     |   | (296,296)      |   | -                   |   | -                   |   | -                 |   | -                       |   | (296,296)           |
|                                                                                       |               |   |         |   |                  |   |           |   |                |   |                |   |              |   |                    |   |                |
| Receipt      of subscription receivable                                                    | -                  |   | -            |   | -                     |   | -              |   | -                   |   | 1,381               |   | -                 |   | -                       |   | 1,381               |
|                                                                                       |               |   |         |   |                  |   |           |   |                |   |                |   |              |   |                    |   |                |
| Unrealized      holding loss in investments                                                | -                  |   | -            |   | -                     |   | -              |   | -                   |   | -                   |   | -                 |   | (601,560)               |   | (601,560)           |
|                                                                                       |               |   |         |   |                  |   |           |   |                |   |                |   |              |   |                    |   |                |
| Net      loss for year ending December 31, 2005                                            | -                  |   | -            |   | -                     |   | -              |   | -                   |   | -                   |   | (84,681)          |   | -                       |   | (84,681)            |
|                                                                                       |               |   |         |   |                  |   |           |   |                |   |                |   |              |   |                    |   |                |
| Balance,      December 31, 2005                                                            | 18,143,797         | $      | 1,814,380    | $      | 3,142,306             | $      | (296,180)      | $      | 12,221              | $      | (18,844)            | $      | (3,500,698)       | $      | 132,297                 | $      | 1,285,482           |
|                                                                                       |               |   |         |   |                  |   |           |   |                |   |                |   |              |   |                    |   |                |
| Issuance      of stock for exploration expenses at      a price $0.24 per share            | 100,000            |   | 10,000       |   | 14,000                |   | -              |   | -                   |   | -                   |   | -                 |   | -                       |   | 24,000              |
|                                                                                       |               |   |         |   |                  |   |           |   |                |   |                |   |              |   |                    |   |                |
| Treasury      stock issued for services at an average price      of $0.25 per share        | -                  |   | -            |   | (5,164)               |   | 25,484         |   | -                   |   | -                   |   | -                 |   | -                       |   | 20,320              |
|                                                                                       |               |   |         |   |                  |   |           |   |                |   |                |   |              |   |                    |   |                |
| Unrealized      holding gain on investments                                                | -                  |   | -            |   | -                     |   | -              |   | -                   |   | -                   |   | -                 |   | 470,528                 |   | 470,528             |
|                                                                                       |               |   |         |   |                  |   |           |   |                |   |                |   |              |   |                    |   |                |
| Net      income for year ending December 31, 2006                                          | -                  |   | -            |   | -                     |   | -              |   | -                   |   | -                   |   | 367,135           |   | -                       |   | 367,135             |
|                                                                                       |               |   |         |   |                  |   |           |   |                |   |                |   |              |   |                    |   |                |
|  Balance,      December 31, 2006                                                      | 18,243,797         | $      | 1,824,380    | $      | 3,151,143             | $      | (270,696)      | $      | 12,221              | $      | (18,844)            | $      | (3,133,563)       | $      | 602,825                 | $      | 2,167,465           |

|                                                                                            |            |   |      |   |                  |   |      |   |          |   |          |         |        |    | Accumulated   |   |          |
|-------------------------------------------------------------------------------------------------|-----------------|--------|-----------|--------|-----------------------|--------|-----------|--------|---------------|--------|---------------|--------------|-------------|--------------|---------------|--------|---------------|
|                                                                                            | Common Stock    |   |      |   |                  |   |      |   |          |   |          |    | Other       |         | Total         |
|                                                                                            |  Number    |   |      |   | Additional            |   | Treasury  |   |          |   | Subscriptions |         | Accumulated |         | Comprehensive |   | Stockholders' |
|                                                                                            |  of Shares |   | Amount    |   |  Paid-in Capital |   | Stock     |   | Stock Options |   | Receivable    |         | Deficit     |         | Income        |   |  Equity  |
|                                                                                            |            |   |      |   |                  |   |      |   |          |   |          |         |        |         |          |   |          |
| Expiration      of stock options                                                                | -               |   | -         |   | 12,221                |   | -         |   | (12,221)      |   | -             |         | -           |         | -             |   | -             |
|                                                                                            |            |   |      |   |                  |   |      |   |          |   |          |         |        |         |          |   |          |
| Stock      issued for cash at $0.18 per share, net of costs of      $18,000                     | 1,000,000       |   | 100,000   |   | 62,000                |   | -         |   | -             |   | -             |         | -           |         | -             |   | 162,000       |
|                                                                                            |            |   |      |   |                  |   |      |   |          |   |          |         |        |         |          |   |          |
| Stock      issued for cash at $0.20 per share                                                   | 200,000         |   | 20,000    |   | 20,000                |   | -         |   | -             |   | -             |         | -           |         | -             |   | 40,000        |
|                                                                                            |            |   |      |   |                  |   |      |   |          |   |          |         |        |         |          |   |          |
| Stock      issued for cash at $0.20 per share                                                   | 250,000         |   | 25,000    |   | 25,000                |   | -         |   | -             |   | -             |         | -           |         | -             |   | 50,000        |
|                                                                                            |            |   |      |   |                  |   |      |   |          |   |          |         |        |         |          |   |          |
| Issuance      of stock for exploration expenses at a price of      $0.27 per share              | 100,000         |   | 10,000    |   | 17,000                |   | -         |   | -             |   | -             |         | -           |         | -             |   | 27,000        |
|                                                                                            |            |   |      |   |                  |   |      |   |          |   |          |         |        |         |          |   |          |
| Issuance      of stock in exchange for services                                                 | 6,000           |   | 600       |   | 1,320                 |   | -         |   | -             |   | -             |         | -           |         | -             |   | 1,920         |
|                                                                                            |            |   |      |   |                  |   |      |   |          |   |          |         |        |         |          |   |          |
| Adjustments      to common stock and treasury stock to adjust      to actual.  See Note 2. | 47,382          |   | 4,739     |   | 16,388                |   | (21,127)  |   | -             |   | -             |         | -           |         | -             |   | -             |
|                                                                                            |            |   |      |   |                  |   |      |   |          |   |          |         |        |         |          |   |          |
| Receipt      of subscription receivable                                                         | -               |   | -         |   | -                     |   | -         |   | -             |   | 18,844        |         | -           |         | -             |   | 18,844        |
|                                                                                            |            |   |      |   |                  |   |      |   |          |   |          |         |        |         |          |   |          |
| Issuance      of treasury stock for expenses incurred in the      prior year                    | -               |   | -         |   | 3,190                 |   | 3,190     |   | -             |   | -             |         | -           |         | -             |   | 6,380         |
|                                                                                            |            |   |      |   |                  |   |      |   |          |   |          |         |        |         |          |   |          |
| Unrealized      holding gain on investments                                                     | -               |   | -         |   | -                     |   | -         |   | -             |   | -             |         | -           |         | (419,483)     |   | (419,483)     |
|                                                                                            |            |   |      |   |                  |   |      |   |          |   |          |         |        |         |          |   |          |
| Net      income for the year ending December 31, 2007                                           | -               |   | -         |   | -                     |   | -         |   | -             |   | -             |         | (272,854)   |         | -             |   | (272,854)     |
|                                                                                            |            |   |      |   |                  |   |      |   |          |   |          |         |        |         |          |   |          |
|  Balance,      December 31, 2007                                                           | 19,847,179      | $      | 1,984,719 | $      | 3,308,262             | $      | (288,633) | $      | -             | $      | -             | $            | (3,406,417) | $            | 183,342       | $      | 1,781,272     |
|                                                                                            |            |   |      |   |                  |   |      |   |          |   |          |         |        |         |          |   |          |
| Issuance      of stock in exchange for services                                                 | 12,000          |   | 1,200     |   | 1,200                 |   | -         |   | -             |   | -             |         | -           |         | -             |   | 2,400         |
|                                                                                            |            |   |      |   |                  |   |      |   |          |   |          |         |        |         |          |   |          |
| Stock      issued for cash at $0.20 per share, net of costs of $10,000                          | 350,000         |   | 35,000    |   | 25,000                |   | -         |   | -             |   | -             |         | -           |         | -             |   | 60,000        |
|                                                                                            |            |   |      |   |                  |   |      |   |          |   |          |         |        |         |          |   |          |
| Unrealized      holding gain on investments                                                     | -               |   | -         |   | -                     |   | -         |   | -             |   | -             |         | -           |         | -             |   | -             |
|                                                                                            |            |   |      |   |                  |   |      |   |          |   |          |         |        |         |          |   |          |
| Stock      issued for cash at $0.20 per share, net of costs of $4,016                           | 450,000         |   | 45,000    |   | 40,984                |   | -         |   | -             |   | -             |         | -           |         | -             |   | 85,984        |
|                                                                                            |            |   |      |   |                  |   |      |   |          |   |          |         |        |         |          |   |          |
|                                                                                            |            |   |      |   |                  |   |      |   |          |   |          |         |        |         |          |   |          |
| Stock      issued for cash at $0.20 per share                                                   | 250,000         |   | 25,000    |   | 25,000                |   | -         |   | -             |   | -             |         | -           |         | -             |   | 50,000        |
|                                                                                            |            |   |      |   |                  |   |      |   |          |   |          |         |        |         |          |   |          |
| Issuance      of stock for exploration expenses at a price of      $0.22 per share              | 100,000         |   | 10,000    |   | 12,000                |   | -         |   | -             |   | -             |         | -           |         | -             |   | 22,000        |
|                                                                                            |            |   |      |   |                  |   |      |   |          |   |          |         |        |         |          |   |          |
| Stock      issued in exchange for heavy equipement                                              | 454,000         |   | 45,400    |   | 49,940                |   | -         |   | -             |   | -             |         | -           |         | -             |   | 95,340        |
|                                                                                            |            |   |      |   |                  |   |      |   |          |   |          |         |        |         |          |   |          |
| Stock      issued for cash at $0.20 per share                                                   | 250,000         |   | 25,000    |   | 25,000                |   |      |   |          |   |          |         |        |         |          |   | 50,000        |

|                                                                                                                             |               |   |         |   |                  |   |           |   |                |   |                |   |              |   |  Accumulated  |   |                |
|----------------------------------------------------------------------------------------------------------------------------------|--------------------|--------|--------------|--------|-----------------------|--------|----------------|--------|---------------------|--------|---------------------|--------|-------------------|--------|-------------------------|--------|---------------------|
|                                                                                                                             |  Common Stock |   |         |   |                  |   |           |   |                |   |                |   |  Other  |   |  Total             |
|                                                                                                                             |  Number       |   |         |   |  Additional      |   |  Treasury |   |                |   |  Subscriptions |   |  Accumulated |   |  Comprehensive     |   |  Stockholders' |
|                                                                                                                             |  of Shares    |   |  Amount |   |  Paid-in Capital |   |  Stock    |   |  Stock Options |   |  Receivable    |   |  Deficit     |   |  Income            |   |  Equity        |
|                                                                                                                             |               |   |         |   |                  |   |           |   |                |   |                |   |              |   |                    |   |                |
| Stock      issued for cash at $0.20 per share                                                                                    | 250,000            |   | 25,000       |   | 25,000                |   |           |   |                |   |                |   |              |   |                    |   | 50,000              |
|                                                                                                                             |               |   |         |   |                  |   |           |   |                |   |                |   |              |   |                    |   |                |
| Stock      issued in settlement of an agreement with the Company's former CEO                                                    | 100,000            |   | 10,000       |   | 10,000                |   |           |   |                |   |                |   |              |   |                    |   | 20,000              |
|                                                                                                                             |               |   |         |   |                  |   |           |   |                |   |                |   |              |   |                    |   |                |
| Acquisition      of 50,000 shares of treasury stock at $0.12 per share                                                           |               |   |         |   |                  |   | (6,100)        |   |                |   |                |   |              |   |                    |   | (6,100)             |
|                                                                                                                             |               |   |         |   |                  |   |           |   |                |   |                |   |              |   |                    |   |                |
| Acquisition      of 126,000 shares of treasury stock at $0.12 per share                                                          |               |   |         |   |                  |   | (15,120)       |   |                |   |                |   |              |   |                    |   | (15,120)            |
|                                                                                                                             |               |   |         |   |                  |   |           |   |                |   |                |   |              |   |                    |   |                |
| Unrealized      holding gain on investments                                                                                      | -                  |   | -            |   | -                     |   | -              |   | -                   |   | -                   |   | -                 |   | (200,114)               |   | (200,114)           |
|                                                                                                                             |               |   |         |   |                  |   |           |   |                |   |                |   |              |   |                    |   |                |
| Net      income for nine-month period ended September 30, 2008                                                                   | -                  |   | -            |   | -                     |   | -              |   | -                   |   | -                   |   | 3,645,358         |   | -                       |   | 3,645,358           |
|                                                                                                                             | 22,063,179         |   | 2,206,319    |   | 3,522,386             |   | (309,853)      |   | -                   |   | -                   |   | 238,941           |   | (16,772)                |   | 5,641,021           |
|                                                                                                                             |               |   |         |   |                  |   |           |   |                |   |                |   |              |   |                    |   |                |
| Common      stock issued at $0.10 per share in exchange for services                                                             | 10,000             |   | 1,000        |   | -                     |   | -              |   | -                   |   | -                   |   | -                 |   | -                       |   | 1,000               |
|                                                                                                                             |               |   |         |   |                  |   |           |   |                |   |                |   |              |   |                    |   |                |
| Common      stock Issued at $0.11 per share in exchange for services                                                             | 50,000             |   | 5,000        |   | 500                   |   | -              |   | -                   |   | -                   |   | -                 |   | -                       |   | 5,500               |
|                                                                                                                             |               |   |         |   |                  |   |           |   |                |   |                |   |              |   |                    |   |                |
| 50,000      shares of treasuary stock issued at $0.11 per share in exchange for Equipment                                        | -                  |   | -            |   | 2,000                 |   | 5,500          |   | -                   |   | -                   |   | -                 |   | -                       |   | 7,500               |
|                                                                                                                             |               |   |         |   |                  |   |           |   |                |   |                |   |              |   |                    |   |                |
| Common      stock issued at $0.15 per share to acquire 100% of the common stock of      Kimberly Gold Mines, Inc                 | 12,145,306         |   | 1,214,530    |   | 607,264               |   | -              |   | -                   |   | -                   |   | -                 |   | -                       |   | 1,821,794           |
|                                                                                                                             |               |   |         |   |                  |   |           |   |                |   |                |   |              |   |                    |   |                |
| 100,000      shares treasuary stock repurchased at $0.20 per share                                                               | -                  |   | -            |   | -                     |   | (20,000)       |   | -                   |   | -                   |   | -                 |   | -                       |   | (20,000)            |
|                                                                                                                             |               |   |         |   |                  |   |           |   |                |   |                |   |              |   |                    |   |                |
| 70,000      shares of treasury stock issued at 0.10 per share in exchange for services                                           |               |   |         |   | (700)                 |   | 7,700          |   | -                   |   | -                   |   | -                 |   | -                       |   | 7,000               |
|                                                                                                                             |               |   |         |   |                  |   |           |   |                |   |                |   |              |   |                    |   |                |
| 200,000      shares of treasury stock issued at $0.08 per share in connection with      acquisition of Kimberly Gold Mines, Inc. | -                  |   | -            |   | (42,000)              |   | 64,000         |   | -                   |   | -                   |   | -                 |   | -                       |   | 22,000              |
|                                                                                                                             |               |   |         |   |                  |   |           |   |                |   |                |   |              |   |                    |   |                |
| Common      stock issued at $0.10 per share in exchange for directors services                                                   | 20,000             |   | 2,000        |   | -                     |   | -              |   | -                   |   | -                   |   | -                 |   | -                       |   | 2,000               |
|                                                                                                                             |               |   |         |   |                  |   |           |   |                |   |                |   |              |   |                    |   |                |
| Common      stock issued at $0.10 per share in exchange for services                                                             | 4,000              |   | 400          |   | -                     |   | -              |   | -                   |   | -                   |   | -                 |   | -                       |   | 400                 |
|                                                                                                                             |               |   |         |   |                  |   |           |   |                |   |                |   |              |   |                    |   |                |
| Common      stock issued at $0.10 per share in exchange for directors services                                                   | 10,000             |   | 1,000        |   | -                     |   | -              |   | -                   |   | -                   |   | -                 |   | -                       |   | 1,000               |
|                                                                                                                             |               |   |         |   |                  |   |           |   |                |   |                |   |              |   |                    |   |                |
| Reconciliation      adjustment to common stock                                                                                   | 2                  |   | -            |   | -                     |   | -              |   | -                   |   | -                   |   | -                 |   | -                       |   | -                   |
|                                                                                                                             |               |   |         |   |                  |   |           |   |                |   |                |   |              |   |                    |   |                |
| Unrealized      holding gain on investments                                                                                      | -                  |   | -            |   | -                     |   | -              |   | -                   |   | -                   |   | -                 |   | 5,558                   |   | 5,558               |
|                                                                                                                             |               |   |         |   |                  |   |           |   |                |   |                |   |              |   |                    |   |                |
| Net income for twelve-month period ended September 30, 2009                                                                      | -                  |   | -            |   | -                     |   | -              |   | -                   |   | -                   |   | -                 |   | -                       |   | (1,779,976)         |
|                                                                                                                             | 34,302,487         |   | 3,430,249    |   | 4,089,450             |   | (252,653)      |   | -                   |   | -                   |   | (1,541,035)       |   | (11,214)                |   | 5,714,797           |
|                                                                                                                             |               |   |         |   |                  |   |           |   |                |   |                |   |              |   |                    |   |                |
|                                                                                                                             |               |   |         |   |                  |   |           |   |                |   |                |   |              |   |                    |   |                |
| Common      stock issued for cash at $0.10 per share                                                                             | 7,051,550          |   | 705,155      |   | -                     |   | -              |   | -                   |   | -                   |   | -                 |   | -                       |   | 705,155             |
|                                                                                                                             |               |   |         |   |                  |   |           |   |                |   |                |   |              |   |                    |   |                |
| Common      stock issued at $0.18 per share in exchange for services                                                             | 5,000              |   | 500          |   | 400                   |   | -              |   | -                   |   | -                   |   | -                 |   | -                       |   | 900                 |
|                                                                                                                             |               |   |         |   |                  |   |           |   |                |   |                |   |              |   |                    |   |                |
| Common      stock issued to Board of Directors at $0.16 per share                                                                | 1,250,000          |   | 125,000      |   | 75,000                |   | -              |   | -                   |   | -                   |   | -                 |   | -                       |   | 200,000             |
|                                                                                                                             |               |   |         |   |                  |   |           |   |                |   |                |   |              |   |                    |   |                |
| Common      stock issued in exchange for lease payment on mining property                                                        | 50,000             |   | 5,000        |   | 4,000                 |   | -              |   | -                   |   | -                   |   | -                 |   | -                       |   | 9,000               |
|                                                                                                                             |               |   |         |   |                  |   |           |   |                |   |                |   |              |   |                    |   |                |
| Treasury      stock issued in exchange for services at $0.18 per share                                                           | -                  |   | -            |   | (20,300)              |   | 46,400         |   | -                   |   | -                   |   | -                 |   | -                       |   | 26,100              |
|                                                                                                                             |               |   |         |   |                  |   |           |   |                |   |                |   |              |   |                    |   |                |
| Unrealized      holding gain on investments                                                                                      | -                  |   | -            |   | -                     |   | -              |   | -                   |   | -                   |   | -                 |   | (39,839)                |   | (39,839)            |
|                                                                                                                             |               |   |         |   |                  |   |           |   |                |   |                |   |              |   |                    |   |                |
| Net      income for twelve-month period ended September 30, 2010                                                                 | -                  |   | -            |   | -                     |   | -              |   | -                   |   | -                   |   | (1,042,489)       |   | -                       |   | (1,042,489)         |
|                                                                                                                             | 42,659,037         | $      | 4,265,904    | $      | 4,148,550             |   | $(206,253)     |   | $-                  |   | $-                  |   | $(2,583,524)      |   | $(51,053)               | $      | 5,573,624           |

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

41

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**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**

**NOTE1: ORGANIZATION AND DESCRIPTION OF BUSINESS**

ShoshoneSilver Mining Company (an Exploration StageCompany) (“the Company” or “Shoshone”) was incorporated under the laws of theState of Idaho on August 4, 1969, under the name of Sunrise Mining Company andwas engaged in the business of mining.  On January 22, 1970, the Company's name was changed to Shoshone Silver Mining Company.   During 2003, theCompany’s focus broadened to include resource management and sales of mineraland timber interests.  

Beginningin fiscal 2000, the Company entered into an exploration stage.  The Company hasacquired several mining properties since entering the exploration stage.  

TheCompany’s year-end is September 30th.

**NOTE2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**

This summary of significantaccounting policies is presented to assist in understanding the financialstatements.  The financial statements and notes are representations of theCompany’s management, which is responsible for their integrity andobjectivity.  These accounting policies conform to accounting principlesgenerally accepted in the United States of America and have been consistentlyapplied in the preparation of the financial statements.  

AccountingMethods

TheCompany’s financial statements are prepared using the accrual basis ofaccounting in accordance with accounting principles generally accepted in the United States of America.

Cashand Cash Equivalents

Forpurposes of its statements of cash flows, the Company considers all highlyliquid investments with original maturities of three months or less to be cashequivalents.  Cash equivalents also include money market accounts.

Concentrationof Credit Risk

TheCompany maintains its cash in several commercial accounts at major financialinstitutions and brokerage houses.  The brokerage accounts contain cash andsecurities. Balances are insured up to $500,000 (with a limit of $100,000 forcash) by the Securities Investor Protection Corporation (SIPC).  At September30, 2010 and September 30, 2009, the Company’s cash balances did not exceedFederal Deposit Insurance Corporation (FDIC) or SIPC limits.  

EarningsPer Share

Theprovisions of Topic 260 in the Accounting Standards Codification (ASC 260)which provides the guidance for the calculation of "basic" and"diluted" earnings per share.  Basic earnings per share includes nodilution and is computed by dividing net income (loss) available to commonshareholders by the weighted average common shares outstanding for the period. Diluted earnings per share reflect the potential dilution of securities thatcould share in the earnings of an entity similar to fully diluted earnings pershare.  

AtSeptember 30, 2010, there were 7,051,550 common stock warrants outstandingwhich were not included in the calculation of earnings (loss) per share atSeptember 30, 2010, because they would have been anti-dilutive.

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AtSeptember 30, 2009, there were 725,000 common stock warrants outstanding whichwere not included in the calculation of earnings (loss) per share at September30, 2009, because they would have been anti-dilutive.

FairValue of Financial Instruments

TheCompany's financial instruments as defined in Topic 825 in the AccountingStandards Codification (ASC 825) include cash and cash equivalents, depositsand prepaid expenses, supplies inventory, investments in available-for-salesecurities and silver bars and coins, accounts payable and short-termborrowings.  All instruments other than the investments in available-for-salesecurities and silver bars and coins are accounted for on an historical costbasis, which, due to the short maturity of these financial instruments,approximates fair value at the reporting dates.  Investments inavailable-for-sale securities and silver bars and coins are recorded at fairvalue at the reporting dates in accordance with ASC Topic 825.

Fair Value Measurements

Topic 820 in the AccountingStandards Codification (ASC 820) defines fair value,establishes a framework for measuring fair value in generally acceptedaccounting principles and expands disclosures about fair value measurements.ASC 820 applies whenever other standards require (or permit) assets orliabilities to be measured at fair value but does not expand the use of fairvalue in any new circumstances. In this standard, the FASB clarifies theprinciple that fair value should be based on the assumptions market participantswould use when pricing the asset or liability. In support of this principle,ASC 820 establishes a fair value hierarchy that prioritizes the informationused to develop those assumptions. The fair value hierarchy is as follows:

- Level 1 inputs — Unadjusted quoted process in     active markets for identical assets or liabilities that the entity has the     ability to access at the measurement date.

- Level 2 inputs — Inputs other than quoted prices     included in Level 1 that are observable for the asset or liability, either     directly or indirectly. These might include quoted prices for similar     assets and liabilities in active markets, and inputs other than quoted     prices that are observable for the asset or liability, such as interest     rates and yield curves that are observable at commonly quoted intervals.

- Level 3 inputs — Unobservable inputs for     determining the fair values of assets or liabilities that reflect an     entity’s own assumptions about the assumptions that market participants     would use in pricing the assets or liabilities.

Investments in available-for-sale securities and investments insilver coins and bars are reported at fair value utilizing Level 1 inputs. Forthese investments, the Company obtains fair value from active markets. 

The Company’s Note Receivable (net of discount) is reported atfair value utilizing Level 2 inputs.  The discounting of this note receivableutilized interest rates.  See Note 8.

The following table presents information about the Company’sassets measured at fair value on a recurring basis as of September 30, 2010,and indicates the fair value hierarchy of the valuation techniques utilized bythe Company to determine such fair value.

|                                     |   |                                                                                         |   |   | Fair Value Measurements                                                  |   |
|------------------------------------------|--------|----------------------------------------------------------------------------------------------|--------|--------|--------------------------------------------------------------------------|--------|
|                                     |   |                                                                                         |   |   | At September 30, 2010, Using                                             |   |
|                                     |   |                                                                                         |   |   | Quoted Prices                                                            |   |   |   |   |   |   |   |
|                                     |   |                                                                                         |   |   | In Active                                                                |   |   | Other |   |   | Significant |   |
|                                     |   |                                                                                         |   |   | Markets for                                                              |   |   | Observable |   |   | Unobservable |   |
|                                     |   | Fair Value                                                                                   |   |   | Identical Assets                                                         |   |   | Inputs |   |   | Inputs |   |
| Description                              |   | Sept. 30, 2010                                                                               |   |   | (Level 1)                                                                |   |   | (Level 2) |   |   | (Level 3) |   |
| Investments                              | $      | 132,430                                                                                      |   | $      | 132,430                                                                  |   | $ | - |   | $ | - |   |
| Note Receivable (net of  discount)       |   | 1,537,944                                                                                    |   |   | -                                                                        |   |   | 1,537,944 |   |   | - |   |
| **Total Assets Measured at  Fair Value** | **$**  |  **             1,670,374** |   | **$**  |  **          132,430** |   | **$** |  **     1,537,944** |   | **$** |  **              -  ** |   |

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FiscalPeriods

Referencesto a fiscal year refer to the calendar year in which such fiscal year ends.

GoingConcern

Asshown in the accompanying financial statements, the Company has limited cashand limited revenues and incurred an accumulated deficit of $2,583,524 frominception through September 30, 2010.  These factors raise substantial doubtabout the Company’s ability to continue as a going concern.  Management intendsto seek additional capital from new equity securities offerings that willprovide funds needed to increase liquidity and fully implement its businessplan.  The financial statements do not include any adjustments relating to therecoverability and classification of recorded assets, or the amounts and classificationof liabilities that might be necessary in the event the Company cannot continuein existence.

Historically,the Company has generally funded its operations with proceeds from the sale ofmarketable securities, royalty and option agreement payments, and from the saleof the Company’s common stock.  Should the Company be unable to raise capitalthrough any of these avenues, its business, financial position, results ofoperations and cash flow will likely be materially adversely impacted.  As such,substantial doubt as to the Company’s ability to continue as a going concernremains as of the date of these financial statements.****

Thefinancial statements do not include any adjustments relating to therecoverability and classification of recorded assets, or the amounts andclassification of liabilities that might be necessary in the event the Companycannot continue in existence.  An estimated $1,000,000 is believed necessary tocontinue operations and increase development through the next twelve months.Currently, the Company anticipates raising the majority of the $1,000,000through the issuance of common stock to private investors.  The timing andamount of capital requirements will depend on a number of factors, includingdemand for products and services, capital expenditures and revenues generated. 

Investments

TheCompany accounts for marketable securities and investments in silver bars andcoins (excluding Shoshone logo coins held as inventory for resale) inaccordance with the provisions of ASCTopic 320.  Under ASC Topic 320, debtsecurities and equity securities that have readily determinable fair values areto be classified in three categories:

Heldto Maturity – the positive intent and ability to hold to maturity.  Amounts arereported at amortized cost, adjusted for amortization of premiums and accretionof discounts.

TradingSecurities – bought principally for purpose of selling them in the near term. Amounts are reported at fair value, with unrealized gains and losses includedin earnings.

Availablefor Sale – not classified in one of the above categories.  Amounts are reportedat fair value, with unrealized gains and losses excluded from earnings andreported separately as a component of stockholders’ equity. 

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At this time, the Company classifies both marketable securities and investments in silver barsand coins as available for sale.  SeeNote 9.

Investmentsecurities are reviewed for impairment in accordance with ASC 320-10Investments - Debt and Equity Securities. The Company periodically reviews ourinvestments for indications of other-than-temporary impairment considering manyfactors, including the extent and duration to which a security's fair value hasbeen less than its cost, overall economic and market conditions, and thefinancial condition and specific prospects for the issuer. Impairment ofinvestment securities results in a charge to income when a market decline belowcost is other-than-temporary.

MiningProperties, Land and Water Rights

Costsof acquiring and developing mining properties, land and water rights arecapitalized as appropriate by project area. Exploration and related costs andcosts to maintain mining properties, land and water rights are expensed asincurred while the property is in the exploration and evaluation stage.Development and related costs and costs to maintain mining properties, land andwater rights are capitalized as incurred while the property is in thedevelopment stage. When a property reaches the production stage, the relatedcapitalized costs are amortized using the units-of-production basis over provenand probable reserves. Mining properties, land and water rights areperiodically assessed for impairment of value, and any subsequent losses arecharged to operations at the time of impairment. If a property is abandoned orsold, a gain or loss is recognized and included in the consolidated statementof operations.  See Note 7. 

MineralExploration and Development Costs

All exploration expenditures are expensed as incurred. Significantproperty acquisition payments for active exploration properties arecapitalized. If no economic ore body is discovered, previously capitalizedcosts are expensed in the period the property is abandoned. Expenditures todevelop new mines, to define further mineralization in existing ore bodies, andto expand the capacity of operating mines, are capitalized and amortized on aunits-of-production basis over proven and probable reserves. 

Should a property be abandoned, its capitalized costs are chargedto operations. The Company charges to the consolidated statement of operationsthe allocable portion of capitalized costs attributable to properties sold.Capitalized costs are allocated to properties sold based on the proportion ofclaims sold to the claims remaining within the project area. See Note 7.

NotesReceivable

TheCompany’s policy for notes receivable is to continue accruing interest incomeuntil it becomes likely that the note is uncollectible.  At that time, anallowance for bad debt would be established and interest would stop accruing.

Principlesof Consolidation

TheCompany’s consolidated financial statements include the accounts of the Companyand its one wholly owned subsidiary, Lakeview Consolidated Silver Mines, Inc. The inter-company accounts and transactions are eliminated upon consolidation. 

Propertyand Equipment 

Propertyand equipment are stated at cost.  Depreciation of property and equipmentbegins on the date the asset is place in service and is calculated using thestraight-line method over the estimated useful lives of the assets, which rangefrom three to thirty-one and one half years.  See Note 6.

Provisionfor Taxes

Topic 740 in the Accounting Standards Codification(ASC 740) prescribes recognitionthreshold and measurement attribute for the financial statement recognition andmeasurement of a tax position taken or expected to be taken in a tax return. ASC 740 also provides guidance on de-recognition, classification,interest and penalties, accounting in interim periods, disclosure andtransition.  At September 30, 2010, the Company had taken no tax positions thatwould require disclosure under ASC 740.

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Pursuant to ASC 740, incometaxes are provided for based upon the liability method of accounting. Underthis approach, deferred income taxes are recorded to reflect the taxconsequences on future years of differences between the tax basis of assets andliabilities and their financial reporting amounts at each year-end.  Avaluation allowance is recorded against deferred tax assets if management doesnot believe the Company has met the “more likely than not” standard imposed byASC 740 to allow recognition of such an asset.

Thesignificant components of the deferred tax assets at September 30, 2010 andSeptember 30, 2009 were as follows:

|                                       |   | **September 30,** |   |  ** ** | **September 30,** |   |
|--------------------------------------------|--------|-------------------|--------|------------------|-------------------|--------|
|                                       |   |  **2010**    |   |  ** ** |  **2009**    |   |
| **Deferred Tax Assets**                    |   |              |   |             |              |   |
| Net operating loss  carry-forward          | $      | 858,087           |   | $                | 456,870           |   |
| Recognized impairment of  investments      |   | 16,252            |   |             | 34,503            |   |
|   Net deferred tax assets             |   | 874,339           |   |             | 491,373           |   |
|                                       |   |              |   |             |              |   |
| **Deferred Tax  Liabilities**              |   |              |   |             |              |   |
| Installment income                         |   | (605,323          | )      |             | (605,323          | )      |
| Depreciation                               |   | (19,919           | )      |             | (2,794            | )      |
|    Net deferred tax  liabilities |   | (625,242          | )      |             | (608,118          | )      |
|                                       |   |              |   |             |              |   |
| Net deferred tax assets  (liabilities)     | $      | 249,096           |   | $                | (116,745          | )      |
|                                       |   |              |   |             |              |   |
| Valuation allowance                        |   | (249,096          | )      |             | 116,745           |   |
| Net deferred tax assets  (liabilities)     | $      | -                 |   | $                | -                 |   |

Asmanagement of the Company cannot determine that it is more likely than not thatthe Company will realize the cost of the deferred tax liability, valuationallowances equal to both the deferred tax liability and deferred tax asset havebeen established at September 30, 2010.  At September 30, 2010 and September30, 2009, the Company had net operating loss carry-forwards of****approximately$2,525,000 and $1,344,000, respectively, which expire in the years 2024 through2030.  

AtSeptember 30, 2010, the Company had a total deferred tax liability of$625,242.  Of this amount $605,323 represents the total estimated taxes payableon the income from the note receivable on the sale of Bilbao concessions thatis recognized under the full accrual method for financial statement purposesand the installment sale method for income tax purposes.  See Note 8.

AtSeptember 30, 2010, the Company has a total deferred tax asset of $874,339.  Ofthis amount $16,252 represents impairment charge on available-for-salesecurities recognized for financial reporting purposes in according with ASC820.  For income tax purposes, gain or loss recognized upon the disposition ofthe security will be recognized in the year of disposition.  The remaining $858,087relates to the Company’s net operating loss carry-forward of $2,525,000.

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RecentlyAdopted Accounting Pronouncements

In January 2010, the FASB issued Accounting Standards Update No.2010-01 which clarifies that the stock portion of a distribution toshareholders that allows them to elect to receive cash or stock with apotential limitation on the total amount of cash that all shareholders canelect to receive in the aggregate is considered a share issuance that isreflected in earnings per share prospectively and is not a stock dividend forpurposes of applying ASC Topics 505 and 260 (Equity and Earnings Per Share). The amendments in Update 2010-01 are effective for interim and annual periodending on or after December 15, 2009, and should be applied on a prospectivebasis.  The Company adopted the amendments in Update No. 2010-01 without a material effect on itsresults of operations and financial position.

In January 2010, the FASB issued Accounting Standards Update No.2010-06 which provides amendments to ASC Topic 820 that will provide morerobust disclosures about (1) the different classes of assets and liabilitiesmeasured at fair value, (2) the valuation techniques and inputs used, (3) theactivity in Level 3 fair value measurements, and (4) the transfers betweenLevels 1, 2, and 3.  The new disclosures and clarifications of existingdisclosures are effective of interim and annual reporting periods beginningafter December 15, 2009, except for the disclosures about purchases, sales,issuances and settlements in the roll forward of activity in Level 3 fair valuemeasurements.  Those disclosures are effective for fiscal years beginning after December 15, 2010, and for interim periods within those years. The Companydoes not expect that the adoption of Update No. 2010-06 will have a materialeffect on its results of operations and financial position.

In February 2010, the FASB issued Accounting Standards Update No.2010-09 which amended guidance on subsequent events. Under this amendedguidance, SEC filers are no longer required to disclose the date through whichsubsequent events have been evaluated in originally issued and revisedfinancial statements. This guidance was effective immediately and the Companyadopted the amendments in Update No. 2010-09 without a material effect on itsresults of operations and financial position.

Reclamation and Remediation

Expenditures for ongoing compliance with environmental regulationsthat relate to current operations are expensed or capitalized as appropriate.Expenditures resulting from the remediation of existing conditions caused bypast operations that do not contribute to future revenue generations areexpensed. Liabilities are recognized when environmental assessments indicatethat remediation efforts are probable and the costs can be reasonablyestimated.

Estimates of such liabilities are based upon currently availablefacts, existing technology and presently enacted laws and regulations takinginto consideration the likely effects of inflation and other societal andeconomic factors, and include estimates of associated legal costs. Theseamounts also reflect prior experience in remediating contaminated sites, othercompanies’ clean-up experience and data released by The EnvironmentalProtection Agency or other organizations. Such estimates are by their natureimprecise and can be expected to be revised over time because of changes ingovernment regulations, operations, technology and inflation.  Recoveries areevaluated separately from the liability and, when recovery is assured, theCompany records and reports an asset separately from the associated liability.

Reclassifications

Certainpreviously reported amounts have been reclassified to conform to the currentpresentation.  In particular, expenses totaling approximately $570,000 thatwere previously classified as general and administrative expenses on the ConsolidatedStatement of Operations in fiscal 2009 have been reclassified as mining andexploration expenses.  This reclassification was done to align the Company’sexternal reporting with its internal reporting. 

RevenueRecognition 

The Company generateslimited income from the sale of silver concentrate produced at its Lakeviewmill facility from previously stockpiled ore. During the fiscal 2010, theCompany generated $20,111 from the sale of its ore concentrate.  The Companyrecognizes income from the sale of silver concentrate when the concentrate isprocessed.

To a lesser extent, theCompany generates income from timber sales, sales of “Company logo” silvermedallions and the processing of ore for other companies.  The Companyrecognizes income from timber sales at the time payment for the timber isreceived.  The Company recognizes income from the sales of “Company logo”silver medallions when the coins are shipped to the customer.  The Companyrecognizes income from the processing of ore for other companies when the orehas been processed.  The net income from these sources are included under thecaption “Other Income (Expense)” on the Company’s Consolidated Statements ofOperations and Comprehensive Income (Loss).

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TreasuryStock

TheCompany accounts for its treasury stock under the cost method.  Under the costmethod, the gross cost of the shares reacquired is charged to a contra equityaccount (i.e., treasury stock).  The equity accounts that were credited for theoriginal share issuance (i.e., common stock, additional paid-in capital, etc.)remain intact.  When the treasury shares are reissued, proceeds in excess ofcost are credited to a paid-in capital account.   See Note 12.

Useof Estimates

Thepreparation of financial statements in accordance with accounting principlesgenerally accepted in the United States of America requires the use ofestimates and assumptions that affect the reported amounts of assets andliabilities, disclosure of contingent assets and liabilities known to exist as ofthe date the financial statements are published, and the reported amounts ofrevenues and expenses during the reporting period.  Uncertainties withrespect to such estimates and assumptions are inherent in the preparation ofthe Company’s financial statements; accordingly, it is possible that the actualresults could differ from these estimates and assumptions, which could have amaterial effect on the reported amounts of Shoshone’s financial position andresults of operations.

**NOTE 3:  ACCOUNTS RECEIVABLE FROM RELATED PARTY**

OnNovember 4, 2008, the Company purchased silver coins and bars as well asvarious dies for making coins from a related party.  The cost to the Company ofthe silver and the dies was $56,452.  However, the Company paid $110,000 and hasrecorded a receivable from the related party of $53,548.  The Company’sChairman is also a member of the board of directors of this related party.  On March 3, 2009, this related party filed a voluntary petition for reorganization reliefunder Chapter 11 of the United States Bankruptcy Code in the United StatesBankruptcy Court for the District of Idaho.  During 2009, based on this filing,the Company created an allowance for this receivable in the amount of $53,548. 

InSeptember 2010, the Company received a payment of $47,008 on this receivable.  

**NOTE 4:  DEPOSITS AND PREPAID EXPENSES**

In December 2009, the Company purchased for $21,694 aone-year liability insurance policy covering its Lakeview mill (the “Policy”). The Policy was purchased with a cash payment of $5,761 with the balance of$15,933 settled with a promissory note.  The Company recorded prepaid insuranceof $21,694 and a related entry to record a $15,933 note payable. During thetwelve-month period ended September 30, 2010, $18,080 of this prepaid insurancewas amortized into General & Administrative Expenses.  See Note 10.

**NOTE 5:  SUPPLIES INVENTORY**

During 2004, the Company purchased 500 one troy ouncesilver medallions with the Company’s logo for $5,303.  This purchase wasrecorded as supplies inventory and the medallions are expected to be usedsubstantially for marketing purposes.  At September 30, 2010, the Company had185 coins remaining in inventory with an historical cost basis of $1,957.

**NOTE 6:  PROPERTY AND EQUIPMENT**

Propertyand equipment are stated at cost.  Depreciation begins on the date an asset isplaced in service using the straight-line method over the asset’s estimateduseful life.

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Theuseful lives of property, plant and equipment for purposes of computing depreciationare three to thirty-one and one-half years. The following is a summary ofproperty, equipment, and accumulated depreciation at September 30, 2010 andSeptember 30, 2009:

|                                  |             | **September 30,** |
|---------------------------------------|------------------|-------------------|
|                                  |             |              |  **2010** |   |   |  **2009** |   |
| **Administrative:**                   |  ** ** |              |  ** ** |  ** ** |   |  ** ** |   |
|    Building                 |             | $                 | 167,129 |   | $ | 150,000 |   |
|    Equipment                |             |              | 652,156 |   |   | 652,056 |   |
|    Furniture                |             |              | 12,000 |   |   | 12,000 |   |
|                                  |             |              | 831,285 |   |   | 814,056 |   |
| **Lakeview:**                         |  ** ** |              |  ** ** |  ** ** |   |  ** ** |   |
|    Building                 |             |              | 56,255 |   |   | 56,255 |   |
|    Equipment                |             |              | 393,687 |   |   | 388,311 |   |
|    Furniture                |             |              | 1,539,282 |   |   | 1,539,282 |   |
|                                  |             |              | 1,989,224 |   |   | 1,983,848 |   |
| **Warren****:**                       |  ** ** |              |  ** ** |  ** ** |   |  ** ** |   |
|    Building                 |             |              | 378,934 |   |   | 328,366 |   |
|    Equipment                |             |              | 260,000 |   |   | 260,000 |   |
|                                  |             |              | 638,934 |   |   | 588,366 |   |
| Total                                 |             |              | 3,459,443 |   |   | 3,386,270 |   |
| Less:  Accumulated  Depreciation |             |              | (1,553,772 | ) |   | (1,374,968 | ) |
| Property, Plant &  Equipment, net |             | $                 | 1,905,671 |   | $ | 2,011,302 |   |

Depreciation expense was$178,804 for fiscal 2010, and $130,743 for fiscal 2009.  

Equipmentwith a combined carrying amount of $16,778 serves as collateral for notespayable.  See Note 10.

During fiscal 2010, theCompany sold for $5,000 equipment that had been fully depreciated.  The $5,000is presented under the caption “Gain from the sale of fixed assets” on theCompany’s Consolidated Statements of Operations.

The Company evaluates therecoverability of property and equipment when events and circumstances indicatethat such assets might be impaired.  The Company determines impairment bycomparing the undiscounted future cash flows estimated to be generated by theseassets to their respective carrying amounts.  

Maintenance and repairs areexpensed as incurred.  Replacements and betterments are capitalized.  The costand related reserves of assets sold or retired are removed from the accounts,and any resulting gain or loss is reflected in results of operations.

**NOTE7:  MINERAL AND MINING PROPERTIES**

TheCompany currently has interests in 317 properties or claims, which are theprimary focus of operations.****

**Northwestern United States**

49

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*Silver Valley**, Idaho*

**ShoshoneGroup**

Thismineral property grouping owned by the Company consists of 5 patented lodemining claims covering 96 acres situated in the St. Joe Mining District, Shoshone County, Idaho. The 5 patented claims were acquired in 1970 from an outside partyfor $2,500 in cash and 100,000 shares of common stock.   The cost of theproperty, $17,500, was expensed in prior years as an exploration expense.

**BullionGroup**

Thismineral property group acquired by the Company in 1998 consists of 7 patentedmining claims covering 138 acres.  The cost of the property was included as anexploration expense in a prior year.

**North Osburn**

The Company owned a group of 15 unpatentedproperties known as the North Osburn Group located within the Silver Valley in Shoshone County, Idaho.  During fiscal 2010, the Company received $175,000 related to the sale of these claims to anunrelated party.  Since the Company had previously expensed the approximately$10,000 cost to acquire and maintain this property, the entire proceeds of$175,000 were accounted for as gain and presented under the caption “Net gainon the sale of lode claim” on the Company’s Consolidated Statements ofOperations.

**Camp****Project**

The Company has leased 35 patented lode claims totaling630 acres in the Coeur d’Alene Mining District.  These claims were leased fromMerger Mines Corporation for 15 years on December 14, 2009 for consideration ofShoshone common stock, a net smelter return, and annual advance royaltypayments. 

*Lakeview District**, Idaho*

**IdahoLakeview, Keep Cool Group and Weber Group**

TheCompany acquired the Lakeview and Keep Cool mining properties consisting of 9patented and 14 unpatented lode claims through the issuance of 3,126,700 sharesof its common stock during 1985.  The total cost of the properties, $334,690,is included in the financial statements under mining properties.

During2006, the Company made improvements to the land to be more accessible as wellas usable.  The total cost of the $68,472 was capitalized.  This amount is acomponent of the total cost of the properties of $334,690 discussed above.

In1999, the Company acquired, for 100,000 shares of its common stock, 6 patentedand 10 unpatented lode mining claims located in the Lakeview Mining District, Bonner County, Idaho.  In addition, $125 cash was paid and 100 shares of common stock wereissued to acquire a pit fraction within the same location.  The cost of theproperty, $125,000, was expensed in prior years as an exploration expense.  

**AuxerMine**

TheAuxer Mine, consisting of 2 unpatented claims covering 40 acres, was acquiredby the Company in 2003 for 50,000 shares of common stock.  The cost of theproperty, $7,500, is included in the financial statements under miningproperties until such time as the Company’s outside study on the property’sreserves, if any, is completed.

**TalacheGroup**The Company acquired, for150,000 shares of its common stock, 2 unpatented lode mining claim covering 40acres during 2003.  The cost of the former mining property, $22,500, isincluded in the financial statements under Mining Properties until such time asthe Company’s outside study on the related property’s reserves, if any, iscompleted.

**RegalMine**

TheCompany acquired, for 100,000 shares of its common stock, four contiguousunpatented lode mining claims covering 80 acres located in the Moyie-Yaak MiningDistrict of Boundary County, Idaho during 2003.  The cost of the former miningproperty, $15,000, is included in the financial statements under MiningProperties until such time as the Company’s outside study on the relatedproperty’s reserves, if any, is completed.

50

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**Conjecture**

During2004, the Company entered into a 25-year lease agreement for 13 unpatented lodemining claims and six patented lode mining claims in Bonner County.  Yearly lease payments on the property were 100,000 shares of common stock.  

InApril 2010, the Company cancelled the lease agreement and, under the terms ofthe agreement, paid to the lessor 50,000 shares of its common stock (valued at$9,000) and a royalty fee $259. 

*Warren**District, Idaho*

**Rescue Gold Mine**

The Company holds 82unpatented mining claims and 2 unpatented mill-site claims covering 1,720 acresin central Idaho.  There is a 120 ton per day mill complete with a Knelson GoldConcentrator on the mill-site claims.  

**Iola Claims**

The Company leases 5 patented  mining claims in central Idaho covering 70 acres.

**Silver King Claims**

The Company leases 12patented mining claims in central Idaho covering 174 acres. 

*Marshall Mountain  District**, Idaho*

**Kimberly Gold Mine**

The Company holds 24unpatented mining claims covering 480 acres in central Idaho.  The mineconsists of 10 separate tunnels which explore 8,798 feet of previouslyproducing workings. 

*Other North Idaho and Montana*

**MontgomeryMine Group**

Duringthe fiscal year ended December 31, 2005, the Company acquired, for $43,557 incash, 25 unpatented lode mining claims covering 500 acres located in Boundary County, Idaho.  The cost of the properties was expensed in prior years as anexploration expense.

**Stillwater****Extension Claims**

TheCompany acquired, for 100,000 shares of its common stock, ten unpatented lodemining claims covering 200 acres located along the J-M Reef of the StillwaterComplex of south central Montana during 2003.  The cost of the properties,$15,000, has been expensed in prior years as an exploration expense.

**Princeton****Gulch Claims**

During2006, the Company made a partial payment of $13,000 toward the purchase of fourunpatented placer claims and two unpatented lode claims.  These claims inaggregate cover 120 acres and are located in Granite County, Montana.  Thepayment of $13,000 was included in exploration expenses during 2006.

**DrumhellerGroup**

TheCompany owned six patented claims consisting of 111 acres which are adjoiningand lying south of the Idaho Lakeview claims on an extension of the Hewervein.  The Company issued 109,141 shares of its common stock to acquire theseclaims in February 1984. 

*Wenatchee District**, Washington*

**ShaftClaims**

TheCompany holds 19 unpatented mining claims covering 380 acres in central Washington.   The claims are located within the heart of the Wenatchee Gold Belt.  

51

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**Southwestern United States**

**WesternGold**

TheCompany acquired, for 100,000 shares of stock, 13 unpatented lode mining claimscovering 240 acres located in the Oatman Mining District of Mojave County, Arizona during 2003.  The cost of the properties, $15,000, has been expensed in prior yearsas an exploration expense.

**GoldRoad Claims**

TheCompany acquired, for 10,000 shares of stock, 16 unpatented lode mining claimscovering 320 acres located in Mohave County, Arizona during 2003.  The cost ofthe properties, $1,500, has been expensed in prior years as an explorationexpense.

**CerroColorado Group**

During2004, the Company acquired three unpatented lode claims covering 60 acreslocated in the Cerro Colorado Mining District of Pima County, Arizona.  Thecost of the properties, $1,500, has been expensed in prior years as anexploration expense.

**Mexico****Properties**

**Sonora****Mexico****Mining Properties**

Shoshonehas an interest in several other Mexican exploration projects which the Companydoes not currently consider to be material.

**NOTE8: ****NOTES RECEIVABLE**

*Mexican Concessions*

OnAugust 11, 2008, the Company sold 100% of the common stock of its wholly ownedsubsidiary in Mexico, Shoshone Mexico, S.A. de C.V, to Xtierra Resources, Ltd(“Xtierra”).  The Company’s interest in the Bilbao concessions in Zacatecas, Mexico was included in this sale.   In exchange for its interest in the Bilbao concessions the Company received net proceeds of $2,497,990 and a non-interestbearing note receivable for $2,500,000.  

Thenote does not bear interest and a discounted payment of $450,000 was made inJuly 2009.   The remaining balance of $2,000,000 is to be paid in fourconsecutive equal annual installments to begin at the time of the commencementof construction of any mine developed on the Bilbao concessions but in anyevent will be due and payable no later than August 11, 2019.  

Sincethe note does not bear interest, the Company imputed interest at a rate of 5%. Accordingly the Company recorded a note discount of $634,637.  During fiscal2010 and 2009, $73,235 and $91,573, respectively, of interest income wasrealized through the amortization of this note discount.  

The balance on this note receivable (net of discount)was $1,537,944 at September 30, 2010.

**NOTE9:  INVESTMENTS**

The Company has invested in marketable securities and insilver coins and bars and accounts for these as available-for-sale.  Amountsare reported at fair value as determined by quoted market prices, withunrealized gains and losses excluded from earnings and reported separately as acomponent of stockholders’ equity. The cost of securities sold is based on thespecific identification method.

Unrealized gains and losses are recorded on the statementsof operations as other comprehensive income (loss) and on the balance sheet asother accumulated comprehensive income.

The following summarizes theinvestments at September 30, 2010**:**

52

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|                               |             |                                                                               |             |             |                                            |             |             |                                            |   |
|------------------------------------|------------------|------------------------------------------------------------------------------------|------------------|------------------|-------------------------------------------------|------------------|------------------|-------------------------------------------------|--------|
|                               |             |                                                                               |             |             |                                            |             |             | Market                                          |   |
| Investment                         |             | Quantity                                                                           |             |             | Cost                                            |             |             | Value                                           |   |
|                               |             |                                                                               |             |             |                                            |             |             |                                            |   |
| **Available for Sale Securities:** |             |                                                                               |             |             |                                            |             |             |                                            |   |
| Bayswater Uranium  Corporation     |             | 20,000                                                                             |             | $                | 12,200                                          |             | $                | 12,200                                          |   |
| Chester Mining Company             |             | 2,500                                                                              |             |             | 1,125                                           |             |             | 1,850                                           |   |
| Gold Crest Mines                   |             | 567,600                                                                            |             |             | 975                                             |             |             | 9,649                                           |   |
| Lucky Friday Extension             |             | 5,000                                                                              |             |             | 250                                             |             |             | 250                                             |   |
| Merger Mines                       |             | 729,299                                                                            |             |             | 103,885                                         |             |             | 36,465                                          |   |
| Metropolitan Mines Limited         |             | 6,000                                                                              |             |             | 360                                             |             |             | 720                                             |   |
| New Jersey Mining                  |             | 142,875                                                                            |             |             | 34,290                                          |             |             | 32,861                                          |   |
| Vindicator Mines                   |             | 88,000                                                                             |             |             | 17,600                                          |             |             | 10,560                                          |   |
| **    Subtotal**    |  ** ** |  **    1,561,274**                                             |  ** ** |  ** ** |  **   170,685**                  |  ** ** |  ** ** |  **    104,555**            |   |
|                               |             |                                                                               |             |             |                                            |             |             |                                            |   |
| **Silver Coins & Bars**        |  ** ** |  **            1,267** |  ** ** |  ** ** |  **      12,936** |  ** ** |  ** ** |  **      27,874** |   |
|                               |             |                                                                               |             |             |                                            |             |             |                                            |   |
| **Total at September 30,  2010**   |  ** ** |  **    1,562,541**                                             |  ** ** | **$ **      |  **   183,621**                  |  ** ** | **$**            |  **    132,429**            |   |

TheCompany had an unrealized holding loss during the fiscal year ended September30, 2010 of $87,640.  This is recorded on the statements of operations as othercomprehensive income (loss) and included on the balance sheet in otheraccumulated comprehensive income.

TheCompany recognized $1,036 of net gain previously included in accumulated othercomprehensive income on the sale of investments during the fiscal year endedSeptember 30, 2010.

AtSeptember 30, 2010, the Company determined that certain of itsavailable-for-sale securities had experienced an impairment that wasother-than-temporary.  Key factors used in determining whether or not theimpairment was other-than-temporary included the length of time and the extentto which the market value of the securities had been below their cost.  Inconnection with this determination, the Company recognized an impairment chargeof $47,800.  This impairment charge is presented under the caption“Other-than-temporary impairment of investments” on the Company’s ConsolidatedStatements of Operations.  

Thefollowing table presents certain details related to investments for which theCompany determined the impairment was other-than-temporary:

|                               |             |   |             |             |   |   | **Market**     |   |   |           |   |
|------------------------------------|------------------|--------|------------------|------------------|--------|--------|----------------|--------|--------|----------------|--------|
|                               | **# of**         |   |             |  ** ** |   |   | **Value**      |   |   | **Recognized** |   |
| **Investment**                     | **Shares**       |   |  ** ** | **Cost**         |   |   | **at 9/30/10** |   |   | **Impairment** |   |
| Bayswater      Uranium Corporation | 200,000          |   | $                | 60,000           |   | $      | 12,200         |   | $      | (47,800        | )      |
| **   Total**             |  ** ** |   | **$**            | **60,000**       |   | **$**  | **12,200**     |   | **$**  | **(47,800**    | **)**  |

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AtSeptember 30, 2010, the Company made the determination that certain of itsavailable-for-sale securities had experienced an impairment that wastemporary.  This determination was made for certain investments because thedecline in value had persisted for less than twelve months and was notextensive.  Key factors used in determining whether or not the impairment was other-than-temporaryincluded the length of time and the extent to which the market value of thesecurities had been below their cost.  

Thefollowing table presents certain details related to investments for which theCompany determined the impairment was temporary:

|                   |             |       |   |             |                                                          |   |              | **Market**                                                                           |   |              |                                                                      |   |
|------------------------|------------------|------------|--------|------------------|---------------------------------------------------------------|--------|-------------------|--------------------------------------------------------------------------------------|--------|-------------------|---------------------------------------------------------------------------|--------|
|                   |             | **# of**   |   |             |  ** **                                              |   |              | **Value**                                                                            |   |              | **Unrecognized**                                                          |   |
| **Investment**         |  ** ** | **Shares** |   |  ** ** | **Cost**                                                      |   |              | **at 9/30/10**                                                                       |   |              | **Impairment**                                                            |   |
| Merger Mines           |             | 729,299    |   |             | 103,885                                                       |   |              | 36,465                                                                               |   |              | (67,420                                                                   | )      |
| New Jersey Mining      |             | 142,875    |   |             | 34,290                                                        |   |              | 32,861                                                                               |   |              | (1,429                                                                    | )      |
| Vindicator  Mines      |             | 88,000     |   |             | 17,600                                                        |   |              | 10,560                                                                               |   |              | (7,040                                                                    | )      |
| **   Total** |             |       |   | **$**            |  **         155,775** |   |  **$ ** |  **             79,886** |   |  **$ ** |  **           (75,889** | **)**  |

Thefollowing summarizes the investments at September 30, 2009**:**

|                               |             |                                                                               |             |             |                                            |             |             |                                            |   |
|------------------------------------|------------------|------------------------------------------------------------------------------------|------------------|------------------|-------------------------------------------------|------------------|------------------|-------------------------------------------------|--------|
|                               |             |                                                                               |             |             |                                            |             |             | Market                                          |   |
| Investment                         |             | Quantity                                                                           |             |             | Cost                                            |             |             | Value                                           |   |
|                               |             |                                                                               |             |             |                                            |             |             |                                            |   |
| **Available for Sale Securities:** |             |                                                                               |             |             |                                            |             |             |                                            |   |
| Bayswater Uranium  Corporation     |             | 200,000                                                                            |             | $                | 60,000                                          |             | $                | 22,000                                          |   |
| Chester Mining Company             |             | 2,500                                                                              |             |             | 1,125                                           |             |             | 1,125                                           |   |
| Gold Crest Mines                   |             | 617,600                                                                            |             |             | 975                                             |             |             | 9,264                                           |   |
| Lucky Friday Extension             |             | 5,000                                                                              |             |             | 250                                             |             |             | 250                                             |   |
| Merger Mines                       |             | 929,299                                                                            |             |             | 131,885                                         |             |             | 130,102                                         |   |
| Metropolitan Mines Limited         |             | 6,000                                                                              |             |             | 360                                             |             |             | 360                                             |   |
| New Jersey Mining                  |             | 142,875                                                                            |             |             | 34,290                                          |             |             | 35,719                                          |   |
| Vindicator Mines                   |             | 88,000                                                                             |             |             | 17,600                                          |             |             | 16,720                                          |   |
| **    Subtotal**    |  ** ** |  **    1,991,274**                                             |  ** ** |  ** ** |  **   246,485**                  |  ** ** |  ** ** |  **    215,540**            |   |
|                               |             |                                                                               |             |             |                                            |             |             |                                            |   |
| **Silver Coins & Bars**        |  ** ** |  **            3,115** |  ** ** |  ** ** |  **      31,804** |  ** ** |  ** ** |  **      51,398** |   |
|                               |             |                                                                               |             |             |                                            |             |             |                                            |   |
| **Total at September 30,  2009**   |  ** ** |  **    1,994,389**                                             |  ** ** | **$**            |  **   278,289**                  |  ** ** | **$**            |  **    266,938**            |   |

TheCompany had an unrealized holding gain during the fiscal year ended September30, 2009 of $5,557.  This is recorded on the statements of operations as othercomprehensive income (loss) and included on the balance sheet in otheraccumulated comprehensive income.

TheCompany recognized $2,225 of net gain previously included in accumulated othercomprehensive income on the sale of investments during the fiscal year ended September 30, 2009.

54

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**NOTE10:  NOTES PAYABLE**

InDecember 2007, the Company purchased equipment for $15,377 in exchange for anote.  The note has a term of 43 months, bears interest at 3.90% annually andstipulates that payments of $384 be made monthly.  The lender has the right toincrease the interest rate to 19.8% in the event of a violation of the terms ofthe loan agreement. The outstanding balance on this note payable was $3,768 atSeptember 30, 2010 all of which is payable within twelve months. The purchasedequipment which serves as collateral for this note payable had a carryingamount of $9,216 at September 30, 2010.

InAugust 2009, the Company purchased equipment for $9,000 by paying $2,000 incash and signing a note for the remaining $7,000.  The note has a term offourteen months, bears interest at 4.00% annually and stipulates that paymentsof $513 are to be made monthly.  The outstanding balance on this note payablewas $511 at September 30, 2010, all of which is payable within twelve months.  Thepurchased equipment which serves as collateral for this note payable had acarrying amount of $7,563 at September 30, 2010.

InDecember 2009, the Company purchased for $21,694 a one-year liability insurancepolicy covering its Lakeview mill (the “Policy”).  The Policy was purchasedwith a cash payment of $5,761 with the balance of $15,933 settled with apromissory note.  The Company recorded prepaid insurance of $21,694 and arelated entry to record a $15,933 note payable.  The note had a term of ninemonths, bore interest at 11.25% annually and stipulated that payments of $1,855be made monthly.   The outstanding balance on this note payable was $0 atSeptember 30, 2010.  See Note 4.

**NOTE11:  COMMON STOCK**

The Company is authorizedto issue 200,000,000 shares of $0.10 par value common stock.  All shares haveequal voting rights, are non-assessable and have one vote per share.  Votingrights are not cumulative and, therefore, the holders of more than 50% of thecommon stock could, if they choose to do so, elect all of the directors of theCompany.

*Fiscal 2010 Issuances*

Duringfiscal 2010, the Company issued 5,000 shares of common stock in exchange forservices valued at $900.  

During fiscal 2010,the Company issued 1,250,000 shares of common stock to four of its directors inexchange for services valued at $200,000.

During fiscal 2010,the Company issued 50,000 shares of common stock for the leasing of a miningproperty valued at $9,000.

During fiscal 2010, the Company issued 7,051,550shares of common stock to eighteen investors for a total of $705,155 in cash. For every share purchased, each investorreceived one warrant to purchase one share of common stock.  The warrants areexercisable at $0.20 per share and 3,540,000 expire on August 6, 2011, and3,511,550 expire on March 20, 2012.

*Fiscal 2009 Issuances*

Duringfiscal 2009, the Company issued 90,000 shares of common in exchange for theservices of its Board of Directors valued at $9,500. 

Duringfiscal 2009, the Company acquired certainassets from Kimberly Gold Mines, Inc. (“Kimberly”) in a transaction where theCompany issued 12,145,306 shares of common stock and other consideration inexchange for 100% of Kimberly’s common stock.  This transaction was valued at$2,185,126.  See Note 15.  

Duringfiscal 2009, the Company issued 4,000 sharesin exchange for consulting services valued at $400.

55

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**NOTE12:  TREASURY STOCK**

TheCompany held 818,986 and 963,986 shares of treasury stock at September 30, 2010and September 30, 2009, respectively.

*Fiscal 2010 Activity*

Duringfiscal 2010, the Company issued 145,000 treasury shares in exchange forconsulting services valued at $26,100.  The treasury shares had a cost of $0.32per share

*Fiscal 2009 Activity*

During fiscal 2009, the Company acquired equipment valued at $12,500 inexchange for $5,000 in cash and 50,000 shares of treasury stock valued at$7,500, or $0.15 per share, with a cost of $5,500, or $0.11 per share. Thedifference between the cost and the value of the treasury shares was recordedas an increase to Additional Paid-In Capital.  

Duringfiscal 2009, the Company repurchased for treasury 100,000 common shares at a priceof $20,000, or $0.20 per share.  These common shares were repurchased inconnection with a settlement agreement with its former Chief Executive Officer,Conrad Houser.  

During fiscal 2009, the Company issued 70,000 treasury shares inexchange for consulting services.  The treasury shares were valued at $7,000,or $0.10 per share, with a cost of $7,700, or $0.11 per share. The differencebetween the cost and the value of the treasury shares was recorded as areduction to Additional Paid-In Capital.  

During fiscal 2009, the Company issued 200,000 treasury shares with avalue of $22,000, or $0.11 per share, with a cost of $64,000, or $0.32 pershare, in connection with its acquisition of 100% of Kimberly’s common stock.  The difference between the cost andthe value of the treasury shares was recorded as a reduction to AdditionalPaid-In Capital.  

**NOTE13:   STOCK OPTIONS AND WARRANTS**

Duringfiscal 2007, the Company issued 725,000 non-detachable warrants to purchase anequal number of the Company’s common stock in connection with the issuance of1,450,000 shares in private placements.  Thewarrants are exercisable at $0.50 per share and expired on December 31, 2009. 

Duringfiscal 2008, the Company issued 775,000 non-detachable warrants to purchase anequal number of the Company’s common stock in connection with the issuance of1,550,000 shares in private placements.  Thewarrants are exercisable at $0.40 per share.  525,000 of these warrants expiredon January 26, 2009, and 250,000 expired on June 9, 2009. 

Duringfiscal 2010, the Company issued 7,051,550 non-detachable warrants to purchasean equal number of the Company’s common stock in connection with the sale of7,051,550 shares in private placements.  Thewarrants are exercisable at $0.20 per share and 3,540,000 expire on August 6,2011, and 3,511,550 expire on March 20, 2012. 

**NOTE14: SALE OF LODE CLAIM**

Duringfiscal 2010, the Company received $175,000 related to the sale to an unrelatedparty of its North Osburn claims in the Silver Valley.  Since the Company hadpreviously expensed the approximately $10,000 cost to acquire and maintain thisproperty, the entire proceeds of $175,000 were accounted for as gain andpresented under the caption “Net gain on the sale of lode claim” on theCompany’s Consolidated Statements of Operations.

56

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**NOTE15:  KIMBERLY GOLD MINES, INC. AND CANCELLATION OF DEBT INCOME**

On March 12, 2009, the Company acquired certain assets from Kimberly Gold Mines,Inc. (“Kimberly”) in a transaction where the Company issued 12,145,306 sharesof common stock and other consideration in exchange for 100% of Kimberly’scommon stock valued at $2,185,126. Included in this acquisition were 127 unpatentedmining claims located primarily in Idaho and Washington as well as a mill inneed of refurbishing and various pieces of equipment.  

Thevalue of $2,185,126 consisted of the Company’s common stock valued at$1,821,796, a note receivable from Kimberly valued at $222,408, Kimberly’scommon stock previously held for investment by the Company valued at $38,035,certain accounts payable assumed by the Company valued at $72,887, the issuanceof 200,000 shares of treasury stock valued at $22,000 and a cash payment of$8,000 made to a former vendor of Kimberly.

Duringfiscal 2010, the Company determined that the balance of $69,418 remaining inthe accounts payable assumed by the Company with this acquisition were notgoing to be settled.  Accordingly, the Company made an entry to remove theaccounts payable and to record cancellation of debt income of $69,418.

**NOTE16:  COMMITMENTS & CONTINGENCIES**

*Environmental Issues*

TheCompany is engaged in mineral mining and may become subject to certainliabilities as they relate to environmental cleanup of mining sites or otherenvironmental restoration. 

Althoughthe minerals exploration and mining industries are inherently speculative andsubject to complex environmental regulations, the Company is unaware, with theexception detailed below under the caption “*Civil Action Filed*”, of anypending litigation or of any specific past or prospective matters which couldimpair the value of its mining claims.

*Chester Mining Company Lease Cancellation*

During2004, the Company entered into a 25-year lease agreement for a mining propertyin Bonner County.  Yearly lease payments on the property were 100,000 shares ofcommon stock.  On August 27, 2008, the Company amended this lease agreement(the “Amended Lease”).  The Amended Lease included a provision that changed thenumber of shares to be payable each year to 50,000 from 100,000.  

InApril 2010, the Company cancelled the lease agreement and, under the terms ofthe agreement, paid to the lessor 50,000 shares of its common stock (valued at$9,000) and a royalty fee $259. 

*Bullion Group Claims Lease*

On January 24, 2004, the Company leased two unpatentedmining claims located in Shoshone County, Idaho, to Sterling Mining Company. The lease stipulates a four year exploration program commencing within fiveyears of the lease date.  The lease further stipulates that Shoshone wouldreceive a production royalty equal to 10% of the net proceeds from theproduction of minerals from the property. This lease agreement may be found inExhibit No. 10.4 which was filed as an exhibit to the Company’s Annual Report on Form 10-KSBfiled with the Commission on December 4, 2006.  

*Iola Group Claims Lease*

On September 22, 2008, Kimberly Gold Mines, Inc.(Kimberly), which the Company acquired on March 12, 2009, entered into a lease agreement with Iola Corporation whereby the Company leases certain miningclaims known as the Iola Claim Group located in the Warren Mining District,Idaho.  The lease stipulates that the Company pay annual rent of $10,000 andpay a net smelter royalty of 4%-8% depending upon the price of gold.  Further,the lease grants the Company an option to purchase the claims for $750,000 atany time.  This lease agreement is filed as Exhibit No. 10.8.

*Silver King LTD Lease*

On July 19, 2007, Kimberly Gold Mines, Inc. (Kimberly),which the Company acquired on March 12, 2009, entered into a lease agreementwith Silver King LTD whereby the Company leases certain patented mining claimstotaling 174 patented acres located in the Warren Mining District, Idaho.  Thelease stipulates that the Company pay annual rent of $10,000 for two years andpay a net smelter royalty of 5%.  Further the lease grants the Company anoption to purchase the 174 patented claims for $1,000,000. This lease agreementis filed as Exhibit No. 10.9.

57

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*Civil Action Filed*

OnNovember 17, 2008, the United States Environmental Protection Agency (EPA)filed a civil action against the Company in the United States District Courtfor the District of Idaho.  The civil action seeks recovery of funds paid bythe EPA in response to alleged releases of hazardous substances at theCompany’s Idaho Lakeview mine and mill site in Bonner County, Idaho.  TheCompany and the EPA have reached an agreement whereby the Company must pay$50,000 and we are prohibited from conducting activities on the minimal amountof ground that would disturb the cleanup work in place at the propertiessubject to the civil action.  On August 4, 2010, the Company paid thisliability in full.

*Certain Annual Fees*

TheCompany incurs certain annual fees, which may vary, associated with maintainingits various claims and properties as follows:

|                                                     |   | **Claim** |   |   | **Property ** |   |   | **Lease ** |   |
|----------------------------------------------------------|--------|-----------|--------|--------|--------------------|--------|--------|-----------------|--------|
| **Property**                                             |   | **Fees**  |   |   | **Taxes**          |   |   | **Payments**    |   |
|                                                     |   |      |   |   |               |   |   |            |   |
| Conjecture                                               | $      | -         |   | $      | -                  |   | $      | -               |   |
| Idaho Lakeview, Weber, Keep Cool  & Drumheller  |   | 3,360     |   |   | 7,790              |   |   | -               |   |
| Auxer                                                    |   | 280       |   |   | -                  |   |   | -               |   |
| Talache                                                  |   | 280       |   |   | -                  |   |   | -               |   |
| Shoshone                                                 |   | -         |   |   | 61                 |   |   | -               |   |
| Bullion                                                  |   | -         |   |   | 100                |   |   | -               |   |
| North Osburn                                             |   | -         |   |   | -                  |   |   | -               |   |
| Montgomery                                               |   | 3,500     |   |   | -                  |   |   | -               |   |
| Regal                                                    |   | 560       |   |   | -                  |   |   | -               |   |
| Stillwater Extension Claims                              |   | 1,400     |   |   | -                  |   |   | -               |   |
| Princeton Gulch Group                                    |   | 840       |   |   | -                  |   |   | -               |   |
| Western Gold                                             |   | 1,820     |   |   | -                  |   |   | -               |   |
| Gold Road                                                |   | 2,240     |   |   | -                  |   |   | -               |   |
| Cerro Colorado                                           |   | 420       |   |   | -                  |   |   | -               |   |
| California Creek Uranium                                 |   | -         |   |   | -                  |   |   | -               |   |
| Iola Group Claims                                        |   | -         |   |   | -                  |   |   | 10,000          |   |
| Silver King LTD Claims                                   |   | -         |   |   | -                  |   |   | 10,000          |   |
| Rescue Gold Mine Claims                                  |   | 11,760    |   |   | -                  |   |   | -               |   |
| Kimberly Gold Mine Claims                                |   | 3,360     |   |   | -                  |   |   | -               |   |
| Shaft Claims                                             |   | 2,660     |   |   | -                  |   |   | -               |   |
|                                                     | $      | 32,480    |   | $      | 7,951              |   | $      | 20,000          |   |

**NOTE17:  SUBSEQUENT EVENTS**

Subsequent events have been evaluated through the datethat the consolidated financial statements were available to be issued andmanagement has determined that there have not been any events that haveoccurred that would require adjustments to the unaudited financial statements.

58

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**ITEM9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANICALDISCLOSURE**

None

**ITEM 9A.  CONTROLS ANDPROCEDURES**

*Evaluationof Disclosure Controls and Procedures*

In connection with thepreparation of this annual report on Form 10-K, an evaluation was performedunder the supervision and with the participation of Shoshone Silver MiningCompany’s management including the Chief Executive Officer and the ChiefFinancial Officer, of the effectiveness of the design and operating of the Company’sdisclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e)under the Securities Exchange Act of 1934 (“Exchange Act”)) as of September 30,2010.  Disclosure controls and procedures are designed to ensure thatinformation required to be disclosed in reports filed or submitted under theExchange Act is recorded, processed, summarized, and reported within the timeperiods specified in the SEC rules and forms and that such information isaccumulated and communicated to management, including the Chief ExecutiveOfficer and the Chief Financial Officer, to allow timely decisions regardingrequired disclosures.

Based on thatevaluation, the Company’smanagement concluded, as of the end of the period covered by this report, thatthe Company’s disclosure controls and procedures were effective in recording, processing, summarizing, and reporting informationrequired to be disclosed, within the time periods specified in the Securitiesand Exchange Commission’s rules and forms.

*Management’s  Report on Internal Control Over Financial Reporting*

Management of Shoshone SilverMining Company is responsible for establishing and maintaining adequateinternal control over financial reporting.  The Company’s internal control overfinancial reporting is a process, under the supervision of the Chief ExecutiveOfficer and the Chief Financial Officer, designed to provide reasonableassurance regarding the reliability of financial reporting and the preparationof the Company’s financial statements for external purposes in accordance with United States generally accepted accounting principles (GAAP).  Internal control overfinancial reporting includes those policies and procedures that:

- Pertain to the maintenance     of records that in reasonable detail accurately and fairly reflect the     transactions and dispositions of the Company’s assets;
- Provide reasonable     assurance that transactions are recorded as necessary to permit     preparation of the financial statements in accordance with generally     accepted accounting principles, and that receipts and expenditures are     being made only in accordance with authorizations of management and the     Board of Directors; and
- Provide reasonable     assurance regarding prevention or timely detection of unauthorized     acquisition, use, or disposition of the Company’s assets that could have a     material effect on the financial statements.

Because of its inherentlimitations, internal control over financial reporting may not prevent ordetect misstatements.  Also, projections of any evaluation of effectiveness tofuture periods are subject to the risk that controls may become inadequatebecause of changes in conditions or that the degree of compliance with thepolicies or procedures may deteriorate.

Based on thisassessment, the Company’s management has concluded that, as of September 30, 2010, the Company’s internal control over financial reporting was effectivebased on the criteria in Internal Control – Integrated Framework issued by theCOSO.

This annual report doesnot include an attestation report of our independent registered publicaccounting firm regarding internal control over financial reporting.  We werenot required to have, nor have we, engaged our independent registered publicaccounting firm to perform an audit of internal control over financial reportingpursuant to the rules of the Securities and Exchange Commission that permit usto provide only management’s report in this annual report.

59

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*Changes inInternal Control Over Financial Reporting*

As of the end of the periodcovered by this report, there have been no changes in internal control overfinancial reporting (as defined in Rule 13a-15(f) of the Exchange Act) duringthe quarter ended September 30, 2010, that materially affected, or arereasonably likely to materially affect, the Company’s internal control overfinancial reporting.  

**ITEM 9B.  OTHER INFORMATION**

None.

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**PARTIII**

**ITEM10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT**

For information withrespect to the executive officers and directors of the Registrant, SeeItem 4—“Directors and Executive Officers” at the end of Part I of thisreport. 

Duringfiscal, we paid our principal executive officer $40,267.  No executive officerswere paid in excess of $100,000.

Duringfiscal 2010, we issued 1,250,000 shares of common stock to four of ourdirectors in exchange for services valued at $200,000.

TheCompany has no stock option plans and has not issued any options or warrants toany of its employees or directors.  The Company has no employment agreementswith any of its officers. 

**ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS**

Thefollowing table sets forth as of September 30, 2010, the common stock ownership of the directors, executive officers and each person known by us to be thebeneficial owner of five percent or more of our common stock. The percentage ofownership is based on 42,659,037 shares of our common stock outstanding as of September 30, 2010.

|                                               |   | **Number of**    |   |   |           |   |
|----------------------------------------------------|--------|------------------|--------|--------|----------------|--------|
|                                               |   | **Shares of**    |   |   |           |   |
| **Name and**                                       |   | **Common**       |   |   |           |   |
| **Address**                                        |   | **Stock**        |   |   |           |   |
| **of Beneficial**                                  |   | **Beneficially** |   |   | **Percentage** |   |
| **Owner**                                          |   | **Owned**        |   |   | **of Shares**  |   |
| Lex Smith                                          |   | 435,000          |   |   | 1.02%          |   |
|   C/o Shoshone Silver  Mining Company         |   |             |   |   |           |   |
|   P.O. Box 2011                               |   |             |   |   |           |   |
|   Coeur d'Alene, ID 83816                     |   |             |   |   |           |   |
|                                               |   |             |   |   |           |   |
| Carol Stephan                                      |   | 1,168,856        |   |   | 2.74%          |   |
|   C/o Shoshone Silver  Mining Company         |   |             |   |   |           |   |
|   P.O. Box 2011                               |   |             |   |   |           |   |
|   Coeur d'Alene, ID 83816                     |   |             |   |   |           |   |
|                                               |   |             |   |   |           |   |
| Melanie Farrand                                    |   | 364,000          |   |   | 0.85%          |   |
|   C/o Shoshone Silver  Mining Company         |   |             |   |   |           |   |
|   P.O. Box 2011                               |   |             |   |   |           |   |
|   Coeur d'Alene, ID 83816                     |   |             |   |   |           |   |
|                                               |   |             |   |   |           |   |
| Don Rolfe                                          |   | 116,948          |   |   | 0.27%          |   |
|   C/o Shoshone Silver  Mining Company         |   |             |   |   |           |   |
|   P.O. Box 2011                               |   |             |   |   |           |   |
|   Coeur d'Alene, ID 83816                     |   |             |   |   |           |   |
|                                               |   |             |   |   |           |   |
| Ed Lehman                                          |   | 10,000           |   |   | 0.02%          |   |
|   C/o Shoshone Silver  Mining Company         |   |             |   |   |           |   |
|   P.O. Box 2011                               |   |             |   |   |           |   |
|   Coeur d'Alene, ID 83816                     |   |             |   |   |           |   |
|                                               |   |             |   |   |           |   |
| All officers and directors  as a group (5 persons) |   | 2,094,804        |   |   | 4.91%          |   |

61

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**ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE**

During the previous two fiscal years there have been no transactions between us, or the Company’s subsidiary on the one hand, and any officer, director or principal shareholder on the other. 

**ITEM 14.  PRINCIPAL ACCOUNTING FEES AND SERVICES**

TheCompany paid audit and review fees to BehlerMick PS of $48,828 during fiscal2010 and $54,298 during fiscal 2009.

62

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**PART IV**

**ITEM 15.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES**

| (A) Documents filed as      part of this report are as follows: |
|-----------------------------------------------------------------|
|                                                            |   |   |   |
|                                                            | 1. | Financial Statements. |
|                                                            |   |  |
|                                                            |   |   | See listing of financial      statements included as part of this Form 10-K in Item 8 of Part II. |
|                                                            |   |   |
|                                                            | 2. | Financial Statement      Schedules: |
|                                                            |   |  |
|                                                            |   |   | Financial statement      schedules are omitted because they are not applicable or the required      information is shown in the consolidated financial statements or notes thereto. |
|                                                            |   |   |
|                                                            | 3. | Exhibits: |
|                                                            |   |   |
|                                                            |   |   | The following list of      exhibits includes exhibits submitted with this Form 10-K as filed with the SEC      and those incorporated by reference to other filings. |

| 2.1.1 | Articles of Incorporation.    (*)                                                                                                               |
|-------|-------------------------------------------------------------------------------------------------------------------------------------------------|
| 2.1.2 | Certificate of Amendment of    Articles of Incorporation dated January 21, 1970 (*)                                                             |
| 2.1.3 | Certificate of Amendment of    Articles of Incorporation dated November 17, 1969 (*)                                                            |
| 2.1.4 | Articles of Amendment to    the Articles of Incorporation dated August 28, 1983 (*)                                                             |
| 2.1.5 | Articles of    Amendment to the Articles of Incorporation dated May 15, 1998 (*)                                                                |
| 2.2   | Bylaws. (*)                                                                                                                                     |
| 10.1  | Office Lease    between the Company and Shoshone Business Center, Inc. dated November 1, 2004. ($)                                              |
| 10.2  | Mining Lease    and Agreement between the Company and Chester Mining Company, Inc. dated March 25, 2004. ($)                                    |
| 10.3  | Martin Sutti    declaration of conditional transfer of certain mining concessions dated May 12, 2004. ($)                                       |
| 10.4  | Mining Lease    and Agreement between the Company and Sterling Mining Company dated January 19, 2004 #                                          |
| 10.5  | Bilbao Indemnity and Guarantee Agreement    (&)                                                                                             |
| 10.6  | Bilbao Stock Purchase Agreement (&)                                                                                                         |
| 10.7  | The Amending    Agreement to the Stock Purchase Agreement and Indemnity and Guarantee    Agreement (%)                                          |
| 10.8  | Iola    Corporation Lease and Option Agreement (%)                                                                                              |
| 10.9  | Silver King LTD Lease and Option Agreement (%)                                                                                                  |
| 10.10 | Camp Project    Lease (+)                                                                                                                       |
| 31.1  | Certification    of Principal Executive Officer Pursuant to Rule 13a-14(a)/15d-14(a) of the    Securities Exchange Act of 1934, as amended. (+) |
| 31.2  | Certification    of Principal Financial Officer Pursuant to Rule 13a-14(a)/15d-14(a) of the    Securities Exchange Act of 1934, as amended. (+) |
| 32.1  | Certification    of the Principal Executive Officer Pursuant to 18 U.S.C. Section 1350. (+)                                                     |
| 32.2  | Certification    of the Principal Financial Officer Pursuant to 18 U.S.C. Section 1350. (+)                                                     |
| 99.1  | Map of Lakeview    Group (^)                                                                                                                    |
| 99.2  | Map of Shoshone    Group and Bullion Group (^)                                                                                                  |
| 99.3  | Map of Auxer    Property (^)                                                                                                                    |
| 99.4  | Map of Lucky    Joe Property (^)                                                                                                                |
| 99.5  | Map of Regal    Mine (^)                                                                                                                        |
| 99.6  | Map of Stillwater Extension    Claims (^)                                                                                                       |
| 99.7  | Map of Montgomery Mine (^)                                                                                                                      |
| 99.8  | Map of Arizona Gold Fields    Claims (^)                                                                                                        |
| 99.9  | Map of    California Creek Property (^)                                                                                                         |
| 99.10 | Map of    Princeton Gulch Group (^)                                                                                                             |
| 99.11 | Map of Cerro    Colorado Group (^)                                                                                                              |
| 99.12 | Map of    Bilbao-Mexico Property (^)                                                                                                            |
| 99.13 | Map of North Osburn Property (>)                                                                                                             |
| 99.14 | Maps of Iola    Group Claims Lease, Silver King LTD Lease, Rescue Gold Mine and Kimberly Gold    Mine (%)                                       |
| 99.15 | Map of Shaft    Claims (%)                                                                                                                      |
| 99.16 | Map of Camp     Project Claims (+)                                                                                                              |

| *          | Incorporated by    reference to the Company’s Registration Statement on Form 10-SB, filed with    the Commission on February 15, 2001, File No. 000-31965.    |
|------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| $          | Incorporated by    reference to the Company’s Annual Report on Form 10-KSB, filed with the    Commission on August 3, 2006, File No. 000-31184.               |
| +          | Filed herewith.                                                                                                                                                     |
| #          | Incorporated by    reference to the Company’s Annual Report on Form 10-KSB, filed with the    Commission on December 4, 2006, File No.000-31184.              |
| ^          | Incorporated by    reference to the Company’s Annual Report on Form 10-KSB/A Amendment 1,filed    with the Commission on December 3, 2007, File No. 000-31184 |
| >  | Incorporated by    reference to the Company’s Annual Report on Form 10-K, filed with the    Commission on April 14, 2008, File No.000-31184.                  |
| &      | Incorporated by    reference to the Company’s Annual Report on Form 10-K, filed with the    Commission on January 13, 2009, File No.000-31184.                |
| %          | Incorporated by    reference to the Company’s Annual Report on Form 10-K, filed with the    Commission on January 10, 2010, File No.000-31184.                |

63

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**SIGNATURES**

                Inaccordance with Section 13 or 15 (d) of the Exchange Act, the registrant causedthis report to be signed on its behalf by the undersigned, thereunto dulyauthorized.

**SHOSHONE SILVER MINING COMPANY**

| Dated:December 24, 2010   | By: | /s/ Lex    Smith           Lex Smith President and Principal Executive  Officer |
|-------------------------------------|-----|-----------------------------------------------------------------------------------------------------------------------------------|

Inaccordance with the Exchange Act, this report has been signed by the followingpersons on behalf of the registrant and in the capacities and on the datesindicated.

|   | By: | /s/ Lex Smith        Lex Smith President and Principal ExecutiveOfficer |
|--------|-----|-----------------------------------------------------------------------------------------------------------------|

|   | By: | /s/ Melanie Farrand      Melanie Farrand Treasurer and Principal FinancialOfficer |
|--------|-----|-----------------------------------------------------------------------------------------------------------------|

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