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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



Form 10-QSB



[X]  QUARTERLY REPORT UNDER SECTION 13 OF 15(D) OF THE SECURITIES EXCHANGE

COMMISSION ACT OF 1934



For the quarterly period ended May 31, 2004



[  ]     TRANSITION  REPORT  PURSUANT  TO  SECTION 13 OR 15(D) OF THE SECURITIES

EXCHANGE  ACT  OF  1934



For the transition period from ______ to ______



Commission File Number:  001-05970



Silver Butte Company

(Formerly Silver Butte Mining Company)

(Exact name of registrant as specified in its charter)



NEVADA

82-0263301

(State or other jurisdiction of

(I.R.S. Employer

Incorporation or organization)

Identification Number)



520 Cedar Street, Sandpoint, ID

83864

(Address of Principal Executive Offices)





(Zip Code)



(208) 263-5154

Registrants telephone number, including area code



COMMON STOCK

Name and exchange on which registered



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



At June 24, 2004, 16,410,415 shares of the Companys common stock were outstanding.



SEC 2334 (1/04)

Potential persons who are to respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB control number.

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SILVER BUTTE COMPANY

(FORMERLY SILVER BUTTE MINING COMPANY)

TABLE OF CONTENTS





ITEM 1.  FINANCIAL INFORMATION



Balance Sheets, May 31, 2004 (Unaudited) and August 31, 2003



Statements of Operations for the three months and nine months ended May 31, 2004 and May 31, 2003 - Unaudited



Statements of Cash Flows for the nine months ended May 31, 2004 and May 31, 2003 - Unaudited



Notes to Financial Statements - Unaudited



ITEM 2.  MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.



ITEM 3.  CONTROLS AND PROCEDURES



PART II



ITEM 1.

LEGAL PROCEEDINGS



ITEM 2.

CHANGES IN SECURITIES



ITEM 3.

DEFAULTS UPON SENIOR SECURITIES



ITEM 4.

SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS



ITEM 5.

OTHER INFORMATION



ITEM 6.

EXHIBITS AND REPORTS ON FORM 8-K



SIGNATURES



INDEX TO EXHIBITS









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PART I.



ITEM 1.  FINANCIAL INFORMATION



Silver Butte Company (formerly Silver Butte Mining Company)

Balance Sheets, May 31, 2004 (Unaudited) and August 31, 2003



May 31,



2004

August 31,

(unaudited)

2003

ASSETS



Current assets:

Cash and cash equivalents

$

20,190

$

10,602

Prepaid expenses

0

5,021





Total current assets

20,190

15,623



Property, plant and equipment, net

3,000

3,000



Total assets

$

23,190

$

18,623



LIABILITES AND STOCKHOLDERS EQUITY (DEFICIT)



Current liabilities:

Accounts payable

$

328

$

6,583

Accounts payable to related parties

300

770

Directors fees payable

0

15,000



Total current liabilities

628

22,353





Stockholders equity (deficit):

Preferred stock, $0.001 par value; 10,000,000

shares authorized, none issued and outstanding

Common stock, $0.001 par value; 300,000,000

shares authorized, 16,410,415 shares

issued and outstanding at May 31, 2004

16,410



Common stock, $0.05 par value; 150,000,000

shares authorized, 8,760,415 shares

issued and outstanding at August 31, 2003

438,021

Additional paid-in capital

849,359

363,919

Accumulated deficit

(843,207)

(805,670)

Total stockholders equity (deficit)

22,562

(3,730)



Total liabilities and stockholders equity

$

23,190

$

18,623



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

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Silver Butte Company (formerly Silver Butte Mining Company)

Statements of Operations for the three months and nine months ended May 31, 2004 and May 31, 2003 - Unaudited





Three months ended

Nine months ended      _

5/31/2004        5/31/2003       5/31/2004       5/31/2003



Operating expenses:

Directors fees paid in cash

$

0

$

0

$

0

$

(3,443)

Directors expense reimbursements

(300)

0

(1,271)

(706)

Professional service fees

(4,086)

(3,323)

(25,637)

(15,731)

Professional service fees paid to

related parties

(2,146)

(4,540)

(8,203)

(11,600)

Other general and administrative

0

(376)

(2,533)

(2,901)

Total operating expenses

(6,532)

(8,239)

(37,644)

(34,381)





Other income (expense):

Interest income

46

38

108

259

Total other income (expense)

46

38

108

259



Net loss

$

(6,486)

$

(8,201)

$

(37,536)

$

(34,122)





Loss per common share  basic

Nil

$

(0.001)

$

(0.003)

$

(0.004)



Weighted average common shares

Outstanding  basic

16,410,415

8,623,458

13,555,836

8,614,811































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



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Silver Butte Company (formerly Silver Butte Mining Company)

Statements of Cash Flows for the nine months ended May 31, 2004 and May 31, 2003 - Unaudited





2004

2003



Cash flows from operating activities:

Net loss

$

(37,536)

$

(34,122)

Adjustments to reconcile net loss to net cash

provided (used) by operating activities:

Professional service fees paid by issuing

common stock

500

Professional service fees paid to related

party by issuing common stock

2,500

Decrease in:

Prepaid expenses

5,021

0

Accounts payable

(6,255)

(10,948)

Accounts payable to related party

(470)

0

Directors fees payable

(15,000)

0



Net cash used by operating activities

(54,240)

(42,070)



Cash flows from financing activities:

Proceeds from sale of common stock

76,500

0

Fees paid in connection with common stock issuance

(12,672)

0



Net cash provided by financing activities

63,828

0



Net increase (decrease) in cash and cash equivalents

9,588

(42,070)

Cash and cash equivalents, beginning of period

10,602

53,449

Cash and cash equivalents, end of period

$

20,190

$

11,379

























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

---



Silver Butte Company (formerly Silver Butte Mining Company)

Notes to Financial Statements - Unaudited



1.  Basis of Presentation

The financial statements of Silver Butte Company (formerly Silver Butte Mining Company) (the Company) included herein have been prepared without audit, pursuant to the rules and regulations of the Securities and Exchange Commission.  Although certain information normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted, the Company believes that the disclosures are adequate to make the information presented not misleading.   These financial statements should be read in conjunction with the financial statements and notes thereto for the fiscal year ended August 31, 2003 included in the Companys Form 10-KSB.



The financial statements included herein reflect all normal recurring adjustments that, in the opinion of management, are necessary for a fair presentation.   The results for interim periods are not necessarily indicative of trends or of results to be expected for the full year ended August 31, 2004.



2.  Description of Business

Silver Butte Company (formerly Silver Butte Mining Company) is a Nevada corporation, and the successor of Silver Butte Mining Company, an Idaho corporation that was incorporated on January 19, 1965.  The Company was originally organized to explore, acquire and develop mineral properties and rights primarily in Idaho. However, the Companys exploration activities never developed any commercial ore deposits. During prior years, the Company made a strategic decision to abandon or sell its mineral properties and rights, and favorably position itself to seek other profitable business opportunities.



During an annual meeting of shareholders held on February 4, 2004, a merger with Silver Butte Company was ratified. Silver Butte Company was incorporated in the state of Nevada on March 4, 2004.  The merger became effective on March 4, 2004 upon filing the Articles of Merger with the respective states.  On that date, the Company merged into its wholly-owned Nevada subsidiary and changed its corporate domicile from the state of Idaho to the state of Nevada. Throughout this report reference to the Company may include the Idaho corporation prior to the merger and the Nevada corporation subsequent to the merger.



At August 31, 2003, and years prior, the Company had one class of $0.05 par value common stock authorized and outstanding. Upon merger with Silver Butte Company on March 4, 2004, the surviving corporations capitalization authorizes 300,000,000 shares of $0.001 par value common stock for issue. In addition, a class of $0.001 par value preferred stock is authorized with 10,000,000 shares available for issue.



The Company has incurred losses over the past several years and has no recurring source of revenue.  These conditions raise substantial doubt as to the Companys ability to continue as a going concern.  Management's plans for the continuation of the Company as a going concern are primarily focused on the eventual merger with an entity with profitable business operations.  If existing cash and cash equivalents are exhausted before this occurs, the Company could sell its unregistered common stock to finance operations. However, there are no assurances with respect to the future success of these plans. The financial statements do not contain any adjustments, which might be necessary, if the Company is unable to continue as a going concern.



Unless otherwise indicated, amounts provided in these notes to the financial statements pertain to continuing operations.

---

ITEM 2.  MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.



General

This Form 10-QSB contains forward-looking statements.  Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance and underlying assumptions that are not statements of historical facts.  This document and any other written or oral statements made by us or on our behalf may include forward-looking statements, which reflect our current views with respect to future events and financial performance.  The words believe, expect, anticipate, intends, estimates, forecast, project and similar expressions identify forward-looking statements.



The forward-looking statements in this document are based upon various assumptions, many of which are based on managements discussion and analysis or plan of operations and elsewhere in this report. Although we believe that these assumptions were reasonable when made, these statements are not guarantees of future performance and are subject to certain risks and uncertainties, some of which are beyond our control, and are difficult to predict.  Actual results could differ materially from those expressed in forward-looking statements.   Readers are cautioned not to place undue reliance on any forward-looking statements, which reflect managements view only as of the date of this report.



Plan of Operation

The Companys purpose is to seek, investigate and, if such investigation warrants, acquire an interest in business opportunities presented to it by persons or firms who or which desire to seek the perceived advantages of a publicly registered corporation.  The Company will not restrict its search to any specific business, industry, or geographical location and the Company may participate in a business venture of virtually any kind or nature.



The Company may seek a business opportunity with entities which have recently commenced operations, or wish to utilize the public marketplace in order to raise additional capital in order to expand into new products or markets, to develop a new product or service, or for other corporate purposes.  The Company may acquire assets and establish wholly owned subsidiaries in various businesses or acquire existing businesses as subsidiaries.  Business opportunities may be available in many different industries and at various stages of development, all of which will make the task of comparative investigation and analysis of such business opportunities extremely difficult and complex.



Management of the Company, while not especially experienced in matters relating to the new business of the Company, will rely primarily upon their own efforts to accomplish the business purposes of the Company.  It is not anticipated that any outside consultants or advisors, other than the Company's legal counsel and accountants, will be utilized by the Company to effectuate its business purposes described herein.



Financial Condition and Liquidity

During the nine month period ended May 31, 2004, the Company used $54,240 of cash for operating activities, compared to $42,070 used for operating activities in the nine months ended May 31, 2003.  The increase in spending is due to an increase in professional fees incurred in connection with the annual meeting of shareholders on February 4, 2004.  The Company has no recurring revenue from operating activities.  The Company's sale of common stock during the nine month period is expected to finance operating expenditures of the Company for the next twelve months.



---

During the nine month period ended May 31, 2004, the Company offered 4,000,000 Units of the Companys common stock at a price of $0.01 per Unit.  Each Unit consists of one share of Common Stock and one Common Stock Purchase Warrant, exercisable for twenty-four months from the date of issue, to purchase one additional share of Common Stock. The exercise price of the Common Stock Purchase Warrant is $0.01 per share for the 12 months from the date of issuance and thereafter at a price of $0.05 per share. Through May 31, 2004, all of the Units were sold and 3,650,000 of the warrants have been exercised.  Total proceeds from the sales of stock and warrants, after deducting offering costs, were $63,828 and will be used to fund the Company's plan of operations.  350,000 warrants are outstanding at May 31, 2004.



The offering was made in reliance upon the exemptions  afforded  by  the  Securities  Act  of 1933, as amended, Rule 506 of Regulation  D  promulgated  thereunder,  and  certain  state  securities  law exemptions.  The  Shares  were  be offered to persons who qualify as "accredited investors"  within  the  meaning  of  Rule  501(a)  of  the  General  Rules  and Regulations under the Securities Act of 1933, as amended.



ITEM 3.  CONTROLS AND PROCEDURES



Based  on  their  most recent  evaluation, which was completed within 90 days of the filing of this Form 10-QSB, the Company's president and principle financial officer  believe the Company's disclosure controls and procedures (as defined in Exchange Act Rules 13a -14 and 15d -14) are effective to ensure that information required  to  be  disclosed  by  the  Company  in this report is accumulated and communicated  to  the  Company's  management,  as  appropriate,  to allow timely decisions  regarding  required  disclosure. There were no significant changes in the Company's internal controls or other factors that could significantly affect these controls  subsequent  to  the  date of their evaluation and there were no corrective  actions  with  regard  to  significant  deficiencies  and  material weaknesses.



PART II



ITEM 1.

LEGAL PROCEEDINGS

NONE



ITEM 2.

CHANGES IN SECURITIES

At August 31, 2003 and years prior, the Company had one class of $0.05 par value common stock authorized and outstanding. Upon merger with Silver Butte Company on March 4, 2004, the surviving corporations capitalization authorizes 300,000,000 shares of $0.001 par value common stock for issue. In addition, a class of $0.001 par value preferred stock is authorized with 10,000,000 shares available for issue.



ITEM 3.

DEFAULTS UPON SENIOR SECURITIES

NONE



ITEM 4.

SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

NONE



ITEM 5.

OTHER INFORMATION

NONE.



ITEM 6.

EXHIBITS AND REPORTS ON FORM 8-K

(a)

Exhibits

Exhibit 31.1  Certification required by Rule 13a-14(a) or Rule 15d-14(a).

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



(b) Reports on Form 8K.None.

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SIGNATURES



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



SILVER BUTTE COMPANY

(Registrant)



By:   /s/ Terry McConnaughey



Terry McConnaughey, President and Director

Date:  June 29, 2004



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



By    /s/ Robert J. Evans



Robert J. Evans, Secretary/Treasurer and Director

Date:  June 29, 2004



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



By    /s/ Delaine H. Gruber



Delaine H. Gruber, Director

Date:  June 29, 2004











INDEX TO EXHIBITS



Exhibit 31.1  Certification required by Rule 13a-14(a) or Rule 15d-14(a).



Exhibit 31.2  Certification required by Rule 13a-14(a) or Rule 15d-14(a).



Exhibit 32.1  Certification Required by Rule 13a-14(b) or Rule 15d-14(b) and

section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350.



Exhibit 32.1  Certification Required by Rule 13a-14(b) or Rule 15d-14(b) and

section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350.