**UNITEDSTATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549**

**FORM10-QSB**
| **x**      | ** ** | **QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF  THE SECURITIES EXCHANGE ACT OF 1934**  |
|------------|------------|-----------------------------------------------------------------------------------------|
| ** ** | ** ** | ** **                                                                              |
| ** ** |       | **For the  quarterly period ended March 31, 2007**                                      |
| ** ** |       | ** **                                                                              |
| **o**      | ** ** | **TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF  THE SECURITIES EXCHANGE ACT OF 1934** |

 

**For thetransition period from             to             **

**IdahoGeneral Mines, Inc.**(Name of small business issuer in itscharter)

| **IDAHO**                          |   | **000-50539**           |   | **91-0232000**       |
|------------------------------------|--------|-------------------------|--------|----------------------|
| (State or other  jurisdiction      |   | Commission File  Number |   | (I.R.S. Employer     |
| of incorporation  or organization) |   |                    |   | Identification  No.) |

 

**10 North Post St., Suite 610**

**Spokane, WA 99201**

**Telephone: (509) 838-1213**

(Address andtelephone number of principal executive offices)

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 at least the past 90 days. **YES ****x NO ****o**

Indicateby check mark whether the registrant is a shell company (as defined in Rule 12b-2of the Exchange Act).  **YES ****o NO ****x**

Thenumber of shares outstanding of registrant’s common stock as of May 10, 2007was 54,363,631.

Transitional SmallBusiness Disclosure Format (check one): **YES ****o NO ****x**

 

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**IDAHOGENERAL MINES, INC.(AN EXPLORATION STAGE COMPANY)**

**Consolidated BALANCE SHEETS**
| ** **                                                                                                                                  | ** ** | **March 31,  2007** | ** ** | **December 31  2006** | ** ** |
|---------------------------------------------------------------------------------------------------------------------------------------------|------------|--------------------------|------------|----------------------------|------------|
| ** **                                                                                                                                  | ** ** | **Unaudited**            | ** ** | ** **                 | ** ** |
| **ASSETS:**                                                                                                                                 |       |                     |       |                       |       |
| CURRENT ASSETS                                                                                                                              |       |                     |       |                       |       |
| Cash and cash  equivalents                                                                                                                  |       | $                        | 24,022,646 |                       | $          | 17,882,543 |   |
| Other  Receivables                                                                                                                          |       | 1,794                    |       | —                     |       |
| Deposits                                                                                                                                    |       | 309,804                  |       | 146,563                    |       |
| Prepaid expense                                                                                                                             |       | 28,739                   |       | 46,223                     |       |
| Total Current  Assets                                                                                                                       |       | 24,362,983               |       | 18,075,329                 |       |
| PROPERTY AND EQUIPMENT,  net                                                                                                                |       | 534,543                  |       | 430,638                    |       |
| RECLAMATION BOND                                                                                                                            |       | 490,514                  |       | —                     |       |
| LAND AND MINING CLAIMS                                                                                                                      |       | 12,610,976               |       | 7,884,821                  |       |
| TOTAL ASSETS                                                                                                                                |       | $                        | 37,999,016 |                       | $          | 26,390,788 |   |
|                                                                                                                                        |       |                     |       |                       |       |
| **LIABILITIES AND STOCKHOLDERS’  EQUITY**                                                                                              |       |                     |       |                       |       |
| CURRENT  LIABILITIES                                                                                                                        |       |                     |       |                       |       |
| Accounts payable  and accrued liabilities                                                                                                   |       | $                        | 2,171,135  |                       | $          | 951,474 |   |
| Provision for  post closure monitoring costs                                                                                                |       | 211,965                  |       | —                     |       |
| Current portion  of long term debt                                                                                                          |       | 28,875                   |       | 19,006                     |       |
| Total Current  Liabilities                                                                                                                  |       | 2,411,975                |       | 970,480                    |       |
| Provision for  post closure monitoring cost, net of current portion                                                                         |       | 502,169                  |       | —                     |       |
| Long term debt,  net of current portion                                                                                                     |       | 73,292                   |       | 57,800                     |       |
| Total  Liabilities                                                                                                                          |       | 2,987,436                |       | 1,028,280                  |       |
| STOCKHOLDERS’ EQUITY                                                                                                                   |       |                     |       |                       |       |
| Preferred stock,  Series A, $0.001 par value; 10,000,000 shares authorized, no shares  issued and outstanding                          |       | —                   |       | —                     |       |
| Common stock,  $0.001 par value; 200,000,000 shares authorized, 44,205,545 and 43,397,540 shares  issued and outstanding, respectively |       | 44,205                   |       | 43,398                     |       |
| Additional  paid-in capital                                                                                                                 |       | 49,675,443               |       | 45,221,314                 |       |
| Common stock  issuable                                                                                                                      |       | 14,340,878               |       | —                     |       |
| Accumulated  deficit before exploration stage                                                                                               |       | (212,576                 | )          | (212,576                   | )          |
| Accumulated  deficit during exploration stage                                                                                               |       | (28,836,370              | )          | (19,689,628                | )          |
| Total  Stockholders’ Equity                                                                                                            |       | 35,011,580               |       | 25,362,508                 |       |
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY                                                                                             |       | $                        | 37,999,016 |                       | $          | 26,390,788 |   |

 

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

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**IDAHOGENERAL MINES, INC.**

**(ANEXPLORATION STAGE COMPANY)**

**CONSOLIDATED STATEMENTS OF OPERATIONS**
| ** **                                                                | ** ** | **Three Months Ended** | ** ** | **January 1,  2002  Inception of  Exploration  Stage) to** | ** ** |
|---------------------------------------------------------------------------|------------|----------------------------------|------------|---------------------------------------------------------------------------|------------|
| ** **                                                                | ** ** | **March 31,  2007**         | ** ** | **March 31,  2006**                                                  | ** ** | **March 31,  2007** | ** ** |
| ** **                                                                | ** ** | **(Unaudited)**                  | ** ** | **(Unaudited)**                                                           | ** ** | **(Unaudited)** | ** ** |
|                                                                      |       |                             |       |                                                                      |       |   |   |
| REVENUES                                                                  |       | $                                | —     |                                                                      | $          | — |   | $ | — |   |
|                                                                      |       |                             |       |                                                                      |       |   |   |
| OPERATING  EXPENSES:                                                      |       |                             |       |                                                                      |       |   |   |
| Property research, exploration and development                            |       | 3,911,809                        |       | 1,145,228                                                                 |       | 13,926,119 |   |
| General and administrative expense                                        |       | 5,402,506                        |       | 1,068,795                                                                 |       | 15,757,306 |   |
| Realized loss on marketable securities                                    |       | —                           |       | —                                                                    |       | 320,900 |   |
| TOTAL OPERATING EXPENSES                                                  |       | 9,314,315                        |       | 2,214,023                                                                 |       | 30,004,325 |   |
|                                                                      |       |                             |       |                                                                      |       |   |   |
| LOSS FROM  OPERATIONS                                                     |       | (9,314,315                       | )          | (2,214,023                                                                | )          | (30,004,325 | ) |
|                                                                      |       |                             |       |                                                                      |       |   |   |
| OTHER INCOME                                                              |       |                             |       |                                                                      |       |   |   |
| Interest and dividend income                                              |       | 167,574                          |       | 143,606                                                                   |       | 1,103,104 |   |
| Realized gain on marketable securities                                    |       | —                           |       | —                                                                    |       | 5,089 |   |
| Income from timber sales                                                  |       | —                           |       | —                                                                    |       | 59,764 |   |
| TOTAL OTHER INCOME                                                        |       | 167,574                          |       | 143,606                                                                   |       | 1,167,957 |   |
|                                                                      |       |                             |       |                                                                      |       |   |   |
| LOSS BEFORE  TAXES                                                        |       | (9,146,741                       | )          | (2,070,417                                                                | )          | (28,836,368 | ) |
|                                                                      |       |                             |       |                                                                      |       |   |   |
| INCOME TAXES                                                              |       | —                           |       | —                                                                    |       | — |   |
|                                                                      |       |                             |       |                                                                      |       |   |   |
| NET LOSS                                                                  |       | $                                | (9,146,741 | )                                                                         | $          | (2,070,417 | )) | $ | (28,836,368 | ) |
|                                                                      |       |                             |       |                                                                      |       |   |   |
| BASIC AND  DILUTED NET LOSS PER SHARE OF COMMON STOCK                     |       | $                                | (0.21      | )                                                                         | $          | (0.07 | ) |   |   |
|                                                                      |       |                             |       |                                                                      |       |   |   |
| WEIGHTED AVERAGE NUMBER  OF COMMON SHARES OUTSTANDING - BASIC AND DILUTED |       | 43,746,089                       |       | 30,910,187                                                                |       |   |   |

 

Theaccompanying condensed notes are an integral part of these interim financialstatements.

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**IDAHOGENERAL MINES, INC.**

**(ANEXPLORATION STAGE COMPANY)**

**CONSOLIDATED STATEMENTS OF CASH FLOWS**
| ** **                                                                   | ** ** | **Three Months  Ended  March  31, 2007** | ** ** | **Three Months  Ended  March  31, 2006** | ** ** | **1-Jan-02  (Inception of  Exploration  Stage to  March 31,  2007** | ** ** |
|------------------------------------------------------------------------------|------------|----------------------------------------------------|------------|----------------------------------------------------|------------|------------------------------------------------------------------------------------|------------|
| ** **                                                                   | ** ** | **(Unaudited)**                                    | ** ** | **(Unaudited)**                                    | ** ** | **(Unaudited)**                                                                    | ** ** |
|                                                                         |       |                                               |       |                                               |       |                                                                               |       |
| CASH FLOWS FROM  OPERATING ACTIVITIES:                                       |       |                                               |       |                                               |       |                                                                               |       |
| Net loss                                                                     |       | $                                                  | (9,146,741 | )                                                  | $          | (2,070,417                                                                         | )          | $ | (28,836,368 | ) |
| Adjustments to reconcile net loss to net cash used  by operating activities: |       |                                               |       |                                               |       |                                                                               |       |
| Services and expenses paid with common stock                                 |       | 303,750                                            |       | 307,855                                            |       | 1,753,890                                                                          |       |
| Depreciation and amortization                                                |       | 32,840                                             |       | 4,987                                              |       | 105,862                                                                            |       |
| Gain on sale of investments                                                  |       | —                                             |       | —                                             |       | (9,245                                                                             | )          |
| Unrealized loss on securities                                                |       | —                                             |       | —                                             |       | 4,157                                                                              |       |
| Adjustment to equity                                                         |       | —                                             |       | —                                             |       | (7,684                                                                             | )          |
| Realized loss on impairment of securities                                    |       | —                                             |       | —                                             |       | 320,900                                                                            |       |
| Equity compensation management and directors                                 |       | 3,204,650                                          |       | 116,550                                            |       | 6,125,729                                                                          |       |
| Decrease (increase) in employee advances                                     |       | —                                             |       | 9,000                                              |       | —                                                                             |       |
| Decrease (increase) in prepaid expenses and deposits                         |       | (145,757                                           | )          | 31,571                                             |       | (368,057                                                                           | )          |
| Decrease (increase) in accounts payable and accrued  expenses                |       | 1,165,837                                          |       | (510,533                                           | )          | 2,146,825                                                                          |       |
| Net cash used by operating activities                                        |       | (4,585,421                                         | )          | (2,110,987                                         | )          | (18,763,991                                                                        | )          |
|                                                                         |       |                                               |       |                                               |       |                                                                               |       |
| CASH FLOWS FROM  INVESTING ACTIVITIES:                                       |       |                                               |       |                                               |       |                                                                               |       |
| Payments for the purchase of equipment                                       |       | (103,528                                           | )          | (39,142                                            | )          | (481,535                                                                           | )          |
| Purchase of securities                                                       |       | —                                             |       | —                                             |       | (457,887                                                                           | )          |
| Cash provided from the purchase of mining property,  claims                  |       | 1,278,593                                          |       | —                                             |       | 1,278,593                                                                          |       |
| Purchase of mining property, claims, options                                 |       | (5,338,592                                         | )          | (4,459,827                                         | )          | (12,805,010                                                                        | )          |
| Payments on capital leases                                                   |       | (6,221                                             | )          | —                                             |       | (6,221                                                                             | )          |
| Cash provided by sale of marketable securities                               |       | —                                             |       | —                                             |       | 246,840                                                                            |       |
| Net cash provided (used) by investing activities                             |       | (4,169,748                                         | )          | (4,498,969                                         | )          | (12,225,220                                                                        | )          |
|                                                                         |       |                                               |       |                                               |       |                                                                               |       |
| CASH FLOWS FROM  FINANCING ACTIVITIES:                                       |       |                                               |       |                                               |       |                                                                               |       |
| Cash received for common stock issuable                                      |       | 14,340,878                                         |       | —                                             |       | 14,340,878                                                                         |       |
| Proceeds from issuance of stock                                              |       | 554,394                                            |       | 32,214,149                                         |       | 40,624,766                                                                         |       |
| Net cash provided by financing activities:                                   |       | 14,895,272                                         |       | 32,214,149                                         |       | 54,965,644                                                                         |       |
|                                                                         |       |                                               |       |                                               |       |                                                                               |       |
| Net increase (decrease) in cash and cash equivalents                         |       | 6,140,103                                          |       | 25,604,193                                         |       | 23,976,433                                                                         |       |
| Cash and cash equivalents, beginning of period                               |       | 17,882,543                                         |       | 256,773                                            |       | 46,213                                                                             |       |
| Cash and cash equivalents, end of period                                     |       | $                                                  | 24,022,646 |                                               | $          | 25,860,966                                                                         |       | $ | 24,022,646 |   |
|                                                                         |       |                                               |       |                                               |       |                                                                               |       |
| SUPPLEMENTAL  DISCLOSURES OF CASH FLOW INFORMATION:                          |       |                                               |       |                                               |       |                                                                               |       |
| Income taxes paid                                                            |       | $                                                  | —     |                                               | $          | —                                                                             |       | $ | — |   |
| Interest paid                                                                |       | $                                                  | —     |                                               | $          | —                                                                             |       | $ | — |   |
|                                                                         |       |                                               |       |                                               |       |                                                                               |       |
| NON-CASH  INVESTING AND FINANCING ACTIVITIES:                                |       |                                               |       |                                               |       |                                                                               |       |
| Common stock issued for equipment                                            |       | $                                                  | —     |                                               | $          | 10,800                                                                             |       | $ | 10,800 |   |
| Common stock and warrants issued for property                                |       | $                                                  | 420,000    |                                               | $          | —                                                                             |       | $ | 795,000 |   |
| Reclamation bond acquired from Equatorial                                    |       | $                                                  | 490,514    |                                               | $          | —                                                                             |       | $ | 490,514 |   |
| Post closure monitoring cost acquired from  Equatorial                       |       | $                                                  | 750,892    |                                               | $          | —                                                                             |       | $ | 750,892 |   |
| Accounts payable  and accrued expenses acquired from Equatorial              |       | $                                                  | 53,824     |                                               | $          | —                                                                             |       | $ | 53,824 |   |

 

Theaccompanying condensed notes are an integral part of these interim financialstatements.

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**IDAHOGENERAL MINES, INC.**

**(ANEXPLORATION STAGE COMPANY)**

**NOTES TOCONSOLIDATED FINANCIAL STATEMENTS**

**MARCH 31, 2007**

**NOTE 1—DESCRIPTION OF BUSINESS**

Idaho General Mines, Inc. (“the Company” or “IGMI”)is an Idaho corporation originally incorporated as General Mines Corporation onNovember 23, 1925. In 1966, the Company amended its articles of incorporationto change its name to Idaho General Petroleum and Mines Corporation, andamended its articles again in 1967 changing its name to Idaho GeneralMines, Inc. The Company’s historic activities have principally consistedof the exploration for nonferrous and precious metals in and around ShoshoneCounty, Idaho. The Company entered a new exploration stage in earlyJanuary 2002 when it shifted its focus to minerals exploration. InMay 2004, the Company began a search for substantive mineral propertieswith a focus on metals such as copper, zinc, silver, gold and specialty metals.IGMI entered into an option to lease the Mount Hope molybdenum property locatedin Nevada in November 2004 and exercised that option in October 2005after several phases of feasibility studies and project design studies whichindicated the attractiveness of the project. IGMI similarly optioned the HallTonopah molybdenum-copper property, also in Nevada, in 2005 and exercised thatoption to purchase the Hall Tonopah property in March 2006 with the intentof assessing economic feasibility by exploring and assessing the property’spotential. Accordingly, IGMI has assumed the role of exploring, and aswarranted, developing major mineral deposits which are at a relatively advancedstage and are worthy of economic consideration. IGMI has obtained a portion ofthe funding to carry out the above objectives and plans to carry such projectsforward to production as indicated and as future success in raising of capitalallows.

**NOTE 2—SUMMARY OF SIGNIFICANTACCOUNTING POLICIES**

This summary of significant accounting policies ispresented to assist in understanding the financial statements. The financialstatements and notes are representations of the Company’s management, which isresponsible for their integrity and objectivity. These accounting policiesconform to accounting principles generally accepted in the United States ofAmerica and have been consistently applied in the preparation of the financialstatements.

*Accounting Method*

The Company’s financial statements are prepared usingthe accrual basis of accounting in accordance with accounting principlesgenerally accepted in the United States of America.

*Accounting Pronouncements—Recent*

In February 2007, the Financial Accounting StandardsBoard issued Statement of Financial Accounting Standards No. 159. “The FairValue Option for Financial Assets and Financial Liabilities Including anamendment of FASB Statement No. 115”. This statement permits entities to chooseto measure many financial instruments and certain other items at fair value.The objective is to improve financial reporting by providing entities with theopportunity to mitigate volatility in reported earnings caused by measuringrelated assets and liabilities differently without having to apply complexhedge accounting provisions. This statement is expected to expand the use offair value measurement, which is consistent with the Board’s long termmeasurement objective for accounting for financial instruments. This statementis effective as of the beginning of an entity’s first fiscal year that beginsafter November 15, 2007, although earlier adoption is permitted.Management has not determined the effect that adopting this statement wouldhave on the Company’s financial condition or results of operation.

In September 2006, the Financial Accounting StandardsBoard issued Statement of Financial Accounting Standards No. 158, “Employers’Accounting for Defined Benefit Pension and Other Postretirement Plans anamendment of FASB Statement No. 87,88,106, and 132(R)”. This statement

5

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requiresan employer to recognize the overfunded or underfunded status of a definedbenefit postretirement plan (other than a multiemployer plan) as an asset orliability in its statement of financial position and to recognize changes inthat funded status in the year in which the changes occur through comprehensiveincome of a business entity or changes in unrestricted net assets of a not forprofit organization. This statement also requires an employer to measure thefunded status of a plan as of the date of its year end statement of financialposition, with limited exceptions. The adoption of this statement had noimmediate material effect on the Company’s financial condition or results ofoperations.

In September 2006, the Financial Accounting StandardsBoard issued Statement of Financial Accounting Standards No. 157, “Fair ValueMeasurements”. This statement defines fair value, establishes a framework formeasuring fair value in generally accepted accounting principles (GAAP), andexpands disclosure about fair value measurements. This statement applies underother accounting pronouncements that require or permit fair value measurements.This statement does not require any new fair value measurements, but for someentities, the application of this statement may change current practice. Theadoption of this statement had no immediate material effect on the Company’sfinancial condition or results of operations.

In June 2006, the Financial Accounting Standards Boardissued FASB Interpretation No. 48, “Accounting for Uncertainty in Income Taxesan interpretation of FASB Statement No 109” (hereinafter “FIN 48”), whichprescribes a recognition threshold and measurement attribute for the financialstatement recognition and measurement of tax position taken or expected to betaken in a tax return. FIN 48 also provides guidance on de-recognition,classification, interest and penalties, accounting in interim periods,disclosure and transition. FIN 48 is effective for fiscal years beginning afterDecember 15, 2006. The Company does not expect the adoption of FIN 48 to have amaterial impact on its financial reporting, and the Company is currentlyevaluating the impact, if any the adoption of FIN 48 will have on its disclosurerequirements.

In February 2006, the Financial AccountingStandards Board issued Statement of Financial Accounting StandardsNo. 155, “Accounting for Certain Hybrid Financial Instruments, anAmendment of FASB Standards No. 133 and 140”. This statement establishedthe accounting for certain derivatives embedded in other instruments. Itsimplifies accounting for certain hybrid financial instruments by permittingfair value remeasurement for any hybrid instrument that contains an embeddedderivative that otherwise would require bifurcation under SFAS No. 133 aswell as eliminating a restriction on the passive derivative instruments that aqualifying special-purpose entity may hold under SFAS No. 140. Thisstatement allows a public entity to irrevocably elect to initially andsubsequently measure a hybrid instrument that would be required to be separatedinto a host contract and derivative in its entirety at fair value (with changesin fair value recognized in earnings) so long as that instrument is notdesignated as a hedging instrument pursuant to the statement. SFAS No. 140previously prohibited a qualifying special-purpose entity from holding aderivative financial instrument that pertains to a beneficial interest otherthan another derivative financial instrument. This statement is effective forfiscal years beginning after September 15, 2006, with early adoptionpermitted as of the beginning of an entity’s fiscal year. Management does notexpect the adoption of this statement to have a material impact on its financialposition or results of operations.

In May 2005, the Financial Accounting StandardsBoard issued Statement of Financial Accounting Standards No. 154, “AccountingChanges and Error Corrections,” (hereinafter “SFAS No. 154”) whichreplaces Accounting Principles Board Opinion No. 20, “Accounting Changes,”and SFAS No. 3, “Reporting Accounting Changes in Interim FinancialStatements—An Amendment of APB Opinion No. 28.” SFAS No. 154 providesguidance on accounting for and reporting changes in accounting principle anderror corrections. SFAS No. 154 requires that changes in accountingprinciple be applied retrospectively to prior period financial statements andis effective for fiscal years beginning after December 15, 2005.Management does not expect the adoption of this statement to have a materialimpact on its financial position or results of operations.

In March 2005, the Financial Accounting StandardsBoard issued FASB Interpretation No. 47 “Accounting for Conditional AssetRetirement Obligations—an Interpretation of SFAS No. 143,” (hereinafter “FINNo. 47”). FIN No. 47 provides clarification of the term conditionalasset retirement obligation as used in paragraph A23 of SFAS No. 143, “Accountingfor Asset Retirement Obligations.”

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SFASNo. 143 applies to legal obligations associated with the retirement of atangible long-lived asset, and states that an entity shall recognize the fairvalue of a liability for an asset retirement obligation in the period in whichit is incurred if a reasonable estimate of fair value can be made. The termconditional asset retirement obligation refers to a legal obligation to performan asset retirement activity in which the timing and/or method of settlementare conditional on a future event that may or may not be within the control ofthe entity. The obligation to perform the asset retirement activity isunconditional even though uncertainty exists about the timing and/or method ofsettlement. Thus, the timing and/or method of settlement may be conditional ona future event. Accordingly, an entity is required to recognize a liability forthe fair value of a conditional asset retirement obligation if the fair valueof the liability can be reasonably estimated. The Company has adopted thisstatement which currently impacts these financial statements because of therelated liability assumed in connection with the Company’s acquisition ofEquatorial Mining North America, Inc. See Note 11.

*Cash and Cash Equivalents*

For the purposes of the statement of cash flows, theCompany considers all highly liquid investments with original maturities ofthree months or less to be cash equivalents.

*Derivative Instruments*

The Financial Accounting Standards Board issuedStatement of Financial Accounting Standards No. 133 (hereinafter “SFASNo. 133”), “Accounting for Derivative Instruments and Hedging Activities,”as amended by SFAS No. 137, “Accounting for Derivative instruments andHedging Activities—Deferral of the Effective Date of FASB No. 133,” andSFAS No. 138, “Accounting for Certain Derivative Instruments and CertainHedging Activities,” and SFAS No. 149, “Amendment of StatementNo. 133 on Derivative Instruments and Hedging Activities,” the last ofwhich is effective June 30, 2003. These statements establish and clarifyaccounting and reporting standards for derivative instruments, includingcertain derivative instruments embedded in other contracts, and for hedgingactivities. They require that an entity recognize all derivatives as eitherassets or liabilities in the balance sheet and measure those instruments atfair value.

If certain conditions are met, a derivative may bespecifically designated as a hedge, the objective of which is to match thetiming of gain or loss recognition on the hedging derivative with therecognition of (i) the changes in the fair value of the hedged asset orliability that are attributable to the hedged risk or (ii) the earningseffect of the hedged forecasted transaction. For a derivative not designated asa hedging instrument, the gain or loss is recognized in income in the period ofchange.

Historically, the Company has not entered intoderivatives contracts to hedge existing risks or for speculative purposes.

*Estimates*

The process of preparing financial statements inconformity with accounting principles generally accepted in the United Statesof America requires the use of estimates and assumptions regarding certaintypes of assets, liabilities, revenues, and expenses. Such estimates primarilyrelate to unsettled transactions and events as of the date of the financialstatements. Accordingly, upon settlement, actual results may differ fromestimated amounts.

*Exploration Stage Activities*

The Company has been in the exploration stage sinceJanuary 2002 and has not realized any revenue from operations. It will beprimarily engaged in minerals exploration until it enters a development oroperations stage.

*Fair Value of Financial Instruments*

The Company’s financial instruments as defined byStatement of Financial Accounting Standards No. 107, “Disclosures aboutFair Value of Financial Instruments,” include cash, accounts payable andaccrued liabilities. All instruments are accounted for on a historical costbasis, which, due to the short maturity of these financial instruments,approximates fair value at March 31, 2007 and December 31, 2006.

7

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*Basic and Diluted Net Loss Per Share*

Net loss per share was computed by dividing the netloss by the weighted average number of shares outstanding during the period.The weighted average number of shares was calculated by taking the number ofshares outstanding and weighting them by the amount of time that they wereoutstanding. Diluted net loss per share for IGMI is the same as basic net lossper share, as the inclusion of common stock equivalents would be antidilutive.

*Mineral Exploration and DevelopmentCosts*

All exploration expenditures are expensed as incurred.Significant property acquisition payments for active exploration properties arecapitalized. If no minable ore body is discovered, previously capitalized costsare expensed in the period the property is abandoned. Expenditures to developnew mines, to define further mineralization in existing ore bodies, and toexpand 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 costsare charged to operations. The Company charges to operations the allocableportion of capitalized costs attributable to properties sold. Capitalized costsare allocated to properties sold based on the proportion of claims sold to theclaims remaining within the project area.

*Mining Claims and Land*

Costs of acquiring and developing mineral propertiesare capitalized as appropriate by project area. Exploration and related costsand costs to maintain mineral rights and leases are expensed as incurred. Whena property reaches the production stage, the related capitalized costs areamortized using the units-of-production method on the basis of periodicestimates of ore reserves. Mineral properties are periodically assessed forimpairment of value, and any subsequent losses are charged to operations at thetime of impairment. If a property is abandoned or sold, its capitalized costsare charged to operations.

*Provision for Taxes*

Income taxes are provided based upon the liabilitymethod of accounting pursuant to Statement of Financial Accounting StandardsNo. 109, “Accounting for Income Taxes” (hereinafter “SFAS No. 109”).Under this approach, deferred income taxes are recorded to reflect the taxconsequences in future years of differences between the tax basis of assets andliabilities and their financial reporting amounts at each year-end. A valuationallowance is recorded against the deferred tax asset if management does notbelieve the Company has met the “more likely than not” standard imposed by SFASNo. 109 to allow recognition of such an asset.

*Reclamation and Remediation*

Expenditures for ongoing compliance with environmentalregulations that relate to current operations are expensed or capitalized asappropriate. Expenditures resulting from the remediation of existing conditionscaused by past operations that do not contribute to future revenue generationsare expensed. Liabilities are recognized when environmental assessmentsindicate that remediation efforts are probable and the costs can be reasonablyestimated.

Estimates of such liabilities are based upon currentlyavailable facts, existing technology and presently enacted laws and regulationstaking into consideration the likely effects of inflation and other societaland economic 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.At March 31, 2007 and December 31, 2006, the Company had accruedliabilities for compliance with environmental regulations of $714,134 and $0respectively.

8

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*Reclassification*

Certain amounts from prior periods have been reclassifiedto conform to the current period presentation. This reclassification hasresulted in no changes to the Company’s accumulated deficit or net lossespresented. Previously, directors’ fees paid by issuing common stock were notdisclosed separately in the Company’s statement of cash flows. These fees werepart of services and expenses paid with common stock.

**NOTE 3—INVESTMENTS**

The Company accounts for its investments in debt andequity securities in accordance with the provisions of Statement of FinancialAccounting Standards No. 115, “Accounting for Certain Investments in Debtand Equity Securities,” and reports its investments in available for salesecurities at their fair value, with unrealized gains and losses excluded fromincome or loss and included in other comprehensive income or loss.

On January 30, 2007, the Company completed itspreviously announced acquisition of all of the issued and outstanding shares ofEquatorial Mining North America, Inc., a Delaware corporation (“Equatorial”).Upon its acquisition, Equatorial was consolidated as a subsidiary of theCompany.

In November 2006, the Company acquired 150,000shares of common stock at $2.00 per share of Atlas Precious Metals, Inc.in connection with a property acquisition. Because the shares are not readilymarketable and relate to a privately held entity, the Company has elected torecord its interest at a fair value of zero for financial reporting purposes.

At March 31, 2007 and December 31, 2006 theCompany had no marketable securities, apart from the aforementioned Atlas PreciousMetals, Inc. stock.

**NOTE 4—LAND, MINING CLAIMS, PROPERTY,AND EQUIPMENT**

During the three months ended March 31, 2007 theCompany purchased vehicles for $34,206, field equipment for $45,173, and officeand computers and related equipment for $57,366. The vehicles, equipment andcomputers will be depreciated over useful lives of three to seven years usingstraight line depreciation. Depreciation expense for the three months endedMarch 31, 2007 is $32,840.

During the year ended December 31, 2006 theCompany purchased vehicles for $164,575, field equipment for $10,116, and officeand computers and related equipment and improvements for $260,194. Thevehicles, equipment and computers will be depreciated over useful lives ofthree to seven years using straight line depreciation. Depreciation expense forthe year ended December 31, 2006 is $57,578.

On November 12, 2004, IGMI entered into an option tolease all property and assets of the Mount Hope Molybdenum Property from Mt.Hope Mines, Inc. Exercise of the option in October 2005 allows IGMI to proceedfor the next 30 years with permitting, developing and mining the deposit andfor so long thereafter as IGMI maintains an active operation. At December 31,2004, the Company had paid $456,286 on the Mount Hope option and issued 500,000shares of common stock with warrants to purchase 500,000 shares of common stockfor the Mount Hope option.

Pursuant to the terms of the lease, the underlyingtotal royalty on production payable to Mt. Hope Mines, Inc., less certaindeductions, is 3 percent for a molybdenum price up to $12 per pound, 4 percentfor a molybdenum price up to $15 per pound, and 5 percent for a molybdenumprice above $15 per pound. IGMI is subject to certain periodic paymentstotaling $1,550,000 to be paid as per schedule between January 2006 and October2010. IGMI has a best efforts obligation, by the third anniversary of thelease, to pay Mt. Hope Mines, Inc. a recoverable periodic payment (advanceroyalty) of 3 percent of the estimated capital cost of the project. Thisobligation to pay 3 percent of the construction capital is subject to certainextension provisions through October 2013. Minimum royalty payment after themine commences operations is $0.27 a pound of molybdenum if produced or$500,000 per year if the plant is idle. Additionally, IGMI is obligated to payExxon Mineral Company a one percent net smelter royalty on all production

During the year ended December 31, 2005 the Companyentered into an option agreement with High Desert Winds LLC (“High Desert”) forHigh Desert’s approximately ten square mile property in Nye

9

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County,Nevada, including water rights, mineral and surface rights, buildings andcertain equipment (the “Hall Tonopah Property”). Pursuant to the terms of thisagreement, the Company was granted a nine-month option to purchase the HallTonopah Property. The Company extended the option agreement with High Desertwith payments of $75,000 in June 2005 and $100,000 in August 2005. The optionto purchase the Hall Tonopah Property was subsequently extended to March 17,2006 with an $80,000 payment on January 17, 2006. On March 17, 2006, theCompany entered into a purchase agreement with High Desert whereby it purchaseda substantial portion of the Hall Tonopah Property. At closing, the Companypaid High Desert a cash payment of approximately $4.5 million for the portionof the Hall Tonopah Property that it purchased and made a deferred payment of$989,789 in November of 2006 for the purchase of the remaining portion of thisproperty for the total purchase price of $5,449,616 including $32,698 inbuildings and equipment at the Hall Tonopah site. The primary purpose of theHall Tonopah purchase was to further the Company’s strategy of exploring anddeveloping potential molybdenum properties. The buildings and improvements tothe property were valued at $32,698 based on a previous recent transaction atthe property, and the remaining amount was allocated to the land.  At December 31, 2006 the Hall Tonopahproperty was subject to a 12 percent royalty payable with respect to the netrevenues generated from molybdenum or copper minerals removed from theproperties purchased.  

On January 30, 2007, the Company completed theacquisition of all of the issued and outstanding shares of Equatorial MiningNorth America, Inc., a Delaware corporation (“Equatorial”), from EquatorialMining Limited (“Equatorial Mining Limited”).  Equatorial holds the 12percent net smelter royalty interest in the mineral rights of the Hall Tonopahproperty and as a result of this purchase, the Company now owns theHall-Tonopah property and all associated mineral rights without future royaltyobligations.  As set forth in thePurchase Agreement, the Company paid to Equatorial Mining Limited approximately$4.9 million in cash at closing. At first commercial production of theproperty, the Company has agreed to pay an additional $6.0 million. Because theCompany cannot determine beyond a reasonable doubt that the mine will attaincommercial production the Company has chosen not to recognize the $6.0 millionliability in its financial statements.  Bypurchasing Equatorial, the Company also assumed an approximate $460,000 cashreclamation bond which will continue to be held by the Nevada Department ofEnvironmental Protection and the Bureau of Land Management and acquired cash ofapproximately $1.3 million.

In July 2006, the Company purchased 1,503 acres ofdeeded land which includes 70,000 acres of BLM grazing rights and certain waterrights known as the Gale Ranch for $1,869,373. This ranch is located near theMount Hope mine site. The primary reason for the purchase of this asset was toacquire the water rights of 1,200 acre feet for use by the Mount Hopeoperations. The Company paid $54,982 for the water rights and the remainingamount was used to purchase the land and the grazing rights.

In November 2006, the Company purchased from AtlasPrecious Metals, Inc. patented millsite claims for $32,090, water rights for$42,787, fee land in Eureka, Nevada for $26,740 with improvements of $5,350 and150,000 shares of Atlas Precious Metals, Inc. restricted common stock valued at$2.00 per share plus closing costs at $320,900. This investment was written offand recorded at a fair value of zero for financial reporting purposes. Thetotal capitalized value related to water rights, millsite and fee land is $106,967.The primary purpose of this purchase was to acquire the water rights of 1,448acre feet for the Mount Hope operation.

On March 2, 2007, the Company purchased theFlorence patented lode mining claim for $175,000 cash. This claim is adjacentto the Hall Tonopah property and is included in the total Hall Tonopah Propertyamount.

On March 23, 2007, the Company completed the  purchase of certain patented lode miningclaims referred to as the Liberty Claims on property adjacent to Hall Tonopahproperty for cash of $75,000 and 150,000 shares of restricted common stockvalued at $420,000.

The Company’s mining claims and land purchased priorto 2006 consist in part of (a) approximately 107 acres of fee simple land inthe Pine Creek area of Shoshone County, Idaho, (b) six patented mining claimsknown as Chicago-London group, located near the town of Murray in ShoshoneCounty, Idaho, (c) 265 acres of private land with three unpatented claimsin Josephine County, Oregon, known as the Turner Gold project.

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Capital assets are recorded at cost. Depreciation iscalculated using the straight-line method over three to twenty years. Thefollowing is a summary of property, equipment, and accumulated depreciation atMarch 31, 2007 and December 31, 2006:
| ** **                                | ** ** | ** ** | ** ** | ** **       | ** ** | **Net Book**           | ** ** | **Net Book**           | ** ** |
|-------------------------------------------|------------|------------|------------|------------------|------------|-----------------------------|------------|-----------------------------|------------|
| ** **                                | ** ** | ** ** | ** ** | **Accumulated**  | ** ** | **Value at**           | ** ** | **Value at**           | ** ** |
| ** **                                | ** ** | **Cost**   | ** ** | **Depreciation** | ** ** | **Mar. 31, 2007** | ** ** | **Dec. 31, 2006** | ** ** |
| Depreciable Capital  Assets:              |       |       |       |             |       |                        |       |                        |       |
| Field Equipment                           |       | $          | 60,717     |             | $          | 5,280                       |       | $                           | 55,437     |   | $ | 13,525 |   |
| Vehicles                                  |       | 220,157    |       | 43,640           |       | 176,517                     |       | 153,621                     |       |
| Office Furniture                          |       | 45,511     |       | 10,493           |       | 35,018                      |       | 23,734                      |       |
| Computer  Equipment                       |       | 247,862    |       | 39,557           |       | 208,305                     |       | 185,487                     |       |
| Leasehold  Improvements                   |       | 28,110     |       | 3,238            |       | 24,872                      |       | 18,993                      |       |
| Imp. to Fee Land  in Eureka               |       | 5,350      |       | 112              |       | 5,238                       |       | 5,305                       |       |
| Bldg & Equip  Hall Tonopah            |       | 32,698     |       | 3,542            |       | 29,156                      |       | 29,973                      |       |
| Total Depreciable  Assets                 |       | 640,405    |       | 105,862          |       | 534,543                     |       | 430,638                     |       |
| Non Depreciable Capital  Assets:          |       |       |       |             |       |                        |       |                        |       |
| Pine Creek Land                           |       | 1,450      |       | —           |       | 1,450                       |       | 1,450                       |       |
| Chicago-London  Group                     |       | 80,001     |       | —           |       | 80,001                      |       | 80,001                      |       |
| Liberty Claims                            |       | 495,000    |       | —           |       | 495,000                     |       | —                      |       |
| Turner Gold Land                          |       | 415,462    |       | —           |       | 415,462                     |       | 415,462                     |       |
| Hall Tonopah  Property                    |       | 9,648,073  |       | —           |       | 9,648,073                   |       | 5,416,918                   |       |
| Fee Land Eureka,  Nevada                  |       | 26,740     |       | —           |       | 26,740                      |       | 26,740                      |       |
| Atlas Water  Rights & Millsite Claims |       | 74,877     |       | —           |       | 74,877                      |       | 74,877                      |       |
| Gale Ranch &  Water Rights            |       | 1,869,373  |       | —           |       | 1,869,373                   |       | 1,869,373                   |       |
| Total Non Depreciable  Assets             |       | 12,610,976 |       | —           |       | 12,610,976                  |       | 7,884,821                   |       |
| Total Capital Assets                      |       | $          | 13,251,381 |             | $          | 105,862                     |       | $                           | 13,145,519 |   | $ | 8,315,459 |   |

 

**NOTE 5—RELATED PARTY TRANSACTIONS**

On January 30, 2007 the Company entered into anemployment agreement with a son of the Company’s Chairman for services asDirector of Projects and Operations. Under this agreement, the Company granteda stock option to purchase 140,000 shares at $2.78 per share, the closing priceof the Company’s stock on January 30, 2007.

Additional related party transactions are included aspart of Note 8.

**NOTE 6—COMMON STOCK**

The Company issued 30,000 shares of stock for anoption exercised in 2006.  Warrants andoptions in the amount of 479,053 and 100,000 were exercised for cash in theamount of $524,394 and $30,000 respectively, less brokerage fees of $30,592 onthe warrants.  The Company issued 150,000shares of restricted common stock in the completion of the Liberty Claimspurchase in the amount of $420,000 and issued 75,000 shares of restrictedcommon stock in exchange for services valued at $303,750.  The Company issued 500,000 shares ofrestricted stock to officers of the Company. During the first three months of 2007, shareholders returned to theCompany 38,998 shares of common stock due to a stock option exercise pricingerror in 2006.  At the end of March, theCompany was in the process of a private placement offering and had received$14,000,000 in exchange for 4,117,647 common shares.  This transaction has been classified as commonstock issuable on the Company’s financial statements.

During the year ended December 31, 2006, theCompany had conducted two private placements of stock. In these privateplacements, the Company issued 18,021,936 shares of common stock with warrantsfor cash of $33,324,130 less placement agent and finder’s fees of $2,513,383and issued 170,550 shares of common stock for finder’s fees valued at $187,605.The Company issued 1,482,147 shares of common stock for the cashless exerciseof warrants and 1,008,837 shares of common stock for the cashless exercise ofstock options. Warrants and options in the amount of 5,090,833 and 340,000 wereexercised for cash in

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theamount of $4,109,833 and $57,427 respectively, less combined brokerage fees of$230,684. The Company issued 50,000 shares of common stock for services valuedat $120,250.

During 2004, the board of directors and shareholdersadopted amended and restated articles of incorporation, which authorized theCompany’s issuance of 200,000,000 shares of common stock with a $0.001 parvalue. Prior to 2004, the Company was authorized to issue 25,000,000 shares ofcommon stock with a par value of $0.10.

The Company is authorized to issue 200,000,000 sharesof common stock. All shares have equal voting rights, are non-assessable andhave one vote per share. Voting rights are not cumulative and therefore, theholders of more than 50% of the common stock could, if they choose to do so,elect all of the directors of the Company.

**NOTE 7—PREFERRED STOCK**

On October 28, 2004, shareholders of the Companyauthorized 10,000,000 shares of no par value preferred stock. The authorizedbut unissued shares of preferred stock may be issued in designated series fromtime to time by one or more resolutions adopted by the board of directors. Thedirectors have the power to determine the preferences, limitations and relativerights of each series of preferred stock.

On November 16, 2004, the board of directorsunanimously consented to amend the articles of incorporation of the Company.The amendment reclassified 10,000,000 shares of the Company’s no par valuepreferred stock into 10,000,000 shares of $0.001 par value Series Apreferred stock. At December 31, 2005 and 2006, no shares of $0.001 parvalue Series A preferred stock were issued or outstanding.

**NOTE 8—STOCK BASED COMPENSATION**

**Stock Options**

During the three months ending March 31, 2007 theCompany issued 1,120,000 options within the 2006 Plan with an exercise priceranging from $2.41 to $2.78 with vesting at various dates through 2009.  These options were granted to members of theboard of directors, officers, employees and consultants of the Company.    The fair value of each option is estimatedon the issue date using the Black-Scholes Option Price Calculation.  The following assumptions were made inestimating the fair value: risk free interest of 4.58% to 4.94%; volatility of..9142 to .9228; dividend rate of 0%; and expected life of 2.0 years.   Thetotal value of options awarded during the first three months of 2007 wascalculated at $1,606,619. Expense was recorded of $1,814,650 for the optionswhich vested in 2007.

During 2006, the board of directors and shareholdersadopted the Idaho General Mines, Inc. 2006 Equity Incentive Plan (the “2006Plan”). During 2004, the board of directors and shareholders adopted the IdahoGeneral Mines, Inc. 2003 Stock Option Plan (the “2003 Plan” and togetherwith the 2006 Plan, the “Plans”). The purpose of the Plans is to give theCompany greater ability to attract, retain, and motivate its officers and keyemployees. The Plans are intended to provide the Company with ability toprovide incentives more directly linked to the success of the Company’sbusiness and increases in shareholder value.

Under the 2006 Plan, the board of directors isauthorized to grant incentive stock options (“ISOs”) to employees (pursuant toInternal Revenue Code 422), non-statutory stock options, restricted stock awards,restricted stock units and stock appreciation rights. The aggregate number ofshares of common stock that may be issued pursuant to awards granted under the2006 Plan will not exceed 3,500,000 plus the number of shares that areungranted and those that are subject to reversion under the 2003 Plan. As ofMarch 31, 2007, the maximum number of shares available for issuance underthe 2003 Plan was 360,000 shares.

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Sharesunder the 2003 Plan that become eligible for awards under the 2006 Plan may notbe granted again under the 2003 Plan.

During the year ended December 31, 2006, theCompany granted 1,665,000 non-qualified stock options outside of the Plansprior to our AMEX listing with an exercise price ranging from $2.25 to $3.68with vesting at various dates through 2008. These options were granted tomembers of the board of directors, officers, and employees of the Company. Nooptions or stock grants were made under the 2006 Plan during the year endedDecember 31, 2006. The Company issued 60,000 of ISOs within the 2003 Planwith an exercise price of $2.10 with vesting at various dates through 2008. Thefair value of each option is estimated on the issue date using theBlack-Scholes Option Price Calculation. The following assumptions were made inestimating the fair value: risk free interest of 5%; volatility of 101%;dividend rate of 0% and expected life of 2.4 years. The total value of optionsawarded during 2006 was calculated at $3,346,975. Expense was recorded of$2,325,500 for the options which vested in 2006.

**RestrictedStock**

During the three months ending March 31, 2007 theCompany issued 500,000 shares of restricted stock to officers of the Companythat will vest based on certain performance based milestones established foreach officer**. **Thetotal value of restricted stock awarded and expensed during the first threemonths of 2007 was calculated at $1,390,000.

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The following is a summary of the Company’s stockoption plans as of March 31, 2007:
| ** **                                                  | ** ** | **Number of  securities to be  issued upon  exercise of  outstanding options** | ** ** | **Weighted average  exercise price of  outstanding options** | ** ** | **Number of  securities  remaining available  for future issuance  under equity  compensation plans** | ** ** |
|-------------------------------------------------------------|------------|--------------------------------------------------------------------------------------------------------------|------------|----------------------------------------------------------------------------------|------------|-------------------------------------------------------------------------------------------------------------------------------------|------------|
| Equity  compensation plans not approved by security holders |       | 2,863,333                                                                                                    |       | $                                                                                | 1.66       |                                                                                                                                | n/a        |   |
| Equity  compensation plans approved by security holders:    |       |                                                                                                         |       |                                                                             |       |                                                                                                                                |       |
| 2006 Plan                                                   |       | 1,120,000                                                                                                    |       | $                                                                                | 2.77       |                                                                                                                                | 1,880,000  | (1) |
| 2003 Plan                                                   |       | 540,000                                                                                                      |       | 0.59                                                                             |       | 360,000                                                                                                                             |       |
| Total                                                       |       | 4,523,333                                                                                                    |       | $                                                                                | 1.81       |                                                                                                                                | 2,240,000  |   |

 

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(1)           Theaggregate number of shares of common stock that may be issued pursuant toawards granted under the 2006 Equity Incentive Plan will not exceed 3,500,000plus the number of shares that are ungranted and those that are subject to reversionunder 2003 Stock Plan. Shares under the 2003 Plan that becomes eligible forawards under the 2006 Plan may not be granted again under the 2003 Plan.

The following is a summary of stock option activity in2006 and 2007:
| ** **                                                  | ** ** | **Number of Shares  Under Options** | ** ** | **Weighted Average  Exercise Price** | ** ** |
|-------------------------------------------------------------|------------|----------------------------------------------------|------------|------------------------------------------------|------------|
| Outstanding  January 1, 2006                                |       | 4,020,000                                          |       | $                                              | 0.43       |   |
| Granted                                                     |       | 1,725,000                                          |       | 3.01                                           |       |
| Exercised                                                   |       | 1,615,000                                          |       | 0.49                                           |       |
| Forfeited                                                   |       | 480,000                                            |       | —                                         |       |
| Expired                                                     |       | —                                             |       | —                                         |       |
| Outstanding at  December 31, 2006                           |       | 3,650,000                                          |       | $                                              | 1.48       |   |
| Options exercisable  at December 31, 2006                   |       | 2,705,000                                          |       |                                           |       |
| Weighted average  fair value of options granted during 2006 |       | $                                                  | 3.10       |                                           |       |   |
| Outstanding  January 1, 2007                           |       | 3,650,000                                          |       | $                                              | 1.48       |   |
| Granted                                                     |       | 1,120,000                                          |       | 2.77                                           |       |
| Exercised                                                   |       | 130,000                                            |       | 0.26                                           |       |
| Forfeited                                                   |       | 116,667                                            |       |                                           |       |
| Expired                                                     |       | —                                             |       |                                           |       |
| Outstanding  March 31, 2007                            |       | 4,523,333                                          |       | $                                              | 1.81       |   |
| Exercisable at  March 31, 2007                         |       | 3,941,666                                          |       |                                           |       |
| Weighted Average Fair  Value Granted During 2007            |       | $                                                  | 1.43       |                                           |       |   |

 

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**NOTE 9—COMMON STOCK WARRANTS**

At the end of March, 2007 the Company was in theprocess of a private placement offering and had received $14,000,000 inexchange for 4,117,647 common shares with 2,058,824 warrants attached.

During the year ended December 31, 2006, the Companygranted 1,596,243 common stock warrants (in conjunction with the issuance ofcommon stock) with an exercise price of $1.75, 85,275 of these warrants areattached to 170,550 shares of stock issued as fee for a private placement.  Also the Company granted 8,300,000 commonstock warrants (in conjunction with the issuance of common stock) with anexercise price of $3.75; these common stock warrants expire at various datesthrough 2012.  The Company issued 75,000 warrants in exchange for serviceswith a value of $56,778.  The fair value of the warrants were estimatedusing the Black-Scholes Price Calculation.

**NOTE 10—INCOME TAXES**

At March 31, 2007 and December 31, 2006 theCompany had deferred tax assets principally arising from the net operating losscarry forwards for income tax purposes multiplied by an expected rate of 34%.As management of the Company cannot determine that it is more likely than notthat the Company will realize the benefit of the deferred tax assets, avaluation allowance equal to the deferred tax asset has been established atMarch 31, 2007 and December 31, 2006. The significant components ofthe deferred tax asset at March 31, 2007 and December 31, 2006 were asfollows:
|                                         | ** ** | **March 31,  2007** | ** ** | **December 31,  2006** | ** ** |
|-----------------------------------------|------------|--------------------------|------------|-----------------------------|------------|
| Net operating  loss carry forward       |       | $                        | 11,420,000 |                        | $          | 8,425,000 |   |
| Deferred tax  asset                     |       | $                        | 3,875,000  |                        | $          | 2,865,000 |   |
| Deferred tax  asset valuation allowance |       | $                        | (3,875,000 | )                           | $          | (2,865,000 | ) |
| Net deferred tax asset                  |       | $                        | —     |                        | $          | — |   |

 

At March 31, 2007 and December 31, 2006 theCompany had a net operating loss carry forward of approximately $11,420,000 and$8,425,000 respectively, which expire in the years 2022 through 2027. Thechange in the allowance account from December 31, 2006 to March 31, 2007was $1,010,000.

**NOTE 11—COMMITMENTS AND CONTINGENCIES**

In January 2007, the Company entered into a noteto purchase a 2007 1 ton pickup for $30,451 at an implied interest rate of 7.2%and with a term of three years.

In December 2006, the Company entered into twofive year capital leases for office equipment. The Company inDecember 2006 also entered into a note to purchase a 2007 1 ton pickup for$33,571 at an interest rate of 0.9% and with a term of three years. The tablebelow shows these obligations over the next five years.
| **Year**                  | ** ** | **Lease Payment** | ** ** | **Interest on Leases** | ** ** | **Note Payment** | ** ** | **Note Interest** | ** ** |
|---------------------------|------------|------------------------|------------|----------------------------------|------------|-----------------------|------------|------------------------|------------|
| 2007 (Remaining  portion) |       | $                      | 7,731      |                             | $          | 1,607                 |       | $                      | 16,997     |   | $ | 1582 |   |
| 2008                      |       | 10,308                 |       | 1,751                            |       | 22,667                |       | 1404                   |       |
| 2009                      |       | 10,308                 |       | 1,280                            |       | 22,667                |       | 551                    |       |
| 2010                      |       | 10,308                 |       | 780                              |       | 943                   |       | 6                      |       |
| 2011                      |       | 9,449                  |       | 251                              |       | —                |       | —                 |       |
| Total                     |       | $                      | 48,104     |                             | $          | 5,669                 |       | $                      | 63,274     |   | $ | 3,543 |   |

 

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Set forth below is a schedule of the Company’scontractual obligations for payments under the Mount Hope lease agreement:

**Contractual Obligations for FuturePayments under Mount Hope Lease**
| ** **                                         | ** ** | ** **             | ** ** | **Project Financing Received**                                      | ** ** | **Project Financing Not Received**                                                                                                                               | ** ** |
|----------------------------------------------------|------------|------------------------|------------|-------------------------------------------------------------------------------|------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|
| **Date**                                           | ** ** | **Fixed Payment** | ** ** | **by Date Indicated**                                               | ** ** | **and Deferral Elected**                                                                                                                                              | ** ** |
| April 19,  2007                               |       | $                      | 125,000    |                                                                          |       |                                                                                                                                                                            |       |   |
|                                               |       |                   |       |                                                                          |       |                                                                                                                                                                            |       |
| October 19,  2007                             |       | $                      | 350,000    |                                                                          |       |                                                                                                                                                                            |       |   |
|                                               |       |                   |       |                                                                          |       |                                                                                                                                                                            |       |
| October 19,  2008                             |       |                   |       | Greater  of 3% of Construction  Capital Cost Estimate or  $2,500,000(1)(3)(4) |       | $350,000                                                                                                                                                                        |       |
|                                               |       |                   |       |                                                                          |       |                                                                                                                                                                            |       |
| October 19,  2009                             |       |                   |       | Greater  of 3% of Construction  Capital Cost Estimate or  $2,500,000(1)(3)(4) |       | $350,000                                                                                                                                                                        |       |
|                                               |       |                   |       |                                                                          |       |                                                                                                                                                                            |       |
| October 19,  2010                             |       |                   |       | $2,500,000(3)                                                                 |       | Greater  of $2,500,000 or 3% of  Construction Capital Cost  Estimate(3)(4)                                                                                                      |       |
|                                               |       |                   |       |                                                                          |       |                                                                                                                                                                            |       |
| October 19,  2011                             |       |                   |       | 3%  of Construction Capital  Cost Estimate(3)(4)                              |       | Greater  of (a) $2,500,000 or (b),  if 3% of Construction Capital  Cost Estimate is greater than  $2,500,000, then 50% of the  difference between 3% and  $2,500,000(3)(4) |       |
|                                               |       |                   |       |                                                                          |       |                                                                                                                                                                            |       |
| October 19,  2012                             |       |                   |       | 3%  of Construction Capital  Cost Estimate(3)(4)                              |       | Greater  of (a) $2,500,000 or (b),  if 3% of Construction Capital  Cost Estimate is greater than  $2,500,000, then 50% of the  difference between 3% and  $2,500,000(3)(4) |       |
|                                               |       |                   |       |                                                                          |       |                                                                                                                                                                            |       |
| October 19, 2013  and each year thereafter(3) |       | $                      | 500,000    | (3)                                                                           |       |                                                                                                                                                                            |       |   |

 

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(1)           If Project Financing is not received byOctober 19 of the year shown in the left column, then the Company mayelect to defer this payment and proceed to make the payments under the columnlabeled “Project Financing Not Received and Deferral Elected.”  If priorto making all of the payments under the column “Project Financing Not Receivedand Deferral Elected” the Company obtains project financing, the Company wouldbe required to make this payment and to pay $500,000 each year thereafter.

(2)           In addition to the payments above, the Companyis required to pay to MHMI a production royalty after the commencement ofCommercial Production of the greater of (i) $.20/lb of molybdenum metal(or the equivalent thereof if another Product is sold) sold from the property(not to exceed the amount of Net Returns we receive for those products) or(ii) 3% of the Net Returns, subject to certain adjustments as set forth inthe lease.

(3)           To be offset from the production royaltydescribed in (3) above. The Company may recover the aggregate of thesepayments by retaining 50% of each production royalty payment due to MHMI.

(4)           “Construction Capital Cost Estimate” means theCompany’s projected costs plus 10% to put the Mount Hope property intocommercial production.

On January 30, 2007, the Company completed itspreviously announced acquisition of all of the issued and outstanding shares ofEquatorial Mining North America, Inc., a Delaware corporation (“Equatorial”),from Equatorial Mining Limited (“Equatorial Mining Limited”).  Equatorialholds a 12 percent net smelter royalty interest in the mineral rights of theCompany’s Hall

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Tonopahmolybdenum-copper property in Nye County, Nevada. The Company now owns theHall-Tonopah property and all associated mineral rights without future royaltyobligations.  As set forth in thePurchase Agreement, the Company paid to Equatorial Mining Limited approximately$4.9 million in cash at closing. At first commercial production of theproperty, the Company has agreed to pay an additional $6.0 million.

**Environmental Considerations:**

The Company owns and has owned mineral property interestson certain public and private lands in Shoshone County, Idaho. The Company’smineral property holdings include lands contained in mining districts that havebeen designated as “Superfund” sites pursuant to the ComprehensiveEnvironmental Response, Compensation, and Liability Act. The Company and itsproperties have been and are subject to a variety of federal and stateregulations governing land use and environmental matters. The Company believesit has been in substantial compliance with all such regulations, and is unawareof any pending action or proceeding action relating to regulatory matters thatwould affect the financial position of the Company.  At March 31, 2007, the Company hadaccrued liabilities for compliance with environmental regulations of$714,134.  The Company’s managementacknowledges, however, that the possibility exists that the Company may besubject to further environmental liabilities associated with its properties inthe future, and that the amount and nature of any liabilities the Company maybe held responsible for is impossible to estimate.

**NOTE 12—SUBSEQUENT EVENTS**

In April 2007, the Company purchased 1,675 acres ofland known as the Bobcat Ranch including all water rights and various personalproperty for $3,000,000 plus another $200,500 earnest money which was depositedin escrow on March 8, 2007 and is recorded in the deposits account as of March31, 2007.  This ranch is located near theMount Hope mine site.

On March 29, 2007, the Company announced the privateplacement of units for gross proceeds of $25,000,000, with net proceeds to theCompany of approximately $23.5 million before legal and other relatedexpenses.  In the aggregate, the Company agreed to issue 7.35 millionunits at a price of $3.40 per unit.  Each unit will consist of one shareof common stock and a warrant to purchase one half of one share of commonstock. Each warrant will be exercisable at a price of $5.20 per whole share fora period of one year from the date of closing.  As of March 31, 2007 theCompany had issued 4,117,647 shares and warrants to purchase 2,058,824 sharespursuant to this private placement and had received $14,000,000 and has beenclassified as Common stock issuable on our financial statements. The Units wereoffered and sold pursuant to exemptions from registration under Regulation S ofthe Securities Act of 1933, as amended (the “Securities Act”), for offers andsales occurring outside the United States, and Rule 506 of Regulation D andSection 4(2) of the Securities Act, as a transaction not involving any publicoffering. The Company plans to use net proceeds from the financing to continuethe permitting and development of the Company’s Mount Hope molybdenum project,for drilling and evaluation work on the Hall-Tonopah molybdenum project, andfor general corporate purposes.

On May 9, 2007, the Company purchased water rightsknown as the Risi Ranch water rights for cash of $1,371,429 and 17,000 sharesof IGMI restricted stock.  The Companyhas deposited $40,000 in escrow on this transaction.

We completed our Phase 1 drilling program at ourHall-Tonopah project located in Nye County, Nevada. The drilling program wasdesigned to validate and confirm the continuity of mineralization indicated inthe previous results of drilling by Anaconda and Cyprus. The new drilling hasconfirmed previous drill results for the upper ore body, and has indicated nearsurface high grade mineralization greater than 0.10 % on the east side of theexisting molybdenum pit.

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**ITEM 2.**                                                     MANAGEMENT’SDISCUSSION AND ANALYSIS OR PLAN OF OPERATION

The following discussionof our financial condition and plan of operations constitutes management’sreview of the factors that affected our financial and operating performance forthe three months ended March 31, 2007 and 2006. This discussion should be read in conjunction with the financialstatements and notes thereto contained elsewhere in this report and in our Form10-KSB, for the year ended December 31, 2006.

**Overview**

We are in the business ofthe exploration, development and, if warranted, the mining of propertiescontaining molybdenum, as well as silver, gold, base metals and other specialtymetals. We currently have a 30-year renewable lease for the lands relatedto, possess surface rights for, and own patented and unpatented claims to, theMount Hope Project, a primary molybdenum property, located in Eureka County,Nevada. In 2006, we acquired a second significant molybdenum project, theHall-Tonopah project, located in Nye County, Nevada. We also own otherproperties and mineral rights on which we intend to conduct mineral explorationand evaluation for determining economic viability for further development. Wecontinue to identify, investigate, and acquire other potential properties forfuture development.

**MountHope**.  InNovember 2004, we entered into an option agreement with Mount HopeMines, Inc., or MHMI, pursuant to which we were granted an exclusiveone-year option to enter into a lease agreement for Mount Hope’s previouslydrilled molybdenum deposit consisting of 13 patented claims and 109 unpatentedclaims in Eureka County, Nevada, for a lease period of 30 years.  In April 2005, we completed a Phase 1Mine Feasibility Study with respect to Mount Hope and began the permittingprocess for placing into production an open pit molybdenum mine, concentratorand processing facility capable of producing 40,000 tonnes (44,093 tons) of oreper day. In October 2005, we exercised the option and our lease agreementwith MHMI became effective.

In December 2005, wecompleted a Technical Report which evaluated the potential to profitablyextract the deeper portion of the Mount Hope deposit and augmented the mineplan contained in the 2005 Phase I Mine Feasibility Study. The augmented mineplan currently allows for the mining and processing of 920 million tonnes (1.0billion tons) of molybdenum bearing rock over a mine production life of 50 ormore years.

We are currentlyin the process of developing a new bankable feasibility study with respect tothe Mount Hope Project, which is scheduled to be completed by July 2007.The bankable feasibility study will include optimized mine and waste rockplacement plans as well as revised estimates for capital and operating costs inlight of industry wide increases in input commodity, labor and constructioncosts over the last two years.  As we arecurrently focused primarily on the development of the Mount Hope Project, we donot expect to generate revenues from operations before production of molybdenumbegins at the Mount Hope Project.

**HallTonopah**.  InMarch 2006, we purchased from High Desert Winds LLC it’s approximately tensquare mile property in Nye County, Nevada, including water rights, mineral andsurface rights, buildings and certain equipment. The property includes the former Hall molybdenum and copper depositwhich was mined by open pit methods between 1982 and 1985 by the AnacondaMinerals Company and between 1988 and 1991 by Cyprus Metals Company for molybdenum. EquatorialTonopah, Inc. mined copper from 1999 to 2000 on this property. Much of thedeposit was drilled but not developed or mined.

In January 2007, wepurchased 100% of the Stock in Equatorial Mining North America, Inc. andits two subsidiaries, which owned a 12% net smelter returns royalty on theHall-Tonopah property, from Equatorial Mining Pty. Limited.

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In January 2007, wealso began a drilling program at Hall-Tonopah on the molybdenum mineralizationof the existing molybdenum pit developed by Cyprus and an east extensionmineralized area near the top of the east side of the existing pit. $2.2million was budgeted for exploratory and mineralization confirmation drilling.This program includes 13 RC drill holes and six diamond drill holes. We expectcompletion and results of this drilling program in the second quarter of 2007.Assay data will be confirmed through our geological quality control program andthen incorporated into a mineralization model.

We also currently ownseveral other properties located in the western United States.  These properties include additionaladvanced-stage molybdenum deposits as well as copper and gold deposits.

**Critical Accounting Estimates**

**Estimates**

The process of preparingfinancial statements in conformity with US GAAP requires the use of estimatesand assumptions regarding certain types of assets, liabilities, revenues, andexpenses.  Such estimates primarilyrelate to unsettled transactions and events as of the date of the financialstatements.  Accordingly, uponsettlement, actual results may differ from estimated amounts.

**Basic andDiluted Net Loss Per Share**

Net loss per share wascomputed by dividing the net loss by the weighted average number of shares outstandingduring the period.  The weighted averagenumber of shares was calculated by taking the number of shares outstanding andweighting them by the amount of time that they were outstanding.

**MineralExploration and Development Costs**

All exploration expendituresare expensed as incurred. Significant property acquisition payments for activeexploration properties are capitalized. If no mineable orebody is discovered, previously capitalized costs areexpensed in the period the property is abandoned.  Expenditures to develop new mines, to definefurther mineralization in existing mineral deposits, and, in the future, toexpand the capacity of operating mines, will be capitalized and amortized on aunits of production basis over the economically demonstrated proven andprobable reserves.

Should a property beabandoned, its capitalized costs are charged to operations.  We charge to operations the allocable portionof capitalized costs attributable to properties sold.  Capitalized costs are allocated to propertiessold based on the proportion of claims sold to the claims remaining within theproject area.

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**MiningClaims and Land**

Costs of acquiring anddeveloping mineral properties are capitalized as appropriate by projectarea.  Exploration and related costs and coststo maintain mineral rights and leases are expensed as incurred.  When a property reaches the production stage,the related capitalized costs are amortized using the units-of-productionmethod on the basis of periodic estimates of ore reserves.  Mineral properties are periodically assessedfor impairment of value, and any subsequent losses are charged to operations atthe time of impairment.  If a property isabandoned or sold, its capitalized costs are charged to operations.

**Provisionfor Taxes**

Income taxes are providedbased upon the liability method of accounting pursuant to the Statement ofFinancial Accounting Standards No. 109, “Accounting for Income Taxes” (“**SFAS No. 109**”). Under this approach, deferred income taxes are recorded to reflect the taxconsequences in future years of differences between the tax basis of assets andliabilities and their financial reporting amounts at each year-end.  A valuation allowance is recorded against thedeferred tax asset if management does not believe we have met the “more likelythan not” standard imposed by SFAS No. 109 to allow recognition of such anasset.

**Propertyand Equipment**

Property and equipmentare being depreciated over useful lives of three to seven years usingstraight-line depreciation.

**Share-Based Compensation**

We account forstock-based compensation in accordance with SFAS No. 123(R), *Share-Based Payment*. Under the fair valuerecognition provisions of this statement, share-based compensation cost ismeasured at the grant date based on the value of the award and is recognized asexpense over the vesting period. Determining the fair value of share-basedawards at the grant date requires judgment, including estimating expecteddividends. In addition, judgment is also required in estimating the amount ofshare-based awards that are expected to be forfeited. If actual results differsignificantly from these estimates, stock-based compensation expense and ourresults of operations could be materially impacted.

**Resultsof Operations for the Three Months Ended March 31, 2007**

**Compared to Three Months Ended March 31, 2006**

We are classified as anexploration stage company with no producing mines and, accordingly, we do notproduce income.  Our net loss for thethree months ended March 31, 2007 was $(9,146,741) as compared to a net loss of$(2,070,417) for the three months

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ended March 31,2006.  The increase of $7,076,324 isattributable primarily to increased exploration and documentation studiesrequired to complete our Environmental Impact Statement and our bankablefeasibility study at Mount Hope significantly contributed to additionaloperating expenses.  We also incurredhigher corporate and administrative costs in a number of areas consistent withour substantially increased activity levels. These costs include employee compensation expenses, expansion ofcorporate personnel and associated costs, marketing and investor relationsexpenses, general legal expenses, and accounting and compliance issuesreflecting the greater complexity of our operations.

Exploration anddevelopment expenditures of $3,911,809 were incurred at the Mount Hope Projectand the Hall Tonopah Project during the three months ended March 31, 2007 asexploration and development activity proceeded at a very aggressive pace.  This is consistent with our stated objectiveto complete our Mount Hope Project plans and to focus on the permittingrequired to bring the project to commercial production.  All of the expenditures during the threemonths ended March 31, 2007 were related to this objective, and associated feasibilitystudy costs represent the majority of expenditures at the Mount Hope Project.

**Liquidity and Capital Resources**

We have limited capitalresources and thus have to rely upon the sale of equity and debt securities forthe cash required for exploration and development purposes, for acquisitionsand to fund our administration.  Since wedo not expect to generate any revenues in the near future, we must continue torely upon the sale of our equity and debt securities to raise capital.  There can be no assurance that financing,whether debt or equity, will always be available to us in the amount requiredat any particular time or for any period or, if available, that it can beobtained on terms satisfactory to us.

Our cash balance at March31, 2007 was $24,022,646 compared to $25,860,966 at March 31, 2006.  Total assets at March 31, 2007 were$37,999,016 compared to $30,907,250 at March 31, 2006.  The change in these balances reflects thepurchase of property and water rights for our Mount Hope project and thepurchase of Equatorial Mining North America to secure the royalty at our HallTonopah project offset by proceeds received in March, 2007, from a privateplacement of equity.  Liabilities atMarch 31, 2007 were $2,987,436 compared to $305,220 at March 31, 2006.  This increase in payables reflects ourincreased accounts payable due to increased drilling expenses and expensesrelated to the completion of our bankable feasibility study.

On January 10, 2006,we concluded a private placement of 3,441,936 units at a price of $1.10 perunit.  Each unit consisted of one shareof our common stock and one-half of one warrant to purchase one share of ourcommon stock.   Each whole warrant isexercisable for 24 months from the date of issuance and carries an exerciseprice of $1.75 per whole share.  Thegross proceeds of this offering were $3,786,129 and, after payment of salescommissions and finder’s fees, we received net proceeds of $3,620,730.

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On February 15,2006, we concluded a private placement of 15,000,000 units at a price of $2.00per unit. Each unit consisted of one share of our common stock and a warrant topurchase one-half of a share of our common stock. Each whole warrant isexercisable for five years from the date of issuance and carries an exerciseprice of $3.75 per whole share.  Thegross proceeds of this offering were $30,000,000 and, after payment of salescommissions and finder’s fees, we received net proceeds of $27,875,000.  In the aggregate, we issued 15 million sharesof common stock and warrants to purchase an additional 8.3 million shares,including warrants issued as compensation to the placement agent.

In January 2007, weentered into a note to purchase a 2007 1 ton pickup for $30,451 at an impliedinterest rate of 7.2% and with a term of three years.

InDecember 2006, we entered into two five year capital leases for officeequipment. In December 2006 we also entered into a note to purchase a 20071 ton pickup for $33,571 at an interest rate of 0.9% and with a term of threeyears. The table below shows these obligations over the next five years.
| **Year**                  | ** ** | **Lease Payment** | ** ** | **Interest on Leases** | ** ** | **Note Payment** | ** ** | **Note Interest** | ** ** |
|---------------------------|------------|------------------------|------------|----------------------------------|------------|-----------------------|------------|------------------------|------------|
| 2007 (Remaining  portion) |       | 7,731                  |       | 1,607                            |       | 16,997                |       | 1,582                  |       |
| 2008                      |       | 10,308                 |       | 1,751                            |       | 22,667                |       | 1,404                  |       |
| 2009                      |       | 10,308                 |       | 1,280                            |       | 22,667                |       | 551                    |       |
| 2010                      |       | 10,308                 |       | 780                              |       | 943                   |       | 6                      |       |
| 2011                      |       | 9,449                  |       | 251                              |       | —                |       | —                 |       |
| Total                     |       | $                      | 48,104     |                             | $          | 5,669                 |       | $                      | 63,274     |   | $ | 3,543 |   |
|                           |            |                        |            |                                  |            |                       |            |                        |            |  |  |  |  |

 

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Set forth below is a schedule of our contractual obligations forpayments under the Mount Hope lease agreement:

 

 
| Date                                                | ** ** | **Fixed Payment** | ** **     | **Project Financing  Received by Date  Indicated**                         | ** ** | **Project Financing Not  Received and Deferral  Elected**                              |
|-----------------------------------------------------|------------|-------------------|----------------|----------------------------------------------------------------------------|------------|----------------------------------------------------------------------------------------|
| April 19, 2007                                 |       | $                 | 125,000        |                                                                       |       |                                                                                   |   |
|                                                |       |              |           |                                                                       |       |                                                                                   |   |
| October 19, 2007                               |       | $                 | 350,000        |                                                                       |       |                                                                                   |   |
|                                                |       |              |           |                                                                       |       |                                                                                   |   |
| October 19, 2008                               |       |              |           | Greater of 3% of Construction Capital Cost Estimate  (4) or $2,500,000 (1) |       | Greater of  $350,000 or 3% of Construction Capital Cost Estimate                       |
|                                                |       |              |           |                                                                       |       |                                                                                   |
| October 19, 2009                               |       |              |           | $500,000 (2)(4)                                                            |       | Greater of  $350,000 or 3% of Construction Capital Cost Estimate                       |
|                                                |       |              |           |                                                                       |       |                                                                                   |
| October 19, 2010                               |       |              |           | $500,000 (2)(4)                                                            |       | Greater of  $2,500,000 or 3% of Construction Capital Cost Estimate (4)                 |
|                                                |       |              |           |                                                                       |       |                                                                                   |
| October 19, 2011                               |       |              |           | $500,000 (2)(4)                                                            |       | 3% of  Construction Capital Cost Estimate minus $2,500,000 (if a positive number)  (4) |
|                                                |       |              |           |                                                                       |       |                                                                                   |
| October 19, 2012                               |       |              |           | $500,000 (2)(4)                                                            |       | 3% of  Construction Capital Cost Estimate minus $2,500,000 (if a positive number)  (4) |
|                                                |       |              |           |                                                                       |       |                                                                                   |
| October 19, 2013 and  each year thereafter (3) |       | $                 | 500,000 (2)(4) |                                                                       |       |                                                                                   |   |
|                                                     |            |                   |                |                                                                            |            |                                                                                        |  |  |

 

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(1)          IfProject Financing is not received by October 19, 2008, we may elect todefer this payment and proceed to make the payments under the column labeled “ProjectFinancing Not Received and Deferral Elected.” If prior to making all of the payments under the column “ProjectFinancing Not Received and Deferral Elected” we obtain project financing, wewould be required to make this payment and to pay $500,000 each yearthereafter.

(2)          Eachof these payments is an “advance royalty” pursuant to the terms of the lease.

(3)   In addition to thepayments above, we are required to pay to MHMI a production royalty after thecommencement of Commercial Production of the greater of (i) $.20/lb ofmolybdenum metal (or the equivalent thereof if another Product is sold) soldfrom the property (not to exceed the amount of Net Returns we receive for thoseproducts) or (ii) 3% of the Net Returns, subject to certain adjustments as setforth in the lease.

(4)   To be offset fromthe production royalty described in (3) above. We may recover the aggregate of these payments by retaining 50% of eachproduction royalty payment due to MHMI.

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In addition, inconnection with our purchase of the Hall Tonopah Property, we agreed to make adeferred payment of up to an additional $1,000,000 in purchase price which ispayable, if at all, on or before March 17, 2008 depending on the outcomeof activities at the property.

**Changes in Accounting Policies**

We did not change ouraccounting policies during the three months ended March 31, 2007.

**Special Note Regarding Forward-Looking Statements**

Certain statements inthis report may constitute forward-looking statements, which involve known andunknown risks, uncertainties and other factors, which may cause actual results,performance or achievements of our company, the Mount Hope project, HallTonopah project and our other projects, or industry results, to be materiallydifferent from any future results, performance or achievements expressed orimplied by such forward-looking statements. We use the words “may”, “will”, “believe”, “expect”, “anticipate”, “intend”,“future”, “plan”, “estimate”, “potential” and other similar expressions toidentify forward-looking statements. Forward-looking statements may include, but are not limited to, statementswith respect to the following:

·                  the timing and possible outcome ofpending regulatory and permitting matters;

·                  the parameters and design of ourplanned initial mining facilities at the Mount Hope Project;

·                  future financial or operatingperformances of our company and our projects;

·                  the estimation and realization of mineralization,if any;

·                  the timing of exploration,development and production activities and estimated future production, if any;

·                  estimates related to costs of production,capital, operating and exploration expenditures;

·                  requirements for additional capital;

·                  government regulation of miningoperations, environmental conditions and risks, reclamation and rehabilitationexpenses;

·                  title disputes or claims;

·                  limitations of insurance coverage;and

·                  the future price of molybdenum, gold,silver or other metals.

You should not placeundue reliance on these forward-looking statements, which speak only as of thedate of this report.  Theseforward-looking statements are based on our current expectations and aresubject to a number of risks and uncertainties, including those set forthbelow.  Although we believe that theexpectations reflected in these forward-looking statements are reasonable, ouractual results could differ materially from those expressed in theseforward-looking statements, and any events anticipated in the forward-lookingstatements may not actually occur. Except as required by law, we

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undertake no duty toupdate any forward-looking statements after the date of this report to conformthose statements to actual results or to reflect the occurrence ofunanticipated events. We qualify all forward-looking statements contained inthis report by the foregoing cautionary statements.

**ITEM 3.**                                                     CONTROLSAND PROCEDURES

Anevaluation was performed under the supervision and with the participation ofour management, including our principal executive officer and principalfinancial officer, of the effectiveness of our disclosure controls andprocedures (as defined in Rules 13a-15(e) and 15d-15(e) under the SecuritiesExchange Act of 1934) as of the end of the period covered by this QuarterlyReport on Form 10-QSB. Based on the foregoing, our management concluded thatour disclosure controls and procedures are effective to ensure that informationrequired to be disclosed by us in reports that we file or submit under theExchange Act is recorded, processed, summarized and reported within the timeperiods specified in the Securities and Exchange Commission rules and forms andsuch information is accumulated and communicated to our management, includingour principal executive officer and principal financial officer, to allowtimely decisions regarding required disclosure.

There wasno change in our internal control over financial reporting that occurred duringthe quarter ended March 31, 2007 that has materially affected, or is reasonablylikely to materially affect, our internal control over financial reporting.

**PART II**

**OTHER INFORMATION**

**ITEM 2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.**

During the period coveredby this quarterly report, the Company issued (i) 150,000 shares of common stockvalued at $420,000 in connection with the purchase of certain patented lodemining claims referred to as the Liberty Claims on property adjacent to HallTonopah property and (ii) 75,000 shares of common stock to John Mears inexchange for services valued at $303,750. The foregoing issuances were exempt from the registration requirementsof the Securities Act of 1933, as amended, pursuant to Section 4(2) thereof.

**ITEM 5.**                                                     OTHERINFORMATION

On January 30,2007, Robert Russell resigned his position as our CEO and President and assumedthe position of Executive Director pursuant to a 24-month employmentagreement.  Also on January 30, 2007, weentered into a three year employment contract with Bruce D. Hansen to be ourCEO and President.

OnFebruary 22, 2007, Robert Llee Chapman submitted his resignation from the Boardof Directors and all other positions that he holds with the company, includingChairman of the Audit Committee of the Board of Directors.  Hisresignation was effective March 31, 2007. Also on February 22, 2007, the Board of Directors appointed Mark A.Lettes as a director of the company, effective as of April 1, 2007, filling thevacancy on the Board of Directors due to the resignation of Mr. Chapman. Mr. Lettes has also been appointed to the Chairman of the Audit and FinanceCommittee of the Board of Directors.

OurBoard of Directors revised the executive compensation structure in January2007, to be effective February 1, 2007, based on the recommendations of thecompensation committee.  Below is a chartreflecting the new salaries for the executive management and the executivemanagement bonuses that were awarded for prior year activity.  The bonus awards were based on a percent ofthe 2006 salary for Robert Russell and Robert Dumont.
| **Name**         | ** ** | **Title**                                              | ** ** | **Wage** | ** ** | **Bonus** |
|------------------|------------|--------------------------------------------------------|------------|----------|------------|-----------|
| Robert L Russell |       | Executive Director                                     |       | $        | 350,000    |      | $ | 225,000 |
| Bruce D. Hansen  |       | President/CEO                                          |       | $        | 350,000    |      | $ | -0- |
| Robert L Dumont  |       | Exec VP Bus Dev & Inv Relations & Interim  CFO |       | $        | 205,000    |      | $ | 135,000 |

 

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**ITEM 6.  EXHIBITS**
| Exhibit  Number | ** ** | **Description of Exhibit**                                                                |
|-----------------|------------|-------------------------------------------------------------------------------------------|
|            |       |                                                                                      |
| 31.1            |       | Certification of CEO pursuant to Rule  13a-14(a)/15d-14(a) of the Securities Exchange Act |
| 31.2            |       | Certification of CFO pursuant to Rule  13a-14(a)/15d-14(a) of the Securities Exchange Act |
| 32.1            |       | Certification of CEO pursuant to 18 U.S.C. Section  1350                                  |
| 32.2            |       | Certification of CFO pursuant to 18 U.S.C. Section  1350                                  |

 

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**SIGNATURES**

In accordance with therequirements of the Exchange Act, the Registrant has duly caused this report tobe signed on its behalf by the undersigned, thereunto duly authorized.
|                        | IDAHO GENERAL  MINES, INC. |
|------------------------|----------------------------|
|                   | By:                        |
|                   |                       |
|                   |                       | /s/ Bruce D. Hansen |   |
|                   |                       | Bruce D. Hansen |
|                   |                       | President and  Chief Executive Officer |
|                   |                       | (Principal  Executive Officer) |
| Dated: May 16th,  2007 |                       |

 

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