**UNITEDSTATESSECURITIES AND EXCHANGE COMMISSION****Washington, D.C. 20549**

**FORM10-QSB**

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

**For thequarterly period ended September 30, 2006**

**o****        ****TRANSITION REPORT UNDER SECTION13 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 NorthPost St., Suite 610Spokane, WA 99201Telephone: (509) 838-1213**(Address and telephone 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 Rule12b-2 of the Exchange Act).  **YES ****o NO ****x**

Thenumber of shares outstanding of registrant’s common stock as of October 30, 2006was 41,481,102.

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

 

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**PART I**

**FINANCIALINFORMATION**

**ITEM 1.  FINANCIAL STATEMENTS**

**IDAHO GENERAL MINES, INC.**

**(AN EXPLORATION STAGE COMPANY)**

**BALANCESHEETS**
| ** **                                                                                                                             | ** ** | **September 30,  2006** | ** ** | **December 31, 2005** | ** ** |
|----------------------------------------------------------------------------------------------------------------------------------------|------------|------------------------------|------------|---------------------------------|------------|
| ** **                                                                                                                             | ** ** | **(Unaudited)**              | ** ** | ** **                      | ** ** |
|                                                                                                                                   | ** ** | ** **                   | ** ** | ** **                      | ** ** |
| **ASSETS**                                                                                                                             | ** ** | ** **                   | ** ** | ** **                      | ** ** |
|                                                                                                                                   |       |                         |       |                            |       |
| CURRENT ASSETS                                                                                                                         |       |                         |       |                            |       |
| Cash and cash  equivalents                                                                                                             |       | $                            | 19,355,778 |                            | $          | 256,773 |   |
| Tax refund  receivable                                                                                                                 |       | —                       |       | 29,514                          |       |
| Employee receivable                                                                                                                    |       | 100,500                      |       | 9,000                           |       |
| Deposits                                                                                                                               |       | 179,350                      |       |                            |       |
| Prepaid Expense                                                                                                                        |       | 79,957                       |       | 4,113                           |       |
| Total Current  Assets                                                                                                                  |       | 19,715,585                   |       | 299,400                         |       |
|                                                                                                                                   |       |                         |       |                            |       |
| PROPERTY AND  EQUIPMENT, net                                                                                                           |       | 283,643                      |       | 53,333                          |       |
|                                                                                                                                   |       |                         |       |                            |       |
| LAND AND MINING  CLAIMS                                                                                                                |       | 6,823,932                    |       | 496,913                         |       |
|                                                                                                                                   |       |                         |       |                            |       |
| TOTAL ASSETS                                                                                                                           |       | $                            | 26,823,160 |                            | $          | 849,646 |   |
| ** **                                                                                                                             |       |                         |       |                            |       |
| **LIABILITIES AND STOCKHOLDERS’  EQUITY**                                                                                         |       |                         |       |                            |       |
|                                                                                                                                   |       |                         |       |                            |       |
| CURRENT  LIABILITIES                                                                                                                   |       |                         |       |                            |       |
| Accounts payable  and accrued liabilities                                                                                              |       | $                            | 741,942    |                            | $          | 815,753 |   |
| Total Current  Liabilities                                                                                                             |       | 741,942                      |       | 815,753                         |       |
|                                                                                                                                   |       |                         |       |                            |       |
| COMMITMENTS AND  CONTINGENCIES                                                                                                         |       | —                       |       | —                          |       |
|                                                                                                                                   |       |                         |       |                            |       |
| 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, 40,640,271 and 16,571,312  shares issued and outstanding, respectively |       | 40,627                       |       | 16,571                          |       |
| Additional  paid-in capital                                                                                                            |       | 42,554,747                   |       | 7,174,266                       |       |
| Accumulated  deficit before exploration stage                                                                                          |       | (212,576                     | )          | (212,576                        | )          |
| Accumulated  deficit during exploration stage                                                                                          |       | (16,301,579                  | )          | (6,944,368                      | )          |
| Total  Stockholders’ Equity                                                                                                       |       | 26,081,218                   |       | 33,893                          |       |
|                                                                                                                                   |       |                         |       |                            |       |
| TOTAL LIABILITIES AND  STOCKHOLDERS’ EQUITY                                                                                       |       | $                            | 26,823,160 |                            | $          | 849,646 |   |

 

The accompanyingcondensed notes are an integral part of these interim financial statements.

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**IDAHO GENERAL MINES, INC.**

**(AN EXPLORATION STAGE COMPANY)**

**STATEMENTSOF OPERATIONS**
| ** **                                                                | ** ** | **Three Months Ended** | ** ** | **Nine Months Ended** | ** ** | **January 1,  2002  Inception of  Exploration  Stage) to** | ** ** |
|---------------------------------------------------------------------------|------------|----------------------------------|------------|---------------------------------|------------|---------------------------------------------------------------------------|------------|
| ** **                                                                | ** ** | **September 30,  2006**     | ** ** | **September 30,  2005**    | ** ** | **September 30,  2006**                                              | ** ** | **September 30,  2005** | ** ** | **September 30,  2006** | ** ** |
| ** **                                                                | ** ** | **(Unaudited)**                  | ** ** | **(Unaudited)**                 | ** ** | **(Unaudited)**                                                           | ** ** | **(Unaudited)** | ** ** | **(Unaudited)** | ** ** |
|                                                                      |       |                             |       |                            |       |                                                                      |       |   |   |   |   |
| REVENUES                                                                  |       | —                           |       |                            |       | —                                                                    |       | — |   | — |   |
|                                                                      |       |                             |       |                            |       |                                                                      |       |   |   |   |   |
| OPERATING EXPENSES:                                                       |       |                             |       |                            |       |                                                                      |       |   |   |   |   |
| Property  research, exploration and development                           |       | 1,784,973                        |       | 449,536                         |       | 4,600,584                                                                 |       | 1,477,494 |   | 8,594,044 |   |
| General and  administrative expense                                       |       | 1,031,965                        |       | 309,617                         |       | 5,444,829                                                                 |       | 1,147,322 |   | 8,480,031 |   |
| TOTAL OPERATING  EXPENSES                                                 |       | 2,816,938                        |       | 759,153                         |       | 10,045,413                                                                |       | 2,624,816 |   | 17,074,075 |   |
|                                                                      |       |                             |       |                            |       |                                                                      |       |   |   |   |   |
| LOSS FROM OPERATIONS                                                      |       | (2,816,938                       | )          | (759,153                        | )          | (10,045,413                                                               | )          | (2,624,816 | ) | (17,074,075 | ) |
|                                                                      |       |                             |       |                            |       |                                                                      |       |   |   |   |   |
| OTHER INCOME                                                              |       |                             |       |                            |       |                                                                      |       |   |   |   |   |
| Interest and  dividend income                                             |       | 358,480                          |       | 1,872                           |       | 688,200                                                                   |       | 3,967 |   | 707,642 |   |
| Realized gain on  marketable securities                                   |       | —                           |       | —                          |       | —                                                                    |       | — |   | 5,089 |   |
| Realized income  from timber sales                                        |       | —                           |       | —                          |       | —                                                                    |       | — |   | 59,764 |   |
| TOTAL OTHER  INCOME                                                       |       | 358,480                          |       | 1,872                           |       | 688,200                                                                   |       | 3,967 |   | 772,495 |   |
|                                                                      |       |                             |       |                            |       |                                                                      |       |   |   |   |   |
| LOSS BEFORE TAXES                                                         |       | (2,458,458                       | )          | (757,281                        | )          | (9,357,212                                                                | )          | (2,620,848 | ) | (16,301,579 | ) |
|                                                                      |       |                             |       |                            |       |                                                                      |       |   |   |   |   |
| INCOME TAXES                                                              |       | —                           |       | —                          |       | —                                                                    |       | — |   | — |   |
|                                                                      |       |                             |       |                            |       |                                                                      |       |   |   |   |   |
| NET LOSS                                                                  |       | $                                | (2,458,458 | )                               | $          | (757,281                                                                  | )          | $ | (9,357,212 | ) | $ | (2,620,848 | ) | $ | (16,301,579 | ) |
|                                                                      |       |                             |       |                            |       |                                                                      |       |   |   |   |   |
| BASIC AND DILUTED NET  LOSS PER SHARE OF COMMON STOCK                     |       | $                                | (0.06      | )                               | $          | (0.05                                                                     | )          | $ | (0.26 | ) | $ | (0.19 | ) |   |   |
|                                                                      |       |                             |       |                            |       |                                                                      |       |   |   |   |   |
| WEIGHTED AVERAGE NUMBER  OF COMMON SHARES OUTSTANDING - BASIC AND DILUTED |       | 40,227,439                       |       | 15,560,990                      |       | 35,753,793                                                                |       | 13,947,703 |   |   |   |
|                                                                           |            |                                  |            |                                 |            |                                                                           |            |  |  |  |  |  |  |  |  |  |

 

The accompanyingcondensed notes are an integral part of these interim financial statements.

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**IDAHO GENERAL MINES, INC.**

**(AN EXPLORATION STAGE COMPANY)**

**STATEMENTSOF CASH FLOWS**
| ** **                                                                   | ** ** | **Nine Months  Ended  September  30, 2006** | ** ** | **Nine Months  Ended  September  30, 2005** | ** ** | **1-Jan-02  (Inception of  Exploration  Stage to  September 30,  2006** | ** ** |
|------------------------------------------------------------------------------|------------|-------------------------------------------------------|------------|-------------------------------------------------------|------------|----------------------------------------------------------------------------------------|------------|
| ** **                                                                   | ** ** | **(Unaudited)**                                       | ** ** | **(Unaudited)**                                       | ** ** | **(Unaudited)**                                                                        | ** ** |
|                                                                         |       |                                                  |       |                                                  | ** ** | ** **                                                                             | ** ** |
| CASH FLOWS FROM  OPERATING ACTIVITIES:                                       |       |                                                  |       |                                                  | ** ** | ** **                                                                             | ** ** |
| Net loss                                                                     |       | $                                                     | (9,357,212 | )                                                     | $          | (2,620,849                                                                             | )          | $ | (16,301,579 | ) |
| Adjustments to reconcile net loss to net cash used  by operating activities: |       |                                                  |       |                                                  |       |                                                                                   |       |
| Services and expenses paid with common stock                                 |       | 214,428                                               |       | 142,875                                               |       | 1,436,735                                                                              |       |
| Depreciation and amortization                                                |       | 32,065                                                |       | 8,344                                                 |       | 47,509                                                                                 |       |
| Gain on sale of investments                                                  |       | —                                                |       | —                                                |       | (9,245                                                                                 | )          |
| Management and administrative fees paid with common  stock options           |       | 1,707,710                                             |       | 144,500                                               |       | 2,166,485                                                                              |       |
| Decrease (increase) in employee advances                                     |       | 9,000                                                 |       | —                                                |       | —                                                                                 |       |
| Decrease (increase) in prepaid expenses and deposits                         |       | (225,679                                              | )          | (6,169                                                | )          | (259,306                                                                               | )          |
| Increase (decrease) in accounts payable and accrued  expenses                |       | (174,311                                              | )          | 66,587                                                |       | 641,442                                                                                |       |
| Unrealized loss on securities                                                |       | —                                                |       | —                                                |       | 4,157                                                                                  |       |
| Net cash used by operating activities                                        |       | (7,794,000                                            | )          | (2,264,712                                            | )          | (12,273,803                                                                            | )          |
|                                                                         |       |                                                  |       |                                                  |       |                                                                                   |       |
| CASH FLOWS FROM  INVESTING ACTIVITIES:                                       |       |                                                  |       |                                                  |       |                                                                                   |       |
| Payments for the purchase of equipment                                       |       | (262,376                                              | )          | (8,234                                                | )          | (320,353                                                                               | )          |
| Purchase of securities                                                       |       | —                                                |       | —                                                |       | (136,987                                                                               | )          |
| Purchase of mining property, claims, options                                 |       | (6,327,019                                            | )          | (15,690                                               | )          | (6,367,481                                                                             | )          |
| Cash provided by sale of marketable securities                               |       | —                                                |       | —                                                |       | 246,840                                                                                |       |
| Net cash provided (used) by investing activities                             |       | (6,589,395                                            | )          | (23,924                                               | )          | (6,577,981                                                                             | )          |
|                                                                         |       |                                                  |       |                                                  |       |                                                                                   |       |
| CASH FLOWS FROM  FINANCING ACTIVITIES:                                       |       |                                                  |       |                                                  |       |                                                                                   |       |
| Proceeds from issuance of stock                                              |       | 33,482,399                                            |       | 2,248,448                                             |       | 38,161,348                                                                             |       |
| Net cash provided by financing activities:                                   |       | 33,482,399                                            |       | 2,248,448                                             |       | 38,161,348                                                                             |       |
|                                                                         |       |                                                  |       |                                                  |       |                                                                                   |       |
| Net increase (decrease) in cash and cash equivalents                         |       | 19,099,005                                            |       | (40,188                                               | )          | 19,309,565                                                                             |       |
| Cash and cash equivalents, beginning of period                               |       | 256,773                                               |       | 700,498                                               |       | 46,213                                                                                 |       |
| Cash and cash equivalents, end of period                                     |       | 19,355,778                                            |       | $                                                     | 660,310    |                                                                                   | $          | 19,355,778 |   |
|                                                                         |       |                                                  |       |                                                  |       |                                                                                   |       |
| 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                               |       | $                                                     | —     |                                                  | $          | —                                                                                 |       | $ | 375,000 |   |

 

The accompanyingcondensed notes are an integral part of these interim financial statements.

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**IDAHO GENERAL MINES, INC.**

**(AN EXPLORATION STAGE COMPANY)**

**CONDENSED NOTES TO THE FINANCIALSTATEMENTS**

**SEPTEMBER30, 2006**

**NOTE 1 - DESCRIPTION OF BUSINESS**

IdahoGeneral Mines, Inc. (“the Company” or “IGMI”) is an Idaho corporationoriginally incorporated as General Mines Corporation on November 23, 1925.  In 1966, the Company amended its articles ofincorporation to change its name to Idaho General Petroleum and MinesCorporation, and amended its articles again in 1967 changing its name to IdahoGeneral Mines, Inc.  The Company’sactivities originally consisted of the exploration for nonferrous and preciousmetals in and around Shoshone County, Idaho. However, for many years prior to 2002, the Company’s sole businessconsisted of periodic timber sales.  TheCompany entered a new exploration stage in early January 2002 when it shiftedits focus to minerals exploration.  Withthe listing of the Company on the Over-the-Counter Bulletin Board in May 2004,the Company began a search for substantive mineral properties with a focus onmetals such as copper, zinc, silver, gold and specialty metals.   IGMI entered into an option to lease theMount Hope molybdenum property located in Nevada in November 2004 and exercisedthat option in October 2005 after several phases of feasibility studies andproject design studies, which indicated the attractiveness of the project.  IGMI similarly optioned the Hall Tonopahmolybdenum-copper property, also in Nevada, in 2005 and exercised that optionto purchase the Hall Tonopah property in March 2006 with the intent ofassessing economic feasibility by exploring and assessing the property’spotential.  Accordingly, IGMI has assumedthe role of exploring, and as warranted, developing major mineral depositswhich are at a relatively advanced stage and are worthy of economicconsideration.  IGMI obtained substantialfunding in 2004 though the first quarter of 2006 to carry out the aboveobjectives.

###### **NOTE2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**

Thissummary of significant accounting policies is presented to assist inunderstanding the financial statements. The financial statements and notes are representations of the Company’smanagement, which is responsible for their integrity and objectivity.  These accounting policies conform to accountingprinciples generally accepted in the United States of America and have beenconsistently applied in the preparation of the financial statements.

#### Basis of Presentation

The accompanying financial statements have been prepared inaccordance with generally accepted accounting principles for interim financialinformation.  Accordingly, they do notinclude all of the information and footnotes required by generally acceptedaccounting principles in the United States for complete financialstatements.  The accompanying financialstatements should be read in conjunction with the audited financial statementsof the Company included in the Company’s Annual Report for the year endedDecember 31, 2005, as amended.  In theopinion of the Company’s management, all adjustments considered necessary for afair presentation have been included. The results of the nine months ended September 30, 2006 are notnecessarily indicative of the results of operations expected at the year endingDecember 31, 2006.

#### Accounting Pronouncements-Recent

In March 2006, theFinancial Accounting Standards Board issued Statement of Financial AccountingStandards No. 156, “Accounting for Servicing of Financial Assets—an amendmentof FASB Statement No. 140.”  Thisstatement requires an entity to recognize a servicing asset or servicingliability each time it undertakes an obligation to service a financial asset byentering into a servicing contract in any of the following situations: atransfer of the servicer’s financial assets that meets the requirements forsale accounting; a transfer of the servicer’s financial assets to a qualifyingspecial-purpose entity in a guaranteed mortgage securitization in which thetransferor retains all of the resulting securities and classifies them aseither available-for-sale securities or trading securities; or an acquisitionor assumption of an obligation to service a financial asset that does notrelate to financial assets of the servicer or its consolidated affiliates.  The statement also requires all separatelyrecognized servicing assets and servicing liabilities to be initially measuredat fair value, if practicable and permits an entity to choose either theamortization or fair value method for subsequent measurement of each class ofservicing assets and liabilities.  Thestatement further permits, at its initial adoption,  a one-time reclassification of available forsale securities to trading

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securities by entitieswith recognized servicing rights, without calling into question the treatmentof other available for sale securities under Statement 115, provided that theavailable for sale securities are identified in some manner as offsetting theentity’s exposure to changes in fair value of servicing assets or servicingliabilities that a servicer elects to subsequently measure at fair value andrequires separate presentation of servicing assets and servicing liabilitiessubsequently measured at fair value in the statement of financial position andadditional disclosures for all separately recognized servicing assets andservicing liabilities. This statement is effective for fiscal years beginningafter September 15, 2006, with early adoption permitted as of the beginning ofan entity’s fiscal year. Management believes the adoption of this statementwill have no immediate impact on the Company’s financial condition or resultsof operations at September 30, 2006.

In February 2006, theFinancial Accounting Standards Board issued Statement of Financial AccountingStandards No. 155, “Accounting for Certain Hybrid Financial Instruments, anAmendment of FASB Standards No. 133 and 140” (hereinafter “SFAS No. 155”). Thisstatement established the accounting for certain derivatives embedded in otherinstruments.  It simplifies accountingfor certain hybrid financial instruments by permitting fair value remeasurementfor any hybrid instrument that contains an embedded derivative that otherwisewould require bifurcation under SFAS No. 133 as well as eliminating arestriction on the passive derivative instruments that a qualifyingspecial-purpose entity (“SPE”) may hold under SFAS No. 140.  This statement allows a public entity toirrevocably elect to initially and subsequently measure a hybrid instrumentthat would be required to be separated into a host contract and derivative inits entirety at fair value (with changes in fair value recognized in earnings)so long as that instrument is not designated as a hedging instrument pursuantto 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 for fiscal years beginning after September15, 2006, with early adoption permitted as of the beginning of an entity’sfiscal year. Management believes the adoption of this statement will have noimmediate impact on the Company’s financial condition or results of operationsat September 30, 2006.

In May 2005, theFinancial Accounting Standards Board issued Statement of Financial AccountingStandards No. 154, “Accounting Changes and Error  Corrections,”(hereinafter “SFAS No. 154”) which replaces Accounting  Principles Board Opinion No. 20, “Accounting  Changes,” and SFAS No. 3, “Reporting AccountingChanges in Interim Financial Statements — An Amendment of APB Opinion No. 28.”  SFAS No. 154 provides guidance on accountingfor and reporting changes in accounting principle and error corrections.  SFAS No. 154 requires that changes inaccounting principle be applied retrospectively to prior period financialstatements and is effective for fiscal years beginning after December 15,2005.  The Company does not expect SFASNo. 154 to have a material impact on its financial position, results of operations,or cash flows.

InMarch 2005, the Financial Accounting Standards Board issued FASB InterpretationNo. 47 (“FIN 47”), “Accounting for Conditional Asset Retirement Obligations.”  FIN 47 clarifies that the term “conditionalasset retirement obligation,” which as used in SFAS No. 143, “Accounting forAsset Retirement Obligations,” refers to a legal obligation to perform an assetretirement activity in which the timing and (or) method of settlement areconditional on a future event that may or may not be within the control of theentity.  The entity must record aliability for a “conditional” asset retirement obligation if the fair value ofthe obligation can be reasonably estimated. FIN 47 also clarifies when an entity would have sufficient informationto reasonably estimate the fair value of an asset retirement obligation.   FIN 47 is effective no later than the end offiscal years ending after December 15, 2005. The Company does not expect SFAS No. 154 to have a material impact onits financial position, results of operations, or cash flows.

#### Cash and Cash Equivalents

Forthe purposes of the statement of cash flows, the Company considers all highlyliquid investments with original maturities of three months or less to be cashequivalents.

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#### Derivative Instruments

TheFinancial Accounting Standards Board issued Statement of Financial AccountingStandards No. 133 (hereinafter “SFAS No. 133”), “Accounting for DerivativeInstruments and Hedging Activities,” as amended by SFAS No. 137, “Accountingfor Derivative instruments and Hedging Activities-Deferral of the EffectiveDate of FASB No. 133,” and SFAS No. 138, “Accounting for Certain DerivativeInstruments and Certain Hedging Activities,” and SFAS No. 149, “Amendment ofStatement No. 133 on Derivative Instruments and Hedging Activities,” the lastof which is effective June 30, 2003. These statements establish and clarify accounting and reportingstandards for derivative instruments, including certain derivative instrumentsembedded in other contracts, and for hedging activities.  They require that an entity recognize allderivatives as either assets or liabilities in the balance sheet and measurethose instruments at fair value.

Ifcertain conditions are met, a derivative may be specifically designated as ahedge, the objective of which is to match the timing of gain or lossrecognition on the hedging derivative with the recognition of (i) the changesin the fair value of the hedged asset or liability that are attributable to thehedged risk or (ii) the earnings effect of the hedged forecastedtransaction.  For a derivative notdesignated as a hedging instrument, the gain or loss is recognized in income inthe period of change.

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

#### Estimates

Theprocess of preparing financial statements in conformity with accountingprinciples generally accepted in the United States of America requires the useof estimates and assumptions regarding certain types of assets, liabilities,revenues, and expenses.  Such estimatesprimarily relate to unsettled transactions and events as of the date of thefinancial statements.  Accordingly, upon settlement,actual results may differ from estimated amounts.

Exploration StageActivities

TheCompany has been in the exploration stage since January 2002 and has notrealized any revenue from operations.  Itwill be primarily engaged in minerals exploration until it enters a developmentor operations stage.

#### Fair Value of Financial Instruments

TheCompany’s financial instruments as defined by Statement of Financial AccountingStandards No. 107, “Disclosures about Fair Value of Financial Instruments,”include cash, accounts payable and accrued liabilities.  All instruments are accounted for on ahistorical cost basis, which, due to the short maturity of these financialinstruments, approximates fair value at September 30, 2006 and December 31,2005.

Basic and Diluted NetLoss Per Share

Netloss per share was computed by dividing the net loss by the weighted averagenumber of shares outstanding during the period. The weighted average number of shares was calculated by taking thenumber of shares outstanding and weighting them by the amount of time that theywere outstanding.  Diluted net loss pershare for IGMI is the same as basic net loss per share, as the inclusion ofcommon stock equivalents would be antidilutive.

Mineral Exploration andDevelopment Costs

Allexploration expenditures are expensed as incurred.  Significant property acquisition payments foractive exploration properties are capitalized. If no minable ore body is discovered, previously capitalized costs areexpensed in the period the property is abandoned.  Expenditures to develop new mines, to definefurther mineralization in existing ore bodies, and to expand the capacity ofoperating mines, are capitalized and amortized on a units-of-production basisover proven and probable reserves.

Shoulda property be abandoned, its capitalized costs are charged to operations.  The Company charges to operations theallocable portion of capitalized costs attributable to properties sold.  Capitalized costs are

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allocatedto properties sold based on the proportion of claims sold to the claimsremaining within the project area.

Mining Claims and Land

Costsof acquiring and developing mineral properties are capitalized as appropriateby project area.  Exploration and relatedcosts and costs to 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.

Provision for Taxes

Incometaxes are provided based upon the liability method of accounting pursuant toStatement of Financial Accounting Standards No. 109, “Accounting for IncomeTaxes” (hereinafter “SFAS No. 109”). Under this approach, deferred income taxes are recorded to reflect thetax consequences in future years of differences between the tax basis of assetsand liabilities and their financial reporting amounts at each year-end.  A valuation allowance is recorded against thedeferred tax asset if management does not believe the Company has met the “morelikely than not” standard imposed by SFAS No. 109 to allow recognition of suchan asset.

Property and Equipment

Duringthe nine months ended September 30, 2006 the Company purchased vehicles for$125,305 and the Company purchased computers and related equipment for$137,071.  The vehicles will bedepreciated over useful lives of five years using straight line depreciation.

Duringthe year ended December 31,2005, the Company purchased equipment costing $16,873 and computer equipmentfor $7,589.  The equipment and computerwill be depreciated over useful lives of three to seven years using astraight-line depreciation method. Depreciation expense for the nine months was $32,065.

Reclamation andRemediation

Expendituresfor ongoing compliance with environmental regulations that relate to currentoperations are expensed or capitalized as appropriate.  Expenditures resulting from the remediationof existing conditions caused by past operations that do not contribute tofuture revenue generations are expensed. Liabilities are recognized when environmental assessments indicate thatremediation efforts are probable and the costs can be reasonably estimated.

Estimatesof such liabilities are based upon currently available facts, existingtechnology and presently enacted laws and regulations taking into considerationthe likely effects of inflation and other societal and economic factors, andinclude estimates of associated legal costs. These amounts also reflect prior experience in remediating contaminatedsites, other companies’ clean-up experience and data released by TheEnvironmental Protection Agency or other organizations.  Such estimates are by their nature impreciseand can be expected to be revised over time because of changes in governmentregulations, operations, technology and inflation.  Recoveries are evaluated separately from theliability and, when recovery is assured, the Company records and reports anasset separately from the associated liability. At September 30, 2006, the Company had no accrued liabilities forcompliance with environmental regulations.

Reclassification

Certainamounts from prior periods have been reclassified to conform to the currentperiod presentation.  Thisreclassification has resulted in no changes to the Company’s accumulateddeficit or net losses presented. Previously, directors’ fees paid by issuing common stock were notdisclosed separately in the Company’s statement of cash flows.  These fees were part of services and expensespaid with common stock.

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**NOTE 3 - INVESTMENTS**

TheCompany accounts for its investments in debt and equity securities inaccordance with the provisions of Statement of Financial Accounting StandardsNo. 115, “Accounting for Certain Investments in Debt and Equity Securities,”and reports its investments in available for sale securities at their fairvalue, with unrealized gains and losses excluded from income or loss andincluded in other comprehensive income or loss. The Company’s investment securities are classified as available for salesecurities which are recorded at fair value on the balance sheet as marketablesecurities and classified as current assets.

AtSeptember 30, 2006 and December 31,2005, the Company had no marketable securities.

## **NOTE4 - LAND AND MINING CLAIMS**

In April 2006, the Company entered into a Letter ofIntent to purchase certain patented lode mining claims referred to as theLiberty Claims on property adjacent to Hall Tonopah property for cash of$75,000 and 150,000 shares of restricted common stock.  The Company has paid the $75,000 cash portionof the purchase price and will issue the shares of restricted stock uponcompletion of the purchase agreement.

The Company’s mining claims and land consist in part ofapproximately 107 acres of fee simple land in the Pine Creek area of ShoshoneCounty, Idaho, six patented mining claims known as Chicago-London group,located near the town of Murray in Shoshone County, Idaho and 265 acres ofprivate land 3 unpatented claims in Josephine County, Oregon, known as theTurner Gold project, a ten square mile property including water rights, certainmineral rights and surface rights known as the Hall Tonopah Property and 1,503acres of deeded land, 70,000 acres of BLM grazing rights and certain waterrights together known as the Gale Ranch. The carrying value of these properties at September 30, 2006 and December 31, 2005 is as follows:

|                       | ** ** | **September  30, 2006** | ** ** | **December 31, 2005** | ** ** |
|-----------------------|------------|------------------------------|------------|---------------------------------|------------|
| Pine Creek Land       |       | $                            | 1,450      |                            | $          | 1,450 |   |
| Hall Tonopah          |       | 4,459,826                    |       | —                          |       |
| Chicago-London  Group |       | 80,001                       |       | 80,000                          |       |
| Turner Gold Land      |       | 415,462                      |       | 415,462                         |       |
| Gale Ranch            |       | 1,867,193                    |       | —                          |       |
|                  |       | $                            | 6,823,932  |                            | $          | 496,912 |   |

 

The Company reviews the carrying value of its assetsannually and whenever events or circumstances indicate that an asset’s fairvalue may not be at least equal to its carrying value.

OnNovember 12, 2004, IGMI entered into an option to lease all property and assetsof the Mount Hope Molybdenum Property from Mt. Hope Mines, Inc.  Exercise of the option in October 2005 allowsIGMI to proceed for the next 30 years with permitting, developing and miningthe deposit and for so long thereafter as IGMI maintains an activeoperation.  At December 31, 2004, theCompany had paid $456,286 on the Mount Hope option and issued 500,000 shares ofcommon stock with warrants to purchase 500,000 shares of common stock for theMount Hope option.

Pursuantto the terms of the lease, the underlying total royalty on production payableto Mt. Hope Mines, Inc., less certain deductions, is 3 percent for a molybdenumprice up to $12 per pound, 4 percent for a molybdenum price up to $15 perpound, and 5 percent for a molybdenum price 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 effortsobligation, by the third anniversary of the lease, to pay Mt. Hope Mines, Inc.a recoverable periodic payment (advance royalty) of 3 percent of the estimated

9

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capitalcost of the project.  This obligation topay 3 percent of the construction capital is subject to certain extensionprovisions through October 2013.  Minimumroyalty payment after the mine commences operations is $0.27 a pound ofmolybdenum if produced and $500,000 per year if the plant is idle.  Additionally, IGMI is obligated to pay ExxonMineral Company a one percent net smelter royalty on all production.

OnJune 30, 2005, the Company entered into a two-year option to purchase land andwater rights on property located near the Mt. Hope property in Nevada. The option was paid for with cash of $152,000 and 30,000 shares of restrictedcommon stock.  This property and related water rights were purchased onJuly 19, 2006 for $1,867,193 including closing costs.

During the year endedDecember 31, 2005, the Company purchased acreage at the Turner Gold project for$415,462.  The Company also entered intoan option agreement with High Desert Winds LLC (“High Desert”) for High Desert’sapproximately ten square mile property in Nye County, Nevada, including waterrights, mineral and surface rights, buildings and certain equipment (the “HallTonopah Property”).  Pursuant to theterms of this agreement, the Company was granted a nine-month option topurchase the Hall Tonopah Property.  TheCompany extended the option agreement with High Desert with payments of $75,000in June and $100,000 in August of 2005. The option was subsequently extended to March 17, 2006 with an $80,000payment paid on January 17, 2006.  OnMarch 17, 2006, the Company entered into a purchase agreement with High Desertwhereby it purchased a substantial portion of the Hall Tonopah Property.  At closing, the Company paid High Desert acash payment of $4.5 million for the portion of the Hall Tonopah Property thatit purchased and agreed to make a deferred payment of up to an additional$1,000,000 in purchase price for the remaining portion of this property whichis payable, if at all on or before March 17, 2008 depending on the outcome ofactivities at the property.  The HallTonopah Property is also subject to a 12% royalty payable with respect to thenet revenues generated from the molybdenum or copper minerals removed from theproperties purchased.

**NOTE 5 - RELATED PARTYTRANSACTIONS**

TheCompany had paid professional service fees of $63,106 during the nine monthsended September 30, 2006 to the Company’s legal counsel, who is a shareholderand also serves as the Company’s secretary/treasurer.  Also, the Company paid $49,253 Surradialwhich is a company owned by Charles Russell the President and CEO’s son, fortechnical services during the nine months ended September 30, 2006.

OnOctober 11, 2006, the former COO and son of the CEO exercised 100,000 IncentiveStock Options (ISOs) for cash and 100,000 Non-Qualified Stock Options (NSOs)for cash.  At that same time, heexercised 275,000 NSOs in a cashless exchange for 183,000 shares of commonstock.

OnAugust 16, 2006 the Company entered into an employment agreement effectiveAugust 14, 2006 with Andrew J. Russell, a son of our President and CEO, for theservices as Senior Manager Permitting and Technical.  Under this agreement, Andrew J. Russell ispaid $150,000 per year and was granted a stock option to purchase 60,000 sharesat $2.10 per share, the closing price of the Company’s stock on August 15,2006.

At December 31, 2005, the Company had an employee receivable in the amount of $9,000for cash advances to a corporate officer for expenses and salary. Thisamount was fully repaid during the three months ended March 31, 2006.

The Company paid professional service fees of $35,319during the year ended December 31, 2005, to the Company’s legal counsel, who isa shareholder and also serves as the Company’s secretary/treasurer.

Additional related party transactions are included aspart of Notes 6 and 8.

**NOTE 6 - COMMON STOCK**

During the nine monthsended September 30, 2006, the Company issued 18,021,936 shares of common stockand warrants for cash of $33,324,130 less placement agent and finder’s fees of$2,470,304.  The

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Company issued 170,550shares of common stock for finder’s fees valued at $187,605.  The Company issued upon cashless exercise ofwarrants 1,482,147 shares of common stock and issued 50,000 shares of commonstock for services valued at $120,250. During the nine months ended September 30, 2006, warrants were exercisedin the amount of 3,349,667 shares of common stock, for cash in the amount of$2,417,323.  During this same period,options were exercised in the amount of 125,000 shares of common stock for cashin the amount of $21,875.

During the year ended December 31, 2005, the Companyissued 3,853,932 shares of common stock for cash of $3,059,198, issued 89,611shares of common stock for services valued at $90,875, issued 20,000 shares ofcommon stock for management valued at $23,500, 15,000 shares of common stockfor property valued at $10,800, and issued 30,000 shares of stock for propertyvalued at $28,500.  Additionally, uponthe cashless exercise of options, the Company issued 979,830 shares of commonstock.  In April 2005, theCompany, in connection with the adoption of a shareholder rights agreement,declared a dividend of one right for every common stock share held.  The right is exercisable at $1.03 untilDecember 31, 2007.  The exercise price ofthe right is subject to adjustment.

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 wasauthorized to issue 25,000,000 shares of common stock with a par value of$0.10.

**NOTE 7 - PREFERRED STOCK**

On October 28, 2004, shareholders of the Companyauthorized 10,000,000 shares of no par value preferred stock.  The authorized but unissued shares ofpreferred stock may be issued in designated series from time to time by one ormore resolutions adopted by the board of directors.  The directors have the power to determine thepreferences, limitations and relative rights of each series of preferred stock.

On November 16, 2004, the board of directors unanimouslyconsented to amend the articles of incorporation of the Company.  The amendment reclassified 10,000,000 sharesof the Company’s no par value preferred stock into 10,000,000 shares of $0.001par value Series A preferred stock.  AtDecember 31, 2004 and 2005, and September 30, 2006, no shares of $0.001 parvalue Series A preferred stock were issued or outstanding.

**NOTE 8 - COMMON STOCK OPTIONS**

The board of directorsand shareholders adopted the Idaho General Mines, Inc. 2003 Stock Option Plan (“Plan”)during 2004.  The purpose of the Plan isto give the Company greater ability to attract, retain, and motivate itsofficers and key employees and is intended to provide the Company with abilityto provide incentives more directly linked to the success of the Company’sbusiness and increases in shareholder value.

The board of directorshas determined that options issuable pursuant to the Plan will be utilizedsolely for the purpose of granting ISOs for employees (pursuant to InternalRevenue Code 422).  The maximum number ofshares available for issuance under the Plan is currently 3,000,000shares.  Although the Plan permits theissuance of both ISOs and non-qualified stock options, the board of directorshas opted to issue only ISOs under the Plan.

Duringthe nine months ending September 30, 2006 the Company granted 1,665,000non-qualified stock options outside of the Plan with an exercise price rangingfrom $2.25 to $3.68 with vesting at various dates through 2008.  These options were granted to members of theBoard of Directors, officers, and employees of the Company.  In addition, the Company issued 60,000 ofISOs within the Plan with an exercise price of $2.10 with vesting at variousdates through 2008.  The fair value ofeach option is estimated on the issue

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dateusing the Black-Scholes Option Price Calculation.  The following assumptions were made inestimating the fair value: risk free interest of 4%; volatility of 132%;dividend rate of 0% and expected life of 2 years.  The total value was calculated at$3,424,445.  Expense was recorded of$220,160 for the options which vested in the third quarter of 2006.

Duringthe year ended December 31, 2005, the Company granted 950,000 ISOs under thePlan with an exercise price of $0.72 and vesting at various dates through 2007with expirations at various dates through 2012. These options were granted to officers and employees.  The fair value of each option is estimated onthe issue date using the Black-Scholes Option Price Calculation.  The following assumptions were made inestimating fair value: risk free interest of 4%; volatility of 73%; dividendrate of 0%; and expected life of 2 years. The total value was calculated at $307,800.  Expense was recorded of $113,400 for theISOs, which vested in first quarter of 2005.

The following is asummary of the Company’s stock option plans as of September 30, 2006:
| ** **                                                  | ** ** | **Number of  securities to  be issued  upon exercise  of  outstanding  options** | ** ** | **Weighted  average  excise  price of  outstanding  options** | ** ** | **Number of  securities  remaining  available for  future issuance  under equity  compensation  plans** | ** ** |
|-------------------------------------------------------------|------------|------------------------------------------------------------------------------------------------------|------------|--------------------------------------------------------------------|------------|-----------------------------------------------------------------------------------------------------------------------------|------------|
| Equity  compensation plans not approved by security holders |       | —                                                                                               |       | $                                                                  | —     |                                                                                                                        | —     |   |
|                                                        |       |                                                                                                 |       |                                                               |       |                                                                                                                        |       |
| Equity  compensation plans approved by security holders:    |       |                                                                                                 |       |                                                               |       |                                                                                                                        |       |
| 2003 Stock Option Plan                                      |       | 760,000                                                                                              |       | 0.55                                                               |       | 245,000                                                                                                                     |       |
|                                                        |       |                                                                                                 |       |                                                               |       |                                                                                                                        |       |
| Other equity compensation                                   |       | 3,720,000                                                                                            |       | 1.59                                                               |       | n/a                                                                                                                         |       |
|                                                        |       |                                                                                                 |       |                                                               |       |                                                                                                                        |       |
| Total                                                       |       | 4,480,000                                                                                            |       | $                                                                  | 1.42       |                                                                                                                        | 245,000    |   |

 

The following is a summary ofstock option activity in 2005 and the first none months of 2006:
|                                                  | ** ** | **Number of Shares  Under Options** | ** ** | **Weighted  Average Exercise  Price** | ** ** |
|--------------------------------------------------|------------|----------------------------------------------------|------------|--------------------------------------------|------------|
|                                             |       |                                               |       |                                       |       |
| Outstanding  January 1, 2005                     |       | 4,285,000                                          |       | $                                          | 0.33       |   |
| Granted                                          |       | 950,000                                            |       | $                                          | 0.72       |   |
| Exercised                                        |       | 1,195,000                                          |       |                                       |       |
| Forfeited                                        |       | —                                             |       |                                       |       |
| Expired                                          |       | —                                             |       |                                       |       |
| Outstanding  December 31, 2005                   |       | 4,040,000                                          |       | $                                          | 0.43       |   |
| Exercisable at  December 31, 2005                |       | 2,880,000                                          |       |                                       |       |
| Weighted Average  Fair Value Granted During 2005 |       | $                                                  | 0.32       |                                       |       |   |
|                                             |       |                                               |       |                                       |       |
| Outstanding  January 1, 2006                     |       | 4,040,000                                          |       | $                                          | 0.43       |   |
| Granted                                          |       | 1,725,000                                          |       |                                       |       |
| Exercised                                        |       | 1,105,000                                          |       |                                       |       |
| Forfeited                                        |       | 180,000                                            |       |                                       |       |
| Expired                                          |       | —                                             |       |                                       |       |
| Outstanding  September 30, 2006                  |       | 4,480,000                                          |       | $                                          | 1.42       |   |
| Exercisable at  September 30, 2006               |       | 3,235,000                                          |       |                                       |       |
| Weighted Average Fair  Value Granted During 2006 |       | $                                                  | 3.01       |                                       |       |   |

 

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Thefollowing table gives information about the Company’s common stock that may beissued upon the exercise of options under the Company’s 2003 Stock Option Planand upon the exercise of options outside of the Company’s existing stock optionplan as of September 30, 2006.
| **Exercise  Prices**                                   | ** ** | **Number of  Shares  Issuable Upon  Options  Exercises** | ** ** | **Weighted Average  Exercise Price** | ** ** | **Weighted  Average  Remaining  contractual  Life (in years)** | ** ** | **Number  Currently  Exercisable** | ** ** | **Weighted  Average  Exercise Price** | ** ** |
|--------------------------------------------------------|------------|--------------------------------------------------------------------|------------|------------------------------------------------|------------|--------------------------------------------------------------------------|------------|------------------------------------|------------|--------------------------------------------|------------|
| $                                                      | 0.11       |                                                               | 690,000    |                                           | $          | 0.11                                                                     |       | 2.22                               |       | 690,000                                    |       | $ | 0.11 |   |
| 0.15                                                   |       | 350,000                                                            |       | 0.15                                           |       | 4.46                                                                     |       | 350,000                            |       | 0.15                                       |       |
| 0.30                                                   |       | 100,000                                                            |       | 0.30                                           |       | 2.81                                                                     |       | 100,000                            |       | 0.30                                       |       |
| 0.44                                                   |       | 600,000                                                            |       | 0.44                                           |       | 2.99                                                                     |       | 600,000                            |       | 0.44                                       |       |
| 0.44                                                   |       | 30,000                                                             |       | 0.44                                           |       | 4.99                                                                     |       | 30,000                             |       | 0.44                                       |       |
| 0.70                                                   |       | 220,000                                                            |       | 0.70                                           |       | 3.19                                                                     |       | 220,000                            |       | 0.70                                       |       |
| 0.75                                                   |       | 465,000                                                            |       | 0.75                                           |       | 3.12                                                                     |       | 465,000                            |       | 0.75                                       |       |
| 2.80                                                   |       | 450,000                                                            |       | 2.80                                           |       | 4.51                                                                     |       | 450,000                            |       | 2.80                                       |       |
| 3.32                                                   |       | 200,000                                                            |       | 3.32                                           |       | 4.55                                                                     |       | 200,000                            |       | 3.32                                       |       |
| 3.32                                                   |       | 200,000                                                            |       | 3.32                                           |       | 5.55                                                                     |       | —                             |       | —                                     |       |
| 3.32                                                   |       | 200,000                                                            |       | 3.32                                           |       | 5.56                                                                     |       | —                             |       | —                                     |       |
| 3.68                                                   |       | 40,000                                                             |       | 3.68                                           |       | 5.59                                                                     |       | —                             |       | —                                     |       |
| 3.68                                                   |       | 60,000                                                             |       | 3.68                                           |       | 6.59                                                                     |       | —                             |       | —                                     |       |
| 3.14                                                   |       | 40,000                                                             |       | 3.14                                           |       | 5.59                                                                     |       | —                             |       | —                                     |       |
| 3.14                                                   |       | 25,000                                                             |       | 3.14                                           |       | 6.59                                                                     |       | —                             |       | —                                     |       |
| 3.20                                                   |       | 50,000                                                             |       | 3.20                                           |       | 4.56                                                                     |       | 50,000                             |       | 3.20                                       |       |
| 3.20                                                   |       | 200,000                                                            |       | 3.20                                           |       | 6.57                                                                     |       | —                             |       | —                                     |       |
| 2.10                                                   |       | 30,000                                                             |       | 2.10                                           |       | 5.87                                                                     |       | —                             |       | —                                     |       |
| 2.10                                                   |       | 30,000                                                             |       | 2.10                                           |       | 6.87                                                                     |       | —                             |       | —                                     |       |
| 2.25                                                   |       | 80,000                                                             |       | 2.25                                           |       | 4.86                                                                     |       | 80,000                             |       | 2.25                                       |       |
| 2.25                                                   |       | 60,000                                                             |       | 2.25                                           |       | 5.86                                                                     |       | —                             |       | —                                     |       |
| 2.25                                                   |       | 60,000                                                             |       | 2.25                                           |       | 6.86                                                                     |       | —                             |       | —                                     |       |
|                                                   |       | 4,480,000                                                          |       | $                                              | 1.13       |                                                                     | 2.75       |                               | 3,235,000  |                                       | $          | 0.60 |   |
|                                                   |       |                                                               |       |                                           |       |                                                                     |       |                               |       |                                       |       |
| Weighted average remaining  life of non-vested options |       |                                                               |       |                                           |       | 6.06                                                                     |       |                               |       |                                       |       |
|                                                        |            |                                                                    |            |                                                |            |                                                                          |            |                                    |            |                                            |            |  |  |  |

 

**NOTE 9 - COMMON STOCK WARRANTS**

Duringthe nine months ended September 30, 2006, the Company granted 1,596,243 commonstock warrants (attached to common stock) with an exercise price of $1.75 and8,300,000 common stock warrants were issued with an exercise price of $3.75with expirations at various dates through 2012. The Company issued 75,000 warrants in exchange for services in the thirdquarter.  The fair value of each warrantwas estimated using the Black-Scholes Option Price Calculation.  The following assumptions were made inestimating fair value: risk

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freeinterest rate of 4%; volatility of 127.6%; dividend rate of 0%; and expectedlife of 2 years.  The total value of thewarrants issued in the third quarter is estimated at $94,178.

Duringthe nine months ended September 30,2005, the Company granted 2,998,932 common stock warrants (attached to commonstock) with an exercise price of $1.00 per share and an expiration date of twoyears.  The fair value of each option isestimated using the Black-Scholes Option Price Calculation.  The following assumptions were made inestimating fair value: risk free interest of 4%; volatility of 73%; dividendrate of 0%; and expected life of two years. The total value of these warrants was estimated at $758,148.

Duringthe last quarter of the year ended December 31, 2005, the Company granted210,000 common stock warrants with an exercise price of $1.75 per share and anexpiration date of two years.  The fairvalue of each warrant is estimated using the Block-Scholes option PriceCalculation.  The following assumptionswere made in estimating fair value: risk interest rate of 4%; dividend rate of0%; volatility of 82% and expected life of two years.  The total value of these warrants wasestimated at $64,767.

**NOTE 10 – INCOME TAXES**

At September 30, 2006 and December 31, 2005, the Company had deferred taxassets of approximately $1,704,000 and $1,040,000, respectively, principallyarising from net operating loss carryforwards for income tax purposesmultiplied by an expected rate of 34%. As management of the Company cannot determine that it is more likelythan not that the Company will realize the benefit of the deferred tax assets,a valuation allowance equal to the deferred tax asset has been established atSeptember 30, 2006 and December 31, 2005. The significant components of the deferred tax asset at September 30,2006 and December 31, 2005 were as follows:
| ** **                              | ** ** | **September 30,  2006** | ** ** | **December 31,  2005** | ** ** |
|-----------------------------------------|------------|------------------------------|------------|-----------------------------|------------|
| Net operating loss  carryforward        |       | $                            | 8,153,000  |                        | $          | 3,061,000 |   |
|                                    |       |                         |       |                        |       |
| Deferred tax  asset                     |       | $                            | 2,772,000  |                        | $          | 1,040,000 |   |
| Deferred tax  asset valuation allowance |       | (2,772,000                   | )          | (1,040,000                  | )          |
| Net deferred tax asset                  |       | $                            | —     |                        | $          | — |   |

 

At September 30, 2006 and December 31, 2005, the Company has netoperating loss carryforwards of approximately $6,338,000 and $3,061,000,respectively, which expire in the years 2022 through 2026.  The change in the allowance account fromSeptember 30, 2006 to December 31, 2005 was $1,732,000.

**NOTE 11 - COMMITMENTS ANDCONTINGENCIES**

The Company owns and has owned mineral propertyinterests on certain public and private lands in Shoshone County, Idaho.  The Company’s mineral property holdingsinclude lands contained in mining districts that have been designated as “Superfund”sites pursuant to the Comprehensive Environmental Response, Compensation, andLiability Act (“CERCLA”).  The Companyand its properties have been and are subject to a variety of federal and stateregulations governing land use and environmental matters.  The Company believes it has been insubstantial compliance with all such regulations, and is unaware of any pendingaction or proceeding action relating to regulatory matters that would affectthe financial position of the Company. The Company’s management acknowledges, however, that the possibilityexists that the Company may be subject to environmental liabilities associatedwith its properties in the future, and that the amount and nature of anyliabilities the Company may be held responsible for is impossible to estimate.

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**IDAHO GENERAL MINES, INC.**

**(AN EXPLORATION STAGE COMPANY)**

**CONDENSED NOTES TO THE FINANCIALSTATEMENTS**

**SEPTEMBER30, 2006**

On June 16, 2005, the Company entered into anagreement to secure the services of a contractor. The terms of the agreementinclude the issuance of 100,000 restricted shares of common stock to thecontractor, vesting in batches of 25,000 through March 1, 2006, and theissuance of an additional 35,000 restricted shares of common stock if asuccessful deal is consummated.

On September 2, 2005, the Company entered into anagreement with Canaccord Capital Corporation as its financial advisor forproposed Canadian equity financing agreements.

**NOTE 12- SUBSEQUENT EVENTS**

On July 17, 2006 the Company entered into a letter ofintent to purchase the water rights and stock in Atlas Mining Company for cashof $400,000.  The Company has providedAtlas Mining Company with a refundable deposit of $100,000 with the letter ofintent.  The transaction closed onNovember 7, 2006.

On October 25, 2006 the Company entered into an EarnestMoney Agreement for the purchase of the Risi water rights.  The Company has provided the seller with anonrefundable deposit of $40,000 with the earnest money agreement.

On October 11, 2006 the Company was notified that theBureau of Land Management (BLM) had completed its review of the Plan ofOperation for the Mount Hope Project.

On October 11, 2006, theformer COO and son of the CEO exercised100,000 ISOs for cash and 100,000 NSOs for cash.  At that same time, he exercised 275,000 NSOsin a cashless exchange for 183,000 shares of common stock.

On November 13, 2006, theCompany purchased the remainder of the Hall Tonopah property for an additionalpayment of $1,000,000.

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**ITEM 2.  MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OFOPERATION**

The following discussionof our financial condition and plan of operations constitutes management’sreview of the factors that affected our financial and operating performance forthe nine months ended September 30, 2006 and 2005.  This discussion should be read in conjunctionwith the financial statements and notes thereto contained elsewhere in thisreport and in our Form 10-KSB, as amended, for the year ended December 31,2005.

**Overview**

We are in the business ofexploration, development and, if warranted, the mining of properties containingmolybdenum, as well as silver, gold, base metals and other specialtymetals.  We have an interest inproperties on which we intend to conduct mineral exploration.  Our principal asset is the Mount Hope Project(which we hold under lease with Mount Hope Mines, Inc. (“**MHMI**”)),a primary molybdenum deposit located in Eureka County, Nevada, United States.

Based on the positiveresults of our feasibility study, we intend to proceed with the permitting anddevelopment of the Mount Hope Project. The project will include the development of an open pit mine,construction of a concentrator plant, construction of a roaster plant, andconstruction of all related infrastructure to produce TMO.

We began a feasibilitystudy in November 2004 for the purpose of determining our interest inexercising the long term option to lease the Mount Hope Project.  This study, principally accomplished bymining industry consulting firms, was completed in October 2005 and provides adefinitive mining and processing plan. Based on the results of the feasibility study, we exercised our optionto lease in October 2005 and entered into the Mount Hope Lease.   We plan to begin permitting, environmentalimpact studies, and intermediate stage engineering based upon a tentativetwo-year permitting schedule.  Weindicated our intent to proceed with permitting of the project in meetings withthe principal regulatory agency, the BLM, and various regulatory agencies ofthe State of Nevada in the second quarter of 2005.  On June 6, 2006, we submitted a Plan ofOperations with respect to the Mount Hope Project to the United States Bureauof Land Management (the “**BLM**”), the leadagency reviewing our applications for mining permits.  Various environmental data and study tasksare ongoing and are expected to assist with the permitting process. On October11, 2006, the BLM notified us that it had completed its review of the Plan ofOperations.  We believe that permittingwill require approximately 20-30 months from the date of filing of the Plan ofOperations, but the timing is dependent on the timing of agency actions overwhich we have no control.  We expect thata feasibility study will be finalized upon the completion of the permittingprocess.  We believe that, based upon thefeasibility studies completed to date, once we have completed the permittingprocess and the feasibility study, construction of the planned facilities wouldtake approximately 20-24 months.

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, upon settlement,actual results may differ from estimated amounts.

**Cash andCash Equivalents**

For the purposes of thestatement of cash flows, we consider all highly liquid investments withoriginal maturities of three months or less to be cash equivalents.

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**Basic andDiluted Net Loss Per Share**

Net loss per share wascomputed by dividing the net loss by the weighted average number of sharesoutstanding during the period.  Theweighted average number of shares was calculated by taking the number of sharesoutstanding and weighting them by the amount of time that they wereoutstanding.

**MineralExploration and Development Costs**

All explorationexpenditures are expensed as incurred. Significant property acquisitionpayments for active exploration properties are capitalized.  If no mineable orebody is discovered,previously capitalized costs are expensed in the period the property isabandoned.  Expenditures to develop newmines, to define further mineralization in existing mineral deposits, and, inthe future, to expand the capacity of operating mines, will be capitalized andamortized on a units of production basis over the economically demonstratedproven and probable 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.

**MiningClaims and Land**

Costs of acquiring anddeveloping mineral properties are capitalized as appropriate by projectarea.  Exploration and related costs andcosts to 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 thetax consequences in future years of differences between the tax basis of assetsand liabilities 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.

**Resultsof Operations for the Nine Months Ended September 30, 2006**

**Compared to Nine Months Ended September 30, 2005**

We are classified as anexploration stage company with no producing mines and, accordingly, we do notproduce income.  Our net loss for thenine months ended September 30, 2006 was $(9,357,212) as compared to a net lossof $(2,620,848) for the nine months ended September 30, 2005.  The increase of $6,736,364 is attributableprimarily to increased exploration and documentation studies required tocomplete our Plan of Operations, our Environmental Impact Statement and ourbankable feasibility study significantly contributed to additional operatingexpenses.  We also incurred highercorporate and administrative costs in a number of areas consistent with oursubstantially 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.

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Exploration anddevelopment expenditures of $4,600,584 were incurred at the Mount Hope Projectand the Hall Tonopah Project during the nine months ended September 30, 2006 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 ninemonths ended September 30, 2006 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 as atSeptember 30, 2006 was $19,355,778 compared to $660,311 as at September 30,2005.  Total assets as at September 30,2006 were $26,823,160 compared to $1,214,168 as at September 30, 2005.Theseincreases were due receipt of proceeds from to the private placements of oursecurities that were completed on January 10, 2006 and February 15,2006, offset by the expenditures for purchase of the Hall Tonopah Property andthe purchase of the Gale Ranch and water rights.  Liabilities as at September 30, 2006 were $741,942compared to $92,854 as at September 30, 2005. This increase in payables reflects our increase in activity over thepast year.

On April 27, 2005,we concluded a private placement of 2,998,932 units at a price of $0.75 perunit.  Each unit consisted of one shareof our common stock and one warrant to purchase one share of our commonstock.  Each warrant is exercisable for24 months from the date of issuance and carries an exercise price of $1.00 pershare.  The gross proceeds of thisoffering were $2,249,200 and, after payment of sales commissions and finder’sfees, we received net proceeds of $2,108,150.

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.  The grossproceeds of this offering were $3,786,129.40 and, after payment of sales commissionsand finder’s fees, we received net proceeds of $3,620,730.54.

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 $30,000,000.00 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.

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We do not have anycontractual obligations for future payments under any long-term debtarrangements or capital lease arrangements. 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**        |
|-----------------------------------------------------|------------|-------------------|------------|------------------------------------------------------------------------|------------|------------------------------------------------------------------|
| October 19,  2006                              |       | $                 | 125,000    |                                                                   |       |                                                             |   |
| 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)          Inaddition to the payments above, we are required to pay to MHMI a productionroyalty after the commencement of Commercial Production of the greater of (i)$.20/lb of molybdenum metal (or the equivalent thereof if another Product issold) sold from the property (not to exceed the amount of Net Returns wereceive for those products) or (ii) 3% of the Net Returns, subject to certainadjustments as set forth in the lease.

(4)          Tobe offset from the production royalty described in (3) above.  We may recover the aggregate of thesepayments by retaining 50% of each production royalty payment due to MHMI.

The Hall Tonopah Propertyis also subject to a 12% royalty payable with respect to the net revenuesgenerated from the molybdenum or copper minerals removed from the propertiespurchased.

**Changes in Accounting Policies**

We did not change ouraccounting policies during the nine months ended September 30, 2006.

**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 and ourother projects, or industry results, to be materially different from any futureresults, performance or achievements expressed or implied by suchforward-looking statements.  We use thewords “may”, “will”, “believe”, “expect”, “anticipate”, “intend”, “future”, “plan”,“estimate”, “potential” and other similar expressions to identifyforward-looking statements. Forward-looking statements may include, but are not limited to,statements with respect to the following:

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·                  thetiming and possible outcome of pending regulatory and permitting matters;

·                  theparameters and design of our planned initial mining facilities at the MountHope Project;

·                  futurefinancial or operating performances of our company and our projects;

·                  theestimation and realization of mineral reserves, if any;

·                  thetiming of exploration, development and production activities and estimatedfuture production, if any;

·                  estimatesrelated to costs of production, capital, operating and explorationexpenditures;

·                  requirementsfor additional capital;

·                  governmentregulation of mining operations, environmental conditions and risks,reclamation and rehabilitation expenses;

·                  titledisputes or claims;

·                  limitationsof insurance coverage; and

·                  thefuture 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 undertake no duty to update anyforward-looking statements after the date of this report to conform thosestatements to actual results or to reflect the occurrence of unanticipatedevents. We qualify all forward-looking statements contained in this report bythe foregoing cautionary statements.

**ITEM 3.  CONTROLS AND PROCEDURES**

An evaluation wasperformed under the supervision and with the participation of our management,including our principal executive officer and principal financial officer, ofthe effectiveness of our disclosure controls and procedures (as defined inRules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934) as ofthe end of the period covered by this Quarterly Report on Form 10-QSB. Inconnection with the evaluation,, our Board of Directors and management,including our principal executive officer and principal financial officer,adopted a policy formalizing the Company’s disclosure controls andprocedures.   Pursuant to this action,our management formed a Disclosure Committee that is committed to the fair andconsistent disclosure of information to our shareholders, the investmentcommunity and the public.  The DisclosureCommittee assists management in fulfilling their responsibility for oversightof the accuracy and timeliness of the disclosures made by the Company in each periodic report that is filedwith the Securities and Exchange Commission.

Based on the foregoing,our management concluded that our disclosure controls and procedures areeffective to ensure that information required to be disclosed by us in reportsthat we file or submit under the Exchange Act is recorded, processed,summarized and reported within the time periods specified in the Securities andExchange Commission rules and forms and such information is accumulated andcommunicated to our management, including our principal executive officer andprincipal financial officer, to allow timely decisions regarding requireddisclosure.

There was no change inour internal control over financial reporting that occurred during the quarterended September 30, 2006 that has materially affected, or is reasonably likelyto materially affect, our internal control over financial reporting.

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**PART II**

**OTHER INFORMATION**

**ITEM2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS**

In August 2006, we issueda warrant to purchase 75,000 shares of common stock at $2.75 to O&MPartners, LLC for consulting services provided to the Company.  Thewarrant was issued pursuant to an exemption from registration under Section4(2) of the Securities Act of 1933, as amended, as a transaction not involvingany public offering.

Also in August 2006, we granted a stock option to purchase 60,000 sharesof common stock at $2.10 per share to Andrew J. Russell under an employmentagreement between the Company and Andrew J. Russell, effective as ofAugust 14, 2006.

** 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/ Robert L.  Russell |   |
|   |                       | Robert L.  Russell |
|   |                       | President and  Chief Executive Officer |
|   |                       | (Principal  Executive Officer) |

 

Dated: November20, 2006

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