northbay10q093014.htm
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549 
 
 
FORM 10-Q 
 
 
(Mark One)
x  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2014

or

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

For the transition period from ___________ to __________
 
Commission file number 000-54213
 
NORTH BAY RESOURCES INC.
(Exact name of registrant as specified in its charter)

Delaware
83-0402389
(State or other jurisdiction of incorporation or organization)
(IRS Employer Identification No.)
 
2120 Bethel Road
Lansdale, Pennsylvania 19446
 (Address of principal executive offices)

 (215) 661-1100
 (Issuer’s telephone number, including area code)
 
_______________________________________________________
(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes x No o  
 
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes x No o

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

Large accelerated filer o                                                      Accelerated filer o   
Non-accelerated filer o                                                        Smaller reporting company x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes o No x

State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date: 608,090,023 shares of Common Stock as of November 10, 2014. 
 
 
 
 
NORTH BAY RESOURCES INC.
(AN EXPLORATION STAGE COMPANY)
 
TABLE OF CONTENTS
 
PART I.  FINANCIAL INFORMATION
Page
     
Item 1.
3
     
Item 2.
29
     
Item 3.
39
     
Item 4.
39
     
PART II.  OTHER INFORMATION.
  
     
Item 1.
41
     
Item 1A.
41
     
Item 2.
41
     
Item 3.
42
     
Item 4.
42
     
Item 5.
42
     
Item 6.
42
     
43
     
44
 
 
 
 
PART I.  FINANCIAL INFORMATION
 
ITEM 1.  FINANCIAL STATEMENTS
 
NORTH BAY RESOURCES INC.
UNAUDITED CONSOLIDATED BALANCE SHEETS
AS OF SEPTEMBER 30, 2014 AND DECEMBER 31, 2013
 
   
Sept 30, 2014
    
Dec 31, 2013
  
             
ASSETS
            
Current Assets
            
Cash
  
$
163,350
    
$
133,873
  
Accounts Receivable
    
30,000
      
-
  
Deferred Financing Costs, net
    
62,653
      
22,966
  
Available For Sale Securities
    
78,913
      
22,500
  
Total Current Assets
    
334,916
      
179,339
  
                 
Other Assets
                
Certificates of Deposit
    
173,122
      
172,880
  
Prepaid Expenses
    
57,373
      
57,373
  
Mining Claims – Unproved
    
1,795,780
      
1,797,488
  
Property, Plant & Equipment, net of accumulated depreciation
    
524,356
      
608,038
  
Reclamation Bond – Fraser River
    
5,000
      
5,000
  
Total Other Assets
    
2,555,631
      
2,640,779
  
TOTAL ASSETS
  
$
2,890,547
    
$
2,820,118
  
                 
LIABILITIES & STOCKHOLDERS’ EQUITY (DEFICIT)
                
Liabilities
                
Current Liabilities
                
Accounts Payable
  
$
37,918
    
$
41,611
  
Accrued Expenses - Related Party
    
922,474
      
820,474
  
Accrued Interest
    
170,194
      
101,366
  
Convertible notes payable (net of discounts of $661,359 and $264,389, respectively)
    
1,178,993
      
836,858
  
Advance Gold Sales (net of discounts of $0 and $4,289, respectively)
    
-
      
195,711
  
Derivative Liabilities – Convertible Debt
    
964,137
      
696,648
  
Derivative Liabilities – Advances on Gold
    
-
      
22,223
  
Note Payable – Ruby Mine Mortgage
    
473,259
      
627,101
  
Note Payable - Equipment
    
9,509
      
41,687
  
Total Current Liabilities
    
3,756,484
      
3,383,679
  
                 
Long-Term Liabilities
                
Note Payable – Ruby Mine Mortgage, net of current portion
    
1,218,471
      
1,205,537
  
Note Payable – Equipment, net of current portion
    
19,017
      
-
  
Asset Retirement Obligation
    
4,833
      
6,158
  
Total Long-Term Liabilities
    
1,242,321
      
1,211,695
  
Total Liabilities
  
$
4,998,805
    
$
4,595,374
  
                 
Commitment & Contingencies
                
Common shares subject to redemption, stated at estimated redemption value, 0 and 10,217,468 shares outstanding at September 30, 2014 and December 31, 2013, respectively
    
-
      
667,758
  
Total Commitment & Contingencies
  
$
-
    
$
667,758
  
                 
Stockholders’ Equity (Deficit)
                
Preferred stock, Series I, $0.001 par value, 100 shares authorized, 100 shares issued and outstanding at September 30, 2014 and December 31, 2013, respectively
    
-
      
-
  
                 
Convertible Preferred stock, Series A, $0.001 par value, 8,000,000 shares authorized, 4,000,000 and 4,000,000 shares issued and outstanding at September 30, 2014 and December 31, 2013, respectively
    
4,000
      
4,000
  
                 
Common stock, $0.001 par value, 500,000,000 shares authorized, 281,617,618 and 127,897,079 shares issued and outstanding at September 30, 2014 and December 31, 2013, respectively
    
281,617
      
127,898
  
Additional Paid-In Capital
    
15,104,688
      
12,962,791
  
Accumulated Other Comprehensive Income
    
(46,137
)
    
(2,550
) 
Stock Payable
    
19,440
      
-
  
Deficit Accumulated During Exploration Stage
    
(17,471,866
)
    
(15,535,153
)
Total Stockholders’ Equity (Deficit)
    
(2,108,258
)
    
(2,443,014
) 
TOTAL LIABILITIES, COMMITMENTS & CONTINGENCIES, & STOCKHOLDERS’ EQUITY (DEFICIT)
  
$
2,890,547
    
$
2,820,118
  
 
The accompanying notes are an integral part of these financial statements. 
 
 
3
 
NORTH BAY RESOURCES INC.
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE AND NINE MONTH PERIODS ENDING
SEPTEMBER 30, 2014 AND 2013
 
   
3 months ended
September 30, 2014
    
3 months ended
September 30, 2013
    
9 months ended
September 30, 2014
    
9 months ended
September 30, 2013
  
                         
Revenues
                        
Gold Sales
  
$
6,602
    
$
-
    
$
6,602
    
$
-
  
Gross Profit
    
6,602
      
-
      
6,602
      
-
  
                                 
Operating Expenses
                                
Commissions & Consulting Fees
    
-
      
-
      
-
      
4,800
  
General & Administrative Costs
    
86,188
      
161,057
      
257,612
      
322,785
  
Mining Property Costs
    
484,642
      
272,617
      
1,170,747
      
499,157
  
Depreciation Expense
    
28,786
      
25,520
      
82,682
      
73,640
  
Impairment Expense
    
-
      
-
      
-
      
-
  
Accretion Expense
    
117
      
87
      
383
      
250
  
Professional Services
    
26,710
      
19,336
      
127,189
      
85,606
  
Total Operating Expenses
    
626,443
      
478,617
      
1,638,613
      
986,238
  
Net Operating Loss
    
(626,443
)
    
(478,617
)
    
(1,638,613
)
    
(986,238
)
Other Income (Expenses)
                                
Gain on Mineral Claim Sales
    
2,000
      
166,675
      
2,000
      
280,174
  
Other Income from Mineral Claims
    
200,000
      
-
      
200,000
      
-
  
Interest Income
    
1,370
      
147
      
6,242
      
391
  
Interest Expense
    
(392,567
)
    
(121,620
)
    
(1,017,569
)
    
(527,520
)
Gain/Loss on Derivative Liability
    
(29,050
)
    
432,026
      
523,528
      
(144,614
)
Loss on Conversion of Debt
    
-
      
-
      
-
      
-
  
Loss on Equity Modification
    
-
      
-
      
-
      
-
  
Bad Debt Expense
    
-
      
-
      
-
      
-
  
Loss on Settlement
    
(38,630
)
    
-
      
(71,103
)
    
-
  
Other Expense
    
-
      
-
      
-
      
-
  
Other Income
    
-
      
-
      
52,203
      
1,094
  
Realized Gain (Loss) on Investment
    
-
      
-
      
-
      
-
  
Net Other Income (Expenses)
    
(256,877
)
    
477,228
      
(304,699
)
    
(390,475
)
      Loss From Continuing Operations
    
(883,320
)
    
(1,389
)
    
(1,943,312
)
    
(1,376,713
)
      Loss From Discontinued Operations
    
-
      
-
      
-
      
-
  
Net Loss
    
(876,718
)
    
(1,389
)
    
(1,936,710
)
    
(1,376,713
)
    Accretion of Discount on Redeemable Common Stock
    
-
      
(37,645
)
    
-
      
(52,346
)
    Excess Cash Received Compared to Redeemable Amount of Stock
    
-
      
-
      
-
      
-
  
    Interest on Redeemable Common Stock
    
-
      
(14,655
)
    
(29,288
)
    
(35,953
)
Net Loss Attributable to Common Shareholders
    
(876,718
)
    
(53,689
)
    
(1,965,998
)
    
(1,465,012
)
      Unrealized (Loss)/Gain on Available For Sale Securities
    
(43,587
)
    
27,500
      
(43,587
)
    
29,950
  
Total Comprehensive Loss
    
(920,305
)
    
(26,189
)
    
(2,009,585
)
    
(1,435,062
)
                                 
WEIGHTED AVG NUMBER OF SHARES OUTSTANDING (Basic)
    
225,880,262
      
114,243,164
      
182,103,134
      
110,463,873
  
 Basic Net Loss per Share
  
$
(0.00
)
  
$
(0.00
)
  
$
(0.01
)
  
$
(0.01
)
WEIGHTED AVG NUMBER OF SHARES OUTSTANDING (Diluted)
    
225,880,262
      
114,243,164
      
182,103,134
      
110,463,873
  
 Diluted Net Loss per Share
  
$
(0.00
)
  
$
(0.00
)
  
$
(0.01
)
  
$
(0.01
)
 
The accompanying notes are an integral part of these financial statements.
 
 
4
 
 
NORTH BAY RESOURCES INC.
UNAUDITED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)
FOR THE PERIOD
JANUARY 1, 2013 THROUGH SEPTEMBER 30, 2014
 
   
Preferred Stock
    
Common Stock
                                          
   
Series A
Shares
    
Series G
Shares
    
Series I
Shares
    
Series A
Amount
    
Series G
Amount
    
Series I
Amount
    
Shares
    
Amount
    
Additional
 Paid-In
Capital
    
Stock
Payable
    
Accumulated
Deficit
    
Accumulated
OCI
    
Total
Stockholders’
Deficit
  
Balance at 12/31/2012
(restated)
    
4,000,000
      
-
      
100
    
$
4,000
    
$
-
    
$
-
      
97,485,130
    
$
97,485
    
$
11,805,636
    
$
-
    
$
(13,475,848
)
  
$
(12,500
)
  
$
(1,581,227
)
Common Stock issued for cash
    
-
      
-
      
-
      
-
      
-
      
-
      
13,564,152
      
13,564
      
445,736
      
-
      
-
      
-
      
459,300
  
Common Stock issued for convertible debt conversion
    
-
      
-
      
-
      
-
      
-
      
-
      
11,229,545
      
11,230
      
272,691
      
-
      
-
      
-
      
283,921
  
Common Stock issued for services
    
-
      
-
      
-
      
-
      
-
      
-
      
191,724
      
192
      
9,071
      
-
      
-
      
-
      
9,263
  
Common Stock issued for directors compensation
    
-
      
-
      
-
      
-
      
-
      
-
      
277,778
      
278
      
9,722
      
-
      
-
      
-
      
10,000
  
Common Stock issued for deferred compensation
    
-
      
-
      
-
      
-
      
-
      
-
      
5,000,000
      
5,000
      
175,000
      
-
      
-
      
-
      
180,000
  
Common Stock issued for deferred financing costs
    
-
      
-
      
-
      
-
      
-
      
-
      
148,750
      
149
      
6,332
      
-
      
-
      
-
      
6,481
  
Mark to market AFS securities
    
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
9,950
      
9,950
  
Settlement of Derivative Liability
    
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
256,472
      
-
      
-
      
-
      
256,472
  
Loss on Equity Modification
    
 -
      
 -
      
 -
      
 -
      
 -
      
 -
      
 -
      
 -
      
85,399
      
-
      
-
      
-
      
85,399
  
Accretion of discount on redeemable common stock
    
 -
      
 -
      
 -
      
 -
      
 -
      
 -
      
 -
      
 -
      
(52,346
)
    
-
      
-
      
-
      
(52,346
)
Interest on redeemable common stock
    
 -
      
 -
      
 -
      
 -
      
 -
      
 -
      
 -
      
 -
      
(50,922
)
    
-
      
-
      
-
      
(50,922
) 
Net loss for period
    
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
(2,059,305
) 
    
-
      
(2,059,305
)
Balance at 12/31/2013
    
4,000,000
      
-
      
100
    
$
4,000
    
$
-
    
$
-
      
127,897,079
    
$
127,898
    
$
12,962,791
    
$
-
    
 $
(15,535,153
) 
  
$
(2,550
) 
  
$
(2,443,014
) 
Common Stock issued for cash
    
-
      
-
      
-
      
-
      
-
      
-
      
72,975,807
      
72,975
      
669,324
      
-
      
-
      
-
      
742,299
  
Common Stock issued for convertible debt conversion
    
-
      
-
      
-
      
-
      
-
      
-
      
70,059,047
      
70,059
      
525,587
      
-
      
-
      
-
      
595,646
  
Common Stock issued for services
    
-
      
-
      
-
      
-
      
-
      
-
      
100,000
      
100
      
2,600
      
-
      
-
      
-
      
2,700
  
Common Stock issued for deferred financing costs
    
-
      
-
      
-
      
-
      
-
      
-
      
368,217
      
368
      
9,942
      
-
      
-
      
-
      
10,310
  
Mezzanine shares no longer deemed temporary
    
-
      
-
      
-
      
-
      
-
      
-
      
10,217,468
      
10,217
      
686,829
      
-
      
-
      
-
      
697,046
  
Stock payable for deferred financing costs
    
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
19,440
      
-
      
-
      
19,440
  
Mark to market AFS securities
    
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
(43,587
 )    
(43,587
 )
Settlement of Derivative Liability - Gold
    
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
2,223
      
-
      
-
      
-
      
2,223
  
Settlement of Derivative Liability – Convertible Debt
    
 -
      
 -
      
 -
      
 -
      
 -
      
 -
      
 -
      
 -
      
274,680
      
-
      
-
      
-
      
274,680
  
Interest on redeemable common stock
    
 -
      
 -
      
 -
      
 -
      
 -
      
 -
      
 -
      
 -
      
(29,288
)
    
-
      
-
      
-
      
(29,288
) 
Net loss for period
    
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
(1,936,710
) 
    
-
      
(1,936,710
)
Balance at 9/30/2014
    
4,000,000
      
-
      
100
    
$
4,000
    
$
-
    
$
-
      
281,617,618
    
$
281,617
    
$
15,104,688
    
$
19,440
    
 $
(17,471,866
) 
  
$
(46,137
) 
  
$
(2,108,258
) 
 
The accompanying notes are an integral part of these financial statements.
 
 
5
 
 
NORTH BAY RESOURCES INC.
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTH PERIODS ENDINGSEPTEMBER 30, 2014 AND 2013
 
   
9 Months Ended
September 30, 2014
    
9 Months Ended
September 30, 2013
  
CASH FLOWS FROM OPERATING ACTIVITIES
            
Net Loss
  
$
(1,936,710
)
  
$
(1,376,713
)
Adjustments to reconcile Net Loss to net cash used in operations:
                
Gain on sale of claims
    
-
      
(225,174
)
Gain on sale of claims – non-cash
    
-
      
(55,000
)
Common Stock issued for services
    
2,700
      
-
  
Loss on conversion of debt and deferred compensation
    
71,109
      
-
  
Amortization of discount on debt
    
758,077
      
216,436
  
Amortization of deferred financing cost
    
75,492
      
20,231
  
Amortization of gold advances discount
    
4,289
      
9,546
  
Change in derivative liability
    
(523,528
)
    
144,614
  
Depreciation Expense
    
82,682
      
73,640
  
Accretion Expense
    
383
      
250
  
Extension Expense for Ruby mortgage
    
-
      
160,000
  
Changes in operating assets and liabilities:
                
Accounts receivable
    
(30,000
 )     
-
  
Other assets
    
(241
 )     
(3,316
) 
Accrued expenses – related party
    
102,000
      
99,906
  
Accrued interest
    
95,619
      
-
  
Accrued expenses
    
(20,000
 )     
33,810
  
Accounts Payable
    
(3,696
 )     
(13,001
) 
Net Cash Used in Operating Activities
    
(1,321,824
)
    
(914,771
)
CASH FLOWS FROM INVESTING ACTIVITIES
                
Proceeds from Fixed Asset Disposal
    
1,000
      
-
  
Investment received for claim sales
    
(100,000
 )     
-
  
Cash received from sales of claims
    
-
      
215,339
  
Net Cash Provided by/Used in Investing Activities
    
(99,000
 )     
215,339
  
CASH FLOWS FROM FINANCING ACTIVITIES
                
Proceeds from sale of redeemable common stock
    
-
      
197,000
  
Proceeds from sale of common stock
    
742,300
      
75,500
  
Advances - Gold
    
(200,000
)
    
200,000
  
Cash paid for deferred financing costs
    
(85,430
 )     
(16,650
)
Debt Repayments
    
(154,069
 )     
(178,110
)
Borrowings on convertible debt
    
1,147,500
      
431,097
  
Net Cash Provided by Financing Activities
    
1,450,301
      
708,837
  
Net cash increase (decrease) for period
    
29,477
      
9,405
  
Cash at beginning of period
    
133,873
      
42,008
  
Cash at end of period
    
163,350
      
51,413
  
Supplementary Cash Flow Information:
                
Cash Paid for Interest
  
$
25,000
    
$ 
-
  
Non-Cash Investing & Financing Activities:
                
Revision to Asset Retirement Obligation
  
$
1,708
    
$
-
  
Common stock issued for conversion of convertible debt
  
$
551,035
    
$
161,413
  
Equipment acquired with note payable
  
$
-
    
$
56,071
  
Common stock owed for deferred financing costs
  
$
19,440
    
$
-
  
Common Stock issued for deferred financing costs
  
$
10,310
    
$
-
  
Debt discount due to derivative liability
  
$
1,065,697
    
$
188,713
  
Settlement of Derivative liability
  
$
274,680
    
$
150,568
  
Settlement of gold derivative
  
$
2,223
    
$
-
  
Discount on gold advance
  
$
-
    
$
22,223
  
Accretion of Discount on Redeemable Common Stock
  
$
-
    
$
52,346
  
Interest on Redeemable Common Stock
  
$
29,288
    
$
35,953
  
Mezzanine shares returned to CS/APIC
  
$
697,046
    
$
-
  
Unrealized gain/loss  on AFS
  
$
43,587
    
$
29,950
  
 
The accompanying notes are an integral part of these financial statements.
 
 
6
 
NORTH BAY RESOURCES INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1             GENERAL ORGANIZATION AND BUSINESS

The Company was incorporated in the State of Delaware on June 18, 2004 under the name Ultimate Jukebox, Inc.  On September 4, 2004, Ultimate Jukebox, Inc. merged with NetMusic Corporation, and subsequently changed the Company name to NetMusic Entertainment Corporation.  On March 10, 2006, the Company ceased digital media distribution operations, began operations as a natural resources company, and changed the Company name to Enterayon, Inc.  On January 15, 2008, the Company merged with and assumed the name of its wholly-owned subsidiary, North Bay Resources Inc.  As a result of the merger, Enterayon, Inc. was effectively dissolved, leaving North Bay Resources Inc. as the remaining company.

The Company’s business plan is based on the Generative Business Model, which is designed to leverage our mining properties and mineral claims into near-term income streams even during the earliest stages of exploration. This is accomplished by entering into sales, joint-venture, and/or option contracts with other mining companies, for which the Company generates income through payments in cash, stock, and other consideration.
 
The Generative Business Model is our short term plan to leverage properties until funding is adequate to implement our long term plan. The Company’s long term plan is to locate and extract gold and silver from current exploration stage properties. This will be done through utilizing joint-ventures and other funding that is available to develop properties until they reach the production stage. Once in the production stage, the Company plans on extracting gold, silver, and other profitable by-products, and selling them to smelters. The Company has not currently begun this stage of the business plan. 
 
NOTE 2             GOING CONCERN
 
These consolidated financial statements have been prepared on a going concern basis, which implies the Company will continue to realize its assets and discharge its liabilities in the normal course of business. The Company has generated modest revenues since inception and has never paid any dividends and is unlikely to pay dividends. The Company has accumulated losses since inception equal to $17,470,217 as of September 30, 2014. These factors raise substantial doubt regarding the ability of the Company to continue as a going concern. The continuation of the Company as a going concern is dependent upon the continued financial support from its shareholders, the ability of the Company to obtain necessary equity financing to continue operations and to determine the existence, discovery and successful exploration of economically recoverable reserves in its resource properties, confirmation of the Company’s interests in the underlying properties, and the attainment of profitable operations. The Company has had very little operating history to date. These consolidated financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.
 
NOTE 3             SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
Reclassifications
 
Certain prior period amounts have been reclassified to conform to the current period presentation. There was no material effect to the consolidated financial statements as result of these reclassifications.
 
Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, Ruby Gold, Inc. All significant inter-company accounts and transactions have been eliminated in consolidation
 
Use of Estimates
 
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.
 
 
7
 
Cash and Cash Equivalents
 
The Company considers all highly liquid debt instruments and other short-term investments with a maturity of three months or less, when purchased, to be cash equivalents. There were no cash equivalents at September 30, 2014 and December 31, 2013. The Company maintains cash and cash equivalent balances at one financial institution that is insured by the Federal Deposit Insurance Corporation up to $250,000.
 
Reclamation Bonds
 
The Company holds its reclamation bonds on the Ruby Mine in the form of one-year Certificates of Deposit that automatically rollover annually on their anniversary dates.  These funds are held in reserve to guarantee the Company's Asset Retirement Obligation.
 
Marketable Securities
 
The Company accounts for its marketable securities, which are available for sale, in accordance with Financial Accounting Standards Board (“FASB”) guidance regarding accounting for certain investments in debt and equity securities, which requires that available-for-sale and trading securities be carried at fair value. Unrealized gains and losses deemed to be temporary on available-for-sale securities are reported as other comprehensive income (“OCI”) within shareholders’ deficit. Realized gains and losses and declines in value deemed to be other than temporary on available-for-sale securities are included in “(Gain) loss on short- and long-term investments” and “Other income” on our statements of operations. Trading gains and losses also are included in “(Gain) loss on short-term and long-term investments.” Fair value of the securities is based upon quoted market prices in active markets or estimated fair value when quoted market prices are not available. The cost basis for realized gains and losses on available-for-sale securities is determined on a specific identification basis. We classify our available-for-sale securities as short- or long-term based upon management’s intent and ability to hold these investments. In addition, throughout 2009, the FASB issued various authoritative guidance and enhanced disclosures regarding fair value measurements and impairments of securities which helps in determining fair value when the volume and level of activity for the asset or liability have significantly decreased and in identifying transactions that are not orderly.
 
Revenue Recognition
 
The company has recognized no mining revenue to date. In the future mining revenue will be recognized according to the policy described below.
 
Revenue is recognized when the following conditions are met:
 
(a)  persuasive evidence of an arrangement to purchase exists;
(b) the price is fixed or determinable;
(c) the product has been delivered; and
(d) collection of the sales price is reasonably assured.
 
Under the terms of concentrate sales contracts with third-party smelters, final prices for the gold, silver, zinc, copper and lead in the concentrate are set based on the prevailing spot market metal prices on a specified future date based on the date that the concentrate is delivered to the smelter. The Company records revenues under these contracts based on forward prices at the time of delivery, which is when transfer of legal title to concentrate passes to the third-party smelters. The terms of the contracts result in differences between the recorded estimated price at delivery and the final settlement price. These differences are adjusted through revenue at each subsequent financial statement date.
 
Mineral Property Costs
 
Mineral property acquisition costs are capitalized upon acquisition. Mineral property exploration and improvement costs are expensed as incurred. When it has been determined that a mineral property can be economically developed as a result of establishing proven or probable reserves, the costs incurred to develop and improve such property are capitalized. To date the Company has not established any proven or probable reserves on its mineral properties.
 
The Company reviews long-lived assets for indicators of impairment whenever events or changes in circumstances indicate that the carrying value may not be recoverable. If the review indicates that the carrying amount of the asset may not be recoverable, the potential impairment is measured based on a projected discounted cash flow method using a discount rate that is considered to be commensurate with the risk inherent in the Company's current business model. For purposes of recognition and measurement of an impairment loss, a long-lived asset is grouped with other assets at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets.
 
 
8
 
Purchase Options for Mining Property
 
Costs associated with acquisitions related to purchase options for mining properties are capitalized when the costs are incurred in accordance with ASC 340.10. The costs are carried at the amount paid and transferred to the appropriate asset account if the option is exercised. If it is determined that the Company will not exercise the option, the option is expensed.
 
Deferred Gains
 
Deposits on pending sales of mineral claims are classified as deferred gains until the transaction has been completed.  
 
Asset Retirement Obligation
 
The FASB standard on accounting for asset retirement obligation requires that the fair value of the liability for asset retirement costs be recognized in an entity’s balance sheet, as both a liability and an increase in the carrying values of such assets, in the periods in which such liabilities can be reasonably estimated. The present value of the estimated future asset retirement obligation (“ARO”), as of the date of acquisition or the date at which mining commences is capitalized as part of the costs of mineral assets and recorded with an offsetting liability. The asset retirement costs are depleted over the production life of the mineral assets on a unit-of-production basis.
 
The ARO is recorded at fair value and accretion expense is recognized as the discounted liability is accreted to its expected settlement value. The fair value of the ARO liability is measured by using expected future cash outflows discounted at the Company’s credit adjusted risk free interest rate.
 
Amounts incurred to settle plugging and abandonment obligations that are either less than or greater than amounts accrued are recorded as a gain or loss in current operations.  Revisions to previous estimates, such as the estimated cost to remediate and abandon a mine may require adjustments to the ARO and are capitalized as part of the costs of mineral assets.
 
Income Taxes
 
The Company utilizes the liability method of accounting for income taxes. Under the liability method, deferred tax assets and liabilities are determined based on the differences between the financial reporting basis and the tax basis of the assets and liabilities, and are measured using enacted tax rates that will be in effect when the differences are expected to reverse.
 
The Company adopted the provisions of the FASB interpretation related to accounting for uncertainty in income taxes, which seeks to reduce the diversity in practice associated with the accounting and reporting for uncertainty in income tax positions.  The Company believes it does not have any uncertain tax positions taken or expected to be taken in its income tax returns.
 
Fair Value of Financial Instruments
 
The Company adopted the FASB standard related to fair value measurement at inception. The standard defines fair value, establishes a framework for measuring fair value and expands disclosure of fair value measurements. The standard applies under other accounting pronouncements that require or permit fair value measurements and, accordingly, does not require any new fair value measurements. The standard clarifies that fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, the standard established a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows.
 
 
Level 1. Observable inputs such as quoted prices in active markets;
 
 
Level 2. Inputs, other than quoted prices in active markets, that are observable either directly or indirectly; and
 
 
Level 3. Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.
 
 
9
 
The Company values its derivative instruments related to embedded conversion features and warrants from the issuance of convertible debentures in accordance with the Level 3 guidelines. For the nine month period ended September 30, 2014, the following table reconciles the beginning and ending balances for financial instruments that are recognized at fair value in these consolidated financial statements. The fair value of embedded conversion features that have floating conversion features and tainted common stock equivalents (warrants and convertible debt) are estimated using a Binomial Lattice model. The key inputs to this valuation model as of September 30, 2014, were: Volatility of 148% - 156%, inherent term of instruments equal to the remaining contractual term, quoted closing stock prices on valuation dates, and various settlement scenarios and probability percentages summing to 100%.
 
   
Balance at
December 31, 2013
    
New
Issuances
    
Settlements
    
Changes in
Fair Values
    
Balance at
September 30,
2014
  
Level 3 –
                              
Derivative liabilities from:
                              
Conversion features – embedded derivative
  
$
156,761
    
$
1,024,855
    
$
(274,680
)
  
$
(217,151
)
  
$
689,785
  
Conversion features – tainted equity
    
391,686
      
229,339
      
-
      
(349,294
)
    
271,731
  
Warrants – tainted equity
    
148,201
      
-
      
-
      
(145,580
)
    
2,621
  
   
$
696,648
    
$
1,254,194
    
$
(274,680
)
  
$
(712,025
)
  
$
964,137
  
 
Changes in the unobservable input values would likely cause material changes in the fair value of the Company’s Level 3 financial instruments. The significant unobservable input used in the fair value measurement is the estimation for probability percentages assigned to future expected settlement possibilities. A significant increase (decrease) in this distribution of percentages would result in a higher (lower) fair value measurement.
 
The following table presents assets and liabilities that were measured and recognized at fair value as of December 31, 2013 and the year then ended on a recurring basis:
 
                   
Total
  
                   
Unrealized
  
Description
  
Level 1
    
Level 2
  
Level 3
    
Gain
  
Available For Sale Securities
  
$
22,500
    
$
       -
    
$
-
    
$
2,500
  
 Totals
  
$
22,500
    
$
       -
    
$
-
    
$
2,500
  
 
                   
Total
  
                   
Unrealized
  
Description
  
Level 1
    
Level 2
  
Level 3
    
Loss
  
Derivate Liability – Advances on Gold
  
$
-
    
$
22,223 
    
$
-
    
$
22,223
  
 Totals
  
$
-
    
$
22,223 
    
$
-
    
$
22,223
  
 
The following table presents assets that were measured and recognized at fair value as of September 30, 2014:
 
                   
Total
  
                   
Unrealized
  
Description
  
Level 1
    
Level 2
  
Level 3
    
Loss
  
Available For Sale Securities
  
$
78,913
    
$
       -
    
$
-
    
$
46,137
  
 Totals
  
$
78,913
    
$
       -
    
$
-
    
$
46,137
  
 
                   
Total
  
                   
Unrealized
  
Description
  
Level 1
    
Level 2
  
Level 3
    
Loss
  
Derivate Liability – Advances on Gold
  
$
-
    
$
-
    
$
-
    
$
-
  
 Totals
  
$
-
    
$
-
    
$
-
    
$
-
  
 
 
10
 
The following schedule summarizes the valuation of financial instruments at fair value on a recurring basis in the balance sheets as of September 30, 2014 and December 31, 2013:

   
Fair Value Measurements at September 30, 2014
  
   
Level 1
    
Level 2
    
Level 3
  
Assets
                  
Cash
  
$
163,350
    
$
-
    
$
-
  
Certificates of Deposit
    
173,122
                  
Total assets
    
336,472
      
-
      
-
  
Liabilities
                        
Advance Gold Sales
    
-
      
-
      
-
  
Convertible notes
    
-
      
1,178,993
      
-
  
Note payable, Ruby
    
-
      
1,691,730
      
-
  
Notes payable, equipment
    
-
      
28,526
      
-
  
Total liabilities
    
-
      
2,899,249
      
-
  
   
$
336,472
    
$
(2,899,249
)
  
$
-
  

   
Fair Value Measurements at December 31, 2013
  
   
Level 1
    
Level 2
    
Level 3
  
Assets
                  
Cash
  
$
133,873
    
$
-
    
$
-
  
Certificates of Deposit
    
172,880
                  
Total assets
    
306,753
      
-
      
-
  
Liabilities
                        
Advance Gold Sales
    
-
      
195,711
      
-
  
Convertible notes
    
-
      
836,858
      
-
  
Note payable, Ruby
    
-
      
1,832,638
      
-
  
Notes payable, equipment
    
-
      
41,687
      
-
  
Total liabilities
    
-
      
2,906,894
      
-
  
   
$
306,753
    
$
(2,906,894
)
  
$
-
  
 
The fair values of our debts are deemed to approximate book value, and are considered Level 2 inputs as defined by ASC Topic 820-10-35.
 
There were no transfers of financial assets or liabilities between Level 1, Level 2 and Level 3 inputs for the nine months ended September 30, 2014 or the year ended December 31, 2013.
 
The Company had no other assets or liabilities valued at fair value on a recurring or non-recurring basis as of September 30, 2014 or the year ended December 31, 2013.
 
Stock Based Compensation
 
Beginning January 1, 2006, the Company adopted the FASB standard related to stock based compensation. The standard requires all share-based payments to employees (which includes non-employee Directors), including employee stock options, warrants and restricted stock, be measured at the fair value of the award and expensed over the requisite service period (generally the vesting period). The fair value of common stock options or warrants granted to employees is estimated at the date of grant using the Black-Scholes option pricing model by using the historical volatility of the Company. The calculation also takes into account the common stock fair market value at the grant date, the exercise price, the expected life of the common stock option or warrant, the dividend yield and the risk-free interest rate.
 
The Company from time to time may issue stock options, warrants and restricted stock to acquire goods or services from third parties. Restricted stock, options or warrants issued to other than employees or directors are recorded on the basis of their fair value, which is measured as of the date required by the Emerging Issues Task Force guidance related to accounting for equity instruments issued to non-employees. In accordance with this guidance, the options or warrants are valued using the Black-Scholes option pricing model on the basis of the market price of the underlying equity instrument on the “valuation date,” which for options and warrants related to contracts that have substantial disincentives to non-performance, is the date of the contract, and for all other contracts is the vesting date. Expense related to the options and warrants is recognized on a straight-line basis over the shorter of the period over which services are to be received or the vesting period.   As of September 30, 2014 and December 31, 2013, no options or warrants related to compensation have been issued, and none are outstanding.
 
 
11
 
Beneficial Conversion Feature
 
From time to time, the Company may issue convertible notes that may have conversion prices that create an embedded beneficial conversion feature pursuant to the Emerging Issues Task Force guidance on beneficial conversion features. A beneficial conversion feature exists on the date a convertible note is issued when the fair value of the underlying common stock to which the note is convertible into is in excess of the remaining unallocated proceeds of the note after first considering the allocation of a portion of the note proceeds to the fair value of any attached equity instruments, if any related equity instruments were granted with the debt. In accordance with this guidance, the intrinsic value of the beneficial conversion feature is recorded as a debt discount with a corresponding amount to additional paid in capital. The debt discount is amortized to interest expense over the life of the note using the effective interest method.  
 
Deferred Financing Costs
 
Deferred financing costs include debt issuance costs primarily incurred by the Company as part of Convertible Note transactions. These amounts are capitalized to Deferred Financing Costs and amortized over the term of the note. Amortization is provided on a straight-line basis over the terms of the respective debt instruments to which the costs relate and is included in interest expense.  The difference between the straight line and effective interest methods is immaterial due to the short term nature of the convertible notes.
 
Accounting for Derivative Instruments
 
All derivatives have been recorded on the balance sheet at fair value based on the lattice model calculation. These derivatives, including embedded derivatives in the Company’s convertible notes which have floating conversion prices based on changes to the quoted price of the Company’s common stock and common stock equivalents tainted as a result of the derivative, are separately valued and accounted for on the Company’s balance sheet. Fair values for exchange traded securities and derivatives are based on quoted market prices. Where market prices are not readily available, fair values are determined using market based pricing models incorporating readily observable market data and requiring judgment and estimates.
 
Lattice Valuation Model
 
The Company valued the conversion features in their convertible notes and tainted warrants using a lattice valuation model, with the assistance of a valuation consultant. The lattice model values these instruments based on a probability weighted discounted cash flow model. The Company uses the model to develop a set of potential scenarios. Probabilities of each scenario occurring during the remaining term of the instruments are determined based on conversion prices relative to current stock prices, historic volatility, and estimates on investor behavior. These probabilities are used to create a cash flow projection over the term of the instruments and determine the probability that the projected cash flow will be achieved. A discounted weighted average cash flow for each scenario is then calculated and compared to the discounted cash flow of the instruments without the compound embedded derivative in order to determine a value for the compound embedded derivative.
 
Income/Loss Per Share of Common Stock
 
Basic net loss per common share is computed using the weighted average number of common shares outstanding. Diluted earnings per share includes additional dilution from common stock equivalents, such as stock issuable pursuant to the exercise of stock options and warrants. Common stock equivalents are not included in the computation of diluted earnings per share when the Company reports a loss because to do so would be anti-dilutive for the periods presented.  As of September 30, 2014 and 2013, there were 283,970,101 and 52,852,098 common stock equivalents outstanding, respectively.
 
The following is a reconciliation of the computation for basic and diluted EPS for the nine months ended September 30, 2014 and 2013, respectively:
 
   
September 30, 2014
    
September 30, 2013
  
Net Loss attributable to common shareholders
  
$
(1,936,710
)
  
$
(1,465,012
)
Weighted-average common shares Outstanding (Basic)
    
182,103,134
      
110,463,873
  
Weighted-average common stock Equivalents
    
283,970,101
      
52,852,098
  
Deduction of stock Equivalents not included due to net loss
    
(283,970,101
)
    
(52,852,098
)
Weighted-average common shares Outstanding (Diluted)
    
182,103,134
      
110,463,873
  
Basic and Diluted Net Gain (Loss) per Share
  
$
(0.01
)
  
$
(0.01
)
 
 
12
 
Property, Plant and Equipment
 
Property, plant and equipment are stated at cost less accumulated depreciation. The cost of property, plant and equipment is depreciated using the straight-line method over the estimated useful life of the asset - periods of approximately 18 - 28 years for buildings, 3 - 10 years for machinery and equipment and 3 - 5 years for vehicles. Long-lived assets are reviewed for impairment whenever in management's judgment conditions indicate a possible loss. Such impairment tests compare estimated undiscounted cash flows to the recorded value of the asset. If an impairment is indicated, the asset is written down to its fair value or, if fair value is not readily determinable, an estimated fair value is used based on discounted cash flows. Fully depreciated assets are retained in property, plant and equipment and accumulated depreciation accounts until they are removed from service. In case of disposals of assets, the assets and related accumulated depreciation are removed from the accounts, and the net amounts after proceeds from disposal are credited or charged to income.
 
Recently Issued Accounting Standards

In June 2014, the FASB issued ASU 2014-10, "Development Stage Entities". The amendments in this update remove the definition of a development stage entity from the Master Glossary of the ASC thereby removing the financial reporting distinction between development stage entities and other reporting entities from U.S. GAAP. In addition, the amendments eliminate the requirements for development stage entities to (1) present inception-to-date information in the statements of income, cash flows, and shareholder equity, (2) label the financial statements as those of a development stage entity, (3) disclose a description of the development stage activities in which the entity is engaged, and (4) disclose in the first year in which the entity is no longer a development stage entity that in prior years it had been in the development stage. The amendments in this update are applied retrospectively. The Company elected early adoption of ASU 2014-10. The adoption of ASU 2014-10 removed the development stage entity financial reporting requirements from the Company.

In July 2013, the FASB issued ASU No. 2013-11 Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit when a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists (“ASU No. 2013-11”). This pronouncement provides explicit guidance on the financial statement presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists. This pronouncement is effective for fiscal years and interim periods within those fiscal years beginning after December 15, 2013. The provisions of ASU No. 2013-11 did not have a material impact on to the Company’s condensed consolidated financial statements.

In February 2013, the Financial Accounting Standards Board (“FASB”) issued an accounting standards update which added new disclosure requirements for items reclassified out of accumulated other comprehensive income. The update required entities to disclose additional information about reclassification adjustments, including changes in accumulated other comprehensive income balances by component and significant items reclassified out of accumulated other comprehensive income. The update became effective for us in the first quarter of 2013. This update had no material impact on our financial statements.

NOTE 4             AVAILABLE FOR SALE SECURITIES
 
On October 24, 2012, the Company entered into an agreement on its Willa property with Caribou King Resources Ltd. ("Caribou", or “CKR”), a Canadian issuer listed on the TSX Venture Exchange.  Under the terms of Agreement, Caribou may earn up to a 100% interest in the Willa Claims by making aggregate payments to North Bay of USD $232,500 in cash and issuing 1,000,000 shares of Caribou common stock.  Of the aggregate payments, $7,500 in cash and 500,000 shares are due upon receipt of regulatory acceptance of the agreement by the TSX Venture Exchange.  Subsequent to TSX approval in November, 2012, and pursuant to the agreement, the Company received 500,000 shares of CKR stock. These shares were valued at $25,050 based upon the closing price of CKR stock on the date the shares were issued. As of September 30, 2014 and December 31, 2013, the market value of these shares was $5,500 and $22,500, respectively.  We consider the unrealized net loss as temporary due to the short length of time the market price for these securities has been below its value on the acquisition date.
 
On July 18, 2014, the Company executed a mineral property option agreement (the "Agreement") with Ximen Mining Corp. ("Ximen"), a Canadian issuer listed on the TSX Venture Exchange,  pursuant to which Ximen may earn up to a 100% interest in the Company's “Brett West” and “Bouleau Creek” mineral claims (the “Brett West Claims”) in southeastern British Columbia.  Under the terms of Agreement, Ximen may earn up to a 100% interest in the Brett West Claims by making aggregate payments to North Bay of USD $600,000, consisting of $300,000 in cash and issuing $300,000 in shares of Ximen common stock.  Of the aggregate payments, $100,000 in cash and $100,000 in stock are due upon receipt of regulatory acceptance of the agreement by the TSX Venture Exchange, and equal payments of $50,000 cash and $50,000 in shares of Ximen stock are each due upon the 1st, 2nd, 3rd, and 4th 6-month anniversaries of the Agreement. Subsequent to TSX approval on September 5, 2014, and pursuant to the agreement, the Company received $70,000 of the $100,000 cash consideration due on closing and received $20,000 of the balance due subsequent to September 30, 2014, which was accounted for as accounts receivable as of September 30, 2014. As of September 30, 2014 the Company also received 217,391 shares of Ximen stock. These shares were valued at $100,000 based upon the closing price of Ximen stock on the date the shares were issued. As of September 30, 2014 and December 31, 2013, the market value of these shares was $73,413 and $0, respectively.  We consider the unrealized net loss as temporary due to the short length of time the market price for these securities has been below its value on the acquisition date.
 
 
13

 NOTE 5            RUBY MINE ACQUISITION
 
On September 27, 2010, the Company executed an option-to-purchase agreement with Ruby Development Company (“RDC”), a California partnership, for the acquisition of the Ruby Mine (the “Ruby”) in Sierra County, California. The purchase price is $2,500,000.
 
On June 1, 2011, the Company exercised its option to purchase the Ruby Mine and made a final option payment of $85,000 to open escrow.  On July 1, 2011, escrow was closed and the acquisition of the Ruby Mine was completed. During the preceding option period and as of the closing date, the Company has made payments totaling $510,000 to RDC, consisting of $360,000 cash and 10,000,000 shares of common stock valued at $150,000.  These payments were credited towards the purchase price, thereby reducing the outstanding principal due to $1,990,000.  The mortgage is to be paid in full by December 30, 2015 pursuant to amendments to the agreement executed on December 12, 2012, March 28, 2013, and November 19, 2013.  The seller has also been granted 10 million 5-year warrants exercisable at 2 cents, 2 million 5-year warrants exercisable at 9 cents, 2 million 5-year warrants exercisable at 10 cents, and 4 million 5-year warrants exercisable at 4 cents.  Pursuant to the aforementioned amendment dated November 19, 2013, the term of all of the outstanding warrants issued to the seller has been extended to December 30, 2018.

On the transaction closing date of July 1, 2011, the Company issued a promissory note to RDC for $1,990,000 plus 3% interest per annum.  The note, as amended, is due on or before December 30, 2015, and currently accrues interest at 6% per annum.  As of September 30, 2014 and December 31, 2013, the outstanding balance due on the note is $1,691,730 and $1,832,638, respectively.

Upon the close of the transaction and the transfer of title, as previously set forth in the purchase agreement, the Company acquired all of the real and personal property associated with the Ruby Gold Mine, all of the shares of Ruby Gold, Inc., a private California corporation, and $171,618 in reclamation bonds securing the permits at the Ruby Mine. Subsequent to the close of the transaction, Ruby Gold, Inc. became a wholly-owned subsidiary of North Bay Resources Inc.  The Company has also assumed the reclamation liabilities on the Ruby Mine, for which reclamation bonds are pledged.  In addition, a $2,500 liability from a pre-existing shareholder loan that was outstanding as of the closing date has been extinguished as of the close of escrow.

All costs related to the acquisition of the property have been capitalized when incurred. All other costs have been expensed when incurred.
 
NOTE 6             PROPERTY, PLANT, EQUIPMENT AND MINERAL CLAIM ASSETS

 As of September 30, 2014 and December 31, 2013, components of property, plant, and equipment and mineral assets were as follows:
 
   
September 30,
    
December 31,
  
   
2014
    
2013
  
             
Buildings
  
$
558,885
    
$
558,885
  
Machinery and equipment
    
137,820
      
138,820
  
Vehicles
    
281,602
      
281,602
  
Total property, plant and equipment
    
978,307
      
979,307
  
                 
Less: accumulated impairment (1)
    
(124,343
)
    
(124,343
)
Less: accumulated depreciation(2)
    
(329,608
)
    
(246,926
)
                 
Property, plant and equipment, net
  
$
524,356
    
$
608,038
  
 
   
September 30,
    
December 31,
  
   
2014
    
2013
  
             
Mining claims
  
$
1,792,660
    
$
1,792,660
  
Asset retirement costs
    
3,120
      
4,828
  
Total mineral claim assets
    
1,795,780
      
1,797,488
  
Less: accumulated depletion(2)
    
-
      
-
  
                 
Mining claims, net
  
$
1,795,780
    
$
1,797,488
  
 
(1) Following the acquisition of the Ruby Mine on July 1, 2011, an evaluation of the equipment inventory determined that some equipment was obsolete and/or otherwise not in compliance with safety regulations, resulting in an impairment deduction of $124,343.
 
(2) Depreciation expense totaled $82,682 and $73,640 for the nine months ended September 30, 2014 and 2013, respectively. Depletion expense totaled $0 and $0 for the nine months ended September 30, 2014 and 2013, respectively.
 
 
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NOTE 7             DEBT

On July 1, 2011, upon the acquisition of the Ruby Mine, the Company issued a promissory note to Ruby Development Company (“RDC”) for $1,990,000 plus 3% interest per annum.  The note, as amended, is due on or before December 30, 2015.  Monthly payments are $10,000 per month during Q1, 2012, $15,000 per month during Q2, 2012, and $20,000 per month from July 1, 2013 through December 2015. Pursuant to an amendment executed on March 28, 2013, the interest rate on the note was increased to 6% as of April 1, 2013, and $160,000 was added to the principal. Pursuant to an amendment executed on November 19, 2013, mortgage payments through December 2015 are set at $20,000 due on the 1st day of each month, and an additional $40,000 due by the 20th day of each month, for aggregate monthly payments of $60,000 per month. As of September 30, 2014, the outstanding balance due on the note is $1,691,730.
 
On December 29, 2011, the Company entered into two agreements ("the Agreements") with Tangiers Investors LP, ("Tangiers") pursuant to which the Company received two $25,000 loans from Tangiers.  As the Agreement specifies, loan proceeds will only be used towards expenses related to the Ruby Mine Project.  The Agreement is structured as a $25,000 Promissory Note (the “Promissory Note”), and a $25,000 Convertible Promissory Note (the “Convertible Note”). The Promissory Note, as amended, has a maturity date of twenty four (24) months from the Effective Date, and an interest rate on the unpaid principal balance equal to 9.9% per year.  The Company shall make cash payments to Tangiers every two (2) weeks beginning January 1, 2012, at a minimum of $2,500 against the principal and accrued interest until the Promissory Note has been satisfied. The Company has further authorized Tangiers to debit this amount directly from any drawdowns made on Company’s existing Equity Line of Credit (“ELOC”) with Tangiers.  As further consideration, Tangiers shall be entitled to 250,000 5-year warrants to purchase 250,000 shares of our common stock at an exercise price of $0.115 per share. The value of these warrants was calculated via the Black-Scholes model and was calculated at $20,568. This value was recorded as a discount on the related note payable. The $25,000 Convertible Note is convertible into common stock, in whole or in part, at any time and from time to time before maturity at the option of the holder at a fixed price of $0.08 per share, which was the closing market share price on the Effective Date. Due to the conversion price being equal to the closing share price on the grant date no beneficial conversion feature resulted from this issuance. The Note accrues interest at a rate equal to 9.9% per year.  The Agreement further specifies that there shall be no penalty for prepayment of either the Promissory Note or the Convertible Note. During the years ended December 31, 2013 and 2012, $0 and $20,568 of the discount was amortized, respectively, and the discount has been fully amortized as of December 31, 2013.  As of December 31, 2013, the outstanding balance due on the Note is $29,970, which includes $4,970 in accrued interest. Repayment of this note has been waived by the lender until November 15, 2014. As of September 30, 2014, the outstanding balance due on the Note is $31,822, which includes $6,822 in accrued interest.

On February 2, 2012, the Company entered into two Convertible Promissory Note Agreements ("the Notes", or individually, the “Note”) with Tangiers Investors LP, ("Tangiers") pursuant to which the Company received an aggregate of $100,000 ($50,000 per Note) as a loan from Tangiers.  Each Note, as amended, has a term of twenty four (24) months.  Each Note accrues interest at a rate equal to 9.9% per year, and is convertible into common stock, in whole or in part, at any time and from time to time before maturity at the option of the holder at a fixed price of $0.08 per share.  As further consideration, Tangiers shall be entitled to 500,000 5-year warrants exercisable at $0.13.  The Notes further specify that there shall be no penalty for prepayment. The beneficial conversion feature resulting from the discounted conversion price compared to market price was valued on the date of grant to be $78,296 on the note, and $21,704 on the warrants. The warrants were valued using the Black-Scholes valuation model. This value was recorded as a discount on debt and offset to additional paid in capital. The discount was fully amortized as of December 31, 2012.  As of December 31, 2013, the outstanding balance due on the Note is $118,932, which includes $18,932 in accrued interest. Repayment of this note has been waived by the lender until November 15, 2014. As of September 30, 2014, the outstanding balance due on the Note is $126,357, which includes $26,357 in accrued interest.

On March 15, 2012, the Company entered into two Convertible Promissory Note Agreements ("the Notes", or individually, the “Note”) with Tangiers Investors LP, ("Tangiers") pursuant to which the Company received an aggregate of $75,000 ($37,500 per Note) as a loan from Tangiers.  Each Note, as amended, has a term of twenty four (24) months.  Each Note accrues interest at a rate equal to 9.9% per year, and is convertible into common stock, in whole or in part, at any time and from time to time before maturity at the option of the holder at a fixed price of $0.09 per share.  As further consideration, Tangiers shall be entitled to 500,000 5-year warrants exercisable at $0.09.  The Notes further specify that there shall be no penalty for prepayment.  The beneficial conversion feature resulting from the discounted conversion price compared to market price was valued on the date of grant to be $34,896 on the note, and $40,104 on the warrants. The warrants were valued using the Black-Scholes valuation model. This value was recorded as a discount on debt and offset to additional paid in capital.  The discount was fully amortized as of September 30, 2014. Repayment of this note has been waived by the lender until November 15, 2014. As of September 30, 2014, the outstanding balance due on the Note is $93,913, which includes $18,913 in accrued interest.
 
 
15
 
On May 16, 2012, the Company entered into a Convertible Promissory Note Agreement ("the Note") with Tangiers Investors LP, ("Tangiers") pursuant to which the Company received $50,000 as a loan from Tangiers.  The Note, as amended, has a term of twenty four (24)  months, accrues interest at a rate equal to 9.9% per year, and is convertible into common stock, in whole or in part, at any time and from time to time before maturity at the option of the holder at a fixed price of $0.06 per share.  As further consideration, Tangiers shall be entitled to 150,000 5-year warrants exercisable at $0.07.  The Note further specifies that there shall be no penalty for prepayment.  The beneficial conversion feature resulting from the discounted conversion price compared to market price was valued on the date of grant to be $16,241 on the note, and $9,393 on the warrants. The warrants were valued using the Black-Scholes valuation model. This value was recorded as a discount on debt and offset to additional paid in capital.  The discount was fully amortized as of September 30, 2014. Repayment of this note has been waived by the lender until November 15, 2014. As of September 30, 2014, the outstanding balance due on the Note is $61,786, which includes $11,786 in accrued interest.
 
On May 30, 2012, the Company entered into a Convertible Promissory Note Agreement ("the Note") with Tangiers Investors LP, ("Tangiers") pursuant to which the Company received $25,000 as a loan from Tangiers.  The Note, as amended, has a term of twenty four (24) months, accrues interest at a rate equal to 9.9% per year, and is convertible into common stock, in whole or in part, at any time and from time to time before maturity at the option of the holder at a fixed price of $0.06 per share.  As further consideration, Tangiers shall be entitled to 150,000 5-year warrants exercisable at $0.06.  The Note further specifies that there shall be no penalty for prepayment.  The beneficial conversion feature resulting from the discounted conversion price compared to market price was valued on the date of grant to be $10,988 on the note, and $9,380 on the warrants. The warrants were valued using the Black-Scholes valuation model. This value was recorded as a discount on debt and offset to additional paid in capital.  The discount was fully amortized as of September 30, 2014.  Repayment of this note has been waived by the lender until November 15, 2014. As of September 30, 2014, the outstanding balance due on the Note is $30,789, which includes $5,789 in accrued interest.
 
On June 19, 2012, the Company entered into a Convertible Promissory Note Agreement ("the Note") with Tangiers Investors LP, ("Tangiers") pursuant to which the Company received $100,000 as a loan from Tangiers.  The Note, as amended, has a term of twenty four (24) months, accrues interest at a rate equal to 7% per year, and is convertible into common stock, in whole or in part, at any time and from time to time before maturity at the option of the holder at a fixed price of 2 cents.  As further consideration, Tangiers shall be entitled to 750,000 5-year warrants exercisable at $0.07, and 750,000 5-year warrants exercisable at $0.14.  The Note further specifies that there shall be no penalty for prepayment.  The beneficial conversion feature resulting from the discounted conversion price compared to market price was valued on the date of grant to be $58,048 on the note, and $41,952 on the warrants. The warrants were valued using the Black-Scholes valuation model. This value was recorded as a discount on debt and offset to additional paid in capital.  Amortization expense during the nine months ended September 30, 2014 was $17,365. Repayment of this note has been waived by the lender until November 15, 2014. As of September 30, 2014, the outstanding balance due on the Note is $115,990, which includes $15,990 in accrued interest.
 
On July 11, 2012, the Company issued a $550,000 Promissory Note ("the Note") to JMJ Financial, ("JMJ", or “the Lender”).  The Principal Sum due to the Lender shall be prorated based on the consideration actually paid by the Lender, plus an approximate 10% Original Issue Discount ("OID") that is prorated based on the consideration actually paid by the Lender as well as any other interest or fees, such that the Company is only required to repay the amount funded and the Company is not required to repay any unfunded portion of the Note.  The Note has a maturity date of twelve (12) months from the Effective Date.  If the Note is repaid within ninety (90) days of the Effective Date, the interest rate shall be zero percent (0%).  Should the Note still be outstanding after 90 days, a one-time 5% interest rate will be applied.  In addition, the Lender has the right, at any time 90 days after the Effective Date, at its election, to convert all or part of the outstanding and unpaid Principal Sum and accrued interest (and any other fees) into shares of fully paid and non-assessable shares of common stock of the Company. The Conversion Price is the lesser of $0.10 or 70% of the average of the two lowest closing prices in the 25 trading days previous to the conversion. The consideration received as of December 31, 2012 is $115,000. Due to the floating conversion price this note had an embedded derivative. The debt discount resulting from the derivative was valued on the date of grant to be $111,517 on the note. This value was recorded as a discount on debt and offset to derivative liability. In addition there was a $11,500 discount as a result of the principal owed ($126,500) exceeding the cash received ($115,000).  This resulted in a total discount of $123,017.  Amortization of the discount was $64,710 for the twelve months ended December 31, 2013.   During the twelve month period ended December 31, 2013 an additional $235,000 was drawn down from this facility, plus $27,550 in OID. The debt discounts resulting from the derivatives on each draw date was valued on the date of grants to be a cumulative value of $228,713 on the notes as of December 31, 2013. Amortization of the discount was $169,424 as of December 31, 2013. During the twelve month period ended December 31, 2013, stock conversions reduced the outstanding balance of principal and accrued interest due by $283,920, and the Company issued an aggregate of 11,229,544 common shares with the conversions, which was consistent with the note agreement, and therefore no gain or loss was recognized on the conversions. Amortization for the nine month period ended September 30, 2014 was $49,068. During the nine month period ended September 30, 2014, stock conversions reduced the outstanding balance of principal and accrued interest due by $133,860, and the Company issued an aggregate of 15,709,495 common shares for the conversions, which was consistent with the note agreement, and therefore no gain or loss was recognized on the conversions. As of September 30, 2014, the outstanding balance due on the Note is $97,508, which includes $5,085 in accrued interest.
 
 
16
 
On October 2, 2012, the Company issued a $750,000 Promissory Note ("the Note") to Tangiers Investors, LP ("Tangiers", or “the Lender”).  The consideration will be received by the Company in tranches of $50,000 no less than bi-weekly, by mutual consent.  The Principal Sum due to the Lender shall be prorated based on the consideration actually paid by the Lender plus any accrued interest, such that the Company is only required to repay the amount funded and the Company is not required to repay any unfunded portion of the Note. The Note has a maturity date of twenty four (24) months from the Effective Date of each tranche.  The Note shall accrue interest at a rate of 7% per annum on each $50,000 tranche independently from other tranches.  Unless repaid in cash, the Lender shall have the right to convert all or part of the outstanding and unpaid Principal Sum and accrued interest into shares of fully paid and non-assessable shares of common stock at a fixed price of $0.02 per share In addition, upon conversion, 125,000 5-year warrants for each $50,000 in Consideration received shall be issued, at an exercise price of 125% of the Conversion Price of each tranche, as applicable.  There is no penalty for prepayment, with prepayment subject to the consent of the Lender.  As of September 30, 2014, the Company has drawn $421,098 from this facility.  As of December 31, 2013, the outstanding balance due on this Note is $419,674 which includes $23,577 in accrued interest. Amortization for the nine month period ended September 30, 2014 was $16,336. As of September 30, 2014, the outstanding balance due on the Note is $466,934, which includes $47,637 in accrued interest.
 
On September 26, 2013, the Company acquired a Case 580SM Backhoe for the purchase price of $56,071.  This purchase was financed as a 36 month note with CNH Capital America LLC at an interest rate of 8.49%.  A $10,000 initial payment was made on October 1, 2013, with 36 payments scheduled at $1,462 per month.  As of December 31, 2013, the principal balance due on this note was $41,687 plus $1,114 in accrued interest. As of September 30, 2014, the principal balance due on this note was $28,526 plus $3,073 in accrued interest.
 
On October 1, 2013, the Company issued a $280,000 Secured Convertible Promissory Note ("the Typenex Note", or the “Note”) to Typenex Co-Investment, LLC ("Typenex").  The Note carries a $25,000 original issue discount (the “OID”), as well as $5,000 in transaction fees. The interest rate on the Note is 10% per annum. The Note has a maturity date of thirteen (13) months from the Effective Date, and has a fixed conversion price of $0.08 if converted by the holder.  The Note is self-amortizing, such that it may be repaid in cash in eight (8) monthly installments of $35,000 plus accrued interest beginning 180 days from the Effective Date.  In lieu of cash payments, the Company may elect to convert the note to shares at 70% of the arithmetic average of the two (2) lowest VWAPs of the shares of Common Stock during the twenty (20) consecutive Trading Day period immediately preceding the date of such conversion.  No conversion can occur prior to 180 days from the Effective Date.  In addition, the Company retains the option of pre-paying the Note at any time at an amount equal to 125% of the outstanding principal and the accrued and unpaid interest.  The initial tranche received from this transaction was $125,000. The debt discount due to the tainted equity valuation and “OID” was $125,000 and $30,000, respectively. The second tranche of $125,000 was received on January 31, 2014, and as of September 30, 2014 a debt discount of $280,000 was recorded. Amortization on the debt discount was $85,929 during the nine month period ended September 30, 2014.  During the nine month period ended September 30, 2014, stock conversions reduced the outstanding balance of principal and accrued interest due by $222,989, and the Company issued an aggregate of 28,283,280 common shares for the conversions, which was consistent with the note agreement, and therefore no gain or loss was recognized on the conversions. As of September 30, 2014, the principal balance due on this note was $104,025, which includes $8,262 in accrued interest.

On October 7, 2013, the Company issued a $56,500 Promissory Note ("the LG Note", or the "Note") to LG Capital Funding LLC ("LG", or “the Lender”).  The Principal Sum due to the Lender includes a 10% Original Issue Discount ("OID") plus $1,500 in transaction fees payable to the Lender. The Note has a maturity date of nine (9) months from the Effective Date.  If the Note is repaid within ninety (90) days of the Effective Date, the interest rate shall be zero percent (0%).  Should the Note still be outstanding after 90 days, a one-time 5% interest rate will be applied.  Unless the Note is prepaid in cash, the Lender has the right at its election to convert all or part of the outstanding and unpaid Principal Sum and accrued interest (and any other fees) into shares of fully paid and non-assessable shares of common stock of the Registrant. The Conversion Price is the lesser of $0.10 or 70% of the average of the two lowest closing prices in the 25 trading days previous to the conversion.  The consideration received as of December 31, 2013 is $50,000. Due to the floating conversion price this note had an embedded derivative. The debt discount resulting from the derivative was valued on the date of grant to be $55,758 on the note. This value was recorded as a discount on debt and offset to derivative liability. In addition there was a $6,500 discount as a result of the principal owed ($56,500) exceeding the cash received ($50,000).  This resulted in a total discount limited to the Note principal of $56,500.   As of December 31, 2013, the outstanding balance due on this Note is $56,500.  On April 8, 2014, the outstanding balance due on this note of $56,500 in principal plus $2,285 in accrued interest was fully converted to 4,154,411 shares of common stock, and the Note has paid in full and retired.
 
 
17
   
On January 31, 2014, the Company issued two $50,000 Convertible Redeemable Notes ("the Note", or collectively “the Notes”) to GEL Properties, LLC ("GEL", or “the Lender”).  Each Note carries a 10% original issue discount (the “OID”), such that the outstanding balance upon the issuance of each Note is $55,000. Each Note has a maturity date of twelve (12) months from the Effective Date, and accrues interest at 5% per annum.   The Notes may be converted to shares of Common Stock of the Company at a conversion price of 70% of the arithmetic average of the two (2) lowest VWAPs (volume weighted average price) of the shares of Common Stock during the twenty-five (25) consecutive Trading Day period immediately preceding the date of such conversion.  No conversion can occur prior to 180 days from the Effective Date.  As of September 30, 2014, only one of these notes has been funded, such that the initial tranche received from this transaction was $50,000, less $2,500 in legal fees, and a commission paid to Carter Terry & Company, a registered broker-dealer, consisting of $4,000 in cash. Due to the floating conversion price this note had an embedded derivative. The debt discount resulting from the derivative was valued on the date of grant to be $52,129 on the note. This value was recorded as a discount on debt and offset to derivative liability. Amortization of the discount was $54,159 for the nine month period ended September 30, 2014. During the three month period ended September 30, 2014, stock conversions reduced the outstanding balance of principal and accrued interest due by $38,500, and the Company issued an aggregate of 10,817,127 common shares for the conversions, which was consistent with the note agreement, and therefore no gain or loss was recognized on the conversions. As of September 30, 2014, the principal balance due on this note was $16,500, which includes $1,818 in accrued interest. 
 
On February 3, 2014, the Company issued two $30,000 Convertible Redeemable Notes ("the LG Note", or collectively “the Notes”) to LG Capital Funding, LLC ("LG", or “the Lender”).  Each LG Note carries a 10% original issue discount (the “OID”), such that the outstanding balance upon the issuance of each LG Note is $33,000. Each LG Note has a maturity date of nine (9) months from the Effective Date, and accrues interest at 5% per annum.   The Notes may be converted to shares of Common Stock of the Company at a conversion price of 70% of the arithmetic average of the two (2) lowest VWAPs (volume weighted average price) of the shares of Common Stock during the twenty-five (25) consecutive Trading Day period immediately preceding the date of such conversion.  No conversion can occur prior to 180 days from the Effective Date.  As of September 30, 2014, both of these notes have been funded, such that the total amount received from this transaction was $60,000, less $3,000 in legal fees, and a commission paid to Carter Terry & Company, a registered broker-dealer, consisting of $4,800 in cash. The debt discount resulting from the derivative was valued on the date of grant to be $32,280 on the note. This value was recorded as a discount on debt and offset to derivative liability. Amortization of the discount was $27,727 for the nine month period ended September 30, 2014. As of September 30, 2014, the principal balance due on this note was $68,210, which includes $2,210 in accrued interest.
 
On March 13, 2014, the Company issued a $35,000 Convertible Redeemable Note (the “Note”) to LG Capital Funding LLC ("LG", or “the Lender”).  The Principal Sum due to the Lender includes a 10% Original Issue Discount ("OID") plus $1,750 in transaction fees.  The Note has a maturity date of nine (9) months from the Effective Date, and accrues interest at 5% per annum. Unless the Note prepaid in cash, the Lender has the right at its election to convert all or part of the outstanding and unpaid Principal Sum and accrued interest (and any other fees) into shares of fully paid and non-assessable shares of common stock of the Company. The Note may be converted to shares of Common Stock of the Registrant at a conversion price of 70% of the arithmetic average of the two (2) lowest VWAPs (volume weighted average price) of the shares of Common Stock during the twenty-five (25) consecutive Trading Day period immediately preceding the date of such conversion.  No conversion can occur prior to 180 days from the Effective Date. In connection with this transaction, a commission has been paid to Carter Terry & Company, a registered broker-dealer, consisting of $2,800 in cash. The debt discount resulting from the derivative was valued on the date of grant to be $31,453 on the note. This value was recorded as a discount on debt and offset to derivative liability. Amortization of the discount was $27,103 for the nine month period ended September 30, 2014. As of September 30, 2014, the principal balance due on this note was $39,551, which includes $1,051 in accrued interest.
 
On March 13, 2014, the Company issued a $30,000 Convertible Redeemable Note (the “Note”) to Union Capital LLC ("Union", or “the Lender”).  The Principal Sum due to the Lender includes a 10% Original Issue Discount ("OID") plus $1,500 in transaction fees.  The Note has a maturity date of twelve (12) months from the Effective Date, and accrues interest at 5% per annum. Unless the Note prepaid in cash, the Lender has the right at its election to convert all or part of the outstanding and unpaid Principal Sum and accrued interest (and any other fees) into shares of fully paid and non-assessable shares of common stock of the Company. The Note may be converted to shares of Common Stock of the Registrant at a conversion price of 70% of the arithmetic average of the two (2) lowest VWAPs (volume weighted average price) of the shares of Common Stock during the twenty-five (25) consecutive Trading Day period immediately preceding the date of such conversion.  No conversion can occur prior to 180 days from the Effective Date. In connection with this transaction, a commission has been paid to Carter Terry & Company, a registered broker-dealer, consisting of $2,400 in cash. The debt discount resulting from the derivative was valued on the date of grant to be $29,074 on the note. This value was recorded as a discount on debt and offset to derivative liability. Amortization of the discount was $17,575 for the nine month period ended September 30, 2014.  During the three month period ended September 30, 2014, stock conversions reduced the outstanding balance of principal and accrued interest due by $13,062, and the Company issued an aggregate of 4,999,496 common shares for the conversions, which was consistent with the note agreement, and therefore no gain or loss was recognized on the conversions. As of September 30, 2014, the principal balance due on this note was $20,275, which includes $566 in accrued interest.
 
 
18
 
On March 27, 2014, the Company issued a $50,000 Convertible Promissory Note (the “Note”) to Beaufort Capital Partners LLC ("Beaufort", or “the Lender”).  The Principal Sum due to the Lender includes a 10% Original Issue Discount ("OID").  The Note has a maturity date of six (6) months from the Effective Date, and accrues interest at 5% per annum. Unless the Note prepaid in cash, the Lender has the right at its election to convert all or part of the outstanding and unpaid Principal Sum and accrued interest (and any other fees) into shares of fully paid and non-assessable shares of common stock of the Company. The Note may be converted to shares of Common Stock of the Registrant at a conversion price of 70% of the arithmetic average of the two (2) lowest VWAPs (volume weighted average price) of the shares of Common Stock during the twenty-five (25) consecutive Trading Day period immediately preceding the date of such conversion.  No conversion can occur prior to 180 days from the Effective Date. In connection with this transaction, a commission has been paid to Carter Terry & Company, a registered broker-dealer, consisting of $4,000 in cash. The debt discount resulting from the derivative was valued on the date of grant to be $52,808 on the note. This value was recorded as a discount on debt and offset to derivative liability. In addition there was a $5,000 discount as a result of the principal owed ($55,000) exceeding the cash received ($50,000).  This resulted in a total discount limited to the Note principal of $55,000 including amortization of $31,870 as of September 30, 2014.  During the nine month period ended September 30, 2014, stock conversions reduced the outstanding balance of principal and accrued interest due by $6,500, and the Company issued an aggregate of 3,095,238 common shares for the conversions, which was consistent with the note agreement, and therefore no gain or loss was recognized on the conversions. As of September 30, 2014, the principal balance due on this note was $48,523, which includes $23 in accrued interest.

On April 10, 2014, the Company issued a $44,000 Convertible Promissory Note (the “Note”) to Caesar Capital Group, LLC ("Caesar", or “the Lender”).  The Principal Sum due to the Lender includes a 10% Original Issue Discount ("OID").  The Note has a maturity date of twelve (12) months from the Effective Date, and accrues interest at 8% per annum. Unless the Note is prepaid in cash, the Lender has the right at its election upon maturity of the Note to convert all or part of the outstanding and unpaid Principal Sum and accrued interest (and any other fees) into shares of fully paid and non-assessable shares of common stock of the Registrant. The Note may be converted to shares of Common Stock of the Registrant at a conversion price of 70% of the lowest VWAP (volume weighted average price) of the shares of Common Stock during the five (5) consecutive Trading Day period immediately preceding the date of such conversion.  In connection with this transaction, a commission has been paid to Meyers and Associates, a registered broker-dealer, consisting of $4,000 in cash. The debt discount resulting from the derivative was valued on the date of grant to be $39,830 on the note. This value was recorded as a discount on debt and offset to derivative liability. In addition there was a $4,000 discount as a result of the principal owed ($44,000) exceeding the cash received ($40,000).  This resulted in a total discount to the Note principal of $43,830 including amortization of $20,711 as of September 30, 2014.  As of September 30, 2014, the principal balance due on this note was $45,562, which includes $1,668 in accrued interest.

On April 21, 2014, the Company issued a $55,000 Convertible Promissory Note (the “Note”) to WHC Capital, LLC ("WHC", or “the Lender”).  The Principal Sum due to the Lender includes a 10% Original Issue Discount ("OID").  The Note has a maturity date of twelve (12) months from the Effective Date, and accrues interest at 8% per annum. Unless the Note prepaid in cash, the Lender has the right at its election to convert all or part of the outstanding and unpaid Principal Sum and accrued interest (and any other fees) into shares of fully paid and non-assessable shares of common stock of the Company. The Note may be converted to shares of Common Stock of the Registrant at a conversion price of 70% of the arithmetic average of the two (2) lowest VWAPs (volume weighted average price) of the shares of Common Stock during the twenty-five (25) consecutive Trading Day period immediately preceding the date of such conversion.  No conversion can occur prior to 180 days from the Effective Date. In connection with this transaction, a commission has been paid to Carter Terry & Company, a registered broker-dealer, consisting of $4,000 in cash. The debt discount resulting from the derivative was valued on the date of grant to be $48,112 on the note. This value was recorded as a discount on debt and offset to derivative liability. In addition there was a $5,000 discount as a result of the principal owed ($55,000) exceeding the cash received ($50,000).  This resulted in a total discount to the Note principal of $53,112 including amortization of $23,788 as of September 30, 2014.  As of September 30, 2014, the principal balance due on this note was $57,028, which includes $2,028 in accrued interest.
 
On May 8, 2014, the Company issued a $280,000 Secured Convertible Promissory Note ("the Typenex Note", or the “Note”) to Typenex Co-Investment, LLC ("Typenex").  The Note carries a $25,000 original issue discount (the “OID”), as well as $5,000 in transaction fees. The interest rate on the Note is 10% per annum. The Note has a maturity date of thirteen (13) months from the Effective Date.  The Note is self-amortizing, such that it may be repaid in cash in eight (8) monthly installments of $35,000 plus accrued interest.  In lieu of cash payments, the Company may elect to convert the note to shares at 70% of the arithmetic average of the two (2) lowest VWAPs of the shares of Common Stock during the twenty (20) consecutive Trading Day period immediately preceding the date of such conversion.  In addition, the Company retains the option of pre-paying the Note at any time at an amount equal to 125% of the outstanding principal and the accrued and unpaid interest.  The initial tranche received from this transaction was $50,000. A second tranche of $50,000 was received on June 9, 2014, and a third tranche of $50,000 was received on August 8, 2014. In connection with this transaction, a commission has been paid to Carter Terry & Company, a registered broker-dealer, consisting of $8,000 in cash. The debt discount resulting from the derivative was valued on the date of grant to be $60,147 on the first tranche, and $52,713 for the second tranche. This value was recorded as a discount on debt and offset to derivative liability. In addition there was a $16,500 discount as a result of the principal owed ($165,000) exceeding the cash received ($100,000).  This resulted in a total discount limited to the Note principal of $170,000 including amortization of $41,403 as of September 30, 2014.  As of September 30, 2014, the principal balance due on this note was $174,845, which includes $4,845 in accrued interest.
 
 
19

On May 9, 2014, the Company issued $34,000 Convertible Redeemable Notes ("the LG Note", or collectively “the Notes”) to LG Capital Funding, LLC ("LG", or “the Lender”).  The LG Note carries a 10% original issue discount (the “OID”), such that the outstanding balance upon issuance is $37,400. The LG Note has a maturity date of twelve (12) months from the Effective Date, and accrues interest at 5% per annum.   The Notes may be converted to shares of Common Stock of the Registrant at a conversion price of 70% of the arithmetic average of the two (2) lowest VWAPs (volume weighted average price) of the shares of Common Stock during the twenty-five (25) consecutive Trading Day period immediately preceding the date of such conversion.  No conversion can occur prior to 180 days from the Effective Date.  The initial tranche received from this transaction was $34,000, less $2,000 in legal fees, and a commission paid to Carter Terry & Company, a registered broker-dealer, consisting of $2,270 in cash. The debt discount resulting from the derivative was valued on the date of grant to be $32,024 on the note. This value was recorded as a discount on debt and offset to derivative liability. In addition there was a $3,400 discount as a result of the principal owed ($37,400) exceeding the cash received ($34,000).  This resulted in a total discount limited to the Note principal of $35,424 including amortization of $13,975 as of September 30, 2014.  As of September 30, 2014, the principal balance due was $38,177, which includes $777 in accrued interest.

On July 14, 2014, the Company issued a $250,000 Convertible Promissory Note (the “Note”) to JSJ Investments Inc. ("JSJ", or “the Lender”).   The Note has a maturity date of six (6) months from the Effective Date, and accrues interest at 10% per annum. The Principal Sum due to the Lender shall be prorated based on the consideration actually paid by the Lender, as well as any other interest or fees, such that the Registrant is only required to repay the amount funded and the Registrant is not required to repay any unfunded portion of the Note.  The initial tranche received from this transaction was $100,000. Unless the Note is prepaid in cash within 120 days of the effective date, the Lender has the right at its election upon maturity of the Note to convert all or part of the outstanding and unpaid Principal Sum and accrued interest (and any other fees) into shares of fully paid and non-assessable shares of common stock of the Registrant. The Conversion Price is at a 42% discount to the average of the three lowest volume weighted average prices (VWAP) on the previous twenty (20) trading days to the date of Conversion, or 42% discount to the average of the three lowest VWAPs on the previous twenty (20) trading days that would be obtained if the conversion were to be made on the date that the Note was executed. In connection with this transaction, a commission has been paid to Carter Terry & Company, a registered broker-dealer, consisting of $8,000 in cash. The debt discount resulting from the derivative was valued on the date of grant to be $100,000 on the note. This value was recorded as a discount on debt and offset to derivative liability. This resulted in a total discount limited to the Note principal of $100,000 including amortization of $42,391 as of September 30, 2014.  As of September 30, 2014, the principal balance due was $102,137, which includes $2,137 in accrued interest.
 
On August 6, 2014, the Company issued a $98,500 Convertible Promissory Note ("the Note") to KBM Worldwide, Inc. ("KBM", or “the Lender”).  The interest rate on the Note is 8% per annum, and the Note has a maturity date of nine (9) months from the Effective Date. The Note carries a $13,000 original issue discount (the “OID”), as well as $3,500 in transaction fees, such that the consideration received by the Registrant is $82,000.  The Company retains the option of pre-paying the Note at an amount equal to 110% of the outstanding principal and the accrued and unpaid interest within 30 days of the effective date, increasing at 5% per month to a maximum of 135% by the 6th month. Unless the Note is repaid in cash within 180 days, the Lender has the right to convert all or part of the outstanding and unpaid Principal Sum and accrued interest (and any other fees) into shares of fully paid and non-assessable shares of common stock of the Company. The Conversion Price is at a 25% discount to the average of the two lowest closing prices on the previous twenty (20) trading days prior to the date of Conversion. In connection with this transaction, a commission has been paid to Carter Terry & Company, a registered broker-dealer, consisting of $6,560 in cash. The debt discount resulting from the derivative was valued on the date of grant to be $97,603 on the note. This value was recorded as a discount on debt and offset to derivative liability. In addition there was a $16,500 discount as a result of the principal owed ($98,500) exceeding the cash received ($82,000).  This resulted in a total discount limited to the Note principal of $98,500 including amortization of $19,844 as of September 30, 2014.  As of September 30, 2014, the principal balance due was $99,687, which includes $1,187 in accrued interest.

On August 7, 2014, the Company issued a $125,000 Convertible Promissory Note ("the Note") to RLS Premiere Financial LLC ("RSL", or “the Lender”).  The interest rate on the Note is 5% per annum, and the Note has a maturity date of twelve (12) months from the Effective Date. The Principal Sum due to the Lender shall be prorated based on the consideration actually paid by the Lender, as well as any other interest or fees, such that the Company is only required to repay the amount funded and the Registrant is not required to repay any unfunded portion of the Note.  The initial tranche received from this transaction was $20,000. The Company retains the option of pre-paying the Note at an amount equal to 135% of the outstanding principal and the accrued and unpaid interest. Unless the Note is repaid in cash within 180 days, the Lender has the right to convert all or part of the outstanding and unpaid Principal Sum and accrued interest (and any other fees) into shares of fully paid and non-assessable shares of common stock of the Company. The Conversion Price is at a 20% discount to the average of the two lowest volume weighted average prices (VWAP) on the previous fifteen (15) trading days to the date of Conversion. The debt discount resulting from the derivative was valued on the date of grant to be $20,000 on the note. This value was recorded as a discount on debt and offset to derivative liability. This resulted in a total discount limited to the Note principal of $20,000 including amortization of $2,959 as of September 30, 2014.  As of September 30, 2014, the principal balance due was $20,249, which includes $249 in accrued interest.
 
 
20
 
On September 3, 2014, the Company issued a $550,000 Promissory Note ("the Note") to JMJ Financial, ("JMJ", or “the Lender”).  The Principal Sum due to the Lender shall be prorated based on the consideration actually paid by the Lender, plus an approximate 10% Original Issue Discount ("OID") that is prorated based on the consideration actually paid by the Lender, a 3% Closing and Due Diligence Fee, as well as any other interest or fees, such that the Company is only required to repay the amount funded and the Company is not required to repay any unfunded portion of the Note.  The Note has a maturity date of twenty four (24) months from the Effective Date.  If the Note is repaid within ninety (90) days of the Effective Date, the interest rate shall be zero percent (0%).  Should the Note still be outstanding after 90 days, a one-time 5% interest rate will be applied.  In addition, the Lender has the right, at any time after the Effective Date, at its election, to convert all or part of the outstanding and unpaid Principal Sum and accrued interest (and any other fees) into shares of fully paid and non-assessable shares of common stock of the Company. The Conversion Price is the lesser of $0.10 or 70% of the average of the two lowest closing prices in the 25 trading days previous to the conversion.  The initial consideration received as of the date of this report is $75,000.  In connection with this transaction, a commission has been paid to Meyers and Associates, a registered broker-dealer, consisting of $5,250 in cash. The debt discount resulting from the derivative was valued on the date of grant to be $77,569 on the note. This value was recorded as a discount on debt and offset to derivative liability. In addition there was a $7,500 discount as a result of the principal owed ($82,500) exceeding the cash received ($75,000).  This resulted in a total discount limited to the Note principal of $84,750 including amortization of $3,130 as of September 30, 2014.  As of September 30, 2014, the principal balance due was $82,500, which includes $0 in accrued interest.

On September 3, 2014, the Company issued a $53,000 Convertible Promissory Note ("the KBM Note") to KBM Worldwide, Inc. ("KBM", or “the Lender”).  The interest rate on the KBM Note is 8% per annum, and the KBM Note has a maturity date of twelve (12) months from the Effective Date. The KBM Note carries a $5,000 original issue discount (the “OID”), as well as $3,000 in transaction fees, such that the purchase price is $48,000, and the net consideration received by the Company is $45,000.  The Company retains the option of pre-paying the KBM Note at an amount equal to 110% of the outstanding principal and the accrued and unpaid interest within 30 days of the effective date, increasing at 5% per month to a maximum of 135% by the 6th month. Unless the KBM Note is repaid in cash within 180 days, the Lender has the right to convert all or part of the outstanding and unpaid Principal Sum and accrued interest (and any other fees) into shares of fully paid and non-assessable shares of common stock of the Company. The Conversion Price is at a 25% discount to the average of the two lowest closing prices on the previous twenty (20) trading days prior to the date of Conversion. In connection with this transaction, a commission has been paid to Carter Terry & Company, a registered broker-dealer, consisting of $3,600 in cash. The debt discount resulting from the derivative was valued on the date of grant to be $50,373 on the note. This value was recorded as a discount on debt and offset to derivative liability. This value was recorded as a discount on debt and offset to derivative liability. In addition there was a $8,000 discount as a result of the principal owed ($53,000) exceeding the cash received ($45,000).  This resulted in a total discount limited to the Note principal of $55,000 including amortization of $3,899 as of September 30, 2014.  As of September 30, 2014, the principal balance due was $53,331, which includes $331 in accrued interest.

The following table summarizes all of the Convertible Notes outstanding as of September 30, 2014 and December 31, 2013:
 
   
September 30,
2014
    
December 31,
2013
  
Mortgage payable – Ruby Mine
  
$
1,691,730
    
$
1,832,638
  
Secured note payable with annual interest rate of 8%
    
28,526
      
41,687
  
Discount on note payable
    
-
      
-
  
Net note payable
    
1,720,256
      
1,874,325
  
Convertible notes:
                
Secured convertible notes payable with annual interest rate of 10%
    
220,000
      
155,000
  
Unsecured convertible notes payable with annual interest rate of 10%
    
195,279
      
-
  
Unsecured convertible notes payable with annual interest rate of 9.9%
    
275,000
      
275,000
  
Unsecured convertible notes payable with annual interest rate of 8%
    
298,500
      
-
  
Unsecured convertible notes payable with annual interest rate of 7%
    
519,298
      
496,097
  
Unsecured convertible notes payable with annual interest rate of 5%
    
332,275
      
175,050
  
Discount on debt from derivative valuation
    
(661,359
)
    
(264,389
) 
Total convertible notes
    
1,178,993
      
836,858
  
Total Debt
  
$
2,899,249
    
$
2,711,183
  
 
 
21
 
NOTE 8             DEFERRED FINANCING COSTS
 
Deferred financing costs include debt issuance costs primarily incurred by the Company as part of Convertible Note transactions. Deferred financing costs as of September 30, 2014 was $62,653. Amortization was $75,493 and $6,150 for the nine month periods ended September 30, 2014 and 2013, respectively.
 
These costs include commissions paid to Carter Terry & Company, a registered broker-dealer, consisting of $55,620 in cash. These amounts were capitalized to Deferred Financing Costs and amortized over the term of the note. Amortization is provided on a straight-line basis over the terms of the respective debt instruments to which the costs relate and is included in interest expense.  The difference between the straight line and effective interest methods is immaterial due to the short term nature of the convertible notes.
 
During the nine month period ending September 30, 2014, 368,217 restricted shares of common stock of the Company valued at $10,310 were issued to Carter Terry & Company as part of their commission package.  As of September 30, 2014, $19,440 in stock payable related to deferred financing costs remains due.

NOTE 9             DERIVATIVE LIABILITIES
 
During the year ended December 31, 2013, the Company issued additional convertible notes totaling $692,797, which were considered tainted upon issuance. The related derivative liability and debt discount recorded was valued at inception and equal to $585,210. In addition, the Company retired $253,336 in debt and accrued interest through cash payments and stock conversions, which resulted in a settlement of derivative liabilities to additional paid in capital of $386,536. All instruments with embedded derivative liabilities or included in the derivative liability due to the tainted equity environment were re-valued at December 31, 2013, with all changes flowing through the gain/loss on derivative for a total gain on derivative of $151,533 for the year ended December 31, 2013. The derivative liability related to convertible debt was valued at $548,447, and the derivative liability related to warrants was $148,201 as of December 31, 2013. This includes 4 million new warrants granted in FY 2013 that were valued and included in the derivative.
 
During the nine months ended September 30, 2014, the Company issued additional convertible notes totaling $1,254,194, which were considered tainted upon issuance. The related derivative liability was valued at inception and equal to $1,254,194 from a $188,497 loss and a $1,065,697discount. In addition, the Company retired $274,680 in stock conversions, which resulted in a settlement of derivative liabilities to additional paid in capital of $274,680. All instruments with embedded derivative liabilities or included in the derivative liability due to the tainted equity environment were re-valued at September 30, 2014, with all changes flowing through the gain/loss on derivative for a total gain on derivative of $523,528 for the nine months ended September 30, 2014. The derivative liability related to convertible debt was valued at $961,516, and the derivative liability related to warrants was $2,621 as of September 30, 2014.

The following shows the changes in the derivative liability measured on a recurring basis for the nine months ended September 30, 2014, and for the year ended December 31, 2013.

Derivative Liability at December 31, 2013
  
$
696,648
  
Gain on Derivative Liability
    
(523,528
)
Settlement to APIC from Conversion
    
(274,680
)
Additions to Liability for Convertible Debt recorded as debt discount
    
877,200
  
Additions to Liability for Convertible Debt expensed due to value of derivative exceeding debt
    
188,497
  
Derivative Liability at September 30, 2014
  
$
964,137
  
 
The following tabular presentation reflects the components of derivative financial instruments on the Company’s balance sheet at September 30, 2014 and December 31, 2013:
 
Derivative Liabilities:
  
September 30,
2014
    
December 31,
2013
  
Embedded derivative liability in convertible debt
  
$
689,785
    
$
156,761
  
Derivative liability due to tainted equity – convertible debt
    
271,731
      
391,686
  
Derivative liability due to tainted equity – warrants
    
2,621
      
148,201
  
Total Derivative Liability
  
$
964,137
    
$
696,648
  
 
 
22
 
NOTE 10           COMMITMENTS AND CONTINGENCIES
 
During the second quarter of fiscal 2013, the Company discovered it had offered and sold certain shares of common stock without registration under the Securities Act of 1933 (the “Securities Act”), as amended, during the period from October 24, 2011 through April 25, 2013.  Pursuant to Section 10(a)(3) of the Securities Act, by the time our prospectus had been in use for 9 months from the effective date of January 24, 2011, the balance sheet date of the audited financial statement contained in our prospectus was more than 16 months old, and had not been refreshed to present our current financial statements within said prospectus. This inadvertent technical failure to update our prospectus according to Section 10(a)(3) of the Securities Act may have caused our prospectus to no longer be effective as of October 24, 2011. As a result, purchasers of these securities may have the right to rescind their purchases for an amount equal to the purchase price paid for the securities, plus interest from the date of purchase, limited to the unregistered shares purchased from the original seller and still held by the original purchaser. The federal Securities Act requires that any claim for rescission be brought within one year of reporting the violation. The time periods within which claims for rescission must be brought under state securities laws vary and may be two years or more from the transaction date. As of the date of this report, approximately 10 million shares of our outstanding common stock are subject to possible rescission. The maximum potential liability as of June 30, 2014 and December 31, 2013 was $697,046 and $667,758, respectively. These amounts include interest at 10% per annum from the date of the respective purchases.  Due to the shares being redeemable by the holder since their inception, the shares are required to be classified outside of permanent equity on the balance sheet. Since redemption is uncertain and outside of the Company’s control the shares are classified within the mezzanine section of the balance sheet at their respective redemption values. Any differences between the cash received and the redemption value was recorded to additional paid in capital. Interest of 10% is being accrued on the values and is recorded through additional paid in capital consistent with the appropriate accounting guidance covering the accounting treatment of mezzanine instruments.
 
The following shows the changes in the redeemable common stock from October 24, 2011 through June 30, 2014.
 
Cash received for 880,982 shares issued after October 24, 2011
  
$
89,000
  
Mark redeemable common stock down to the redeemable amount
    
(974
)
Interest on redeemable common stock
    
247
  
Redeemable common stock value at December 31, 2011
  
$
88,273
  
Cash and note relief received for 3,636,619 shares issued
    
227,000
  
Mark redeemable common stock up to the redeemable amount
    
29,516
  
Interest on redeemable common stock
    
22,701
  
Redeemable common stock value at December 31, 2012
  
$
367,490
  
Cash received for 5,699,885 shares issued
    
197,000
  
Mark redeemable common stock up to the redeemable amount
    
52,346
  
Interest on redeemable common stock
    
50,922
  
Redeemable common stock value at December 31, 2013
  
$
667,758
  
Interest on redeemable common stock
    
29,288
  
Redeemable common stock value at June 30, 2014
  
$
697,046
  
 
As of September 30, 2014, the federal statute of limitations as defined in the federal Securities Act has expired. Accordingly, redemption is now considered remote, and the shares have been moved from the mezzanine section of the balance sheet to Stockholders’ Equity.

As of September 30, 2014 and December 31, 2013, respectively, the Company does not have any outside commitments, and is not currently leasing any office space.  Office space is provided as part of a management agreement with The PAN Network, a private business management and consulting company wholly-owned by the Company’s Chief Executive Officer.  The agreement is renewable annually at the discretion of both parties. As a result there are no future payments for our lease beyond the current year contract.
 
The Company is not and has never been involved in any litigation of any nature, and the Company is not aware of any pending or threatened litigation.
 
EB-5
 
On July 28, 2010, the Company executed an agreement with ACG Consulting, LLC ("ACG") intended to establish a new economic Regional Center ("RC") under the federal EB-5 program (the "EB-5 Program") that will encompass all of  Northern California's Gold Country. Once established, the Regional Center is expected to provide full funding for the Company's Ruby Mine Project in Sierra County, California.  Terms of the agreement specify that upon filing an application for a new Regional Center with USCIS, North Bay shall pay ACG its share of the startup expenses, which as of December 31, 2011 were $0. During Q1, 2011, the Company agreed to reimburse ACG $37,216 in expenses incurred to prepare and file EB-5 applications with USCIS.  As of March 31, 2011, $15,000 of this amount had been paid, and $22,216 remained outstanding.  As of December 31, 2011, $0 remains outstanding and this account has been paid in full.  No shares of Company stock have been or will be issued in connection with this agreement.
 
 
23
 
The agreement also provides that North Bay will own 49% of the Regional Center, and ACG will own 51%. ACG and North Bay, working together through the Regional Center, will seek to raise up to $7.5M in EB-5 funding for North Bay's Ruby Mine Project, subject to USCIS approval. ACG will also be an equity partner in each project North Bay may bring into the Regional Center, the amount of which will vary on a deal by deal basis based on the amount of consulting services ACG actually provides. At the present time, no projects other than mining are being considered, and the industry focus for the Regional Center is expected to be limited to mining initially.

Effective October 14, 2010, the Company, together with ACG, entered into a Memorandum of Understanding (“MOU”) with Northern California Regional Center, LLC ("NCRC"), whereby NCRC has agreed to expand its scope to include mining projects in the counties of Sierra and Nevada in Northern California, and together with ACG has agreed to sponsor North Bay's application to secure $7.5 million for the Ruby Gold project in Sierra County, California, through the EB-5 Program.  NCRC was approved on April 22, 2010 by the United States Citizenship and Immigration Services (“USCIS”) as a designated EB-5 Regional Center, and is currently approved to sponsor qualifying investments in such capacity within the counties of Colusa; Butte; Glenn; Sacramento; San Joaquin; Shasta; Sutter; Tehama; Yuba; and Yolo in the State of California (the “Regional Center’s Geographic Area”).  Pursuant to its regional center designation, NCRC may sponsor qualifying investments in certain industry economic sectors that do not currently include mining.  The agreement with North Bay and ACG calls for NCRC to seek USCIS approval for an expansion of NCRC’s Regional Center Geographic Area (the “Expansion”) to include Sierra County, where the Ruby Mine is located, and for approval to include mining within its designated industry sectors (the “Mining Designation”). These applications have been filed with USCIS, and are currently being reviewed. Upon approval of the Expansion and Mining Designation by USCIS, NCRC will then be permitted to sponsor qualified investments in North Bay’s Ruby Gold project under the EB-5 Program.  Under the terms of the agreement, NCRC will receive a $5,000 fee for each investor whose minimum $500,000 investment is approved by USCIS.  In addition, upon the Ruby Gold project receiving the aggregate sum of $7,500,000 through the EB-5 Program, NCRC shall be entitled to an undivided one and one half percent (1.5%) interest in the Ruby Gold project.  No shares of Company stock have been or will be issued in connection with this agreement, and the entire EB-5 funding is expected to be non-dilutive to shareholders. 
 
On July 19, 2011, the NCRC Expansion Amendment, which includes the Mining Designation and pre-approval of the Ruby Gold project as a qualified EB-5 project, was formally approved by USCIS.  As of the date of this report, the EB-5 funding is still pending and is considered unlikely to be completed.
 
NOTE 11           DEFERRED COMPENSATION/NQDC
 
The Company has adopted an unfunded Non-Qualified Deferred Compensation (NQDC) plan to compensate our Chief Executive Officer.  Under this plan, the Company is not required to reserve funds for compensation, and is only obligated to pay compensation when and if funds are available.  Any amounts due but unpaid automatically accrue to deferred compensation. The plan has the option to be renewed annually at the discretion of the Company. While unfunded and non-recourse, for compliance with GAAP this is disclosed as an accrued expense on the balance sheet.  On April 28, 2011, the Company issued two million (2,000,000) shares of common stock to our Chief Executive Officer  to reduce the aggregate amount of deferred compensation owed to him by $180,000.  The shares were valued at the closing market price of our common stock on the date of issuance.  On December 9, 2013, the Company issued five million (5,000,000) shares of common stock to our Chief Executive Officer  to reduce the aggregate amount of deferred compensation owed to him by $180,000.  The shares were valued at the closing market price of our common stock on the date of issuance, which was equal to the deferred compensation relieved.  As of September 30, 2014 and December 31, 2013, the outstanding balance of the NQDC plan is $922,474 and $820,474, respectively.
 
In 2007, 2008, and 2009, our Chief Executive Officer was awarded restricted stock bonuses for deferring accrued salary. The value of common shares were based on the market closing price on the day of issuance, and the value of preferred shares were valued via a valuation model generated by an independent valuation expert, as follows:
 
Date
  
Type of Stock
  
Number of
 Shares
    
Value
  
  2/12/2007
  
Preferred
    
100
    
$
101,000
  
    2/9/2007
  
Common
    
250,000
    
$
31,250
  
12/21/2007
  
Common
    
10,000,000
    
$
900,000
  
12/16/2008
  
Common
    
2,500,000
    
$
50,000
  
8/11/2009
  
Preferred
    
4,100,000
    
$
253,785
  
 
NOTE 12           ASSET RETIREMENT OBLIGATIONS
 
Provisions for site closure and reclamation costs are based principally on legal and regulatory requirements established by various government agencies, principally Sierra County, California, the US Forest Service, and the California Dept. of Conservation Office of Mine Reclamation (OMR). Under current regulations, the Company is required to meet performance standards to minimize the environmental impact from its operations and to perform site restoration and other closure activities at its mining sites. The exact nature of environmental remediation requirements that may be encountered in the future, if any, cannot be predicted with certainty, because environmental requirements currently established by government agencies may change.
 
 
24
 
The following table illustrates the inputs used to calculate the current Asset Retirement Obligation as of September 30, 2014 and December 31, 2013.
 
Cost estimate for reclamation work at today's cost
  
$
173,141
  
Estimated life of mine (years)
    
50
  
Risk adjusted rate (borrowing rate)
    
9.9
%
Estimated inflation rate
    
2.2
%
 
   
Asset Retirement Obligation
  
Asset retirement obligation at 12/31/13
  
$
6,158
  
Adjustment
    
(1,708
)
Accretion Expense
    
383
  
Asset retirement obligation at 9/30/14
  
$
4,833
  
 
NOTE 13           RELATED PARTY TRANSACTIONS
 
During the twelve month period ended December 31, 2013, director Fred Michini was paid $10,000 in director fees, which was paid as 277,778 shares of stock valued at the closing market price of our common stock on the date of issuance.  
 
NOTE 14           ADVANCE GOLD SALES
 
On June 4, 2013, the Company executed a Memorandum of Understanding (the “Agreement”) with a private US investor (the “Investor”) for an advance sale of up to 120 ounces of specimen gold from the Ruby Mine in Sierra County, California.  The price paid in advance by the Investor shall be at a ten percent (10%) discount to the then-current spot price of gold (the “Purchase Price”) on the day the gold is produced and made available for shipment (the “Delivery Date”). The Investor will acquire the right to purchase the gold at their discretion. Upon signing the Agreement, the Company received an initial cash advance of $150,000 (the “Advance”), which is based on a 10% discount to the current spot price of gold, for delivery of the first 120 ounces of specimen gold produced from the Ruby Mine on or before February 1, 2014 (the “Due Date”).  The Advance paid will be applied to the amount due to the Company on the Delivery Date, as determined by the then-current spot price of gold on the Delivery Date.  In the event that 120 ounces of specimen gold is not available for delivery by the Due Date, the Investor will be entitled to be repaid the Advance in cash plus 10% interest equal to $165,000 total, with an option to still purchase the same amount of gold at a discount of 10% to the then-current spot price of gold when the specimen gold becomes available for delivery at a later date. A $165,000 cash payment was made on the due date, February 1, 2014, and the Advance has been repaid.  The payment offset $15,000 of the derivative liability, and the remaining derivative liability of $1,667 was settled to additional paid-in capital with payment. As per the Agreement, the investor retains the right to purchase 120 ounces of gold at a future date at a 10% discount to the then-current spot price of gold.

On August 2, 2013, the Company sold an additional 40 ounces of gold under the same terms for $50,000.  In the event that the 40 ounces of specimen gold is not available for delivery by the Due Date on April 2, 2014, the Investor will be entitled to be repaid the Advance in cash plus 10% interest equal to $55,000 total, with an option to still purchase the same amount of gold at a discount of 10% to the then-current spot price of gold when the specimen gold becomes available for delivery at a later date. As of September 30, 2014, the Company has repaid the cash advance in its entirety, plus interest.
 
The related obligations have been recorded for the full $200,000 received and an additional $22,223 recorded as a derivative liability represents the additional amount owed related to the 10% discount on the gold price. This discount of $22,223 was amortized straight line over the term of the agreement and has been fully amortized as of September 30, 2014.
 
NOTE 15           SHARE ISSUANCES

During the first half of 2013 the Company amended the Securities Purchase Agreement with Tangiers Investors LP ("Tangiers") dated October 7, 2009 to (a) increase the commitment amount from $5 million to $10 million, (b) increase the term from 3 years to 5 years, (c) increase the maximum draw from $100,000 to $250,000, (d) provides for up to 300% of the base amount of each draw as determined by the average daily trading volume in dollar amount during the 10 trading days (the “Base Amount”) preceding the Advance Note date, and (e) the price on the Base Amount remains 90% of the lowest volume weighted average price of the Company's common  stock during the 5 day pricing period following each Advance Notice (the “Market Price”), any Advance Notice that exceeds the Base Amount by up to 200% will be further discounted by 7.5% (or 82.5% of the Market Price), and any Advance Notice in excess of 200% and up to 300% of the Base Amount will be further discounted by an additional 7.5% (or 75% of the Market Price).

During the first half of 2013, the Company issued 5,700,049 shares of common stock to Tangiers Investors LP ("Tangiers") pursuant to a Securities Purchase Agreement entered into with Tangiers on October 7, 2009, as amended, in consideration of $197,000. As noted within footnote 10, these shares were considered unregistered and re-classified to temporary equity based on the potential cash redemption to the investor.
 
 
25
 
During the second half of 2013, the Company issued 13,564,152 shares of common stock to Tangiers Investors LP ("Tangiers") pursuant to a Securities Purchase Agreement entered into with Tangiers on October 7, 2009, as amended, in consideration of $459,000.

During 2013, and pursuant to twelve partial conversion notices received, the Company issued an aggregate of 11,229,545 shares of common stock of the Company to satisfy $283,920 of the principal and interest due on a Promissory Note ("the Note") dated July 11, 2012 with JMJ Financial, ("JMJ").  The number of shares issued was consistent with the terms of the agreement, therefore equity was credited for the value of the debt relieved with no gain or loss recorded.
 
During 2013, the Company issued 57,143 shares of restricted common stock for geological services rendered in the amount of $4,000.  The shares were valued on the grant date at the closing market price.
 
During 2013, the Company issued 94,563 shares of restricted common stock for mining safety & health services rendered in the amount of $3,782. The shares were valued on the grant date at the closing market price.
 
During 2013, the Company issued 40,000 shares of restricted common stock for mining services. The shares were valued at $1,480 based on the closing market price on the date of grant.
 
During 2013, the Company issued 5,000,000 shares of common stock to our Chief Executive Officer to reduce the aggregate amount of deferred compensation owed to him by $180,000.  The shares were valued at the closing market price of our common stock on the date of grant.
 
During 2013, the Company issued 277,778 shares of common stock to director Fred Michini for director fees earned during 2013.  The shares were valued at $10,000 based on the closing market price of our common stock on the date of grant.
 
During 2013, in connection with the Typenex and LG note issuances, a commission has been paid to Carter Terry & Company, a registered broker-dealer, consisting of $17,500 in cash and 148,750 restricted Rule 144 shares of common stock.  The shares were valued at $6,481 based on the closing market price on the date of grant. This value is being amortized over the term of the related note agreement.

During the three month period ended March 31, 2014, the Company issued 11,801,616 shares of common stock previously registered with the SEC for issuance to Tangiers Investors LP ("Tangiers") pursuant to a Securities Purchase Agreement entered into with Tangiers on October 7, 2009, as amended, in consideration of cash received of $301,500.
 
During the three month period ended March 31, 2014 and pursuant to three partial conversion notices received, the Company issued an aggregate of 2,515,280 shares of common stock of the Company to satisfy $50,208 of the principal and interest due on a Promissory Note ("the Note") dated July 11, 2012 with JMJ Financial, ("JMJ").  
 
During the three month period ended March 31, 2014, $12,800 in stock payable (458,499 shares) is due to Carter Terry & Company, a registered broker-dealer, as additional commissions payable but not yet issued.

During the three month period ended March 31, 2014, the Company issued 100,000 shares of restricted common stock to William S. Watters, the new COO of our wholly-owned subsidiary, Ruby Gold, Inc., as a signing bonus. The shares were valued at $2,700 based on the closing market price on the date of grant.

During the three month period ended June 30, 2014 and pursuant to a partial conversion notice received, the Company issued an aggregate of 3,000,000 shares of common stock of the Company to satisfy $76,800 of the principal and interest due on a Promissory Note dated October 2, 2012 with Tangiers Investors, LP, ("Tangiers").  

During the three month period ended June 30, 2014, the Company issued 368,217 restricted shares of common stock of the Company to Carter Terry & Company, a registered broker-dealer, for accrued commissions in connection with the Typenex Note.

During the three month period ended June 30, 2014, the Company issued 21,049,171 shares of common stock previously registered with the SEC for issuance to Tangiers Investors LP ("Tangiers") pursuant to a Securities Purchase Agreement entered into with Tangiers on October 7, 2009, as amended, in consideration of cash received of $216,200.

During the three month period ended June 30, 2014 and pursuant to three partial conversion notices received, the Company issued an aggregate of 10,707,578 shares of common stock of the Company to satisfy $114,079 of the principal and interest due on a Promissory Note dated October 1, 2013 with Typenex Co-Investment, LLC ("Typenex").
 
 
26
 
During the three month period ended June 30, 2014 and pursuant to three partial conversion notices received, the Company issued an aggregate of 5,494,215 shares of common stock of the Company to satisfy $46,847 of the principal and interest due on a Promissory Note ("the Note") dated July 11, 2012 with JMJ Financial, ("JMJ").  

During the three month period ended June 30, 2014 and pursuant to a conversion notice received, the Company issued 4,154,411 shares of common stock of the Company to satisfy $59,325 of the principal and interest due on a Promissory Note dated October 7, 2013 with LG Capital Funding LLC ("LG").   
 
During the three month period ended September 30, 2014, the Company issued 40,125,020 shares of common stock previously registered with the SEC for issuance to Tangiers Investors LP ("Tangiers") pursuant to a Securities Purchase Agreement entered into with Tangiers on October 7, 2009, as amended, in consideration of cash received of $224,600.

During the three month period ended September 30, 2014 and pursuant to three partial conversion notices received, the Company issued an aggregate of 17,575,702 shares of common stock of the Company to satisfy $108,910 of the principal and interest due on a Promissory Note dated October 1, 2013 with Typenex Co-Investment, LLC ("Typenex").

During the three month period ended September 30, 2014 and pursuant to three partial conversion notices received, the Company issued an aggregate of 7,700,000 shares of common stock of the Company to satisfy $36,806 of the principal and interest due on a Promissory Note ("the Note") dated July 11, 2012 with JMJ Financial, ("JMJ").  

During the three month period ended September 30, 2014 and pursuant to six partial conversion notices received, the Company issued 10,817,127 shares of common stock of the Company to satisfy $38,500 of the principal and interest due on a Promissory Note ("the Note") dated January 31, 2014 with GEL Properties, LLC (“GEL”).
 
During the three month period ended September 30, 2014 and pursuant to two partial conversion notices received, the Company issued 4,999,496 shares of common stock of the Company to satisfy $13,062 of the principal and interest due on a Promissory Note ("the Note") dated March 13, 2014 with Union Capital LLC ("Union").

During the three month period ended September 30, 2014 and pursuant to a partial conversion notices received, the Company issued 3,095,238 shares of common stock of the Company to satisfy $6,500 of the principal and interest due on a Promissory Note ("the Note") dated March 27, 2014 with Beaufort Capital Partners LLC ("Beaufort").

NOTE 16           WARRANTS
 
4,000,000 warrants exercisable at $0.04 were issued to Ruby Development Company (“RDC”) on November 19, 2013 as consideration for a mortgage modification executed on that same date. The warrants have an expiration date on December 30, 2018. These warrants were valued within the derivative liability using the binomial lattice model due to tainted equity. See the fair value footnote for inputs to the binomial lattice model.
 
On the same date the expiration dates of the remaining 14,000,000 warrants previously issued to RDC were all reset and extended to December 30, 2018.  A loss on the equity modification of $85,399 was expensed and recorded to APIC. This loss was valued using the Black-Scholes model by valuing the instrument before extending the expiration term and valuing it after the extension. The key inputs to these valuations are indicated below.
 
Warrants before modification:
 
Stock Price on Measurement Date
  
$
0.044
  
Exercise Price of Warrants
  
$
 0.02  – 0.09
  
Term of Warrants (years)
    
 2.12  –   3.3
  
Computed Volatility
    
144
%
Annual Dividends
    
0.00
%
Discount Rate
    
0.58
%
 
Warrants after modification:
 
Stock Price on Measurement Date
  
$
0.044
  
Exercise Price of Warrants
  
$
 0.02  – 0.09
  
Term of Warrants (years)
    
5.12
  
Computed Volatility
    
144
%
Annual Dividends
    
0.00
%
Discount Rate
    
0.58
%
 
 
27
 
A summary of activity related to the Company’s warrant activity for the period from December 31, 2013 through September 30, 2014 is presented below:
 
               
Weighted
  
         
Weighted
    
Average
  
         
Average
    
Remaining
  
   
Number
    
Exercise Price
    
Contractual
  
   
Outstanding
    
Per Share
    
Life (Years)
  
Outstanding at December 31, 2013
    
23,550,000
      
0.045
      
4.75
(2)
Granted
    
-
      
-
      
-
  
Exercised
    
-
      
-
      
-
  
Canceled/forfeited/expired
    
-
      
-
      
-
  
Outstanding at September 30, 2014
    
23,550,000
      
0.045
      
4.75
(2)

(1) Pursuant to a January 26, 2011 amendment to the Ruby Mine Option Agreement whereby the term of the warrants issued to Ruby Development Company were extended to December 30, 2018.

(2) Primary reason for change related to a November 19, 2013 amendment to the Ruby Mine Option Agreement whereby the term of the warrants issued to Ruby Development Company were extended to December 30, 2018.
 
NOTE 17           SUBSEQUENT EVENTS
 
Subsequent to September 30, 2014, the Company issued 20,883,997 shares of common stock previously registered with the SEC for issuance to Tangiers Investors LP ("Tangiers") pursuant to a Securities Purchase Agreement entered into with Tangiers on October 7, 2009, as amended, in consideration of cash received of $24,200.
 
Subsequent to September 30, 2014 and pursuant to two partial conversion notices received, the Company issued an aggregate of 60,205,131 shares of common stock of the Company to satisfy $51,049 of the principal and interest due on a Promissory Note dated October 1, 2013 with Typenex Co-Investment, LLC ("Typenex").
 
Subsequent to September 30, 2014 and pursuant to two partial conversion notices received, the Company issued 12,612,411shares of common stock of the Company to satisfy $10,327 of the principal and interest due on a Promissory Note ("the Note") dated January 31, 2014 with GEL Properties, LLC (“GEL”).

Subsequent to September 30, 2014 and pursuant to two partial conversion notices received, the Company issued 16,207,360 shares of common stock of the Company to satisfy $10,277 of the principal and interest due on a Promissory Note ("the Note") dated March 13, 2014 with Union Capital LLC ("Union").

Subsequent to September 30, 2014 and pursuant to a partial conversion notice received, the Company issued 16,989,285 shares of common stock of the Company to satisfy $9,514 of the principal and interest due on a Promissory Note ("the Note") dated April 10, 2014 with Caesar Capital Group, LLC ("Caesar ").

Subsequent to September 30, 2014 and pursuant to seven partial conversion notices received, the Company issued an aggregate of 87,797,555 shares of common stock of the Company to satisfy $36,200 of the principal and interest due on a Promissory Note ("the Note") dated March 27, 2014 with Beaufort Capital Partners LLC ("Beaufort").

Subsequent to September 30, 2014 and pursuant to two partial conversion notices received, the Company issued an aggregate of 49,630,000 shares of common stock of the Company to satisfy $9,548 of the principal and interest due on a Promissory Note ("the Note") dated April 21, 2014 with WHC Capital, LLC ("WHC ").

Subsequent to September 30, 2014 and pursuant to two partial conversion notices received, the Company issued an aggregate of 43,700,000 shares of common stock of the Company to satisfy $13,325 of the principal and interest due on a Promissory Note ("the Note") dated July 11, 2012 with JMJ Financial, ("JMJ").

Subsequent to September 30, 2014, the Company filed a Certificate of Amendment to its Certificate of Incorporation with the Secretary of State of the State of Delaware (the “Amendment”) which increased the Company’s authorized shares of common stock from 500,000,000 shares, par value $0.001 per share, to 1,500,000,000 shares, par value $0.0001 per share.
 
 
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ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Disclosure Regarding Forward Looking Statements

This Quarterly Report on Form 10-Q includes forward looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (“Forward Looking Statements”). All statements other than statements of historical fact included in this report are Forward Looking Statements. In the normal course of its business, the Company, in an effort to help keep its shareholders and the public informed about the Company’s operations, may from time-to-time issue certain statements, either in writing or orally, that contain or may contain Forward-Looking Statements. Although the Company believes that the expectations reflected in such Forward Looking Statements are reasonable, it can give no assurance that such expectations will prove to have been correct. Generally, these statements relate to business plans or strategies, projected or anticipated benefits or other consequences of such plans or strategies, past and possible future, of acquisitions and projected or anticipated benefits from acquisitions made by or to be made by the Company, or projections involving anticipated revenues, earnings, levels of capital expenditures or other aspects of operating results. All phases of the Company operations are subject to a number of uncertainties, risks and other influences, many of which are outside the control of the Company and any one of which, or a combination of which, could materially affect the results of the Company’s proposed operations and whether Forward Looking Statements made by the Company ultimately prove to be accurate. Such important factors (“Important Factors”) and other factors could cause actual results to differ materially from the Company’s expectations are disclosed in this report. All prior and subsequent written and oral Forward Looking Statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by the Important Factors described below that could cause actual results to differ materially from the Company’s expectations as set forth in any Forward Looking Statement made by or on behalf of the Company.

The following discussion and analysis should be read in conjunction with the information set forth in the Company’s audited financial statements for the year ended December 31, 2013.

Overview
 
We seek to acquire, explore, develop, and exploit natural resource properties with extensive reserves of precious metals, including gold, silver, platinum, and palladium, as well as base metals, including copper, zinc, lead and molybdenum. The Company’s business plan is based on the Generative Business Model, which is designed to leverage our mining properties and mineral claims into near-term income streams even during the earliest stages of exploration and development.  This is accomplished by entering into sales, joint-venture, and/or option contracts with other mining companies, for which the Company generates income through payments in cash, stock, and other consideration.
 
We are an exploration stage company and there is no assurance that a commercially viable mineral deposit exists on any of our properties. Further exploration will be required before any final evaluation as to the economic viability and feasibility of any of our mining projects can be determined.
 
On July 1, 2011 we acquired Ruby Gold, Inc. and the Ruby Mine. The Ruby Mine is an underground placer and lode mine located between Downieville and Forest City, in Sierra County, California.  With the exception of the Ruby Mine, we currently do not control any properties with active or imminent mining operations in the United States. Work commenced at the Ruby Mine during Q4 2011 to rehabilitate the Ruby Tunnel and renovate the infrastructure.  The initial phase of this work was completed in the third quarter of 2013 with the restoration of natural air flow throughout the extent of the Ruby tunnel and the reopening of the tunnel for a full mile to restore access to the Black Channel and the Big Bend mining targets.  Mill renovation has been completed, and the wash plant is fully operational as of the date of this report.  While bulk sampling and drilling of selected mining targets has begun, there is no guarantee that mining activities will continue, or that our mining activities will be successful. As of September 30, 2014, exploration and drilling expenditures including construction and renovation costs directly related to the Ruby Mine rehab and excluding acquisition, depreciation, and regulatory expenses totaled $2,419,018.
 
With the exception of the Fraser River Project, we currently do not control any properties with active or imminent mining in Canada. Mining activities commenced at the Fraser River Project on October 23, 2012, to begin the excavation of test pits. Operations were suspended for the winter in December, 2012.  A new permit was subsequently applied for and was issued in July 2013.  Mining activities are currently on hold pending completion of a Heritage Impact Assessment requested by the Province of British Columbia.  This survey began in Q2 2014 and is still ongoing. There is no guarantee that mining operations will resume or that commercial production will begin at the Fraser River Project, or that our mining activities will be successful.
 
As of September 30, 2014 and September 30, 2013, gains from joint-venture and option agreements totaled $200,000 and $0, respectively.  As of September 30, 2014 and September 30, 2013, cash gains from claim sales totaled $2,000 and $280,174, respectively.  As per GAAP, these revenues have been classified as “Other Income”. As of September 30, 2014 and September 30, 2013, gains from gold sales were $6,602 and $0, respectively.
 
 
29
 
As of December 31, 2011, the Company had a Memorandum of Understanding (“MOU”) with Devlin's Bench Mining Ltd and P. Wright Contracting Ltd (“PWC”) to engage in a joint-venture on the Company’s Fraser River Platinum project.  Subsequent to December 31, 2011, the MOU was amended to include a second joint-venture on the Company’s Monte Cristo property.  As of the date of this report, a definitive agreement has not yet been executed. Under the terms of the MOU, a definitive agreement will be signed within 60 days of formal permit approval by the British Columbia Ministry of Mines and the local First Nations governments.  A mining permit for the Fraser River Project was issued on June 25, 2012, but a definitive agreement with PWC was never consummated.  As of the date of this report, the Company continues to own and control 100% of the project. During 2013, the Company executed a definitive joint-venture agreement for mining operations on Fraser River Project with Solid Holdings Ltd. (“Solid”), a private company domiciled in British Columbia and based in Houston, BC. The terms of the agreement call for Solid to provide all equipment, personnel, and related expenditures required to initiate and sustain mining operations at the Fraser River Project JV.  The Company will be responsible for maintaining the property in good standing and securing the permits required for mining operations to proceed.  The Company will retain 100% ownership of the property, and will be paid a 20% net smelter royalty (“NSR”) on all metals recovered from operations, with Solid retaining 100% of the net profits following payment of the aforementioned NSR.  Solid will be deemed the project operator, and will be responsible for the day-to-day operations.
  
On December 2, 2013, the Board of Directors authorized the spinoff of our wholly-owned subsidiary, Ruby Gold, Inc. (“RGI”) as a separate and independent public company.  Once the spinoff is complete, the Company intends to issue a special stock dividend based on a ratio yet to be determined. Shareholders who are eligible to receive such stock dividend will be holders of common stock of North Bay as of the record date, which has yet to be set by the Board of Directors of the Company. On January 14, 2014, RGI filed a registration statement on Form 10 with the SEC to initiate said spinoff.  As of the date of this report, RGI’s registration statement on Form 10 is not yet effective, RGI has withdrawn the Form 10, and RGI has filed a registration statement on Form S-1 in its place.  After the RGI registration statement on Form S-1 is deemed effective, the Board of Directors of the Company intends to then determine the date and ratio for the distribution of shares from the spin-off and a news release announcing the record date will be issued at that time. Other than the authorization for said spinoff by our Board of Directors and the Board of RGI, there are no agreements, formal or otherwise, in place between the respective companies, any affiliate of either company, or any other parties governing the spinoff, and no shareholder approvals are required. As the completion of the spinoff is contingent on a registration statement by RGI becoming effective, there has been no further determination as to when the spinoff and stock dividend distribution might be completed, and there is no guarantee that it will be completed.

On January 9, 2014, the Company and our wholly-owned subsidiary, Ruby Gold, Inc. ("RGI"), executed a definitive joint-venture agreement (the “Ruby JV Agreement”), with regard to the mining and exploitation of the Ruby Mine in Sierra County, California (the "Ruby").  Under the terms of the Ruby JV Agreement, the Company will fund Ruby through loans, as needed, to maintain the property and operations thereof.  RGI will remain the owner and operator of Ruby, and the Company shall be apportioned a 50% interest of net income distribution from Ruby once all debt has been extinguished.

On July 18, 2014, the Company executed a mineral property option agreement (the "Agreement") with Ximen Mining Corp. ("Ximen"), a Canadian issuer listed on the TSX Venture Exchange,  pursuant to which Ximen may earn up to a 100% interest in the Company's “Brett West” and “Bouleau Creek” mineral claims (the “Brett West Claims”) in southeastern British Columbia.  Under the terms of Agreement, Ximen may earn up to a 100% interest in the Brett West Claims by making aggregate payments to North Bay of USD $600,000, consisting of $300,000 in cash and issuing $300,000 in shares of Ximen common stock.  Of the aggregate payments, $100,000 in cash and $100,000 in stock are due upon receipt of regulatory acceptance of the agreement by the TSX Venture Exchange (received), and equal payments of $50,000 cash and $50,000 in shares of Ximen stock are each due upon the 1st, 2nd, 3rd, and 4th 6-month anniversaries of the Agreement.

As of September 30, 2014, we own the mineral rights to 186 mining claims in British Columbia encompassing an aggregate of 40,175 acres (16,265 hectares).  This is a snapshot in time, and the number may be quite different six months or one year from now. The Company has a very active exploration program in place, which on a daily basis will add new claims, drop or reduce the size of others, and maintain the rest.  All of our claims are under constant review, and may be decreased or further increased at any time, depending on the constant re-evaluation of our present holdings, and the availability of new opportunities in the future as other claims of merit become available for acquisition. Our mineral property acquisition costs are capitalized, and our mineral property exploration costs are expensed as incurred.  When it has been determined that a mineral property can be economically developed as a result of establishing proven and probable reserves, the costs incurred to develop such property are capitalized. To date the Company has not established any reserves on its claims.  Our acquisition of any mining claim in British Columbia conveys the mineral or placer rights for mining-related purposes only, and while our rights allow us to use the surface of a claim for mining and exploration activities, our claims do not convey any other surface, residential or recreational rights to the Company.  Additionally, our right to extraction is not absolute, as any mechanized extraction work on claims in BC requires additional permits and possibly conversion of our claims to mining leases, the approval of which is not guaranteed.  Based on the limitations of our claims and unproven reserves, all capitalized costs on our claims in British Columbia were expensed as of September 30, 2014.
 
 
30
 
We currently generate income from claim sales and joint-venture agreements.  When we sell a claim, we capture near-term revenue, but forego any possibility of a future revenue stream.  When we enter into a joint-venture, we receive near-term income as well as a commitment for future revenue, but since the joint-venture partner has the option to withdraw at any time, we cannot project revenue from a joint-venture into the future.  However, should a joint-venture partner withdraw, we still retain control of the asset, and can therefore enter into another joint-venture with another partner, develop the property ourselves, or else elect to sell the claims.
 
We expect to generate near-term income growth through claim sales and joint-venture activities. However, there is no assurance that the Company can successfully secure new joint-venture partnerships on terms that are satisfactory to the Company.
 
We expect to generate long-term revenue from our acquisition of the Ruby Mine and our joint-venture with RGI, through the acquisition of additional mines, and by the development of our properties, either independently or through joint-venture partners, into operating mines.  There is no assurance that these efforts will be successful, or that the projects will be economically viable. 
  
Going Concern
 
Our consolidated financial statements have been prepared on a going concern basis, which implies the Company will continue to realize its assets and discharge its liabilities in the normal course of business. The Company has generated modest revenues since inception and has never paid any dividends and is unlikely to pay dividends. The continuation of the Company as a going concern is dependent upon the continued financial support from its shareholders, the ability of the Company to obtain necessary equity financing to continue operations and to determine the existence, discovery and successful exploration of economically recoverable reserves in its resource properties, confirmation of the Company’s interests in the underlying properties, and the attainment of profitable operations. The Company has had very little operating history to date. These consolidated financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.
 
We have experienced recurring net losses from operations, which losses have caused an accumulated deficit of $17,470,217 as of September 30, 2014. In addition, we have a working capital deficit of $3,421,568 as of September 30, 2014. We had a net loss of $1,936,710 for the nine months ended September 30, 2014, and we had net losses of $2,059,305 for the year ended December 31, 2013. These factors, among others, raise substantial doubt about our ability to continue as a going concern. If we are unable to generate profits and are unable to continue to obtain financing to meet our working capital requirements, we may have to curtail our business sharply or cease operations altogether. Our continuation as a going concern is dependent upon our ability to generate sufficient cash flow to meet our obligations on a timely basis to retain our current financing, to obtain additional financing, and, ultimately, to attain profitability. Should any of these events not occur, we will be adversely affected and we may have to cease operations.
 
As of December 31, 2013 the accumulated deficit attributable to CEO stock awards, including previous management and valued according to GAAP, totals $2,558,535 since inception in 2004. As of December 31, 2013 the accumulated deficit attributable to CEO compensation is $820,474 in deferred compensation.  This reflects the total amounts unpaid as per the management agreement with The PAN Network dating back to January 2006, less any amounts actually paid or forgiven since 2006.  These totals are non-cash expenses which are included in the accumulated deficit since inception.  Actual CEO compensation paid in cash over the course of the seven years since 2006 has consisted of $10,000 in 2006, $50,764 in 2007, $23,139 in 2008, $29,979 in 2009, $21,988 in 2010, $90,000 in 2011, $116,000 in 2012, and $100,000 in 2013.  These cash expenditures are also included in the accumulated deficit.
 
The ongoing execution of our business plan is expected to result in operating losses over the next twelve months. Management believes it will need to raise capital through loans or stock issuances in order to have enough cash to maintain its operations for the next twelve months. There are no assurances that we will be successful in achieving our goals of obtaining cash through loans, stock issuances, or increasing revenues and reaching profitability.
 
In view of these conditions, our ability to continue as a going concern is dependent upon our ability to meet our financing requirements, and to ultimately achieve profitable operations. Management believes that its current and future plans provide an opportunity to continue as a going concern. The accompanying consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classification of liabilities that may be necessary in the event we cannot continue as a going concern.
 
 
31
  
Summary of Significant Accounting Policies
 
Revenue Recognition
 
The company has recognized no mining revenue to date. In the future mining revenue will be recognized according to the policy described below.
 
Revenue is recognized when the following conditions are met:
 
(a) persuasive evidence of an arrangement to purchase exists;
(b) the price is fixed or determinable;
(c) the product has been delivered; and
(d) collection of the sales price is reasonably assured.
 
Under the terms of concentrate sales contracts with third-party smelters, final prices for the gold, silver, zinc, copper and lead in the concentrate are set based on the prevailing spot market metal prices on a specified future date based on the date that the concentrate is delivered to the smelter. The Company records revenues under these contracts based on forward prices at the time of delivery, which is when transfer of legal title to concentrate passes to the third-party smelters. The terms of the contracts result in differences between the recorded estimated price at delivery and the final settlement price. These differences are adjusted through revenue at each subsequent financial statement date.
 
Mineral Property Costs
 
Mineral property acquisition costs are capitalized upon acquisition. Mineral property exploration and improvement costs are expensed as incurred. When it has been determined that a mineral property can be economically developed as a result of establishing proven or probable reserves, the costs incurred to develop such property are capitalized. To date the Company has not established any proven or probable reserves on its mineral properties.
 
The Company reviews long-lived assets for indicators of impairment whenever events or changes in circumstances indicate that the carrying value may not be recoverable. If the review indicates that the carrying amount of the asset may not be recoverable, the potential impairment is measured based on a projected discounted cash flow method using a discount rate that is considered to be commensurate with the risk inherent in the Company's current business model. For purposes of recognition and measurement of an impairment loss, a long-lived asset is grouped with other assets at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets.
 
Income Taxes
 
The Company utilizes the liability method of accounting for income taxes. Under the liability method, deferred tax assets and liabilities are determined based on the differences between the financial reporting basis and the tax basis of the assets and liabilities, and are measured using enacted tax rates that will be in effect when the differences are expected to reverse.
 
The Company adopted the provisions of the FASB interpretation related to accounting for uncertainty in income taxes, which seeks to reduce the diversity in practice associated with the accounting and reporting for uncertainty in income tax positions.  The Company believes it does not have any uncertain tax positions taken or expected to be taken in its income tax returns.

Fair Value of Financial Instruments

The Company adopted the FASB standard related to fair value measurement at inception. The standard defines fair value, establishes a framework for measuring fair value and expands disclosure of fair value measurements. The standard applies under other accounting pronouncements that require or permit fair value measurements and, accordingly, does not require any new fair value measurements. The standard clarifies that fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, the standard established a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows.

 
Level 1. Observable inputs such as quoted prices in active markets;

 
Level 2. Inputs, other than quoted prices in active markets, that are observable either directly or indirectly; and

 
Level 3. Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.
 
 
32
 
The Company values its derivative instruments related to embedded conversion features and warrants from the issuance of convertible debentures in accordance with the Level 3 guidelines. For the nine  month period ended September 30, 2014, the following table reconciles the beginning and ending balances for financial instruments that are recognized at fair value in these consolidated financial statements. The fair value of embedded conversion features that have floating conversion features and tainted common stock equivalents (warrants and convertible debt) are estimated using a Binomial Lattice model. The key inputs to this valuation model as of September 30, 2014, were: Volatility of 148% - 156%, inherent term of instruments equal to the remaining contractual term, quoted closing stock prices on valuation dates, and various settlement scenarios and probability percentages summing to 100%.
 
   
Balance at
December 31, 2013
    
New
Issuances
    
Settlements
    
Changes in
Fair Values
    
Balance at
September 30,
2014
  
Level 3 –
                              
Derivative liabilities from:
                              
Conversion features – embedded derivative
  
$
156,761
    
$
1,024,855
    
$
(274,680
)
  
$
(217,151
)
  
$
689,785
  
Conversion features – tainted equity
    
391,686
      
229,339
      
-
      
(349,294
)
    
271,731
  
Warrants – tainted equity
    
148,201
      
-
      
-
      
(145,580
)
    
2,621
  
   
$
696,648
    
$
1,254,194
    
$
(274,680
)
  
$
(712,025
)
  
$
964,137
  
 
Changes in the unobservable input values would likely cause material changes in the fair value of the Company’s Level 3 financial instruments. The significant unobservable input used in the fair value measurement is the estimation for probability percentages assigned to future expected settlement possibilities. A significant increase (decrease) in this distribution of percentages would result in a higher (lower) fair value measurement.
 
The following table presents assets and liabilities that were measured and recognized at fair value as of December 31, 2013 and the year then ended on a recurring basis:
 
                   
Total
  
                   
Unrealized
  
Description
  
Level 1
    
Level 2
  
Level 3
    
Gain
  
Available For Sale Securities
  
$
22,500
    
$
       -
    
$
-
    
$
2,500
  
 Totals
  
$
22,500
    
$
       -
    
$
-
    
$
2,500
  
 
                   
Total
  
                   
Unrealized
  
Description
  
Level 1
    
Level 2
  
Level 3
    
Loss
  
Derivate Liability – Advances on Gold
  
$
-
    
$
22,223 
    
$
-
    
$
22,223
  
 Totals
  
$
-
    
$
22,223 
    
$
-
    
$
22,223
  
 
The following table presents assets that were measured and recognized at fair value as of September 30, 2014:
 
                   
Total
  
                   
Unrealized
  
Description
  
Level 1
    
Level 2
  
Level 3
    
Loss
  
Available For Sale Securities
  
$
78,913
    
$
       -
    
$
-
    
$
46,137
  
 Totals
  
$
78,913
    
$
       -
    
$
-
    
$
46,137
  
 
                   
Total
  
                   
Unrealized
  
Description
  
Level 1
    
Level 2
  
Level 3
    
Loss
  
Derivate Liability – Advances on Gold
  
$
-
    
$
-
    
$
-
    
$
-
  
 Totals
  
$
-
    
$
-
    
$
-
    
$
-
  
 
 
33
 
The following schedule summarizes the valuation of financial instruments at fair value on a recurring basis in the balance sheets as of September 30, 2014 and December 31, 2013:
 
   
Fair Value Measurements at September 30, 2014
  
   
Level 1
    
Level 2
    
Level 3
  
Assets
                  
Cash
  
$
163,350
    
$
-
    
$
-
  
Certificates of Deposit
    
173,122
                  
Total assets
    
336,472
      
-
      
-
  
Liabilities
                        
Advance Gold Sales
    
-
      
-
      
-
  
Convertible notes
    
-
      
1,178,993
      
-
  
Note payable, Ruby
    
-
      
1,691,730
      
-
  
Notes payable, equipment
    
-
      
28,526
      
-
  
Total liabilities
    
-
      
2,899,249
      
-
  
   
$
336,472
    
$
(2,899,249
)
  
$
-
  

   
Fair Value Measurements at December 31, 2013
  
   
Level 1
    
Level 2
    
Level 3
  
Assets
                  
Cash
  
$
133,873
    
$
-
    
$
-
  
Certificates of Deposit
    
172,880
                  
Total assets
    
306,753
      
-
      
-
  
Liabilities
                        
Advance Gold Sales
    
-
      
195,711
      
-
  
Convertible notes
    
-
      
836,858
      
-
  
Note payable, Ruby
    
-
      
1,832,638
      
-
  
Notes payable, equipment
    
-
      
41,687
      
-
  
Total liabilities
    
-
      
2,906,894
      
-
  
   
$
306,753
    
$
(2,906,894
)
  
$
-
  
 
The fair values of our debts are deemed to approximate book value, and are considered Level 2 inputs as defined by ASC Topic 820-10-35.
 
There were no transfers of financial assets or liabilities between Level 1, Level 2 and Level 3 inputs for the nine months ended September 30, 2014 or the year ended December 31, 2013.
 
The Company had no other assets or liabilities valued at fair value on a recurring or non-recurring basis for the nine months ended September 30, 2014 or the year ended December 31, 2013.
  
Stock Based Compensation
 
Beginning January 1, 2006, the Company adopted the FASB standard related to stock based compensation. The standard requires all share-based payments to employees (which includes non-employee Directors), including employee stock options, warrants and restricted stock, be measured at the fair value of the award and expensed over the requisite service period (generally the vesting period). The fair value of common stock options or warrants granted to employees is estimated at the date of grant using the Black-Scholes option pricing model by using the historical volatility of comparable public companies. The calculation also takes into account the common stock fair market value at the grant date, the exercise price, the expected life of the common stock option or warrant, the dividend yield and the risk-free interest rate.
 
The Company from time to time may issue stock options, warrants and restricted stock to acquire goods or services from third parties. Restricted stock, options or warrants issued to other than employees or directors are recorded on the basis of their fair value, which is measured as of the date required by the Emerging Issues Task Force guidance related to accounting for equity instruments issued to non-employees. In accordance with this guidance, the options or warrants are valued using the Black-Scholes option pricing model on the basis of the market price of the underlying equity instrument on the “valuation date,” which for options and warrants related to contracts that have substantial disincentives to non-performance, is the date of the contract, and for all other contracts is the vesting date. Expense related to the options and warrants is recognized on a straight-line basis over the shorter of the period over which services are to be received or the vesting period.   As of September 30, 2014, no options or warrants have been issued for compensation and none are outstanding.  As of September 30, 2014, 20.5 million warrants have been issued and are outstanding in connection with the Ruby Mine Purchase Option Agreement executed on September 27, 2010.
 
 
34
 
Beneficial Conversion Feature
 
From time to time, the Company may issue convertible notes that may have conversion prices that create an embedded beneficial conversion feature pursuant to the Emerging Issues Task Force guidance on beneficial conversion features. A beneficial conversion feature exists on the date a convertible note is issued when the fair value of the underlying common stock to which the note is convertible into is in excess of the remaining unallocated proceeds of the note after first considering the allocation of a portion of the note proceeds to the fair value of any attached equity instruments, if any related equity instruments were granted with the debt. In accordance with the guidance, the intrinsic value of the beneficial conversion feature is recorded as a debt discount with a corresponding amount to additional paid in capital. The debt discount is amortized to interest expense over the life of the note using the effective interest method.
 
Deferred Financing Costs

Deferred financing costs include debt issuance costs primarily incurred by the Company as part of Convertible Note transactions. These amounts are capitalized to Deferred Financing Costs and amortized over the term of the note. Amortization is provided on a straight-line basis over the terms of the respective debt instruments to which the costs relate and is included in interest expense.  The difference between the straight line and effective interest methods is immaterial due to the short term nature of the convertible notes.
 
Accounting for Derivative Instruments

All derivatives have been recorded on the balance sheet at fair value based on the lattice model calculation. These derivatives, including embedded derivatives in the Company’s convertible notes which have floating conversion prices based on changes to the quoted price of the Company’s common stock and common stock equivalents tainted as a result of the derivative, are separately valued and accounted for on the Company’s balance sheet. Fair values for exchange traded securities and derivatives are based on quoted market prices. Where market prices are not readily available, fair values are determined using market based pricing models incorporating readily observable market data and requiring judgment and estimates.

Lattice Valuation Model

The Company valued the conversion features in their convertible notes and tainted warrants using a lattice valuation model, with the assistance of a valuation consultant. The lattice model values these instruments based on a probability weighted discounted cash flow model. The Company uses the model to develop a set of potential scenarios. Probabilities of each scenario occurring during the remaining term of the instruments are determined based on conversion prices relative to current stock prices, historic volatility, and estimates on investor behavior. These probabilities are used to create a cash flow projection over the term of the instruments and determine the probability that the projected cash flow will be achieved. A discounted weighted average cash flow for each scenario is then calculated and compared to the discounted cash flow of the instruments without the compound embedded derivative in order to determine a value for the compound embedded derivative.

Income/Loss Per Share of Common Stock
 
Basic net loss per common share is computed using the weighted average number of common shares outstanding. Diluted earnings per share includes additional dilution from common stock equivalents, such as stock issuable pursuant to the exercise of stock options and warrants. Common stock equivalents are not included in the computation of diluted earnings per share when the Company reports a loss because to do so would be anti-dilutive for the periods presented.  As of September 30, 2014 and December 31, 2013, there were 283,970,101 and 56,852,098 common stock equivalents outstanding, respectively.
 
Results of Operations for the Nine months Ended September 30, 2014 Compared to Results of Operations for the Nine months Ended September 30, 2013
 
Gains from Gold Sales.  For the nine months ended September 30, 2014 and September 30, 2013, the Company’s gains from gold sales were $6,602 and $0, respectively.

Gains from Other Income.  For the nine months ended September 30, 2014 and September 30, 2013, the Company’s other income related to mineral claim sales and other income from joint-ventures in British Columbia was $202,000 and $280,174, respectively. The Company has spent $17,271 and $28,999 in mineral property maintenance costs during each respective period in order to generate cash flows, consisting primarily of British Columbia claim registration and maintenance fees. The decrease is due to exploration expenditures that extended the good-until date of some of our principal properties for several years into the future that consequently reduced our total annual claim fees.
 
 
35
 
Operating Expenses.   For the nine months ended September 30, 2014, the Company had operating expenses of $1,638,613, which included general and administrative expenses of $257,612 and mining property costs of $1,170,747.  Operating expenses for the nine months ended September 30, 2013 were $986,238, which included general and administrative expenses of $322,785 and mining property costs of $499,157.  Our increase in operating expenses was mainly from exploration and construction costs at the Ruby Mine, and exploration expenditures incurred in British Columbia.
 
Net Loss.  For the nine months ended September 30, 2014, we had a net loss of $1,936,710.  Our net loss for the nine months ended September 30, 2013 was $1,376,713.  The increase in our net loss was attributed primarily to interest expense and exploration expenditures at the Ruby Mine.
 
Liquidity and Capital Resources
 
The ability of the Company to continue as a going concern is dependent on the Company’s ability to raise additional capital and implement its business plan. Since its inception, the Company has been funded primarily by its founders, board members, employees and persons related to or acquainted with these, the sale of securities, and the issuance of debt. To remedy the current deficiency in our liquidity position, we will raise funds through our equity credit line established with Tangiers Investors, LP (see Exhibit 10.0 under Item 15 herein), additional equity offerings, strategic agreements with partner companies, and debt. We currently have no external sources of liquidity and internal sources (revenue from sales) are very limited. Excluding management fees, which are often deferred as-needed, the Company has required approximately $7,000 per month to maintain its mineral claims in British Columbia in good standing and pay general administrative expenses.   We believe these expenses can be maintained at present levels for the foreseeable future.  Going forward, as a fully-reporting company, we estimate it will cost an additional $2,500 to $5,000 per month in SEC compliance fees, consisting primarily of accounting, legal, and edgarization fees.  The Company believes it can generate enough revenue from claim sales and joint-ventures to cover these costs, and we believe we can rely on our equity credit line established with Tangiers to make up for any revenue shortfall.  If we cannot generate sufficient revenue or raise additional funds through equity, we may not be able to maintain our mineral claims or make timely filings with the SEC.  
 
In FY 2014, our mortgage on the Ruby Mine property requires us to make payments in aggregate of $60,000 per month, consisting of $20,000 on the 1st of each month, and an additional $40,000 by the 20th day of each month. As of September 30, 2014, the balance due on the mortgage is $1,691,730. The Company believes it can rely on revenue from claims sales and joint ventures, and from loans and our equity credit line established with Tangiers to make up for any revenue shortfall.  If we cannot generate sufficient revenue or raise additional funds through equity or loans, we may not be able to maintain our mortgage on the Ruby Mine.
 
As of September 30, 2014, total current assets were $334,916, which consisted of 163,350 in cash, $30,000 in receivables, $62,653 in net deferred financing costs, and $78,913 in available for sale securities.  As of December 31, 2013, total current assets were $133,873, which consisted primarily of cash. 
 
As of September 30, 2014 and December 31, 2013, our total current liabilities were $3,756,484 and $3,383,679, respectively. The net increase in current liabilities is primarily due to an increase in convertible debt.
 
We had a working capital deficit of $3,421,568 as of September 30, 2014, and a working capital deficit of $3,204,340 as of December 31, 2013.
 
During the nine months ended September 30, 2014, operating activities used cash of $1,321,824 as compared to the nine months ended September 30, 2013, where we used cash of $481,283 in operating activities. The increase in cash used by operating activities for the nine months ended September 30, 2014 was due primarily to an increase in amortization of our debt discount and a change in derivative liability,
 
We had a net increase in cash of $29,477 for the nine months ended September 30, 2014. Cash flows financing activities represented the Company’s principal source of cash for the nine months ended September 30, 2014. Cash flows from financing activities during the nine months ended September 30, 2014 were $1,450,301, consisting primarily of proceeds from the issuance of stock and convertible debt. During the fiscal year ended December 31, 2013, we received $1,235,875 from financing activities, consisting primarily of proceeds from the issuance of stock and convertible debt.
 
 
36
 
On July 14, 2014, the Company issued a $250,000 Convertible Promissory Note (the “Note”) to JSJ Investments Inc. ("JSJ", or “the Lender”).   The Note has a maturity date of six (6) months from the Effective Date, and accrues interest at 10% per annum. The Principal Sum due to the Lender shall be prorated based on the consideration actually paid by the Lender, as well as any other interest or fees, such that the Registrant is only required to repay the amount funded and the Registrant is not required to repay any unfunded portion of the Note.  The initial tranche received from this transaction was $100,000. Unless the Note is prepaid in cash within 120 days of the effective date, the Lender has the right at its election upon maturity of the Note to convert all or part of the outstanding and unpaid Principal Sum and accrued interest (and any other fees) into shares of fully paid and non-assessable shares of common stock of the Registrant. The Conversion Price is at a 42% discount to the average of the three lowest volume weighted average prices (VWAP) on the previous twenty (20) trading days to the date of Conversion, or 42% discount to the average of the three lowest VWAPs on the previous twenty (20) trading days that would be obtained if the conversion were to be made on the date that the Note was executed. In connection with this transaction, a commission has been paid to Carter Terry & Company, a registered broker-dealer, consisting of $8,000 in cash.
 
On August 6, 2014, the Company issued a $98,500 Convertible Promissory Note ("the Note") to KBM Worldwide, Inc. ("KBM", or “the Lender”).  The interest rate on the Note is 8% per annum, and the Note has a maturity date of nine (9) months from the Effective Date. The Note carries a $13,000 original issue discount (the “OID”), as well as $3,500 in transaction fees, such that the consideration received by the Registrant is $82,000.  The Company retains the option of pre-paying the Note at an amount equal to 110% of the outstanding principal and the accrued and unpaid interest within 30 days of the effective date, increasing at 5% per month to a maximum of 135% by the 6th month. Unless the Note is repaid in cash within 180 days, the Lender has the right to convert all or part of the outstanding and unpaid Principal Sum and accrued interest (and any other fees) into shares of fully paid and non-assessable shares of common stock of the Company. The Conversion Price is at a 25% discount to the average of the two lowest closing prices on the previous twenty (20) trading days prior to the date of Conversion. In connection with this transaction, a commission has been paid to Carter Terry & Company, a registered broker-dealer, consisting of $6,560 in cash.

On August 7, 2014, the Company issued a $125,000 Convertible Promissory Note ("the Note") to RLS Premiere Financial LLC ("RSL", or “the Lender”).  The interest rate on the Note is 5% per annum, and the Note has a maturity date of twelve (12) months from the Effective Date. The Principal Sum due to the Lender shall be prorated based on the consideration actually paid by the Lender, as well as any other interest or fees, such that the Company is only required to repay the amount funded and the Registrant is not required to repay any unfunded portion of the Note.  The initial tranche received from this transaction was $20,000. The Company retains the option of pre-paying the Note at an amount equal to 135% of the outstanding principal and the accrued and unpaid interest. Unless the Note is repaid in cash within 180 days, the Lender has the right to convert all or part of the outstanding and unpaid Principal Sum and accrued interest (and any other fees) into shares of fully paid and non-assessable shares of common stock of the Company. The Conversion Price is at a 20% discount to the average of the two lowest volume weighted average prices (VWAP) on the previous fifteen (15) trading days to the date of Conversion.
 
On September 3, 2014, the Company issued a $550,000 Promissory Note ("the Note") to JMJ Financial, ("JMJ", or “the Lender”).  The Principal Sum due to the Lender shall be prorated based on the consideration actually paid by the Lender, plus an approximate 10% Original Issue Discount ("OID") that is prorated based on the consideration actually paid by the Lender, a 3% Closing and Due Diligence Fee, as well as any other interest or fees, such that the Company is only required to repay the amount funded and the Company is not required to repay any unfunded portion of the Note.  The Note has a maturity date of twenty four (24) months from the Effective Date.  If the Note is repaid within ninety (90) days of the Effective Date, the interest rate shall be zero percent (0%).  Should the Note still be outstanding after 90 days, a one-time 5% interest rate will be applied.  In addition, the Lender has the right, at any time after the Effective Date, at its election, to convert all or part of the outstanding and unpaid Principal Sum and accrued interest (and any other fees) into shares of fully paid and non-assessable shares of common stock of the Company. The Conversion Price is the lesser of $0.10 or 70% of the average of the two lowest closing prices in the 25 trading days previous to the conversion.  The initial consideration received as of the date of this report is $75,000.  In connection with this transaction, a commission has been paid to Meyers and Associates, a registered broker-dealer, consisting of $5,250 in cash.

On September 3, 2014, the Company issued a $53,000 Convertible Promissory Note ("the KBM Note") to KBM Worldwide, Inc. ("KBM", or “the Lender”).  The interest rate on the KBM Note is 8% per annum, and the KBM Note has a maturity date of twelve (12) months from the Effective Date. The KBM Note carries a $5,000 original issue discount (the “OID”), as well as $3,000 in transaction fees, such that the purchase price is $48,000, and the net consideration received by the Company is $45,000.  The Company retains the option of pre-paying the KBM Note at an amount equal to 110% of the outstanding principal and the accrued and unpaid interest within 30 days of the effective date, increasing at 5% per month to a maximum of 135% by the 6th month. Unless the KBM Note is repaid in cash within 180 days, the Lender has the right to convert all or part of the outstanding and unpaid Principal Sum and accrued interest (and any other fees) into shares of fully paid and non-assessable shares of common stock of the Company. The Conversion Price is at a 25% discount to the average of the two lowest closing prices on the previous twenty (20) trading days prior to the date of Conversion. In connection with this transaction, a commission has been paid to Carter Terry & Company, a registered broker-dealer, consisting of $3,600 in cash.
 
 
37

Recent Material Developments
 
Commitments and Contingencies
 
During the second quarter of fiscal 2013, the Company discovered it had offered and sold certain shares of common stock without registration under the Securities Act of 1933 (the “Securities Act”), as amended, during the period from October 24, 2011 through April 25, 2013.  Pursuant to Section 10(a)(3) of the Securities Act, by the time our prospectus had been in use for 9 months from the effective date of January 24, 2011, the balance sheet date of the audited financial statement contained in our prospectus was more than 16 months old, and had not been refreshed to present our current financial statements within said prospectus. This inadvertent technical failure to update our prospectus according to Section 10(a)(3) of the Securities Act may have caused our prospectus to no longer be effective as of October 24, 2011. As a result, purchasers of these securities may have the right to rescind their purchases for an amount equal to the purchase price paid for the securities, plus interest from the date of purchase, limited to the unregistered shares purchased from the original seller and still held by the original purchaser. The federal Securities Act requires that any claim for rescission be brought within one year of reporting the violation. The time periods within which claims for rescission must be brought under state securities laws vary and may be two years or more from the transaction date. As of the date of this report, approximately 10 million shares of our outstanding common stock are subject to possible rescission. The maximum potential liability as of June 30, 2014 and December 31, 2013 was $697,046 and $667,758, respectively. These amounts include interest at 10% per annum from the date of the respective purchases. Due to the shares being redeemable by the holder since their inception, the shares are required to be classified outside of permanent equity on the balance sheet. Since redemption is uncertain and outside of the Company’s control the shares are classified within the mezzanine section of the balance sheet at their respective redemption values. Any differences between the cash received and the redemption value was recorded to additional paid in capital. Interest of 10% is being accrued on the values and is recorded through additional paid in capital consistent with the appropriate accounting guidance covering the accounting treatment of mezzanine instruments. As of September 30, 2014, the federal statute of limitations as defined in the federal Securities Act has expired. Accordingly, redemption is now considered remote, and the shares have been moved from the mezzanine section of the balance sheet to Stockholders’ Equity.
 
Recent Developments
 
On June 5, 2014, our wholly-owned subsidiary Ruby Gold, Inc. announced that it has engaged Taurus Drilling LLC ("Taurus") of Lake Havasu City, Arizona, to complete the drilling of nearby mining targets at the Ruby Mine in Sierra County, California. The drilling commenced on June 9, 2014.

On July 8, 2014, the Company announced the our summer drilling program resulted in the discovery of a previously unknown gold bearing channel directly above the Ruby Adit, now known as the South Terrace.  Construction of a raise to reach the South Terrace commenced in late July.

On August 28, 2014, the Company reported that mining in the Black Channel had begun.

On September 18, 2014, the Company reported that an aggregate of 2.1 ounces of the initial specimen gold produced from the Ruby Mine has recently been sold at prices up to 50% above the spot price of gold on the date of sale.

On October 3, 2014, the Company reported that the South Terrace raise had encountered bad ground and was deemed to be unsafe for use.  Construction of a new raise was initiated 100 feet downstream to reach the South Terrace in an area with more stable ground.

On October 6, 2014, the Company filed a Certificate of Amendment to its Certificate of Incorporation with the Secretary of State of the State of Delaware (the “Amendment”) which increased the Company’s authorized shares of common stock from 500,000,000 shares, par value $0.001 per share, to 1,500,000,000 shares, par value $0.0001 per share.

On October 13, 2014, the Company reported that operations at the Ruby Mine were winding down for the season and would resume next spring.

Off-Balance Sheet Arrangements
 
We do not have any off-balance sheet arrangements.
 
 
38
 
Recent Accounting Pronouncements
 
In June 2014, the FASB issued ASU 2014-10, "Development Stage Entities". The amendments in this update remove the definition of a development stage entity from the Master Glossary of the ASC thereby removing the financial reporting distinction between development stage entities and other reporting entities from U.S. GAAP. In addition, the amendments eliminate the requirements for development stage entities to (1) present inception-to-date information in the statements of income, cash flows, and shareholder equity, (2) label the financial statements as those of a development stage entity, (3) disclose a description of the development stage activities in which the entity is engaged, and (4) disclose in the first year in which the entity is no longer a development stage entity that in prior years it had been in the development stage. The amendments in this update are applied retrospectively. The Company elected early adoption of ASU 2014-10. The adoption of ASU 2014-10 removed the development stage entity financial reporting requirements from the Company.

In July 2013, the FASB issued ASU No. 2013-11 Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit when a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists (“ASU No. 2013-11”). This pronouncement provides explicit guidance on the financial statement presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists. This pronouncement is effective for fiscal years and interim periods within those fiscal years beginning after December 15, 2013. The provisions of ASU No. 2013-11 did not have a material impact on to the Company’s condensed consolidated financial statements.

In February 2013, the Financial Accounting Standards Board (“FASB”) issued an accounting standards update which added new disclosure requirements for items reclassified out of accumulated other comprehensive income. The update required entities to disclose additional information about reclassification adjustments, including changes in accumulated other comprehensive income balances by component and significant items reclassified out of accumulated other comprehensive income. The update became effective for us in the first quarter of 2013. This update had no material impact on our financial statements.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item.
 
ITEM 4. CONTROLS AND PROCEDURES

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to our management, including our president and chief executive officer (who is our principal executive officer) and our chief financial officer, treasurer, and secretary (who is our principal financial officer and principal accounting officer) to allow for timely decisions regarding required disclosure. In designing and evaluating our disclosure controls and procedures, our management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and our management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

As of September 30, 2014, the end of the nine month period covered by this report, we carried out an evaluation, under the supervision and with the participation of our management, including our principal executive officer and our principal financial officer and principal accounting officer (all the same individual), of the effectiveness of the design and operation of our disclosure controls and procedures. Based on the foregoing, we concluded that our disclosure controls and procedures were ineffective as of the end of the period covered by this quarterly report due to the three material weaknesses that were identified in our annual report on Form 10-K for the fiscal year ended December 31, 2013.
 
 
39

Management’s Evaluation of Necessary Remediation Initiatives

During the Company’s annual audit Management evaluated remediation plans related to the above internal control deficiencies. Management analyzed the costs and benefits of several different options to improve our internal controls over financial reporting. The following options for improving the controls were analyzed: (i) hiring a qualified CFO with both GAAP and SEC reporting experience, (ii) forming an internal audit department, (iii) subscribing to GAAP and SEC reporting databases, (iv) additional staffing to provide segregation of duties and a review infrastructure for financial reporting, and (v) an information technology department to provide security over our information and to help facilitate electronic filing. In the evaluation, Management estimated implementation of the proposed remediation plan within 1 to 2 years. It was concluded from our evaluation that the costs to implement the plan were greater than the benefits to be received, and Management therefore passed on implementation until operations of the Company have improved. Due to the current operating condition of the company, and the current and future outlook of the economic climate, we do not foresee the ability to adequately implement the remediation plan within the foreseeable future.

Changes in internal control over financial reporting

There were no changes in our internal control over financial reporting during the nine months ended September 30, 2014 that have materially affected, or are reasonably likely to materially affect our internal control over financial reporting.
 
 
 
 
40
 
PART II.  OTHER INFORMATION.

ITEM 1.  LEGAL PROCEEDINGS.

None.

ITEM 1A. RISK FACTORS

We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item.

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

In the nine month period ended September 30, 2014, and pursuant to eight partial conversion notices received, the Company issued an aggregate of 15,709,495 shares of common stock of the Company to satisfy $133,860 of the principal and interest due on a Promissory Note ("the Note") dated July 11, 2012 with JMJ Financial, ("JMJ").  The number of shares issued was consistent with the terms of the agreement, therefore equity was credited for the value of the debt relieved with no gain or loss recorded. The Company believes this transaction was exempt from the registration requirements of the Securities Act in reliance upon Section 4(a)(2) of the Securities Act or Regulation D promulgated under the Securities Act.
 
In the nine month period ended June 30, 2014, the Company issued 100,000 shares of restricted common stock to William S. Watters, the new COO of our wholly-owned subsidiary, Ruby Gold, Inc., as a signing bonus. The shares were valued at $2,700 based on the closing market price on the date of grant. The Company believes this transaction was exempt from the registration requirements of the Securities Act in reliance upon Section 4(a)(2) of the Securities Act or Regulation D promulgated under the Securities Act.

In the nine month period ended June 30, 2014, and pursuant to a partial conversion notice received, the Company issued an aggregate of 3,000,000 shares of common stock of the Company to satisfy $76,800 of the principal and interest due on a Promissory Note dated October 2, 2012 with Tangiers Investors, LP, ("Tangiers").  The number of shares issued was consistent with the terms of the agreement, therefore equity was credited for the value of the debt relieved with no gain or loss recorded. The Company believes this transaction was exempt from the registration requirements of the Securities Act in reliance upon Section 4(a)(2) of the Securities Act or Regulation D promulgated under the Securities Act.
 
In the nine month period ended September 30, 2014, and pursuant to six partial conversion notices received, the Company issued an aggregate of 28,283,280 shares of common stock of the Company to satisfy $222,989 of the principal and interest due on a Promissory Note dated October 1, 2013 with Typenex Co-Investment, LLC ("Typenex"). The number of shares issued was consistent with the terms of the agreement, therefore equity was credited for the value of the debt relieved with no gain or loss recorded. The Company believes this transaction was exempt from the registration requirements of the Securities Act in reliance upon Section 4(a)(2) of the Securities Act or Regulation D promulgated under the Securities Act.
 
In the nine month period ended September 30, 2014, and pursuant to a conversion notice received, the Company issued 4,154,411 shares of common stock of the Company to satisfy $59,325 of the principal and interest due on a Promissory Note dated October 7, 2013 with LG Capital Funding LLC ("LG").  The number of shares issued was consistent with the terms of the agreement, therefore equity was credited for the value of the debt relieved with no gain or loss recorded. The Company believes this transaction was exempt from the registration requirements of the Securities Act in reliance upon Section 4(a)(2) of the Securities Act or Regulation D promulgated under the Securities Act.

In the nine month period ended September 30, 2014, and pursuant to six conversion notices received, the Company issued an aggregate of 10,817,127 shares of common stock of the Company to satisfy $38,500 of the principal and interest due on a Promissory Note ("the Note") dated January 31, 2014 with GEL Properties, LLC (“GEL”). The number of shares issued was consistent with the terms of the agreement, therefore equity was credited for the value of the debt relieved with no gain or loss recorded. The Company believes this transaction was exempt from the registration requirements of the Securities Act in reliance upon Section 4(a)(2) of the Securities Act or Regulation D promulgated under the Securities Act.

In the nine month period ended September 30, 2014, pursuant to two partial conversion notices received, the Company issued an aggregate of 4,999,496 shares of common stock of the Company to satisfy $13,062 of the principal and interest due on a Promissory Note ("the Note") dated March 13, 2014 with Union Capital LLC ("Union"). The number of shares issued was consistent with the terms of the agreement, therefore equity was credited for the value of the debt relieved with no gain or loss recorded. The Company believes this transaction was exempt from the registration requirements of the Securities Act in reliance upon Section 4(a)(2) of the Securities Act or Regulation D promulgated under the Securities Act.
 
 
41

In the nine month period ended September 30, 2014, and pursuant to a conversion notice received, the Company issued 3,095,238 shares of common stock of the Company to satisfy $6,500 of the principal and interest due on a Promissory Note ("the Note") dated March 27, 2014 with Beaufort Capital Partners LLC ("Beaufort"). The number of shares issued was consistent with the terms of the agreement, therefore equity was credited for the value of the debt relieved with no gain or loss recorded. The Company believes this transaction was exempt from the registration requirements of the Securities Act in reliance upon Section 4(a)(2) of the Securities Act or Regulation D promulgated under the Securities Act.

In the nine month period ended September 30, 2014, the Company issued 368,217 restricted shares of common stock of the Company to Carter Terry & Company, a registered broker-dealer, for accrued commissions in connection with the Typenex Note. The Company believes this transaction was exempt from the registration requirements of the Securities Act in reliance upon Section 4(a)(2) of the Securities Act or Regulation D promulgated under the Securities Act.
 
ITEM 3.  DEFAULTS UPON SENIOR SECURITIES.

None.

ITEM 4.  MINE SAFETY DISCLOSURES

The information concerning mine safety violations and other regulatory matters required by Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 104 of Regulation S-K is included in Exhibit 95.1 and is incorporated by reference into this Quarterly Report

ITEM 5.  OTHER INFORMATION.

None.

ITEM 6.  EXHIBITS.

Reference is made to the Index to Exhibits following the signature page to this report for a list of all exhibits filed as part of this report.
 
 
 
42
 
SIGNATURES

In accordance with the requirements of the Securities Exchange Act of 1934, the Registrant has caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 
NORTH BAY RESOURCES INC.
   
Date: November 12, 2014
/s/ Perry Leopold
  
 
By: Perry Leopold, Chief Executive Officer, Chief Financial Officer & Principal Accounting Officer
 
 
 

 
43
 
EXHIBIT INDEX
 
EXHIBIT NUMBER
  
DESCRIPTION
3 (i)
  
Articles of Incorporation(1)
3(ii)
  
Bylaws(1)
3 (iii)
  
Merger and Name Change Certification(1)
3 (iv)
  
Certificate of Amendment to Articles of Incorporation(47)
4.1
  
Certificate of Designation – Series I Preferred(2)
4.2
  
Certificate of Designation – Series A Preferred(2)
4.3
  
Certificate of Designation – Series G Preferred(2)
4.4
  
Certificate of Elimination – Series G Preferred(24)
10.0
  
Tangiers Securities Purchase Agreement dated October 7, 2009(1)
10.1
  
Tangiers Securities Registration Rights Agreement dated October 6, 2009(1)
10.2
  
Fawn Property/Silver Quest Resources Ltd. Joint Venture Agreement(1)
10.3
  
Coronation Gold Property/Lincoln Resources, Inc. Joint Venture Agreement(1)
10.4
  
Silver Leaf/Hidalgo Mining International. Joint Venture Agreement(2)
10.5
  
Gold Hill Project/Hidalgo Mining International Joint Venture Agreement(2)
10.6
  
Monte Cristo Purchase Agreement(2)
10.7
  
Fraser River Joint Venture Letter of Intent(2)
10.8
  
Fraser River Assay Certificate(2)
10.9
  
Form of Notice of Assignment - June 2, 2009(2)
10.10
  
PAN Management Agreement(2)
10.11
  
ARGO - MINFILE No 092N 037(2)
10.12
  
BOULEAU - MINFILE No 082LSW046(2)
10.13
  
BOULEAU - MINFILE No 082LSW069(2)
10.14
  
CHERRY - MINFILE No 082LSE063(2)
10.15
  
CONNIE HILL - MINFILE No 092F 308(2)
10.16
  
CORONATION - MINFILE No 082FNW161(2)
10.17
  
CORONATION - MINFILE No 082FNW161 – Production(2)
10.18
  
CORONATION - MINFILE No 082FNW164(2)
10.19
  
CORONATION - MINFILE No 082FNW164 – Production(2)
10.20
  
CORONATION - MINFILE No 082FNW191(2)
10.21
  
CORONATION - MINFILE No 082FNW191 – Production(2)
10.22
  
CORONATION - MINFILE No 082FNW213(2)
10.23
  
CORONATION - MINFILE No 082FNW213 – Production(2)
10.24
  
FAWN - MINFILE No 093F 043(2)
10.25
  
FAWN - MINFILE No 093F 043 – Inventory(2)
10.26
  
FAWN - BUCK - MINFILE No 093F 050(2)
10.27
  
FAWN - BUCK - MINFILE No 093F 050 - Inventory(2)
10.28
  
FRASER RIVER - MINFILE No 092ISW078(2)
10.29
  
GOLD HILL - MINFILE No 082FSW204(2)
 10.30
  
GOLD HILL - MINFILE No 082FSW204 - Production(2)
10.31
  
LARDEAU CREEK - MINFILE No 082KNW178(2)
10.32
  
LOUGHBOROUGH - MINFILE No 092K 048(2)
10.33
  
LOUGHBOROUGH - MINFILE No 092K 048 - Production(2)
10.34
  
LYNX - MINFILE No 082LSE055(2)
10.35
  
MONTE CRISTO - MINFILE No 092GNE013(2)
10.36
  
MONTE CRISTO - MINFILE No 092GNE019(2)
10.37
  
NEW ESKAY CREEK - MINFILE No 104B 008(2)
10.38
  
PINE RIVER - MINFILE No 093O 009(2)
10.39
  
RACHEL - MINFILE No 082FSW299(2)
10.40
  
RACHEL - MINFILE No 082FSW299 - Production(2)
10.41
  
SILVER CUP - MINFILE No 082KNW113(2)
 
 
44
 
10.42
  
SILVER CUP - MINFILE No 082KNW116(2)
10.43
  
SILVER CUP - MINFILE No 082KNW220(2)
10.44
  
TRUAX - MINFILE No 092JNE060(2)
10.45
  
TULAMEEN - MINFILE No 092HNE128(2)
10.46
  
Tangiers Convertible Promissory Note dated June 17, 2010(3)
10.47
  
Coronation Gold Property/Lincoln Resources, Inc. Joint Venture Agreement Amendment(3)
10.48
  
Tangiers Waiver Re: Convertible Promissory Note dated June 17, 2010(4)
10.49
  
ACG Consulting Agreement(4)
10.50
  
Silver Quest Joint Venture Agreement Amendment dated September 13, 2010(5)
10.51
  
Property Option Agreement and Addendum with Ruby Development Company dated September 1, 2010(6)
10.52
  
Form of Property Purchase Agreement with Ruby Development Company dated September 1, 2010(6)
10.53
  
Form of Property Purchase Addendum with Ruby Development Company dated September 1, 2010(6)
10.54
  
Convertible Promissory Note with Tangiers Investors, LP dated September 27, 2010(6)
10.55
  
Form of Warrants Issued to Ruby Development Company dated October 1, 2010(6)
10.56
  
Northern California Regional Center MOU dated October 14, 2010(7)
10.57
  
Convertible Promissory Note with Tangiers Investors, LP dated December 30, 2010(8)
10.58
  
Securities Purchase Agreement with Asher Enterprises, Inc. dated January 4, 2011(9)
10.59
  
Convertible Promissory Note issued to Asher Enterprises, Inc. (9)
10.60
  
Property Option Amendment No. 1 with Ruby Development Company dated January 26, 2011(11)
10.61
  
Satisfaction of Tangiers Convertible Promissory Note dated June 17, 2010(12)
10.62
  
Geological Consulting Services Agreement dated March 7, 2011(13)
10.63
  
Satisfaction of Tangiers Convertible Promissory Note dated September 27, 2010(14)
10.64
  
Property Option Amendment No. 2 with Ruby Development Company dated April 22, 2011(15)
10.65
  
Secured Promissory Note and Security Agreement with Ruby Development Company dated July 1, 2011(16)
10.66
  
Memorandum of Understanding with Devlin’s Bench Mining Ltd. And P. Wright Contracting Ltd dated October 14, 2011, as amended on January 19, 2012(19)
10.67
  
Promissory Note with Tangiers Investors, LP dated December 29, 2011(17)
10.68
  
Convertible Promissory Note with Tangiers Investors, LP dated December 29, 2011(17)
10.69
  
Form of Warrants Issued to Tangiers Investors, LP dated December 29, 2011(17)
10.70
  
Six Month Convertible Promissory Note with Tangiers Investors, LP dated  February 2, 2012(18)
10.71
  
Twelve Month Convertible Promissory Note with Tangiers Investors, LP dated  February 2, 2012(18)
10.72
  
Warrants Issued to Tangiers Investors, LP dated February 2, 2012(18)
10.73
  
Six Month Convertible Promissory Note with Tangiers Investors, LP dated  March 15, 2012(20)
10.74
  
Twelve Month Convertible Promissory Note with Tangiers Investors, LP dated  March 15, 2012(20)
10.75
  
Warrants Issued to Tangiers Investors, LP dated  March 15, 2012(20)
10.76
  
Twelve Month Convertible Promissory Note with Tangiers Investors, LP dated  June 19, 2012(21)
10.77
  
Warrants Issued to Tangiers Investors, LP dated June 19, 2012(21)
10.78
  
Twelve Month Convertible Promissory Note with JMJ Financial dated  July 11, 2012(22)
10.79
  
Taber Mine Option Agreement, Amendment No. 1,  dated July 11, 2012(23)
10.80
  
Nine Month Convertible Promissory Note with Tonaquint, Inc, dated  August 2, 2012(25)
10.81
  
Securities Purchase Agreement with Tonaquint, Inc, dated  August 2, 2012(25)
10.82
  
Twenty-Four Month Convertible Promissory Note with Tangiers Investors, LP dated  October 2, 2012(26)
10.83
  
Willa Option Agreement with Caribou King Resources Ltd. dated October 24, 2012(27)
10.84
  
Form of Amendment with Tangiers Investors, LP dated  November 14, 2012(28)
10.85
  
Fraser River Land Access Agreement dated November 26, 2012(29)
10.86
  
Secured Promissory Note Extension Agreement with Ruby Development Company dated December 12, 2012(30)
10.87
  
Amendment No. 1 to the Securities Purchase Agreement with Tangiers Investors, LP dated January 28, 2013(31)
10.88
  
Modification and Extension Agreement with Ruby Development Company dated March 19, 2013 (32)
10.89
  
Amendment No. 2 to the Securities Purchase Agreement with Tangiers Investors, LP dated March 28, 2013(32)
10.90
  
Memorandum of Understanding for Advance Sale of Specimen Gold dated June 4, 2013(33)
10.91
  
Fraser River Project JV Agreement dated June 24, 2013(34)
10.92
  
Amendment No. 3 to the Securities Purchase Agreement with Tangiers Investors, LP dated July 24. 2013(35)
10.93
  
Memorandum of Understanding for Advance Sale of Specimen Gold dated August 2, 2013(36)
10.94
  
Thirteen Month Secured Convertible Promissory Note with Typenex Co-Investment, LLC dated  October 1, 2013(37)
10.95
  
Securities Purchase Agreement with Typenex Co-Investment, LLC dated  October 1, 2013(37)
10.96
  
Nine Month Convertible Promissory Note with LG Capital Funding LLC dated  October 7, 2013(38)
10.97
  
Securities Purchase Agreement with LG Capital Funding LLC dated  October 7, 2013(38)
10.98
  
Amendment to the Modification and Extension Agreement with Ruby Development Company dated November 19, 2013(39)
 
 
45
 
10.99
  
Ruby Gold JV Agreement with Ruby Gold, Inc., dated January 9, 2014(40)
10.100
  
Twelve Month Convertible Redeemable Note with GEL Properties, LLC dated  January 31, 2014(41)
10.101
  
Nine Month Convertible Redeemable Note with LG Capital Funding, LLC dated  February 3, 2014(41)
10.102
  
Twelve Month Convertible Redeemable Note with Union Capital LLC dated  March 13, 2014(42)
10.103
  
Nine Month Convertible Redeemable Note with LG Capital Funding, LLC dated  March 13, 2014(42)
10.104
  
Six Month Convertible Promissory Note with Beaufort Capital Partners, LLC dated  March 27, 2014(43)
10.105
  
Twelve Month Convertible Promissory Note with Caesar Capital Group, LLC dated  April 10, 2014(44)
10.106
  
Amendment to June 19, 2012 Convertible Promissory Note with Tangiers Investors dated April 22, 2014(45)
10.107
  
Amendment to October 2, 2012 Convertible Promissory Note with Tangiers Investors dated April 22, 2014(45)
10.108
  
Twelve Month Convertible Promissory Note with WHC Capital, LLC dated  April 21, 2014(45)
10.109
  
Thirteen Month Secured Convertible Promissory Note with Typenex Co-Investment, LLC dated  May 8, 2014(46)
10.110
  
Twelve Month Convertible Redeemable Note with LG Capital Funding, LLC dated  May 9, 2014(46)
10.111
  
Six Month Convertible Promissory Note with JSJ Investments Inc. dated  July 14, 2014(48)
10.112
  
Nine Month Convertible Promissory Note with KBM Worldwide, Inc. dated  August 6, 2014(49)
10.113
  
Twelve Month Convertible Promissory Note with RLS Premiere Financial LLC dated  August 7, 2014(49)
10.114
  
Twenty Four Month Convertible Promissory Note with JMJ Financial dated September 3, 2014(50)
10.115
  
Twelve Month Convertible Promissory Note with KBM Worldwide, Inc. dated September 3, 2014(50)
14
  
Code of Ethics(1)
 21.1
  
Subsidiaries of the Registrant(19)
23.3
  
Consent of Geologist(6)
31.1*
  
32.1*
  
95.1*
  
101.INS*
  
XBRL Instance Document
101.SCH*
  
XBRL Taxonomy Extension Schema
101.CAL*
  
XBRL Taxonomy Extension Calculation Linkbase
101.DEF*
  
XBRL Taxonomy Extension Definition Linkbase
101.LAB*
  
XBRL Taxonomy Extension Label Linkbase
101.PRE*
  
XBRL Taxonomy Extension Presentation Linkbase

*   Filed herewith.

(1)Previously filed with the Company’s initial filing of Form S-1, SEC file number 333-164860, filed on February 11, 2010, and incorporated by this reference as an exhibit to this Form 10-Q.
 
(2)Previously filed with the Company’s filing of Form S-1/A, SEC file number 333-164860, filed on June 16, 2010, and incorporated by this reference as an exhibit to this Form 10-Q.
 
(3)Previously filed with the Company’s filing of Form S-1/A, SEC file number 333-164860, filed on July 21, 2010, and incorporated by this reference as an exhibit to this Form 10-Q.
 
(4)Previously filed with the Company’s filing of Form S-1/A, SEC file number 333-164860, filed on August 20, 2010, and incorporated by this reference as an exhibit to this Form 10-Q.
 
(5)Previously filed with the Company’s filing of Form S-1/A, SEC file number 333-164860, filed on September 17, 2010, and incorporated by this reference as an exhibit to this Form 10-Q.
 
(6)Previously filed with the Company’s filing of Form S-1/A, SEC file number 333-164860, filed on October 4, 2010, and incorporated by this reference as an exhibit to this Form 10-Q.
 
(7)Previously filed with the Company’s filing of Form S-1/A, SEC file number 333-164860, filed on November 2, 2010, and incorporated by this reference as an exhibit to this Form 10-Q.
 
(8)Previously filed with the Company’s filing of Form 8-K, SEC file number 000-54213, filed on January 4, 2011, and incorporated by this reference as an exhibit to this Form 10-Q.

(9)Previously filed with the Company’s filing of Form 8-K, SEC file number 000-54213, filed on January 7, 2011, and incorporated by this reference as an exhibit to this Form 10-Q.

(10)Previously filed with the Company’s filing of Form S-1, SEC file number 333-171603, filed on January 7, 2011, and incorporated by this reference as an exhibit to this Form 10-Q.
 
 
46
 
(11)Previously filed with the Company’s filing of Form 8-K, SEC file number 000-54213, filed on February 1, 2011, and incorporated by this reference as an exhibit to this Form 10-Q.
 
(12)Previously filed with the Company’s filing of Form 8-K, SEC file number 000-54213, filed on March 4, 2011, and incorporated by this reference as an exhibit to this Form 10-Q.
 
 (13)Previously filed with the Company’s filing of Form 8-K, SEC file number 000-54213, filed on March 10, 2011, and incorporated by this reference as an exhibit to this Form 10-Q.

(14)Previously filed with the Company’s filing of Form 8-K, SEC file number 000-54213, filed on April 1, 2011, and incorporated by this reference as an exhibit to this Form 10-Q.

(15)Previously filed with the Company’s filing of Form 8-K, SEC file number 000-54213, filed on April 25, 2011, and incorporated by this reference as an exhibit to this Form 10-Q.

(16)Previously filed with the Company’s filing of Form 8-K, SEC file number 000-54213, filed on July 1, 2011, and incorporated by this reference as an exhibit to this Form 10-Q.

(17)Previously filed with the Company’s filing of Form 8-K, SEC file number 000-54213, filed on January 5, 2012, and incorporated by this reference as an exhibit to this Form 10-Q.

(18)Previously filed with the Company’s filing of Form 8-K, SEC file number 000-54213, filed on February 8, 2012, and incorporated by this reference as an exhibit to this Form 10-Q.

(19)Previously filed with the Company’s filing of Form 10-K, SEC file number 000-54213, filed on March 12, 2012, and incorporated by this reference as an exhibit to this Form 10-Q.

(20)Previously filed with the Company’s filing of Form 8-K, SEC file number 000-54213, filed on March 21, 2012, and incorporated by this reference as an exhibit to this Form 10-Q.

(21)Previously filed with the Company’s filing of Form 8-K, SEC file number 000-54213, filed on June 19, 2012, and incorporated by this reference as an exhibit to this Form 10-Q.

(22)Previously filed with the Company’s filing of Form 8-K, SEC file number 000-54213, filed on July 13, 2012, and incorporated by this reference as an exhibit to this Form 10-Q.

(23)Previously filed with the Company’s filing of Form 8-K, SEC file number 000-54213, filed on July 16, 2012, and incorporated by this reference as an exhibit to this Form 10-Q.

(24)Previously filed with the Company’s filing of Form 8-K, SEC file number 000-54213, filed on July 30, 2012, and incorporated by this reference as an exhibit to this Form 10-Q.

(25)Previously filed with the Company’s filing of Form 8-K, SEC file number 000-54213, filed on August 3, 2012, and incorporated by this reference as an exhibit to this Form 10-Q.

(26)Previously filed with the Company’s filing of Form 8-K, SEC file number 000-54213, filed on October 3, 2012, and incorporated by this reference as an exhibit to this Form 10-Q.

(27)Previously filed with the Company’s filing of Form 8-K, SEC file number 000-54213, filed on October 25, 2012, and incorporated by this reference as an exhibit to this Form 10-Q.

(28)Previously filed with the Company’s filing of Form 8-K, SEC file number 000-54213, filed on November 27, 2012, and incorporated by this reference as an exhibit to this Form 10-Q.

(29)Previously filed with the Company’s filing of Form 8-K, SEC file number 000-54213, filed on November 28, 2012, and incorporated by this reference as an exhibit to this Form 10-Q.

(30)Previously filed with the Company’s filing of Form 8-K, SEC file number 000-54213, filed on December 28, 2012, and incorporated by this reference as an exhibit to this Form 10-Q.

(31)Previously filed with the Company’s filing of Form 8-K, SEC file number 000-54213, filed on February 5, 2013, and incorporated by this reference as an exhibit to this Form 10-Q.
 
 
47

(32)Previously filed with the Company’s filing of Form 8-K, SEC file number 000-54213, filed on March 28, 2013, and incorporated by this reference as an exhibit to this Form 10-Q.
 
(33)Previously filed with the Company’s filing of Form 8-K, SEC file number 000-54213, filed on June 5, 2013, and incorporated by this reference as an exhibit to this Form 10-Q.
 
(34)Previously filed with the Company’s filing of Form 8-K, SEC file number 000-54213, filed on June 24, 2013, and incorporated by this reference as an exhibit to this Form 10-Q.
 
(35)Previously filed with the Company’s filing of Form 8-K, SEC file number 000-54213, filed on July 24, 2013, and incorporated by this reference as an exhibit to this Form 10-Q.
 
(36)Previously filed with the Company’s filing of Form 8-K, SEC file number 000-54213, filed on August 9, 2013, and incorporated by this reference as an exhibit to this Form 10-Q.

(37)Previously filed with the Company’s filing of Form 8-K, SEC file number 000-54213, filed on October 4, 2013, and incorporated by this reference as an exhibit to this Form 10-Q.
 
(38)Previously filed with the Company’s filing of Form 8-K, SEC file number 000-54213, filed on October 11, 2013, and incorporated by this reference as an exhibit to this Form 10-Q.

(39)Previously filed with the Company’s filing of Form 8-K, SEC file number 000-54213, filed on November 20, 2013, and incorporated by this reference as an exhibit to this Form 10-Q.
 
(40)Previously filed with the Company’s filing of Form 8-K, SEC file number 000-54213, filed on January 10, 2014, and incorporated by this reference as an exhibit to this Form 10-Q.
 
(41)Previously filed with the Company’s filing of Form 8-K, SEC file number 000-54213, filed on February 6, 2014, and incorporated by this reference as an exhibit to this Form 10-Q.
 
(42)Previously filed with the Company’s filing of Form 8-K, SEC file number 000-54213, filed on March 14, 2014, and incorporated by this reference as an exhibit to this Form 10-Q.

(43)Previously filed with the Company’s filing of Form 8-K, SEC file number 000-54213, filed on April 2, 2014, and incorporated by this reference as an exhibit to this Form 10-Q.

(44)Previously filed with the Company’s filing of Form 8-K, SEC file number 000-54213, filed on April 14, 2014, and incorporated by this reference as an exhibit to this Form 10-Q.

(45)Previously filed with the Company’s filing of Form 8-K, SEC file number 000-54213, filed on April 23, 2014, and incorporated by this reference as an exhibit to this Form 10-Q.
 
(46)Previously filed with the Company’s filing of Form 8-K, SEC file number 000-54213, filed on May 14, 2014, and incorporated by this reference as an exhibit to this Form 10-Q.

(47) Previously filed with the Company’s filing of Form 8-K, SEC file number 000-54213, filed on October 8, 2014, and incorporated by this reference as an exhibit to this Form 10-Q.

(48)Previously filed with the Company’s filing of Form 8-K, SEC file number 000-54213, filed on July 17, 2014, and incorporated by this reference as an exhibit to this Form 10-Q.

(49)Previously filed with the Company’s filing of Form 8-K, SEC file number 000-54213, filed on August 12, 2014, and incorporated by this reference as an exhibit to this Form 10-Q.

(50)Previously filed with the Company’s filing of Form 8-K, SEC file number 000-54213, filed on September 12, 2014, and incorporated by this reference as an exhibit to this Form 10-Q.
 
 
48