UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended September 30, 20162017

OR

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

For the transition period from to

Commission File Number:  001-08429

THUNDER MOUNTAIN GOLD, INC.

(Exact name of Registrant as specified in its charter)

(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.   x   Yes  ¨  No

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).  x  Yes¨  No

Indicate by check mark whether the Registrant is  ¨  a large accelerated filer,¨  an accelerated file,¨  a non-accelerated filer, or  x  a smaller reporting company (as defined in Rule 12b-2 of the Exchange Act)or¨ an emerging growth company

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act)

¨  Yes  x   No

Number of shares of issuer’sissuer’s common stock outstanding at November 3:  52,592,5491, 2017:  55,095,579

TABLE OF CONTENTS

PART I – FINANCIAL INFORMATION

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Item 1:  Financial Statements

3

Item 2.  Management's Discussion and Analysis or Plan of Operation

1213

Item 3.  Quantitative and Qualitative Disclosures about Market Risk

1920

Item 4.  Controls and Procedures

1920

PART II – OTHER INFORMATION

2021

Item 1.  Legal Proceedings.

2021

Item 1A. Risk Factors.

2021

Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds.

2021

Item 3.  Defaults Upon Senior Securities.

2021

Item 4.  Mine Safety Disclosures

2021

Item 5.  Other Information

2122

Item 6.  Exhibits

2122

SIGNATURESSIGNATURES

2223

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PART I – FINANCIAL INFORMATION

Item 1:  Financial Statements

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

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

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

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

1.

Summary of Significant Accounting Policies and Business Operations

Business Operations

Thunder Mountain Gold, Inc. (“Thunder Mountain” or “the Company”) was originally incorporated under the laws of the State of Idaho on November 9, 1935, under the name of Montgomery Mines, Inc.  In April 1978, the Montgomery Mines Corporation was obtained by a group of the Thunder Mountain property holders and changed its name to Thunder Mountain Gold, Inc., with the primary goal to further develop their holdings in the Thunder Mountain Mining District, located in Valley County, Idaho. Thunder Mountain Gold, Inc. takes its name from the Thunder Mountain Mining District, where its principal lode mining claims were located. For several years, the Company’s activities were restricted to maintaining its property position and exploration activities. During 2005, the Company sold its holdings in the Thunder Mountain Mining District. During 2007, the Company acquired the South Mountain Mines property in southwest Idaho and initiated exploration activities on that property, which continue today.

Basis of Presentation and Going Concern

The accompanying unaudited consolidated financial statements have been prepared by the Company in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information, as well as the instructions to the Form 10-Q. Accordingly, the financial statements do not include all of the information and footnotes required by accounting principles generally accepted in the United States of AmericaU.S. GAAP for complete financial statements. In the opinion of our management, all adjustments (consisting of only normal recurring accruals) considered necessary for a fair presentation of the interim financial statements have been included. Operating results for the nine monthnine-month period ended September 30, 20162017 are not necessarily indicative of the results that may be expected for the full year ending December 31, 2016.2017. For further information, refer to the financial statements and the footnotes thereto in our Annual Report on Form 10-K for the year ended December 31, 2015.2016.

The accompanying consolidated financial statements have been prepared under the assumption that the Company will continue as a going concern. The Company is an exploration stage company and has historically incurred losses and does not have sufficient cash at September 30, 20162017 to fund normal operations for the next 12 months. The Company has no recurring source of revenue and its ability to continue as a going concern is dependent on the Company’s ability to raise capital to fund its future exploration and working capital requirements. The Company’s plans for the long-term return to and continuation as a going concern include financing the Company’s future operations through sales of its common stock and/or debt and the eventual profitable exploitation of its mining properties. Additionally, the current capital markets and general economic conditions in the United States are significant obstacles to raising the required funds. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The Company is currently investigating a number of alternatives for raising additional capital with potential investors, lessees and joint venture partners.

The consolidated financial statements do not include any adjustments that might be necessary should the Company be unable to continue as a going concern. If the going concern basis was not appropriate for these financial statements, adjustments would be necessary in the carrying value of assets and liabilities, the reported expenses and the balance sheet classifications used.

Reclassifications

Certain reclassifications have been made to conform prior period’s data to the current presentation. These reclassifications have no effect on previously reported operations, stockholders’ equity (deficit) or cash flows.

Principles of Consolidation

The consolidated financial statements include the accounts of the Company; its wholly owned subsidiaries, Thunder Mountain Resources, Inc. and South Mountain Mines, Inc.; and, effective November 6, 2016, a company in which the Company has majority control, Owyhee Gold Trust, LLC (“OGT”).   Intercompany accounts are eliminated in consolidation.

The Company has established 75% ownership and full management of OGT.  Thus, OGT’s financial information is included 100% in the Company’s consolidated financial statements since November 6, 2016. The Company’s consolidated financial statements reflect the other investor’s 25% non-controlling interest in OGT. See Note 3 for further information.    

Accounting 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 assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The more significant areas requiring the use of management estimates and assumptions include the carrying value of properties and mineral interests, environmental remediation liabilities, deferred tax assets, stock

6

based compensation and the fair value of financial and derivative instruments. Management’s estimates and assumptions are based on historical experience and other assumptions believed to be reasonable under the circumstances. Actual results could differ from those estimates.

Cash and cash equivalents

For the purposes of the balance sheet and statement of cash flows, the Company considers all highly liquid investments with a maturity of three months or less when purchased to be a cash equivalent.

Income Taxes

The Company recognizes deferred income tax liabilities or assets at the end of each period using the tax rate expected to be in effect when the taxes are actually paid or recovered. A valuation allowance is recognized on deferred tax assets when it is more likely than not that some or all of the deferred tax assets will not be realized.

Fair Value Measurements

When required to measure assets or liabilities at fair value, the Company uses a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used.  The Company determines the level within the fair value hierarchy in which the fair value measurements in their entirety fall.   The categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement.   Level 1 uses quoted prices in active markets for identical assets or liabilities, Level 2 uses significant other observable inputs, and Level 3 uses significant unobservable inputs.  The amount of the total gains or losses for the period are included in earnings that are attributable to the change in unrealized gains or losses relating to those assets and liabilities still held at the reporting date. The Company has no financial assets or liabilities that are adjusted to fair value on a recurring basis.

Financial Instruments

The Company’s financial instruments include cash and cash equivalents and related party notes payable the carrying value of which approximates fair value based on the nature of those instruments.

Mineral Interests

The Company capitalizes costs for acquiring mineral interests and expenses costs to maintain mineral rights and leases as incurred.  Exploration costs are expensed in the period in which they occur.  Should a property reach the production stage, these capitalized costs would be amortized using the units-of-production method on the basis of periodic estimates of ore reserves. Mineral properties are periodically assessed for impairment of value and any subsequent losses are charged to operations at the time of impairment. If a property is abandoned or sold, its capitalized costs are charged to operations.

Property and Equipment

Property and equipment are stated at cost. Depreciation and amortization are based on the estimated useful lives of the assets and are computed using straight-line or units-of-production methods. The expected useful lives of most of the Company’s equipment ranges between 3 and 10 years. When assets are retired or sold, the costs and related allowances for depreciation and amortization are eliminated from the accounts and any resulting gain or loss is reflected in operations.

Investments in Joint Venture

The Company’s accounting policy for joint ventures is as follows:

1.

The Company uses the cost method when it does not have joint control or significant influence in a joint venture. Under the cost method, these investments are carried at cost. If other than temporary impairment in value is determined, it would then be charged to current net income or loss.

2.

If the Company enters into a joint venture in which there is joint control between the parties or the Company has significant influence, the equity method is utilized whereby the Company’s share of the ventures’ earnings and losses is included in the statement of operations as earnings in joint ventures and its investments therein are adjusted by a similar amount. If other than temporary impairment in value is determined, it would then be charged to current net income or loss.

3.

In a joint venture where the Company holds more than 50% of the voting interest and has significant influence, the joint venture is typically consolidated with the presentation of non-controlling interest.  In determining whether significant influences exist, the Company considers its participation in policy-making decisions and its representation on the

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venture’s management committee. However, seeSee Note 3 regarding the Company’s accounting for its investment in Owyhee Gold Trust, LLC,

Reclamation and Remediation

The Company’s operations have been, and are subject to, standards for mine reclamation that have been established by various governmental agencies. The Company would record the fair value of an asset retirement obligation as a liability in the period in which the Company incurred a legal obligation for the retirement of tangible long-lived assets. A corresponding asset would also be recorded and depreciated over the life of the asset.   After the initial measurement of the asset retirement obligation, the liability is adjusted at the end of each reporting period to reflect changes in the estimated future cash flows underlying the obligation.  Determination of any amounts recognized upon adoption is based upon numerous estimates and assumptions, including future retirement costs, future inflation rates and the credit-adjusted risk-free interest rates.

For non-operating properties, the Company accrues costs associated with environmental remediation obligations when it is probable that such costs will be incurred and they are reasonably estimable. Such costs are based on management’s estimate of amounts expected to be incurred when the remediation work is performed.

Share-Based Compensation

Share-based payments to employees and directors, including grants of employee stock options, are measured at fair value and expensed in the statement of operations over the vesting period.  

Recent Accounting Pronouncements

In November 2015, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update (“ASU”) No. 2015-17 Income Taxes - Balance Sheet Classification of Deferred Taxes (Topic 740). The update is designed to reduce complexity of reporting deferred income tax liabilities and assets into current and non-current amounts in a statement of financial position. ASU No. 2015-17 requires the presentation of deferred income taxes, changes to deferred tax liabilities and assets be classified as non-current in the statement of financial position. The update is effective for fiscal years beginning after December 15, 2016.  The adoption of this update on January 1, 2017 had no impact on the consolidated financial statements.

In March 2016, the FASB issued ASU No. 2016-09 Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. The update simplifies the accounting for stock-based compensation, including income tax consequences and balance sheet and cash flow statement classification of awards. The update is effective for fiscal years beginning after December 15, 2016, with early adoption permitted. The adoption of this update on January 1, 2017 had no impact on the consolidated financial statements.

In August 2016, the FASB issued ASU No. 2016-15 Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. The update provides guidance on classification for cash receipts and payments related to eight specific issues. The update is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years, with early adoption permitted. The Company is currently evaluating the impact of implementing this update on the consolidated financial statements.

In January 2017, the FASB issued ASU No. 2017-01 Business Combinations (Topic 805): Clarifying the Definition of a Business. The update clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The update is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. The Company will apply the provisions of the update to potential future acquisitions occurring after the effective date.

Other accounting standards that have been issued or proposed by FASB that do not require adoption until a future date are not expected to have a material impact on the consolidated financial statements upon adoption. The Company does not discuss recent pronouncements that are not anticipated to have an impact on or are unrelated to its financial condition, results of operations, cash flows or disclosures.

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Net Income (Loss) Per Share

The Company is required to have dual presentation of basic earnings per share (“EPS”) and diluted EPS.  Basic EPS is computed as net income divided by the weighted average number of common shares outstanding for the period. Diluted EPS is calculated based on the weighted average number of common shares outstanding during the period plus the effect of potentially dilutive common stock equivalents, including options and warrants to purchase the Company’s common stock.  As of September 30, 20162017, and 2015, the remaining2016, potentially dilutive common stock equivalents not included in the calculation of diluted earnings per share as their effect would have been anti-dilutive are:

2.  

Commitments

During 2008 and 2009, three lease arrangements were made with land owners that own land parcels adjacent to the Company’s South Mountain patented and unpatented mining claims.  The leases were originally for a seven-year period, with annual payments based on $20 per acre.  The leases were renewed for an additional 10 years at $30 per acre paid annually, these payments are listed in the table below. The lease payments have no work requirements.

On March 21, 2011, the Company signed an exploration agreement with Newmont Mining Corporation (“Newmont”) on the Trout Creek Project that significantly expands the Trout Creek target area. Newmont’s private mineral package added to the Project surrounds the Company’s South Mountain claim group and consists of about 9,565 acres within a thirty-square mile Area of Influence defined in the agreement.  Under the terms of the agreement, the Company is responsible for conducting the exploration program and is obligated to expend a minimum of $150,000 over the ensuing two years, with additional expenditures possible in future years.  

On October 1, 2015, the Company signed an Amendment with Newmont USA Limited that modifies and extends the original Trout Creek Joint Exploration Agreement. The extension allows the Company modified work commitments on the project reducing the annual amount to $150,000 of work obligations by October 31, 2016.

On October 27, 2016, the Company decided to terminate the exploration agreement with Newmont. The Company still retains 78 unpatented claims (1,600 acres) in Trout Creek of the target area.  The Company pays annual fees to BLM of $3,255and Lander County $940 fees in maintaining the property.

On November 4, 2016, the Company agreed to pay its former partner $5,000 per year in advanced royalties on the South Mountain Project. See Note 8 Subsequent Events

3 regarding royalty requirements for the South Mountain Project.

3.

South Mountain Project

On November 8, 2012, the Company, through its wholly-owned subsidiary South Mountain Mines, Inc., (“SMMI”), and Idaho State Gold Company II, LLC (“ISGC II”) formed the Owyhee Gold Trust, LLC, (“OGT”) a limited liability company. In 2015 and through November 2016, disagreements between SMMI and ISGC II resulted in litigation about the status of OGT.      In November 2016, the parties entered into judicially-confirmed Settlement Agreement and Release that resolved outstanding disagreements, and provided for a new operating agreement by which SMMI obtained an option to acquired 100% of OGT’s interest in the South Mountain Project.

Under the new OGT operating agreement, SMMI is the sole manager and pays all expenses for exploration and development of the property.  SMMI and ISGC II have 75% and 25% ownership, respectively, in OGT.  SMMI and OGT have a separate Mining Lease with Option to Purchase (“Lease Option”) under which SMMI has an option to purchase the South Mountain mineral interest for a capped $5 million less net returns royalties paid through the date of exercise.  The Lease Option expires

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in November 2026.  If SMMI exercises the option, the option payment $5 million less advance royalties will be distributed 100% by OGT to ISGC II.  Under the Lease Option, SMMI pays a $5,000 net returns royalty annually on November 4.

During 2015 and through the settlement date (November 6, 2016), the Company managed the South Mountain mineral interests and recognized expenses as Company expenses.

The carrying value of the mineral property is $479,477 at both September 30, 2017 and December 31, 2016.

4.   Property and Equipment

The Company’s initial contribution in accordance with the Operating Agreement, was the non-cash contribution of its South Mountain Mine property and related mining claims locatedequipment are as follows:

On August 22, 2017, the Company’s board of directors approved a resolution to sell a Caterpillar 950G loader to a construction company in southwestern Idaho in Owyhee County whichthe amount of $41,000 cash. This asset had a carrying value of $479,477 at the date$42,021 resulting in a loss on sale of contribution, but for purposesequipment of the Operating Agreement, valued at $6.725 Million. As its initial contribution to OGT, ISGC II agreed to fund operations totaling $18 million; or $8 million if$1,021.

5.   Related Parties Notes Payable

At January 1, 2016, the Company exercises its option to participate pro-rata after ISGC II expends $8 millionhad notes payable balances of $84,268 and completes work commitments including a Feasibility Study, and a certain amount of required underground core drilling.  ISGC II was$86,808 with Eric Jones, the initial manager of OGT LLC. Upon payment of $1 million, and a work commitment of $2 million in pre-determined qualifying expenditures not later than December 31, 2014, ISGC II was to receive 2,000 units representing a vested 25% ownership. As of December 31, 2014, none of these ownership units had been issued to ISGC II.  Through December 31, 2014, the Company accounted for its investment in the OGT by the cost method.

On January 27, 2015, SMMI became manager of the OGT under the terms of the November 8, 2012 operating agreement, because ISGC II had effectively resigned under the Agreement. This appointment as Manager was further ratified by a Judge`s Court Order on March 1, 2016.  Beginning in January 2015, SMMI paid OGT’s expenses to ensure ongoing operations at the site. For the nine-month period ending September 30, 2016 and for the year ended December 31, 2015, the Company incurred expenses of $472,183 and $693,592, respectively relating to OGT operations. The Company has recognized these expenses in these consolidated financial statements because, due to the dispute discussed below, it is not clear as to whether SMMI will be reimbursed by OGT.  At September 30, 2016 and December 31, 2015, accrued payroll for services performed relating to the operation of OGT was $505,000 and $274,000, respectively.  The accrued payroll was earned by three of the Company’s officers whose balances at September 30, 2016 are as follows:  Eric Jones, President and Chief Executive Officer - $200,000, James Collord,and Jim Collard, the Company’s Vice President and Chief Operating Officer, - $200,000, and Larry Thackery, Chief Financial Officer - $105,000.   None of the compensation has been paid.   

SMMI maintains that ISGC II did not earn its ownership units, and resigned under the terms of the Operating Agreement, causing SMMI to become manager. ISGC II did not agree that SMMI became manager of OGT in early 2015. However, that disagreement was resolved on March 1, 2016, when a Judge`s Order stipulated that SMMI was in fact Manager.

In December 2015, the Company received service of a Complaint that had been filed but not served on June 22, 2015, namelyIdaho State Gold Co. II, LLC, an Idaho limited liability company; and, Owyhee Gold Territory, LLC, an Idaho limited liability company v. Thunder Mountain Gold, Inc. a Nevada corporation, et al.,.  At December 31, 2015, the status of the lawsuit was pending and management is unable to predict the outcome due to the early stages of the litigation.  The probability of loss is unknown and the financial statements did not include any adjustment related to litigation.    

On January 11, 2016, the Company answered the complaint it received in December 2015.  In its response, the Company asserts that:

·

ISGC II failed to make its initial contribution, including earn in requirements described by the OGT agreement;

·

ISGC II failed to provide accounting consistent with generally accepted accounting practices, along with an independent audit required for issuance of ownership units; and

·

Significant damages are payable by ISGC II to the Company.

On February 16, 2016, ISGC II filed a motion for a more definitive statement asserting that the Company’s response was not specific enough.

On March 1, 2016, the Company was awarded a Court Order approving defined stipulations and dismissing of certain portions of a December Complaint.  The Court Order acknowledged and confirmed the Company’s assertions, and stipulated that:

a.

As of March 1, 2016, the Company’s wholly owned subsidiary, SMMI, is the manager of OGT for all lawful purposes and shall have the right to advance the project and the interests of OGT and the South Mountain Mine Project according to the terms of OGT’s November 8, 2012, Operating Agreement and the Parties November 8, 2012, Member Agreement; and

b.

OGT is the owner of the real property described in the Operating Agreement signed by both parties prior to November 8, 2012, and confirmed by certain Quitclaim Deed and filed on October 31, 2013, without any claim or encumbrance by Defendants; and

c.

ISGC II acknowledges that a Statement of Authority should be filed with the Idaho Secretary of State that identifies SMMI as Manager of OGT effective the date of this Stipulation; and

d.

Because of conflicts of interest, OGT, and the Company’s subsidiaries THMG and THMR were dismissed from the litigation; and

e.

ISGC II shall not sell or cause to be sold any of the equipment and assets described in the ISGC II financial reports without prior notice and the concurrence of OGT, with SMMI acting as manager of OGT; and

f.

ISGC II’s motion for a more definite statement is withdrawn.

Because of the Court Order above, ISGC II was required to withdraw their original Complaint. ISGC II filed an amended Complaint on March 14, 2016 in which it claims it is entitled to vesting of Units in OGT based solely upon the funds they spent towards the South Mountain mining project, or based upon an equitable claim.  The Company deems their claims erroneous and without merit, and that funds were spent outside of compliance with the Operating Agreement, and without proper controls or accounting. The Company will aggressively and vigorously defend against this lawsuit, and is confident of a positive legal outcome for the Company in Idaho Court.  

At December 31, 2015 and September 30, 2016, because of the uncertainty as to the status of OGT and the share allocation between SMMI and ISGC II, the Company has continued to account for its investment at cost and has recognized the expenses incurred in 2015 and the first nine months of 2016 for the operation of OGT.

On June 20, 2016, OGT held a Management Committee of Members meeting in which the 2016/2017 12-month budget was approved in accordance with the operating agreement. ISGC II representatives requested expenditures on the project paid by SMMI so ISGC II could cover its membership proportionate share.    See Note 8 Subsequent Events for the current status of OGT.

4.  Related Party Notes Payable

On December 9, 2014, the Company executed two promissory notes payable to directors, Eric Jones and Jim Collord. The amount of the notes was $25,000 each for a total of $50,000, and identical in terms. The interest rate on these notes is 10% per month of the principal balance. The notes were due in full no later than July 1, 2015 and had a minimum amount due of 5 months of interest if the notes are paid back earlier.

The original convertible notes contained a beneficial conversion feature of $13,492 which was recognized as a discount on the notes on the date of issuance. The discount was amortized over the note term using the straight-line method, which approximates the effective interest method. For the year ended December 31, 2015, the Company recorded $11,565 in interest expense related to the amortization of the discount.

On July 1, 2015, these notes were extended to December 31, 2015.  As part of this extension the outstanding interest payable on the notes of $33,616 was added to the principal balance of $50,000 resulting in a new outstanding principal balance of $83,616. The interest charge remained the same, as per the original notes agreement at $5,000 per month.  

The extension contained a conversion feature. The note holder can convert all of the outstanding principal and interest at 75% of the average closing bid price of the Company for the 20 days prior to the notice of conversion. The fair value of the conversion feature using the Black Scholes model was $68,726. This amount was determined to be substantial under applicable accounting principles requiring the debt amendment to be accounted for as a debt extinguishment. An expense of $68,726 was recorded to recognize the loss on modification of debt during the year ended December 31, 2015.

During November and December of 2015, Jim Collord and Eric Jones advanced additional funds of $30,000 and $27,460 respectively.  On the due date of the notes, December 31, 2015, these notes were extended to April 11, 2016.   In connection with this extension, the accrued interest balance of $30,000 was added to the principal balance resulting in a new outstanding principal balance of $171,076.   Additionally, the interest rate was changed to 1% per month and the conversion feature was eliminated.  These notes have been extended to December 31, 2016.

On January 18, 2016, the Company initiated a private offering for an aggregate 6,700,000 shares of common stock.  In connection with this offering, Jim Collord and Eric Jones exchanged $25,000 each fromof their related notes payables for a total of 1 million shares.    On November 15, 2016, Jim Collord exchanged an additional $2,000 to exercise warrants and received 20,000 shares (see Note 6).  During the nine months ended September 30, 2016, the Company paid $7,500 on Mr. Jones’ outstanding note balance.  of common stock.

On July 8, 2016, the Company executed two new promissory notes payable to directors, Eric Jones and Jim Collord. The amount of the notes was $15,000 and $10,000, respectively, for a total of $25,000.  The terms of these note are identical with a 2% interest rate accrued per month for a term of two months.  During the year ended December 31, 2016, the Company paid $17,500 on Mr. Jones’ outstanding note balance.  At September 30, 2017 and December 31, 2016, the notes payable balances were $66,768$56,768 and $71,808 for Mr. Jones and Mr. Collord, respectively.  Also at September 30, 2016, accrued interest payable balances were $5,918 and $6,508$69,808 for Mr. Jones and Mr. Collord, respectively.  These notes, originally had a term of two months buthave been extended toas amended, are due December 31, 2016.2017

5.On June 21, 2017, the Company originated a short term promissory notes payable to a Director of the Company, Paul Beckman. The note has a principal amount of $20,000 with simple interest calculated at 1% per month. On July 19, 2017, Mr. Beckman exercised stock options for 275,000 shares of common stock for total consideration of $28,275 which was in the form of the balance due on his note and accrued interest payable of $20,000 and $125, respectively, and $8,150 in cash.  

6.

Related Party TransactionsTransactions:

In addition to the related partyparties notes payable discussed in Note 4,5, the Company hashad the following related party transactions.  

Three of the Company’s officers are deferring compensation for services.  At September 30, 2017, the amounts due them are as follows:  Eric Jones - $320,000 (December 31, 2016 – $230,000), Jim Collord - $320,000 (December 31, 2016 - $230,000),

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and Larry Thackery, Chief Financial Officer - $162,500 (December 31, 2016 - $108,500).     Compensation expense for services performed by these related parties was $78,000 and $78,000 during the quarters ended September 30, 2017 and 2016, respectively and $234,000 and $231,000 during the nine months ended September 30, 2017 and 2016, respectively.  

The Company engaged Baird Hanson LLP (“Baird”), a company owned by one of the Company’s directors, to provide legal servicesservices.  Baird had no legal expenses in the OGT matter (see Note 3).2017.  Legal expenses of $54,000 and $123,108 have beenwere incurred for these services during the nine months ended September 30, 2016 and the year ended December 31, 2015, respectively.2016.   At September 30, 20162017 and December 31, 2015,2016, the amountsbalance due to Baird are $172,177 and $123,038, respectively.is $181,313.  

6.During 2017, Jim Collord and Eric Jones have advanced funds to the Company for operating expenses.    The balances due them on September 30, 2017 were $5,035 and $10,971, respectively, and are included in Accounts payable and other accrued expenses on the consolidated balance sheet.

7.

Stockholders’ Equity

The Company’s common stock has a par value of $0.001 with 200,000,000 shares authorized. The Company also has 5,000,000 authorized shares of preferred stock with a par value of $0.0001.

DuringIn January 2016, the year ended December 31, 2015, the Company sold 4,000,000 shares at $0.05 per share for total proceeds of $200,000.   No warrants were issued with the shares.

On January 18, 2016, Thunder Mountain Gold, Inc. initiated a private offering for an aggregate, 6,700,000 shares of common stock.  Participation was limited to six people, most of whom were officers and directors, and two accredited investors. There was no placement agent fee paid in the offering, and no accountable or unaccountable expense allowance. The Company sold 5,700,000 shares of common stock at a rate of $0.05 for $285,000.  In addition, Mr. Jones and Mr. Collord exchanged $50,000 of their notes outstanding (see Note 4) into 1,000,000 shares of common stock at the same rate of $0.05 per share.    There were no warrants issued with the shares.

On May 12, 2016, the Company extended the expiration of 5,015,0004,365,000 outstanding warrants issued during 2014 for an additional 6six months (Novemberto November 24, 2016).2016.  The Company also reduced the exercise price from $0.15 to $0.10.

During the quarter ended September 30,In 2016, certain warrant holders exercised 1,425,0003,590,000 warrants for shares of common stock at a price of $0.10 per share for proceeds of $142,500. There was$359,000.  In addition, warrants for 203,030 shares of common stock were exercised at $0.10 in exchange for accounts payable balances totaling $20,434.  As disclosed in Note 4, Jim Collard exercised warrants for 20,000 shares of common stock in exchange for a $2,000 payment towards his note payable balance. At September 30, 2017, the Company has no placement agent fee paid in warrant exercise, and no accountable or unaccountable expense allowance.outstanding warrants.

7.8.

Stock Options

The Company has established a Stock Option Incentive Plan (“SIP”) to authorize the granting of stock options up to 10 percent of the total number of issued and outstanding shares of common stock to employees, directors and consultants. Upon exercise of options, shares are issued from the available authorized shares of the Company.

Option awards are generally granted with an exercise price equal to the fair market value of the Company’s stock at the date of grant. 

Effective July 20, 2016March 21, 2017 the Company, granted 2,525,000600,000 stock options to directors, officers, employees and consultantsthree Directors of the Company and its affiliates to purchase common shares in the capital stock of the Company.The options are exercisable on or before July 20, 2021March 31, 2022 at a price of $0.10 per share.for 200,000 shares, and at a price of $0.09 for the remaining 400,000 shares.  After this grant, the Company has 4,765,0005,115,000 outstanding stock options that represent 9.4% of the issued and outstanding shares of common stock.

The fair value of the options was determined to be $175,199$53,558 using the Black Scholes model.  The options were fully vested upon grant and recognized as compensation expense forduring the quarter ended September 30, 2016.March 31, 2017.

On July 19, 2017, Paul Beckman exercised stock options representing 275,000 shares of common stock for total consideration of $28,275 which was in the form of the balance due on his note and accrued interest payable of $20,000 and $125, respectively, and $8,150 in cash.  Additionally, Larry Thackery exercised stock options for 140,000 shares of common stock for $12,400 in cash.

The fair value of each option award was estimated on the date of the grant using the assumptions noted in the following table:

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The following is a summary of the Company’s options issued under the Stock Option Incentive Plan:

The average remaining contractual term of the options outstanding and exercisable at September 30, 20162017 was 3.803.23 years.  As of September 30, 2016,2017, options outstanding and exercisable had noa $589,098 aggregate intrinsic value.value based on the Company’s stock price of $0.21.

8.9.

Subsequent Events

On October 27, 2016 at25, 2017, the Company terminatedborrowed $100,000 from Paul Beckman in the exploration agreement with Newmont Mining Corporation (“Newmont”) on the Trout Creek Project.form of a note payable.   The reason for the decision was to devote the Company’s resources to other projects.

On November 4, 2016,note bears simple interest of 1% per month, has a stipulation was filed in Fourth District Courtterm of Idaho dismissing the previously mentioned Complaint (see Note 3), Case No. CV OC 1510506 (the “Lawsuit”), regardingIdaho State Gold Co. II (ISGC II or ISGC), LLC, an Idaho limited liability company;six months, and Owyhee Gold Territory, LLC (OGT), an Idaho limited liability company v. Thunder Mountain Gold, Inc.contains a Nevada corporation, et al.  The Complaint also named South Mountain Mines, Inc. (SMMI) and Thunder Mountain Resources, both of which are wholly-owned subsidiaries of the Company. Based upon the negotiations among the Parties, they have agreed upon acceptable terms for a settlement and release of any and all Claims the Parties may have against each other.conversion option at $0.18 per common share.  

Under the terms of the settlement, SMMI will manage and retain 75% ownership in the OGT, with ISGC II retaining 25% ownership but no management control. OGT will be managed by SMMI under a new operating agreement signed by both parties, and will exist as a holding company, with the real assets taken out and advanced by SMMI under an industry standard Mining Lease with Option to Purchase Agreement. OGT will retain a capped five-million dollar ($5,000,000) Net Returns Royalty, paid quarterly at 5% of the net profits of the project when it begins producing.  There is also a $5,000 per year lease payment due to OGT.  The lease purchase and ISGC II`s 25% interest in OGT sunsets upon the payment of $5,000,000 to OGT.

Item 2.  Management's Discussion and Analysis or Plan of Operation

The following Management’s Discussion and Analysis of Financial Condition and Results of Operation (“MD&A”) is intended to help the reader understand our financial condition. MD&A is provided as a supplement to, and should be read in conjunction with, our financial statements and the accompanying integral notes (“Notes”) thereto.  The following statements may be forward-looking in nature and actual results may differ materially.

Plan of Operation:

FORWARD LOOKING STATEMENTS: The following discussion may contain forward-looking statements that involve a number of risks and uncertainties. Factors that could cause actual results to differ materially include the following: inability to locate property with mineralization, lack of financing for exploration efforts, competition to acquire mining properties; risks inherent in the mining industry, and risk factors that are listed in the Company's reports and registration statements filed with the Securities and Exchange Commission.

The Company’s financial position remained unchanged during the second quarterfirst nine months of 2016,2017, as metals commodity markets seem to have improved dramatically during the first half of 2016.  Equitythis period.  Junior mining equity markets may strengthen periodically in response to favorable price movements in certain metals during 2016,2017 and 2018, providing some companies with the opportunity to take advantage of short periods of positive sentiment in the market. However, until metal price momentum acrosscapital markets in the board becomes bullish,Junior Mining space become favorable, equity financing in the mining industry will remain challenging. Analyst estimates for the remainder of 20162017 and first half of 2018 are for stabilizing precious metals markets, along with stable and improving prices for zinc.zinc, copper and lead.   

The Company continued to operate on a limited budget during the second quarter of 20162017 while funding the maintenance of the South Mountain Project during which additional financing is being sought orfor the Project.  The Company’s plan of operation for the next twelve months, subject to business conditions, will be to continue to explore and develop the South Mountain Project in order toand complete an industry standard Feasibility Study.

Economic Analysis. The Company has engaged SRK Consulting (Reno) to oversee and complete this work. Work on the Trout Creek Project will also continue in 2016,2017, although the South Mountain Project will still remain the focus.  At the Trout Creek Project, the following is planned:

·

Drill pre-defined drill target on the Joint Exploration area with Newmont Mining.

·

Analyze the drill data, and prepare for further exploration in the 2017 season.

·

Continue geophysical interpretation of the valley area. Define potential drill targets and develop additional drill targets for remaining field season of 2016.

South Mountain Project, Owyhee County, Idaho

The land package at South Mountain consists of a total of approximately 1,518 acres, consisting of (i) 17 patented claims (326 acres) and 360 acres of private land; (ii) lease on private ranch land (542 acres); and, (iii) 21 unpatented lode mining claims on BLM managed land (290 acres).  All holdings are located in the South Mountain Mining District, Owyhee County, Idaho.

The property is located approximately 70 air miles southwest of Boise, Idaho and approximately 24 miles southeast of Jordan Valley, Oregon. It is accessible by highway 95 driving south from the Boise area to Jordan Valley Oregon, then by traveling southeast approximately 22 miles back into Idaho, via Owyhee County road that is dirt and improved to within 4 miles of historic mine site. The last 4 miles up the South Mountain Mine road are unimproved dirt road. The property is accessible year-round to within 4 miles of the property, where the property is accessible from May thru October without plowing snow. There is power to within 4 miles of the site as well. The climate is considered high desert. The Company has water rights on the property, and there is a potable spring on the property that once supplied water to the main camp.

Status of Owyhee Gold Territory (South Mountain Project)

Currently, the project is in a care and maintenance status while new capital is sought. Thunder Mountain Gold continues conducting due diligence with new capital partners, and has narrowed down the number of potential financing partners that they have been working with to continue advancement of South Mountain.  Management remains optimistic that a capital partner will be selected in the coming months.

During the second Quarter, there were on-going legal filings with respect to the previously mentioned legal action involving the SMMI and its former partner at South Mountain.  Based upon the negotiations among the Parties, they have agreed upon acceptable terms for a settlement and release of any and all Claims the Parties may have against each other.  

Property History

The limited historic production peaked during World War II when, based on smelter receipts, the production of direct shipped ore totaled 53,653 tons containing 3,118 ounces of gold, 566,439 ounces of silver, 13,932 pounds of copper, 2,562,318 pounds of lead and 15,593,061 pounds of zinc.  In addition to the direct-ship ore, a flotation mill was constructed and operated during the late-1940s and early-1950s. The Company purchased

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Anaconda Crude Ore Shipments: 1941-1953 Total Tons:  53,653

South Mountain Mines Inc. (an Idaho Corporation) owned the patented claims from 1975 to the time the Company purchased the entity in 2008.  2007. They conducted extensive exploration work including extending the Sonneman Level by approximately 1,500 feet to intercept the down-dip extension of the Texas sulfide mineralization mined on the Laxey Level approximately 400 feet up-dip from the Sonneman.  High grade sulfide mineralization was intercepted and confirmed on the Sonneman Extension.  In 1985 South Mountain Mines Inc. completed a feasibility study based on historic and newly developed ore zones exposed in their underground workings and drilling.  This resulted in a historic resource of approximately 470,000 tons containing 23,500 ounces of gold, 3,530,000 ounces of silver, 8,339,000 pounds of copper, 13,157,000 pounds of lead and 91,817,000 pounds of zinc. Although they determined positive economics, and that the resource was still open at depth with a large upside potential, the project was shut down and placed into care and maintenance.

In 2008, the Company contracted Kleinfelder, Inc., a nationwide engineering and consulting firm, to complete a technical report “Resources Data Evaluation, South Mountain Property, South Mountain Mining District, Owyhee County, Idaho”. The technical report was commissioned by Thunder Mountain Resources, Inc. to evaluate all the existing data available on the South Mountain property.  Kleinfelder utilized a panel modeling method using this data to determine potential mineralized material remaining and to make a comparison with the resource determined by South Mountain Mines in the mid-1980s.  

Additional drilling and sampling will be necessary before the resource can be classified as a mineable reserve, but Kleinfelder’s calculations provided a potential resource number that is consistent with South Mountain Mines’ (Bowes 1985) reserve model.

Late in 2009, the Company contracted with Northwestern Groundwater & Geology to incorporate all the new drill and sampling data into an NI 43-101 Technical Report.  This report was completed as part of the Company’s dual listing on the TSX Venture Exchange in 2010.  The NI 43-101 can be reviewed on the Company`s website at www.thundermountaingold.com, or on www.SEDAR.com.

2012 through 2017 Highlights of South Mountain drilling and development work:

The assay results from 2012 through 2014 pre-development work confirm that there is significant upside to the resource. The results further reinforce the exceptional continuity of high-grade zinc/silver mineralization at South Mountain along the strike of the well-mineralized trend. Both the upper Texas and the DMEA ore shoots were drilled to define the continuity of up- and down-dip sulfide mineralization.  Although additional definition drilling is necessary, positive results showed excellent grades and continuity. Additionally, the Sonneman and Laxey levels of the mine were opened and refurbished, with 2,700 feet of 14 X 14-foot development-ready drifts and drill stations developed on the Sonneman level, along with 720 feet of 10’ X 10’ drift rehabilitation on the Laxey Level.

Underground core holes DM2UC13-13 through DM2UC13-18 have further confirmed the continuity of the DMEA down-dip, enabling the connection between the open visible massive sulfide on the Sonneman, with the earlier core hole intercept drilled some 400 feet below the Sonneman Level from the surface.

Management is very encouraged with the positive drilling results at South Mountain.  With the drift rehabilitation underground, tremendous down dip potential of these high-grade zinc, silver, gold, copper, and lead zones, has emerged, with polymetallic mineralization that could be incorporated into the early years of the South Mountain mine

14

plan. Given the associated economic upside of such a scenario, the Company plans to aggressively delineate the full extent of the mineralization at South Mountain.

Figure 2.  Typical long section along strike showing the orientation of the massive sulfide replacement zones at South Mountain, along with and in relation to the two main drifts.

Assays show that rib sampling on the Sonneman reported during the development of the Sonneman Level during 2012-2013 several massive sulfide mineralized zones were mined through.  HIGHLIGHT:  Rib Sample Results on Sonneman:  80 Feet of 21.9% Zinc, 0.147 opt Gold, 4.76 opt Silver, 0.38% Copper and 0.51% Lead.  

Detailed rib sampling along some of these massive sulfide zones yielded the following results:

Note:  Sample channel lengths were 5 to 10 feet.  All samples were analyzed by ALS Chemex.

15

A detailed underground fan drilling program commenced as soon as the surface drilling program was completed.  Drilling on the DMEA 2 and Texas Ore Shoot were planned in order to define a mineable resource, but unfortunately the program was terminated after the first fan was drilled in the DMEA 2 down dip target.  The results of the drilling are summarized below:

Results from the first drill fan testing the down dip extension of the historic DMEA ore zones.

More than 15,000 feet (4,500 meters) have been drilled at South Mountain and included in the model. The South Mountain historic ore zones remain open down-dip on all of the zones encountered (see Figure 2). The continuing drilling successes proves that the South Mountain resource continues to grow with potential to increase the resource substantially. A new resource estimate for South Mountain is expected to be ready in September 2017. SRK Consulting has been engaged in April to complete the PEA at South Mountain.

Two underground core rigs are planned for extending the South Mountain resource, and testing the high-priority historic ore zones.  One core drill will begin on the DMEA and Laxey zones to complete the confirmation and extensional drilling, while the other core drill will focus primarily on the Texas zone to extend resources at depth beyond the current inferred resource area. In Addition, bulk samples will be mined for metallurgical test work, which will be orchestrated in part by SRK Consulting.  

Qualified Person – Edward D. Fields is the Qualified Person as defined by National Instrument 43-101 responsible for the technical data reported in this news release.

This property is without known reserves and the proposed program is exploratory in nature according to Instruction 3 to paragraph (b)(5) of Industry Guide 7. There are currently no permits required for conducting exploration in accordance with the Company`s current board approved exploration plan.

Trout Creek Project, Lander County, Nevada

The Trout Creek gold exploration project is a pediment exploration gold target is located along the easternwestern flank of Reese River Valley along the pediment of the Shoshone Mountain Range in the Reese River Valley in Lander County, Nevada. The claim package consists of 78 unpatented mining claims (approximately 1560 acres) that are situated along a recognizable structural zone in the Eureka-Battle Mountain mineralized gold trend.  In addition to the claims,Thunder Mountain maintained a joint venture agreement with Newmont Mining on some of their adjoining mineral rights sections and aliquot parcels from 2011 thru 2016. On October 27, 2016 the Company terminated the exploration agreement with Newmont Mining covering approximately 25 square milesCorporation in order to concentrate their efforts on which Newmont owns the mineral rights on about half that land package.South Mountain Project.  The mineral rights consistCompany retained the 78-claim package by paying annual fees to BLM of their ownership of the Continental Railroad sections.  $3,255 and Lander County $940 fees.

The Project is located approximately 155 air miles northeast of Reno, Nevada, or approximately 20 miles SWsouth of Battle Mountain, Nevada, in Sections 10, 11, 14, 16, 21, 22, 27; T.29N.; R.44E. Mount Diablo Baseline & Meridian, Lander County, Nevada. Latitude:   40    23’ 36” North, Longitude: 117   00’ 58” West. The property is accessible by traveling south from Battle Mountain Nevada on state highway 305, which is paved. The project is generally accessible year round. There is no power, no water other than seasonal surface precipitation and associated streams that flow from the Shoshone Range,year-round and there are no improvements on the property.

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The Trout Creek target is based onanchored by a regional gravity anomaly on a well-defined northwest-southeast trending break in the alluvial fill thickness and underlying bedrock.  Previous geophysical work in the 1980s revealed an airborne magnetic anomaly associated with the same structure, and this was further verified and outlined in 2008 by Company personnel using a ground magnetometer. The target is covered by alluvial fan deposits of generally unknown thickness shed from the adjacent Shoshone Range, a fault block mountain range composed of Paleozoic sediments of both upper and lower plate rocks of the Roberts Mountains thrust. The geophysical anomaly could define a prospective and unexplored target within a well mineralized region.

All those certain unpatented lode claims situated in Lander County, Nevada, more particularly described as follows below:

An extensive data package on the area was made available by Newmont to Thunder Mountain Gold and follow-upby Newmont during the joint exploration agreement period (2011-2016) that significantly enhanced the target area. This, along with fieldwork was undertaken once the agreement was finalized.  This fieldwork consistedconsisting of mapping and sampling the altered and mineralized structures that can be followed through the Shoshone Range.  Of importance is that these structures align with the Cortez-Pipeline deposits and the Phoenix deposit (part of the Eureka-Battle Mountain-Getchell Trend).  

In addition to the geologic fieldwork, Wright Geophysics conducted a ground gravity survey and CSMAT over the pediment target area and this provided insight into the gravel-bedrock contact as well as defining the favorable structural setting within the buried bedrock.  An untested drill target was identified under the gravel pediment along these structures, and the geophysics showed that the bedrock was within a reasonable depth for exploration drilling and potential mining if a significant mineralization is encountered.

In early October 2015,Thunder Mountain Gold plans to conduct further exploration in 2017 on this attractive pediment gold target. The Company anticipates that funding will be available during the 2017 season and one or two reverse circulation holes can test the bedrock beneath the gravel along the mineralized structures.  A detailed list of claims controlled by the Company signed an Amendment with Newmont USA Limited that modifies and extendscan be found in the original Trout Creek Joint Exploration Agreement. The extension allows the Company additional time periods to complete work requirementsCompany`s Form 10K filed on the project and reduces the yearly work obligations.Edgar.

The ongoing exploration field work, including claim maintenance and assessment, is financed by the Company through sales of unregistered common stock funded by the Company through private placements with accredited investors.  Future work will be funded in the same manner.  

Qualified Person – Edward D. Fields is the Qualified Person as defined by National Instrument 43-101 responsible for the technical data reported in this news release.manner or through a strategic partnership with another mining company.  

There are currently no environmental permits required for the planned exploration work on the property. In the future, a notice of intent may be required with the Bureau of Land Management.  This property is without known reserves and the proposed program is exploratory in nature according to Instruction 3 to paragraph (b)(5) of Industry Guide 7.

Competition

We areThunder Mountain Gold, Inc. is an exploration stage company. We competeThe Company competes with other mineral resource exploration and development companies for financing and for the acquisition of new mineral properties. Many of the mineral resource exploration and development companies with whom we compete have greater financial and technical resources than us. Accordingly, these competitors may be able to spend greater amounts on acquisitions of mineral properties of merit, on exploration of their mineral properties and on development of their mineral properties. In addition, they may be able to afford greater geological expertise in the targeting and exploration of mineral properties. This competition could result in competitors having mineral properties of greater quality and interest to prospective investors who may finance additional exploration and development. This competition could adversely impact on our ability to finance further exploration and to achieve the financing necessary for us to develop our mineral properties.

Employees

At September 30, 2016,2017, SMMI has accrueddeferred payroll of $505,000.$802,500. These salaries were earned in accordance with the OGT LLC operating agreement and have been recorded on SMMI’s books. OGT Management includes SMMI`s Eric Jones, Jim Collord, and Larry Thackery as CFO. These salaries will continue to be deferred until a later date.

17

Results of Operations:

The Company recognized no revenues and had no production for the Nine Monthsnine months ending September 30, 2016. Total2017.Total operating expenses for the Nine Monthsnine months ending September 30, 2016 increased2017 of $536,533 decreased from the same respective time frame ending 20152016 by $85,315, up 10.9%$246,414 or 31% in total expenses of $782,947.expenses. Exploration expenses for the Nine Monthssix months ended September 30, 20162017 increased by $23,202$1,743 when compared to same period in 2015.2016. Legal and accounting costs decreased from 20152016 by the amount of $41,449$182,421 for a total of legal and accounting expenses of $231,396.$48,975. The decreased Management and administrative expense increaseddecreased by $103,562$124,340 or 25.36%30%, foror a total expensemostly due to stock options valued at $175,199 issued to our directors in July of $408,414.2016.

The increaseOn August 22, 2017, the Company’s board of $85,315directors approved a resolution to sell a Caterpillar 950G loader to Warner Construction in total expenses is due to the grantamount of 2,525,000 stock options to purchase shares$41,000 cash. This asset had a carrying value of common stock under the Stock Incentive Program (SIP) to Directors, Executive Officers and other non-employees’ consultants. This resulted$42,021 resulting in a $175,199loss on sale of equipment of $1,021.

On November 6, 2016, the Company entered a Settlement Agreement between ISGC II and, SMMI, regarding the Owyhee Gold Territory LLC (OGT). Under the terms of this agreement equipment assets were transferred to SMMI resulting in the Company recognizing depreciation expense to Management and administrative.

The Company still maintainsof $57,582 for the cost, of South Mountain Mine project, as its own expenses because it is not clear whether SMMI will be reimbursed by OGT.   During the Nine Monthsperiod ending September 30, 2016, the Company has recognized expenses of $472,183 it has expensed into South Mountain Mining, Inc. Included in the total expenditures is $231,000 of deferred payroll and legal fees of $170,657 incurred for the Nine Months ending September 30, 2016.2017.

Liquidity and Capital Resources:

The consolidated financial statements for the period ending September 30, 2016,2017, disclose a ‘going concern’ qualification to our ability to continue in business. The consolidated financial statements for the period then ended have been prepared under the assumption that we will continue as a going concern. Such assumption contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As shown in the consolidated financial statements for the period ended September 30, 2016,2017, we did not have sufficient cash reserves to cover normal operating expenditures for the following 12 months. These factors raise substantial doubt about our ability to continue as a going concern. The consolidated financial statements do not include any adjustments that might be necessary should we be unable to continue as a going concern.

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 obtain additional financing as may be required, or ultimately to attain profitability. Potential sources of cash, or relief of demand for cash, include additional external debt, the sale of shares of our stock or alternative methods such as mergers or sale of our assets. No assurances can be given, however, that we will be able to obtain any of these potential sources of cash. We currently require additional cash funding from outside sources to sustain existing operations and to meet current obligations and ongoing capital requirements.

Our plans for the long termlong-term continuation as a going concern include financing our future operations through sales of our common stock and/or debt and the eventual profitable exploitation of our mining properties. Our plans may also, at some future point, include the formation of mining joint ventures with senior mining company partners on specific mineral properties whereby the joint venture partner would provide the necessary financing in return for equity in the property.

While the Company does not currently have cash sufficient to support the currently planned aggressive exploration work at South Mountain, we believe that the survivability of Thunder Mountain Gold can be assured by the following:

·

At November 3, 2016,1, 2017, we had $63,918$60,950 cash in our bank accounts.accounts, this includes the $100,000 borrowed from Mr. Beckman on October 25, 2017.

·

Management and the Board have not undertaken plans or commitments that exceedexceeds the cash available toon hand in the Company.  We doThe Company does not include in this considerationstatement any additional investment funds mentioned below.

Management is committed to manage expenses of all types so as to not exceed the on-hand cash resources of the Company at any point in time, now or in the future.

We firmly believe we can outlast the current disruptions in the investment markets and continue to attract investment dollarsfunding in coming months and years.  The Company will also consider other sources of funding, includingthe future. Including debt or equity financing, potential mergers and/or additional farm-out of some of its exploration properties.

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For the period ended September 30, 2016,2017, net cash used for operating activities was $400,543,$182,971, consisting of net loss of $790,135$547,692 for the period ended September 30, 2016,2017, reduced by non-cash expenses and net cash provided by changes in current assets and current liabilities. Cash provided by financing activities for period ended September 30, 2016 totaled $445,000

Our future liquidity and capital requirements will depend on many factors, including timing, cost and progress of our exploration efforts, our evaluation of, and decisions with respect to, our strategic alternatives, and costs associated with the regulatory approvals. If it turns out that we do not have enough money to complete our exploration programs, we will try to raise additional funds from a public offering, a private placement, mergers, farm-outs or loans.

We know that additional financing will be required in the future to fund our planned operations. We do not know whether additional financing will be available when needed or on acceptable terms, if at all. If we are unable to raise additional financing when necessary, we may have to delay our exploration efforts or any property acquisitions or be forced to cease operations. Collaborative arrangements may require us to relinquish our rights to certain of our mining claims.

Private Placement

On February 28, 2015, the Company entered into a subscription agreement with a two individuals whereby the company sold 4,000,000 shares, at US$0.05 per share. There were no warrants associated with the subscriptions. As of March 15, 2015, the Company has issued the 4,000,000 shares under this agreement, and the placement is closed.

On January 18, 2016, Thunder Mountain Gold, Inc. initiated a private offering to purchase, in the aggregate, 6,700,000 shares of common stock. There was no minimum offering.  The minimum individual subscription was $25,000 for non-insiders.  Participation was limited to six people, most of whom were officers and directors, and two accredited investors. There was no placement agent fee paid in the offering, and no accountable or unaccountable expense allowance.  The closing date for the financing was January 22, 2016, and the Company received $285,000 in cash proceeds and $50,000 as a reduction of related party notes payable.

The offering was believed exempt from registration pursuant to the exemption for transactions by an issuer not involving any public offering under Section 4(6) the Securities Act of 1933, as amended.  The securities offered, sold, and issued in connection with the private placement have not been or are not registered under the Securities Act of 1933, as amended, or any state securities laws and may not be offered or sold in the United States absent registration with the Securities and Exchange Commission or an applicable exemption from the registration requirements.

Subsequent Events

On October 27, 2016 at the Company decided to terminate the exploration agreement with Newmont Mining Corporation (“Newmont”) on the Trout Creek Project. The reason for the decision was to concentrate the Company’s finances'.

On November 4, 2016, a motion was filed in Fourth District Court of Idaho Dismissing the previously mentioned Complaint, Case No. CV OC 1510506 (the “Lawsuit”), regardingIdaho State Gold Co. II (ISGC II or ISGC), LLC, an Idaho limited liability company;and, Owyhee Gold Territory, LLC (OGT), an Idaho limited liability company v. Thunder Mountain Gold, Inc. a Nevada corporation, et al.  The Complaint also named South Mountain Mines, Inc. (SMMI) and Thunder Mountain Resources, both of which are wholly-owned subsidiaries of the Company. Based upon the negotiations among the Parties, they have agreed upon acceptable terms for a settlement and release of any and all Claims the Parties may have against each other.

Under the terms of the settlement, SMMI will manage and retain 75% ownership in the OGT, with ISGC II retaining 25% ownership but no management control. OGT will be managed by SMMI under a new operating agreement signed by both parties, and will exist as a holding company, with the real assets taken out and advanced by SMMI under an industry standard Mining Lease with Option to Purchase Agreement. OGT will retain a capped five-million dollar ($5,000,000) Net Returns Royalty, paid quarterly at 5% of the net profits of the project when it begins producing.  There is also a $5,000 per year lease payment due to OGT.  The lease purchase and ISGC II`s 25% interest in OGT sunsets upon the payment of $5,000,000 to OGT.None

Contractual Obligations

During 2008 and 2009, three lease arrangements were made with land owners that own land parcels adjacent to the Company’s South Mountain patented and unpatented mining claims.  The leases were for a seven-year period, with options to renew, with annual payments (based on $20 per acre) listed in the following table.  The leases have no work requirements.

(1)

Amounts shown are for the lease periods years 4 through 7, a total of 1 years that remains after 2013, the second year of the lease period. Lease was extended an additional 10 years at $30/acre.

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(2)

The Lowry lease has an early buy-out provision for 50% of the remaining amounts owed in the event the Company desires to drop the lease prior to the end of the first seven-year period.

(3)  OGT LLC, managed by the Company’s wholly-owned subsidiary SMMI, receives a $5,000 per year payment for up to 10 years, or until a $5 million capped NPI Royalty is paid.

Critical Accounting Policies

We have identified our critical accounting policies, the application of which may materially affect the financial statements, either because of the significance of the financials statement item to which they relate, or because they require management’s judgment in making estimates and assumptions in measuring, at a specific point in time, events which will be settled in the future.  The critical accounting policies, judgments and estimates which management believes have the most significant effect on the financial statements are set forth below:

a)

Estimates. Our management routinely makes judgments and estimates about the effect of matters that are inherently uncertain.  As the number of variables and assumptions affecting the future resolution of the uncertainties increase, these judgments become even more subjective and complex.  Although we believe that our estimates and assumptions are reasonable, actual results may differ significantly from these estimates.  Changes in estimates and assumptions based upon actual results may have a material impact on our results of operation and/or financial condition.

b)

Stock-based Compensation. The Company records stock-based compensation in accordance with ASC 718, “Compensation – Stock Compensation” using the fair value method. All transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable.

c)

Income Taxes. We have current income tax assets recorded in our financial statements that are based on our estimates relating to federal and state income tax benefits. Our judgments regarding federal and state income tax rates, items that may or may not be deductible for income tax purposes and income tax regulations themselves are critical to the Company’s financial statement income tax items.

Item 3.  Quantitative and Qualitative Disclosures about Market Risk

Not required for smaller reporting companies.

Item 4.  Controls and Procedures

Evaluation of Disclosure Controls and Procedures

At the end of the period covered by this report, an evaluation was carried out under the supervision of, and with the participation of, the Company’s Management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Rule 13a – 15(e) and Rule 15d – 15(e) of the Securities and Exchange Act of 1934, as amended).  Based on that evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that as of the end of the period covered by this report, the Company’s disclosure controls and procedures were adequately designed and effective in ensuring that information required to be disclosed by the Company in its reports that it files or submits to the SEC under the Exchange Act, is recorded, processed, summarized and reported within the time period specified in applicable rules and forms.

Changes in Internal Controls overOver Financial Reporting

During the quarter covered by this report, there have been no changes in the Company’s internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II – OTHER INFORMATION

Item 1.  Legal Proceedings.

None.

Item 1A. Risk Factors.

Not required for smaller reporting companies.

Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds.

On October 3, 2013, the Board of Directors approved a Private Placement financing of up to 5,000,000 units of the Company (“Unit”) at a price of $0.05 per Unit for gross proceeds of up to $250,000.  Each Unit consists of one share of the Company’s common stock and one-half of one common share purchase warrant.  Each whole warrant entitles the holder to purchase one additional share of common stock of the Company at a price of $0.15 for a period of 18 months.  

Pursuant to a Selling Agreement, the Selling Agent was entitled to compensation in the following form: (a) a cash commission equal to 10% of the price of the Units sold.  At December 31, 2014, $1,500 in commissions was accrued based on the sale of 300,000 shares; (b) an additional cash commission of 10% of gross proceeds received from the exercise of Warrants issued as part of such Units or any other equity investment made by investors introduced by the Agent within a 24-month period following closing; and (c) non-transferable broker warrants to purchase a number of additional Units equal to 5% of Units sold by the Agent in the initial offering. The Agent Warrants will have the same exercise price and otherwise be on the same terms as the Warrants.  At December 31, 2014, 15,000 agent warrants were issued.

As of December 31, 2014, the Company received $460,000 in gross proceeds from the Private Placement, issuing a total 9,240,000 in common stock and 4,620,000 warrants.

On December 1, 2013, the Company converted a note payable to Rolf Hess in the amount of $20,000 for a total of 400,000 shares of common stock and 200,000 warrants.  

On February 28, 2015, the Company entered into a subscription agreement with a two individuals whereby the companyCompany sold 4,000,000 shares at US $0.05 per share. There were no warrants associated with the subscriptions. The Company received $200,000 in gross proceeds from the Private Placement. As of March 15, 2015, the Company has issued the 4,000,000 shares under this agreement, and the placement is closed.

Under Rule 501(a) of Regulation D, these units were sold to "accredited investors" which within the meaning of section 2(15) of the Act and Rule 501, et seq. of Regulation "D", these transactions are intended to be exempt from registration under the Act by virtue of section 4(2) of the Act and the provisions of Rule 506 of Regulation D as promulgated thereunder.

On January 18, 2016, Thunder Mountain Gold, Inc. initiated a private offering for anto sell, in the aggregate, 6,700,000 shares of common stock. There was no minimum offering.  The minimum individual subscription was $25,000 for non-insiders.  Participation was limited to six people, most of whom were officers and directors, and two accredited investors. There was no placement agent fee paid in the offering, and no accountable or unaccountable expense allowance. The Company sold 5,700,000 shares of common stock at a rate of $0.05closing date for $285,000 in cash.  In addition, Mr. Jones and Mr. Collord exchanged $50,000 of their notes outstanding (see Note 4) into 1,000,000 shares of common stock at the same rate of $0.05 per share.    There were no warrants issued with the shares.

During July of 2016, Company received subscriptions from the exercising of outstanding warrants.  These warrants were issued as part of the units sold during the previously announced Private Placement that closed on November 24, 2014. These warrants were 18-month warrants, and set to expire on May 24, 2016, but were extended for six additional months to November 24,financing was January 22, 2016, and also discounted from the issued strike price of $0.15 down to $0.10 On May 12, 2016, the Company extended the expiration date of five million (5,015,000) outstanding warrants issued during 2014 for an additional 6 months (November 24, 2016).  The Company also reduced the exercise price from $0.15 to $0.10.

The quarter ended September 30, 2016, the Company received subscriptions from the exercising of outstanding warrants. Certain warrant holders exercised 1,425,000 warrants for shares of common stock at a price of $0.10 per share for proceeds of $142,500. There was no placement agent fee paid$335,000 in warrant exercise, and no accountable or unaccountable expense allowance.total proceeds.

Item 3.  Defaults Upon Senior Securities.

None.

Item 4.  Mine Safety Disclosures

Pursuant to Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act”), issuers that are operators, or that have a subsidiary that is an operator, of a coal or other mine in the United States are required to disclose in their periodic reports filed with the SEC information regarding specified health and safety violations, orders and citations, related assessments and legal actions, and mining-related fatalities.

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During the threenine months ended September 30, 2016,2017, the Company did not have any operating mines and therefore had no such specified health and safety violations, orders or citations, related assessments or legal actions, mining-related fatalities, or similar events in relation to the Company’s United States operations requiring disclosure pursuant to Section 1503(a) of the Dodd-Frank Act.

Item 5.  Other Information

None.

Item 6.  Exhibits

(a)

Documents which are filed as a part of this report:

Exhibits:

31.1 –Certification Required by Rule 13a-14(a) or Rule 15d-14(a). Jones

31.2 –Certification Required by Rule 13a-14(a) or Rule 15d-14(a). Thackery

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

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

101*

The following financial information from our Quarterly Report on Form 10-Q for the quarter ended September 30, 20162017 formatted in Extensible Business Reporting Language (XBRL): (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Operations, (iii) the Consolidated Statements of Cash Flows, and (iv) Consolidated Notes to Financial Statements

SIGNATURES

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

THUNDER MOUNTAIN GOLD, INC.

/s/ Eric T. Jones

By                                                          

Eric T. Jones

President and Chief Executive Officer

Date: November 14, 201613, 2017

Pursuant to the requirements of the Securities Act of 1934 this report signed below by the following person on behalf of the Registrant and in the capacities on the date indicated.

/s/ Larry Thackery

By                                                          

Larry Thackery

Chief Financial Officer

Date; November 14, 201613, 2017

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