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3.South Mountain Project

BeMetals Option Agreement:

On December 30, 2022, the Company agreed to terminate the Option Agreement with BeMetals Corporation. The BeMetals Option Agreement ("the Option Agreement") was entered into on February 27, 2019, under the original terms of the Option Agreement, BeMetals provided the funding to SMMI for project expenses including management services.

According to the terms of the Option Agreement BMET USA and SMMI entered a management contract whereby BeMetals paid $25,000 monthly to SMMI for management services to enable BMET to perform exploration and development work with respect to the South Mountain Project. Management service income of $75,000$ 225,000 was recognized during the three monthnine -month period ended March 31,September 30, 2022.

On February 7, 2023, the Company entered into a Mutual Release (the “Release”"Release") with BeMetals Corp. whereby the Company acknowledged and agreed that BeMetals had completed all of its obligations under the Option Agreement in consideration of a final payment of $33,530, which includes payment of all expenditures incurred through the date of termination. The Company also agreed that BeMetals shall not be obligated to make any additional payments or share issuances of further expenditures. The release discharges both parties from any and all claims arising in connection with the Option Agreement.Agreement

Subsequent to the receipt of the Release payment, the Company made payments of $6,035 related to expenses attributable to the Option Agreement and covered under the Release. TheFor the nine -month period ended September 30, 2023, the remaining balance of $27,495$21,495 was recognized in other accrued liabilities, for the period ended March 31, 2023 to cover any additional expenses associated with the Option Agreement.

On April 12, 2023, the Company received a notice of Complaint filed in the fourth judicial district court of the State of Idaho by a law firm representing a former mining contractor who had worked on the South Mountain Mine project in the Fall of 2020. The Complaint alleges the Company owes the contractor for past services related to the BeMetals Option Agreement.

On August 16, 2023, the Company extended a settlement offer to the former mining contractor. Subsequently, on September 28, 2023, the Company was notified that the mining contractor's counsel intended to withdraw from the case. The withdrawal process will involve the filing of a motion with the court, followed by a court hearing. Upon the court's approval of the motion, the mining contractor will have a 21-day window to secure new legal representation. Failure to secure new counsel within this period may result in the dismissal of the case.

SMMI Joint Venture - OGT, LLC

6.Related Party Transactions

Board of Directors Compensation

On March 16, 2022, the Company's Compensation Committee recommended that the Company's Board of Directors receive nominal compensation for their service. The Company's Board of Directors passed the resolution for Board members compensation on March 21, 2022. DuringFor the quarternine-month period ended March 31,September 30, 2023, the amount of cash compensation paid to the Board of Directors was $3,000.$6,000.

Accrued Payroll

Accrued payroll liabilities of $23,500 represent payroll expenses incurred during the quarter ended September 30, 2023. These costs are for accrued management salaries to Eric Jones, the Company's Chief Executive Officer, and Larry Thackery, the Chief Financial Officer. Payment of the salaries has been deferred until a later date.

Deferred Officer Compensation

Three of the Company's officers began deferring compensation for services on April 1, 2015. On July 31, 2018, the Company stopped expensing and deferring compensation for the three Company officers in the interest of marketing the SMMI project. As part of the BeMetals agreement (Note 3), the Company resumed compensation for these officers on May 15, 2019. The officersofficers' deferred compensation balances at MarchSeptember 30, 2023, and December 31, 20232022, represent the balances deferred prior to the BeMetals agreement and are as follows: Eric Jones, President and Chief Executive Officer - $420,000; Jim Collord, Vice President and Chief Operating Officer - $420,000; and Larry Thackery, Chief Financial Officer - $201,500, for a total of $1,041,500.

Accrued Related Party Liability

From 2015 to 2018 the Company engaged Baird Hanson LLP ("Baird"), a company owned by one of the Company's former directors, to provide legal services. The Company's director Joseph Baird retired from the Board of Directors of Thunder Mountain Gold, Inc., and from all other positions or offices with the Company effective April 11, 2022. Baird received $5,000$10,000 in payments duringfor the nine-month period ended March 31,September 30, 2023. At March 31,September 30, 2023, and December 31, 2022, the balance due to Baird for prior years' legal services was $141,685$136,685 and $146,685, respectfully.

On May 10, 2022, the Company agreed to facilitate the sale of 1,000,000 shares of the Company's common stock held by Joseph Baird, one of the Company's former directors and a shareholder. In anticipation of the sale, the Company received $10,000 for the sale of shares that had not yet transferred to the purchasers. The Company held those funds in prepaid expenses, deposits, and other assets with a corresponding liability due to Mr. Baird of $10,000. Mr. Baird decided not to sell 1,000,000 shares of the Company's common stock, the funds were returned to the perspective buyer on February 2, 2023 and the associated liability was relieved.

8. Stock Options

Total operatingOperating expenses for the three months ending March 31,ended September 30, 2023, of $213,132$103,409 decreased from the comparativesame respective period in 2022 by $134,631$40,503 or 39%28%. Exploration expenses for the three months ended March 31,September 30, 2023, increased by $17,266 or 1,482% when comparedwitnessed an increase of $11,681 in comparison to the same period in 2022. The increaseThis rise in exploration expenseexpenses is dueattributed to the termination of the BeMetals Option Agreement. PriorOn December 30, 2022, the Company mutually agreed with BeMetals Corporation to the termination ofterminate the Option Agreement, on December 30, 2022wherein BeMetals washad been providing funding allfor project expenses, including exploration expenses at the Company’sto South Mountain Property.

Mines project. Legal and accounting costs decreased forin the three-month period ended March 31,September 30, 2023, compared to 2022 by $5,731 or 8%.$9,250 for a total of $12,753 Management and administrative expenses decreased by $145,938$42,603 or 53%35%. This decrease in management and administration costs was due to the shareholders meeting and higher payroll, insurance cost incurred for the three months ended September 30, 2022 versus three months ended September 30, 2023.

Nine-month period comparisons

The Company recognized no income from management services for the nine-month period ended September 30, 2023, compared to $225,000 in total revenue for the nine-month period ended on September 30, 2022. The decrease in revenue is due to the termination of the BeMetals Option Agreement (see Note 3).

Operating expenses for the nine months ended September 30, 2023, of $459,807 decreased from the same respective period in 2022 by $178,524 or 28%. Exploration expenses for the nine months ended September 30, 2023, witnessed an increase of $52,450 in comparison to the same period in 2022. This rise in exploration expenses is attributed to the termination of the BeMetals Option Agreement. On December 30, 2022, the Company mutually agreed with BeMetals Corporation to terminate the Option Agreement, wherein BeMetals had been providing funding for project expenses, including exploration expenses to South Mountain Mines project. Legal and accounting costs decreased by $17,379 or 16% for a total of $88,950. Management and administrative expenses decreased by $212,925 or 40% principally due to the decrease in stock compensation of $158,341 related tofor stock options issued to our officers and directors on March 21, 2022. There were no stock options issued forduring the quarternine months ended March 31,September 30, 2023.

Other expenses decreased by $92,268 or 39% for the quarter due to a decrease in the unrealized loss on the BeMetals investment. For the quarter ended March 31, 2023 the Company recognized an unrealized loss on the investment in BeMetals of $147,428 compared to an unrealized loss of $239,064 in the same quarter of 2022. The decrease in unrealized loss of $91,636 represents a 38% decline from the prior year.

Liquidity and Capital Resources:

The condensed consolidated financial statements for the yearperiod ended March 31,September 30, 2023, have been prepared under the assumption that we will continue as a going concern. Such an assumption contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As shown in the condensed consolidated financial statements for the three-monthnine-month period ended March 31,September 30, 2023, weand based upon current plans, management is confident that the Company will have cash reserves and available for sale securities sufficient to cover normal operating expenditures for the following 12 months.

The Company has 8 million common shares of BMET USA with a market value of $591,184, and the Company had cash and cash equivalents of $464,225 for the year ending March 31, 2023.

Based upon current plans, Thunder Mountain Gold management is confident that the Company will have the financial strength and opportunities to meet its financial obligations for the next 12 months.foreseeable future. Factors considered in substantiating this conclusion include:

• On March 31,September 30, 2023, the Company had cash and cash equivalents of $464,225.$209,529.
• The Company has 8 million common shares of BMET USA with a market value of $591,184,$769,344, on March 31,September 30, 2023.
• The ability to raise additional equity capital based upon the results of the exploration and development conducted by BeMetals.

It is important to note, upon the termination of BeMetals South Mountain Option Agreement, the Company's management immediately commenced marketing the South Mountain Project to other groups that have expressed an interest.

We believe we have the ability to continue as a going concern, even though our accumulated deficit totaled $6,711,211 as of March 31, 2023. Our plans for the long-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. The Company does have the option of selling BeMetals common stock shares. If we are not successful with our plans, equity holders could then lose all or a substantial portion of their investment.

At March 31,September 30, 2023, we have current assets of $1,108,268.$1,018,451. For the periodnine months ended March 31,September 30, 2023, net cash used for operating activities was $208,493.$463,139. 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 cash to complete our exploration programs, we will make every effort to raise additional funds from public offerings, sale of liquid stock or loans. To address liquidity concerns, the Company has considered the following:

• On April 21,October 19, 2023, we had $439,173 in$176,386 cash in our bank accounts.
• We do not include in this consideration any option payments mentioned below.
• Management is committed to managing expenses of all types to not exceed the on-hand cash resources of the Company at any point in time, now or in the future.
• The Company will also consider other sources of funding, including potential mergers, the sale of all or part of the Company’sCompany`s 8 million BeMetals Corp. (TSX-V: BMET) common shares beneficially held, and/or additional farm-out of its other exploration property.

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 cash to complete our exploration programs, we will attempt to raise additional funds from a public offering, a private placement, mergers, farm-outs or loans.

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.

Contractual Obligations

During 2008 and 2009, three lease arrangements were made with landowners 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 15 through 16, a total of 1 year that remains after 2022, the lease was extended an additional 10 years at $30/acre after 2014.

(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.

d) Investments. In a joint venture where the Company holds more than 50% of the voting interest and has significant influence, the joint venture is 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 venture management committee.

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 Over 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.

On April 12, 2023, the Company received a notice of Complaint filed in the fourth judicial district court of the State of Idaho by a law firm representing a former mining contractor who had worked on the South Mountain Mine project in the Fall of 2020. The Complaint alleges the Company owes the contractor $44,903 for past services related to the BeMetals Option Agreement. The Company has contested the amount owing and expects the action to be settled without a material impact on the Company's financial position.

On August 16, 2023, the Company extended a settlement offer to the former mining contractor. During the mailing process of the Company's offer, the contractor's attorney communicated their willingness to accept a slightly higher settlement amount. Subsequently, on September 28, 2023, the Company was notified that the mining contractor's counsel intended to withdraw from the case. The withdrawal process will involve the filing of a motion with the court, followed by a court hearing. Upon the court's approval of the motion, the mining contractor will have a 21-day window to secure new legal representation. Failure to secure new counsel within this period may result in the dismissal of the case.

Item 1A. Risk Factors.

Mineral resources are subject to further exploration and development, are subject to additional risks, and no assurance can be given that they will eventually convert to future reserves. Inferred Resources have a great amount of uncertainty as to their existence and their economic and legal feasibility. Mineral interests are periodically assessed for impairment of value and any subsequent losses are charged to operations at the time of impairment. Thunder Mountain Gold evaluated these impairment considerations and determined that no such impairments occurred as of March 31,September 30, 2023.

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

OnIn March 21, 2022, the Company granted 1,600,000 stock options to officers and directors of the Company. The fair value of the options was determined to be $139,200 using the Black Scholes model. The options are exercisable on or before March 21, 2027, and have an exercise price of $0.09. The options were fully vested upon grant and the entire fair value was recognized as compensation expense during the quarter ended March 31, 2022.

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.

During the three-month period ended March 31,September 30, 2023, 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.

/s/ Larry Thackery28

Larry Thackery

Chief Financial Officer

Date: May 11, 2023