10-Q 1 r10q2id4.txt QTR210QILDM 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 June 30, 2004 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: 1-316 INDEPENDENCE LEAD MINES COMPANY (Exact name of registrant as specified in its charter) Arizona 82-0131980 (State or other jurisdiction (IRS Employer Identification No.) of incorporation) 510 Cedar Street Wallace, Idaho 83873 (Address of principal executive offices) Registrant's telephone number, including area code: (208) 753-2525 Common Stock None Title of each class Name of each exchange on which registered 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 as the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ] The number of outstanding shares of the registrant's common stock at June 30, 2004 was 4,459,793 shares. INDEPENDENCE LEAD MINES COMPANY QUARTERLY REPORT ON FORM 10-Q FOR THE QUARTERLY PERIOD ENDED June 30, 2004 TABLE OF CONTENTS Page PART I FINANCIAL INFORMATION Item 1: Financial Statements . . . . . . . . . . . . . . . 1 Item 2: Management's Discussion and Analysis of Financial Condition and Results of Operations . . . 1 PART II OTHER INFORMATION Item 1: Legal Proceedings . . . . . . . . . . . . . . . . . 2 Item 2: Changes in Securities . . . . . . . . . . . . . . . 3 Item 3: Defaults upon Senior Securities . . . . . . . . . . 3 Item 4: Submission of Matters to a Vote of Security Holders .3 Item 5: Other Information . . . . . . . . . . . . . . . . . .3 Item 6: Exhibits and Reports on Form 8-K . . . . . . . . . . 3 CERTIFICATIONS and SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . F/S 6 [The balance of this page has been intentionally left blank.] PART I FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS. The unaudited financial statements of the Company for the periods covered by this report are included elsewhere in this report, beginning at page F/S 1. The unaudited financial statements have been prepared by the Company in accordance with generally accepted accounting principles for interim financial information with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of the Company's management, all adjustments (consisting of only normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the six-month period ended June 30, 2004 are not necessarily indicative of the results that may be expected for the full year ending December 31, 2004. For further information refer to the financial statements and footnotes thereto in the Company's Annual Report on Form 10-K for the year ended December 31, 2003 incorporated by reference herein. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. RESULTS OF OPERATIONS FOR THE PERIOD ENDED JUNE 30, 2004. Six months Ended June 30, 2004 Compared to Six months Ended June 30, 2003. During the six months ended June 30, 2004 the Company realized no income. General and administrative expenses increased to $184,848 for the six-month period ended June 30, 2004 as compared to $39,600 for the six-month period ended June 30, 2003. This increase is principally attributed to increased legal expenses incurred in the second quarter of 2004. For the six months ended June 30, 2004, the Company experienced a net loss of $184,846, or $0.042 per share, compared to a net loss of $31,574, during the comparable period in the previous year. LIQUIDITY AND CAPITAL RESOURCES. The Company is the owner of fifteen patented and seventeen unpatented mining claims. This claim group ("the property") is situated Northwest of Hecla Mining Company's Lucky Friday Mine in the Coeur d'Alene Mining District, Shoshone County Idaho. Adjacent is the community of Mullan and U.S. Interstate Highway 90. Pursuant to the terms of an agreement dated February 8, 1968, among Hecla Mining Company ("Hecla"), Day Mines, Inc. ("Day"), Abot Mining Company ("Abot"), and the Company (the "Unitization Agreement"), the Eastern portion of the Company's Property (approximately five-eighths of the Property) was unitized with certain adjoining and near-by properties owned by Day and Abot into a unitized area, consisting of 55 claims, (known as the "DIA Area"). Under the terms of the Unitization Agreement, ores and minerals in place are owned by the parties thereto in the following percentages: Day (now Hecla by merger) 47.70% Independence 46.30% Abot 6.00% By a second agreement also dated February 8, 1968 (the "Lease Agreement"), Hecla leased the DIA Area for a period of fifty (50) years, subject to a 30-year extension, for the purpose of conducting mineral exploration and development of the DIA Area and mining such commercial ore as may be discovered in the DIA Area by Hecla. The Lease Agreement provides that all costs and expenses incurred in the exploration, development, and operation of the DIA Area are to be paid by Hecla subject to the right of Hecla to be reimbursed for such costs and expenses, together with all advance royalties paid, out of any future net profits realized from the operation of the DIA Area. After recovery of Hecla's costs and expenses and amounts paid as advance royalties, and the establishment of a three month working capital reserve, 1 net profit royalties are to be paid to the Company and the other property owners as follows: Day (now Hecla by merger) 19.08% Independence 18.52% Abot 2.40% Under the terms of the Unitization Agreement, one-half of the first net profit royalties received by the Company are to be paid over to Day (now Hecla) until Day recovers the sum of $450,000. The relationship of the parties to the Agreement may, under certain circumstances, be converted to a joint venture at the option of the property owners, where after the property owners would become participating, non-operating working interest owners who would share profits and expenses in connection with the DIA Area in the same ratio as exists pursuant to lease arrangement with Hecla described above. Until Hecla commences to pay net profit royalties and during such period as the Lease Agreement is in effect, Hecla is obligated to pay an advance royalty to the Company of $750 per month subject to increase to $1,500 if production for the DIA Area exceeds 2,000 tons per month. The Company currently receives an advance royalty of $1,500 per month, which is recorded in the financial statements as deferred income. Pursuant to the terms of the February 8, 1968, agreements, Hecla will be obligated to pay a royalty of 18.52 percent of defined net profits after Hecla has recouped its costs to explore and develop this property from the new discovery to Independence Lead Mines Company. Since June 30, 1999 the Company has experienced substantial differences with the Lesee. In January 1997, Hecla chose to go forward with the DIA Projects Phase III and by June 1, 1998 the Project reached full production. In the first year of full production the Project lost $785,000 after mining and milling 260,000 tons. Independence requested Hecla to stop mining to prevent loss of the resource. Hecla's management has refused all requests to act with prudence, and continues to mine at this writing. Since Hecla chose to go forward with Phase III, through the end of 2003 there has been 1,263,000 tons mined and milled and all development costs have been lost. Request for prudence over the years has failed. During 2003 Hecla mined and milled 151,991 tons containing 15.76 oz. Silver per ton, 9.05% lead, and 2.18% zinc. For the year 2003 the Project lost an additional $723,147. The DIA Project total cost at year-end was $33,352,654. We believe the record indicates the DIA Project was not viable to undertake with the mining method chosen and the existing economic conditions, and did not justify the start-up of a large mining operation on the Lessor's property. In 1999 the Company acquired 38,436 shares of Independence Common Stock on the open market at an average price of $0.49 per share, and in 2000 the Company acquired 94,800 shares at an average price of $0.38 per share. These shares have been carried as treasury stock by the Company, and in December 2003,72,000 shares of treasury stock were sold for $0.70 per share. In the first quarter of 2004 an additional 25,036 shares of treasury stock were sold for $0.75 per share. The remaining 36,400 shares of treasury stock were sold in the second quarter of 2004 at an average price of $0.97 per share. In the second quarter of 2004 the Company realized $147,364 from the sale of 201,436 shares. In addition, the Company issued 10,000 shares for services received. The current officers and directors of the Company serve without compensation and are not considered by the Company to be employees. PART II OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS. The Company has retained the Boise law firm of Marcus, Merrick, Christian and Hardee. As required by terms of a 1968 Lease Agreement with Hecla Mining Company, our Company gave notice of termination of that agreement in early March 2002. This agreement covered the DIA Project, which is Hecla's principle operation at the Lucky Friday mine near Mullan, Idaho. Both parties agreed to waive arbitration requirement contained in the lease and agreed to a trial without a jury. A nine day trial was held from March 22nd through April 1st of 2004, and closing written arguments were submitted to the court by April 30th. Further, the court required the parties to submit to the court a written rebuttal to the other party's closing arguments by May 17, 2004. On July 19, 2004 the court ruled in favor of Hecla Mining Company. Independence is currently in the process of appealing the court's opinion to the Idaho Supreme Court. 2 ITEM 2. CHANGES IN SECURITIES. Neither the constituent instruments defining the rights of the registrant's securities holders nor the rights evidenced by the registrant's outstanding common stock have been modified, limited, or qualified. ITEM 3. DEFAULTS UPON SENIOR SECURITIES. The registrant has no outstanding senior securities. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. No matters were submitted to a vote of the registrant's security holders during the period covered by this report. ITEM 5. OTHER INFORMATION. None. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K. EXHIBITS. The following exhibit is filed as part of this report: NONE REPORTS ON FORM 8-K. No reports on Form 8-K were filed by the registrant during the period covered by this report. [The balance of this page has been intentionally left blank.] 3 INDEPENDENCE LEAD MINES COMPANY TABLE OF CONTENTS PAGE Balance Sheets as of June 30, 2004 and December 31, 2003 . . . . . . . . . . . . . . . . F/S 2 Statements of Operations for the six Months ended June 30, 2004 and for the six Months ended June 30, 2003 . . . . . . . . . . . . . . . . . . . . F/S 3 Statements of Cash Flow for the six Months ended June 30, 2004 and 2003 . . . . . . . . F/S 4 Notes to Interim Financial Statements . . . . . . . . . F/S 5 Certifications and Signatures . . . . . . . . . . . . . F/S 6 [The balance of this page has been intentionally left blank.] F/S 1 INDEPENDENCE LEAD MINES COMPANY (AN EXPLORATORY STAGE COMPANY) BALANCE SHEET - UNAUDITED

ASSETS JUNE 30, ~~2003~~2004 DECEMBER 31, ~~2002~~2003 -------------- ------------ CURRENT ASSETS: Cash $ ~~121~~67,~~558~~824 $ ~~152~~72,~~632~~300 Royalties receivable 1,500 1,500 ~~Refunds and deposits receivable 9,605 2,207~~ Investments 1,006 1,006 ----- ----- Total current assets ~~133~~70,~~669~~330 ~~157~~74,~~345~~806 ------ ------ PROPERTY AND EQUIPMENT, at cost: Equipment 0 0 Less accumulated depreciation 0 0 --- --- 0 0 Mining property 2,945,407 2,945,407 ------ ------ Total property and equipment 2,945,407 2,945,407 OTHER ASSETS: Unrecovered exploration costs 187,920 187,920 ----- ----- Total assets $3,~~266~~203,~~996~~657 $ 3,~~290~~208,~~672~~133 ======= ======= ~~LIABILITIES~~Table ~~AND~~continued ~~STOCKHOLDERS'~~next EQUITY CURRENT LIABILITIES: Accounts payable $ 7,741 $ 8,848 Accrued Expenses 0 0 ----- ----- Total current liabilities 7,741 8,848 ----- ----- DEFERRED INCOME: 383,000 378,500 ------ ------ STOCKHOLDERS' EQUITY: Common Stock, $1page.00 par value, authorized 5,000,000 shares; issued 4,308,793 at 12/31/02; and at 06/30/03 4,308,793 4,308,793 Treasury Stock Additional (55,290) (55,290) Paid-In Capital(Deficit) (108,293) (108,293) ------ ------ 4,145,210 4,145,210 Less deficit accumulated during the exploration stage (1,268,959) (1,237,386) ------- ------- Total Stockholders equity 2,876,251 2,907,824 -------- -------- Total liabilities and stockholders' equity $3,266,996 $3,290,672 ======= ======= The accompanying notes are an integral part of these financial statements.

INDEPENDENCE LEAD MINES COMPANY (AN EXPLORATORY STAGE COMPANY) BALANCE SHEET - UNAUDITED

~~QUARTER~~LIABILITIES ~~SIX~~AND ~~MONTHS~~STOCKHOLDERS' ~~QUARTER~~EQUITY ~~SIX MONTHS ENDED ENDED ENDED ENDED~~ JUNE 30, 032004 ~~JUNE~~DECEMBER 3031, 032003 ~~JUNE 30, 02 JUNE 30, 02~~ ----------- ---~~--------~~ ----------- -~~----------~~ ~~REVENUE~~CURRENT $LIABILITIES: 0Accounts $payable 0 $ 0323 $ ~~0 EXPENSES Consulting~~ 3,~~755~~394 ~~9,121~~Accrued ~~2,406~~Expenses ~~5,163 Licenses and fees 330 329 48 48 Office expense 300 330 519 519 Office services 150 300 150 300 Shareholder and Public Relations 286 735 70 770 Transportation and Travel~~ 0 0 ~~1,648 1,648 Accounting 0 0 0 0 Legal 5,635 28,785 2,463 2,718~~ ----- ----- ~~----- -----~~ Total ~~expenses~~current ~~10,456~~liabilities ~~39,600~~323 73,~~504~~394 ~~11,166~~ ----- ------ DEFERRED INCOME: 401,000 392,000 ------ ------ ~~LOSS~~STOCKHOLDERS' ~~FROM~~EQUITY: ~~OPERATIONS~~Common ~~($10~~Stock,~~456)~~ ($391.00 par value,~~600)~~ ~~($7~~authorized 5,~~504)~~000,000 ~~($11~~shares; 4,~~166)~~459,793 ~~OTHER~~shares ~~INCOME~~issued ~~AND~~at ~~(EXPENSE)~~6/30/04 ~~Interest~~and 4,308,793 ~~net~~shares ~~260~~issued ~~576~~at ~~618~~12/31/03 14,~~260~~459,793 ~~---~~4,308,793 ~~-----~~Treasury ~~-----~~Stock ~~-----~~(at ~~Total~~cost) ~~other~~0 ~~income~~(25,482) ~~$260~~Subscriptions ~~$576~~receivable ~~$618~~0 ~~$1,260~~0 ~~---~~Additional Paid-~~----~~In Capital(Deficit) (89,742) (87,701) ------ ------ ~~NET INCOME(LOSS) BEFORE INCOME TAXES (10~~4,~~196) (39~~370,~~024)~~051 (64,~~886) (9~~195,~~906)~~610 ~~Provision~~Less ~~for~~deficit ~~income~~accumulated ~~taxes~~during ~~(2,330)~~the ~~(7,450)~~exploration stage (1,~~505~~567,717) (1,~~837~~382,871) ------- ------- Total Stockholders equity 2,802,334 2,812,739 -------- -------- ~~NET~~Total ~~INCOME~~liabilities ~~(LOSS)~~and ~~($7,866)~~stockholders' ~~($31,574)~~equity ($53,~~381)~~203,657 ($83,~~069)~~208,133 ~~Table~~======= ~~continues~~======= onThe ~~next~~accompanying ~~page~~notes are an integral part of these financial statements.

F/S 2 INDEPENDENCE LEAD MINES COMPANY (AN EXPLORATORY STAGE COMPANY) STATEMENTS OF OPERATIONS AND DEFICIT ACCUMULATED DURING THE EXPLORATION STAGE - UNAUDITED

QUARTER SIX MONTHS QUARTER SIX MONTHS ENDED ENDED ENDED ENDED JUNE 30,'04 03 JUNE 30,'04 03 JUNE 30,'03 02 JUNE 30,'03 02 ----------- ----------- ----------- ----------- ~~DEFICIT,~~REVENUE ~~accumulated~~$ ~~during~~0 ~~the~~$ ~~exploration~~0 ~~stage~~$ 0 $ 0 EXPENSES Consulting 37,750 ~~beginning~~40,109 of3,755 ~~period~~9,121 ($Licenses and fees 364 364 330 329 Office expense 1,~~261~~422 2,711 300 330 Office services 150 300 150 300 Shareholder and Public Relations 2,094) ~~($1~~2,~~237~~684 286 735 Transportation and Travel 2,~~386)~~200 ~~($1~~2,~~211~~800 0 0 Legal 71,~~853)~~090 ~~($1~~135,~~209~~880 5,~~165)~~635 ~~DEFICIT~~28,785 ~~accumulated~~----- ~~during~~----- ~~the~~----- ~~exploration~~----- ~~stage~~Total expenses 112,070 ~~end~~184,848 of10,456 ~~period~~39,600 ----- ------ ------ ------ LOSS FROM OPERATIONS ($1112,~~268,960~~070) (1184,~~268,960~~848) ($110,~~217,234~~456) ($139,~~217,234~~600) ~~==========~~OTHER ~~==========~~INCOME ~~==========~~AND ~~==========~~(EXPENSE) ~~Income~~Interest, net 2 2 260 576 --- ----- ----- ----- Total other income 2 2 260 576 --- ----- ----- ----- NET INCOME(~~Loss~~LOSS)~~per~~ ~~share~~BEFORE INCOME TAXES (~~$0.002~~112,068) (~~$0.008~~184,846) (~~$0.001~~10,196) (~~$0.002~~39,024) ~~Weighted~~Provision ~~average~~for ~~common~~income ~~shares~~taxes ~~outstanding~~0 ~~4,175,357~~0 4(2,~~175,357~~330) 4(7,~~175,357~~450) ~~4,175,357~~ ----- ----- ----- -----~~---~~ ~~The~~NET ~~accompanying~~INCOME ~~notes~~(LOSS) ~~are~~(112,068) an(184,846) ~~integral~~(7,866) ~~part~~(31,574) ofTable ~~these~~continues ~~financial~~on ~~statements~~next page.

INDEPENDENCE LEAD MINES COMPANY (AN EXPLORATORY STAGE COMPANY) STATEMENTS OF OPERATIONS AND DEFICIT ACCUMULATED DURING THE EXPLORATION STAGE - UNAUDITED continued

QUARTER SIX MONTHS QUARTER SIX MONTHS ENDED ENDED ENDED ENDED JUNE 30,'04 ~~2003~~JUNE 30,'04 JUNE 30,'03 ~~2002~~JUNE 30,'03 ----------- ---------- Operating Activities: Net income (loss) ($31,574) ($8,069) Adjustments to reconcile net loss to net cash used in operating activities: 0 0 Changes in operating assets and liabilities: (Increase) decrease in accounts receivable 0 1,500 Increase (decrease) in accounts payable (1,103) 500 Increase (decrease) in deferred income 9,000 3,000 Increase (decrease) in taxes payable (7,397) (2,371) -~~----~~ ----- ~~Net cash used in operating activities (31,074) (5,440)~~ ---- ---- ~~Investing activities: Purchase of Company's capital stock 0 0~~ --- --- ~~Net cash used in investing activities 0 0~~ --- --- ~~Financing~~DEFICIT, ~~activities:~~accumulated ~~Proceeds~~during ~~from~~ the ~~sale~~exploration ofstage, ~~Land~~beginning ~~0 0 Retirement~~ of ~~director's~~period ~~shares 0 0 Repurchase and retirement of common stock 0 0 Repayment of long-term debt 0 0 --- --- Net cash provided by financing activities 0 0 --- --- Net increase~~ (~~decrease~~1,455,649) ~~in cash~~ (311,~~074~~382,871) (51,~~440~~261,094) ~~Cash and cash equivalent~~(1, ~~beginning of period 152~~237,~~632~~386) ~~167~~DEFICIT,~~674~~ ~~-----~~accumulated ~~-----~~during ~~Cash~~the ~~and~~exploration ~~cash equivalent~~stage, end of period ($~~121~~1,~~558~~567,717) (1,567,717) ($~~162~~1,~~234~~268,960) ($1,237,386) ========== ========== ~~Disclosure~~========== of========== ~~accounting~~Income(Loss)per ~~policy~~share ~~For~~($0.025) ~~the~~($0.042) ~~six~~($0.002) ~~months~~($0.008) ~~ended~~Weighted ~~June~~average ~~30,~~common ~~2003~~shares ~~and~~outstanding ~~June~~4,459,126 304,357,414 ~~2002~~4,175,357 ~~the Company had no cash equivalents. Supplemental disclosure of cash flow information: Cash paid during the year for: Interest $ 0 $ 0 Income taxes $536 $10~~4,~~200~~175,357 ----------------------- The accompanying notes are an integral part of these financial statements.

F/S 3 INDEPENDENCE LEAD MINES COMPANY (AN EXPLORATORY STAGE COMPANY) STATEMENTS OF CASH FLOW - UNAUDITED

F/S 4 INDEPENDENCE LEAD MINES COMPANY (AN EXPLORATORY STAGE COMPANY) NOTES TO INTERIM FINANCIAL STATEMENTS - UNAUDITED Financing information presented in the Company's quarterly reports follow the policies set forth in its Annual Report on Form 10-K filed with the Securities and Exchange Commission. In accordance with generally accepted accounting principles for interim financial information, the instructions to Form 10-Q, and Rule 10-01 of Regulation S-X, these quarterly reports do not include all of the information and footnotes. In the opinion of the Company's management, all adjustments (consisting of only normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the six-month period ended June 30, 2004 are not necessarily indicative of the results that may be expected for the full year ending December 31, 2004. 1. Nature of business: Independence Lead Mines Company ("the Company") is a corporation organized under the laws of the State of Arizona on September 16,1929. The Company is the owner of fifteen patented and fourteen unpatented mining claims. This claim group (the "property") is situated Northwest of Hecla Mining Company's Lucky Friday Mine in the Coeur d'Alene Mining District, Shoshone County Idaho. The Company's property is part of the "DIA Area" which is currently being developed and mined by Hecla Mining Company. The Company has been in the exploration stage since its inception. The Company's only recurring source of funds has been a monthly advance royalty from Hecla Mining Company of $1,500. In March 2002, the Company notified Hecla Mining Company that it considered the DIA Lease terminated and as a result would no longer accept advance royalty payments. Subsequently to that notice, the Company began accepting advance royalty payments, pending the outcome of the dispute between the Company and Hecla Mining Company. On July 19, 2004 the court ruled in favor of Hecla Mining Company. Subsequently, the company has begun the process of appealing the court's decision to the Idaho Supreme Court. The Company has incurred operating losses since inception; these factors indicate doubt as to the ability of the company to continue business as a going concern basis. The financial statements do not contain any adjustments, which might be necessary if the Company is unable to continue as a going concern. 2. Common stock: In September 1997 the capitalization of the Company was increased from 4,000,000 shares to 5,000,000 shares. In the first quarter of 2004 the Company sold 25,036 shares of its treasury stock at an average price of $0.75 per share. In the second quarter of 2004 the Company realized $147,364 from the sale of 201,436 shares. In addition, the Company issued 10,000 shares for services received. [The balance of this page has been intentionally left blank.] F/S 5 INDEPENDENCE LEAD MINES COMPANY AN EXPLORATION STAGE COMPANY JUNE 30, 2004 CERTIFICATIONS I, Bernard C. Lannen, certify that: 1. I have reviewed this quarterly report on Form 10-Q of Independence Lead Mines Company. 2. Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; 3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations, and cash flows of the registrant as of, and for, the periods presented in this quarterly report; 4. The registrant's other certifying officer and I, are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d- 14) for the registrant and we have: a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared; b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 45 days prior to the filing date of this quarterly report (the "Evaluation Date"); and c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function): a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize, and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6. The registrant's other certifying officer and I have indicated in this annual report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date: August 10, 2004 /s/ Merlin D. Bingham ------------ President F/S 6 INDEPENDENCE LEAD MINES COMPANY AN EXPLORATION STAGE COMPANY JUNE 30, 2004 CERTIFICATIONS I, Wayne L. Schoonmaker, certify that: 1. I have reviewed this quarterly report on Form 10-Q of Independence Lead Mines Company. 2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; 3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations, and cash flows of the registrant as of, and for, the periods presented in this quarterly report; 4. The registrant's other certifying officer and I, are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d- 14) for the registrant and we have: a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared; b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 45 days prior to the filing date of this quarterly report (the "Evaluation Date"); and c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function): a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize, and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6. The registrant's other certifying officer and I have indicated in this annual report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date: August 10, 2004 /s/ Wayne L. Schoonmaker ------------ Principal Accounting Officer F/S 7 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the quarterly Report of Independence Lead Mines Company (the "Company") on Form 10-Q for the period ended June 30, 2004, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Bernard C. Lannen, President of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes- Oxley Act of 2002, that: 1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and 2. The information contained in the Report fairly presents, in all material respects, the financial condition, and results of operations of the Company. /s/ Bernard C. Lannen ----------- President Dated: August 10, 2004 F/S 8 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the quarterly Report of Independence Lead Mines Company (the "Company") on Form 10-Q for the period ended June 30, 2004, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Wayne L. Schoonmaker, Principal Accounting Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that: 1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and 2. The information contained in the Report fairly presents, in all material respects, the financial condition, and results of operations of the Company. /s/ Wayne L. Schoonmaker ------------ Principal Accounting Officer Dated: August 10, 2004 F/S 9 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. INDEPENDENCE LEAD MINES COMPANY By: /s/ Bernard C. Lannen ------------ Bernard C. Lannen, its President Date: August 10, 2004 By: /s/ Wayne Schoonmaker ------------ Wayne Schoonmaker, its Principal Accounting Officer Date: August 10, 2004 F/S 10

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