The pilot was participating in a mountain flying seminar and was flying with a CFI. They departed Townsend Airport, Montana, at 1015. The purpose of the flight was instructional in nature intended to practice short canyon turns. The pilot proceeded northwest in search of a suitable canyon. They flew the first canyon at 300 feet agl, 70 mph, 20 degrees of flaps, along the south side of the canyon, and rode a few thermals. Identifying areas where thermal lift could be found was part of the instructional flight. He then crossed into another canyon that was full of burned terrain and dead fall trees. This canyon he flew at 300 to 350 feet agl, 60 to 65 mph, and full flaps. The pilot angled his plane towards a rock cliff expecting to pickup thermal lift from the warm rocks. He flew with the wing tip about 10 feet from the cliff. The climb stopped, the airspeed fell off, and the wing stalled. He turned left, applied full throttle, and lowered the nose of the airplane. The descent was rapid as he tried to direct the airplane between deadfall trees into a drainage gully. The airplane's descent continued and he tried to land the airplane as gently as he could. After the collision with the sloped terrain, both pilots egressed the airplane just before it was engulfed in flames. The pilot stated that the airplane and engine had no mechanical failures or malfunctions during the flight.