ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
Index
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Consolidated Balance Sheets
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F-1
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Consolidated Statements of Operations
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F-2
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Consolidated Statements of Cash Flows
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F-3
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Notes to the Consolidated Financial Statements
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F-4
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CENTOR, INC.
(An Exploration Stage Company)
CONSOLIDATED BALANCE SHEETS
(unaudited)
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June 30,
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March 31,
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2013
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2013
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ASSETS
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Current assets:
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Cash
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$
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2,471
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$
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22,619
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|
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Prepaids
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25,719
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14,633
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Total current assets
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28,190
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37,252
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Mineral property option
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110,000
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100,000
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Total assets
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$
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138,190
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$
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137,252
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LIABILITIES AND STOCKHOLDERS' DEFICIT
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Current liabilities:
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Accounts payable and accrued liabilities
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$
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21,260
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$
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29,425
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Notes payable
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-
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8,800
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Notes payable, net of unamortized discounts of $76,952 and $69,926 as of June 30, 2013 and March 31, 2013, respectively
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309,973
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188,666
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Total current liabilities
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331,233
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226,891
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Total liabilities
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331,233
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226,891
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Stockholders' deficit:
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Common stock; authorized 150,000,000; $0.001 par value; 68,700,000 shares
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issued and outstanding at June 30, 2013 and March 31, 2013
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68,700
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68,700
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Additional paid-in capital
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10,630
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5,255
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Deficit accumulated during the exploration stage
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(272,373
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)
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(163,594
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)
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Total stockholders' deficit
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(193,043
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)
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(89,639
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)
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Total liabilities and stockholders' deficit
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$
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138,190
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$
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137,252
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The accompanying notes are an integral part of these consolidated financial statements.
CENTOR, INC.
(An Exploration Stage Company)
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
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For the Three Months Ended
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From Inception
(February 16, 2011) to
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June 30, 2013
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June 30, 2012
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June 30, 2013
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Operating expenses:
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General and administrative
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$
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46,884
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$
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545
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$
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128,508
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Exploration costs
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12,213
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-
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29,357
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Impairment of mineral property
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-
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-
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13,360
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Total operating expenses
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59,097
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545
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171,225
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Other expenses
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Interest expense
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(49,682
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)
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-
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(88,448
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)
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Total other expenses
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(49,682
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)
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-
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(88,449
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)
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Net loss
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$
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108,779
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$
|
545
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$
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259,673
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Net loss per share:
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Basic
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$
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0.00
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$
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0.00
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Weighted average number of shares outstanding:
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Basic
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68,700,000
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68,700,000
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The accompanying notes are an integral part of these consolidated financial statements.
CENTOR,INC.
(An Exploration Stage Company)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
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For the Three Month Ended
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From Inception
(February 16, 2011)
to
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June 30, 2013
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June 30, 2012
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June 30, 2013
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Cash flow from operating activities:
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Net loss
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$
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(108,779
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)
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$
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(545
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)
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$
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(259,673
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)
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Adjustments to reconcile net loss to net cash used in operating activities:
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Imputed interest on convertible notes payable
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5,375
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-
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10,630
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Discount on notes payable
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44,307
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-
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77,818
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Impairment of mineral property
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-
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-
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13,360
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Changes in operating assets and liabilities:
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Increase in prepaids
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(11,086
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)
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-
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(25,719
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)
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(Decrease) increase in accounts payable and accrued liabilities
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(8,165
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)
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-
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|
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21,260
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Net cash used in operating activities
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(78,348
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)
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(545
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)
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(162,324
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)
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Cash flows from investing activities:
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Acquisition of mineral property option
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(10,000
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)
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-
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(123,360
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)
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Net cash used in investing activities
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(10,000
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)
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-
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(123,360
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)
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Cash flows from financing activities:
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Proceeds from issuance of common stock
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-
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-
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56,000
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|
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Payment of note payable
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(8,800
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)
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|
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-
|
|
|
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(8,800
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)
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Proceeds from notes payable
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77,000
|
|
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|
-
|
|
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240,955
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Net cash provided by financing activities
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68,200
|
|
|
|
-
|
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288,155
|
|
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|
|
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Increase (decrease) in cash during the year
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(20,148
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)
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(545
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)
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2,471
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|
|
|
|
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Cash, beginning of period
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22,619
|
|
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4,383
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|
|
-
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|
|
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Cash, end of period
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$
|
2,471
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$
|
3,838
|
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$
|
2,471
|
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Supplemental disclosure of cash flow information:
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Cash paid during the period
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|
|
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|
|
|
|
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Taxes
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
Interest
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
The accompanying notes are an integral part of these consolidated financial statements.
CENTOR, INC.
(An Exploration Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
June 30, 2013
(Unaudited)
NOTE 1 – ORGANIZATION AND BASIS OF PRESENTATION
Centor Inc. (the "Company") was incorporated in the State of Nevada on February 16, 2011. The Company was organized to develop and explore mineral properties in the State of Nevada and the Republic of Ghana West Africa.
On June 13, 2013, the Company established a wholly owned subsidiary Centor (Ghana) Limited to carry out operations in Ghana, accordingly as of June 30, 2013 the financial statements and related notes are presented on a consolidated basis.
These financial statements and related notes are presented in accordance with accounting principles generally accepted in the United States of America and are expressed in United States (US) dollars. The Company has not produced any revenue from its principal business and accordingly is an exploration stage company.
The interim financial statements included herein, presented in accordance with United States of America generally accepted accounting principles and stated in US dollars, have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). Certain information and footnote disclosures normally included in financial statements prepared in accordance with US generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading.
These statements reflect all adjustments, consisting of normal recurring adjustments, which, in the opinion of management, are necessary for a fair presentation of the information contained therein. It is suggested that these interim financial statements be read in conjunction with the financial statements of the Company for the year ended March 31, 2013 and notes thereto included in the Company’s annual report on Form 10-K. The Company follows the same accounting policies in the preparation of interim reports. Results of operations for the interim periods are not necessarily indicative of annual results.
NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation
For the quarter ended June 30, 2013, the consolidated financial statements include the accounts of Centor, Inc. and Centor (Ghana) Limited. All significant intercompany balances and transactions have been eliminated. Centor, Inc. and Centor (Ghana) Limited will be collectively referred herein to as the “Company”.
Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities, at the date of these financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Cash and Cash Equivalents
Cash and cash equivalents consist of cash and short-term investments with original maturities of less than 90 days. Such investments are carried at cost, which is a reasonable estimate of their fair value. Cash equivalents are placed with high credit quality financial institutions.
CENTOR, INC.
(An Exploration Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
June 30, 2013
(Unaudited)
NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES (CONTINUE)
Mineral Property Expenditures
Mineral property acquisition costs are capitalized in accordance with FASB ASC 930-805, “Extractive Activities-Mining,” when management has determined that probable future benefits consisting of a contribution to future cash inflows have been identified and adequate financial resources are available or are expected to be available as required to meet the terms of property acquisition and budgeted exploration and development expenditures. Mineral property acquisition costs are expensed as incurred if the criteria for capitalization are not met. In the event that mineral property acquisition costs are paid with Company shares, those shares are recorded at the estimated fair value at the time the shares are due in accordance with the terms of the property agreements. Mineral property exploration costs are expensed as incurred.
When it has been determined that a mineral property can be economically developed as a result of establishing proven and probable reserves and pre-feasibility, the costs incurred to develop such property are capitalized. Estimated future removal and site restoration costs, when determinable are provided over the life of proven reserves on a units-of-production basis. Costs, which include production equipment removal and environmental remediation, are estimated each period by management based on current regulations, actual expenses incurred, and technology and industry standards. Any charge is included in exploration expense or the provision for depletion and depreciation during the period and the actual restoration expenditures are charged to the accumulated provision amounts as incurred.
Long-lived Assets
In accordance with the Financial Accounting Standards Board ("FASB") Accounts Standard Codification (ASC) ASC 360-10, "Property, Plant and Equipment," the carrying value of intangible assets and other long-lived assets is reviewed on a regular basis for the existence of facts or circumstances that may suggest impairment. The Company recognizes impairment when the sum of the expected undiscounted future cash flows is less than the carrying amount of the asset. Impairment losses, if any, are measured as the excess of the carrying amount of the asset over its estimated fair value. During the three months ended June 30, 2013 and 2012, the Company recorded impairment of $0 and $0, respectively. For period from inception (February 6, 2011) to June 30, 2013, the Company recorded impairment of $13,360.
Asset retirement obligations
The Company has adopted the provisions of FASB ASC 410-20 "Asset Retirement and Environmental Obligations,"
which requires the fair value of a liability for an asset retirement obligation to be recognized in the period in which it is incurred if a reasonable estimate of fair value can be made. The associated asset retirement costs are capitalized as part of the carrying amount of the related mineral properties. As of June 30, 2013, there has been no asset retirement obligations recorded.
CENTOR, INC.
(An Exploration Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
June 30, 2013
(Unaudited)
NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Foreign Currency Translation
The Company’s functional and reporting currency is the US dollar as substantially all of the Company’s operations are in United States dollars.
Assets and liabilities that are denominated in a foreign currency are translated at the exchange rate in effect at the year end and capital accounts are translated at historical rates. Income statement accounts are translated at the average rates of exchange prevailing during the period. Translation adjustments from the use of different exchange rates from period to period are included in the Comprehensive Income statement account in Stockholder’s Equity, if applicable.
Transactions undertaken in currencies other than the functional currency of the entity are translated using the exchange rate in effect as of the transaction date. If applicable, exchange gains and losses are included in other items on the Statement of Operations.
Basic and Diluted Loss Per Share
The Company computes basic loss per share by dividing the net loss by the weighted average common shares outstanding during the period. There are no potential common shares; accordingly, diluted and basic loss per share amounts are the same.
Fair Value of Financial Instruments
The Company’s only financial instruments are cash, accounts payable, and notes payable. Due to the short maturities of these financial instruments, their fair value approximates their carrying value.
Recent Authoritative Pronouncements
The Company does not expect that the adoption of any recent accounting standards will have a material impact on its financial statements.
NOTE 3 – GOING CONCERN
These financial statements are presented on the basis that the Company is a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business over a reasonable length of time. As of June 30, 2013 the Company had incurred accumulated losses since inception of $272,373. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. Its continuation as a going concern is dependent upon its ability to generate sufficient cash flow to meet its obligations on a timely basis, to obtain additional financing or refinancing as may be required, and ultimately to establish profitable operations.
CENTOR, INC.
(An Exploration Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
June 30, 2013
(Unaudited)
NOTE 3 – GOING CONCERN
(CONTINUED)
Management's plans for the continuation of the Company as a going concern include financing the Company's operations through issuance of its common stock. If the Company is unable to complete its financing requirements or achieve revenue as projected, it will then modify its expenditures and plan of operations to coincide with the actual financing completed and actual operating revenues. There are no assurances, however, with respect to the future success of these plans.
NOTE 4 – MINERAL PROPERTIES
On November 16, 2012, the Company entered into a purchase agreement with Bullnet Gold Resources Limited. (“BGR”) Pursuant to the terms and conditions of the purchase agreement, the Company shall have the option to acquire 100% interest in the Nobewam Concession located in Ghana West Africa, of which BGR directly owns 100% of the Concession. The Company shall acquire 100% as well as, any right, title or interest in the foregoing as the same relates to the Nobewan Concession, either held, or otherwise owned, by BGR shall be referred to hereinafter as the “Property”.
Under the purchase agreement, in consideration of earning the interest in the Property, the Company is required to make a total of $750,000 cash payment according the following schedule:
1) $50,000 on or before December 8, 2012, which were paid during the year ended June 30, 2013;
2) $50,000 on or before February 15, 2013, which were paid during the year ended June 30, 2013;
3) $250,000 on or before January 31, 2014;
4) $400,000 on or before January 15, 2015.
On April 24, 2013, the Company and Achaa Mining Company Limited, a Ghanaian Company ("Achaa") entered into a Memorandum of Understanding (the "MOU'). Under the MOU, the Company will pay Achaa $10,000 (the "Option Fee") and receive the right to perform due diligence and on-site reconnaissance of the Achaa mining concession (The "Anyinaso Concession") located in the Atwima Mponua district in the Ashanti Region of Ghana approximately 30 km southeast of the Newmont mine at Kenyasi. The Anyinaso Concession covers an area of approximately 26.67 sq km along the eastern margin of the Setwi Belt. The term of the option is six months, subject to certain adjustments. The Company paid the Option Fee on May 7, 2013.
CENTOR, INC.
(An Exploration Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
June 30, 2013
(Unaudited)
NOTE 5 – NOTES PAYABLE
Convertible Note Payable
On November 1, 2012 the Company entered into a convertible unsecured promissory note with an unrelated third party. The Note allows for the Company to borrow up to a total of $200,000 of which the company has received a total of $155,155 as of June 30, 2013. On March 1, 2013 the Company entered into a convertible unsecured promissory note with the same unrelated third party. The Note allows for the Company to borrow up to a total of $200,000 of which the company has received an aggregate total of $77,000. The Notes are non interest bearing and provide for conversion at a 40% discount of the average market price over a five day period. Additionally, the Notes may be repaid from 20% of net natural resource production and the note matures on October 31, 2013.
Total discount on conversion feature for the Notes were $386,925 of which $154,770 has amortized through June 30, 2013. The unamortized debt discount balance as of June 30, 2013 is $76,952. During the three months ended June 30, 2013, the Company recorded interest expense for discount on conversion feature of $44,307. The Company imputed interest at an 11% interest rate totaling $5,375 which was applied to additional paid-in capital.
Advances from Unrelated Parties
During the three months ended June 30, 2013, the Company repaid $8,800 to an unrelated party for advances received in the prior year. As of June 30, 2013 and March 31, 2013, the Company has advances from unrelated parties in the amount of $0 and $8,800, respectively. These advances are non-interest bearing, unsecured, and have no fixed terms of repayment.
NOTE 6 – STOCKHOLDERS’ DEFICIT
On February 28, 2013, the Company authorized a common stock increase from 75,000,000 to 150,000,000 shares with a par value of $0.001, and the Company declared a 6 to 1 forward split of its issued and outstanding common stock. Accordingly, the Company’s issued and outstanding shares of common stock increased from 11,450,000 to 68,700,000 shares of common stock. All references in the financial statements and notes to financial statements refer to number of shares, price per share, and weighted average number of shares outstanding prior to the stock split on a retroactive basis.
NOTE 7 – SUBSEQUENT EVENT
On July 24, 2013, the Company received an additional $20,000 of convertible unsecured promissory note from the same unrelated party noted in Note 5.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
FORWARD-LOOKING STATEMENTS
This Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) contains forward-looking statements that involve known and unknown risks, significant uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed, or implied, by those forward-looking statements. You can identify forward-looking statements by the use of the words may, will, should, could, expects, plans, anticipates, believes, estimates, predicts, intends, potential, proposed, or continue or the negative of those terms. These statements are only predictions. In evaluating these statements, you should consider various factors which may cause our actual results to differ materially from any forward-looking statements. Although we believe that the exceptions reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Therefore, actual results may differ materially and adversely from those expressed in any forward-looking statements. We undertake no obligation to revise or update publicly any forward-looking statements for any reason.
On November 26, 2012, Centor, Inc., a Nevada corporation, (the "Company") entered into a purchase agreement with Bullnet Gold Resources Limited. (“BGR”) Pursuant to the terms and conditions of the purchase agreement, the Company shall acquire 100% interest in the Nobewam Concession located in Ghana West Africa, of which BGR directly owns 100% of the Concession. The Company shall acquire 100% as well as, any right, title or interest in the foregoing as the same relates to the Nobewan Concession, either held, or otherwise owned, by BGR shall be referred to hereinafter as the “Property”. As consideration for the acquisition the Company shall pay BGR an aggregate of $750,000 in cash at the closing of the purchase agreement. To date, the Company has paid $100,000 towards the purchase of the Property and the transaction has not closed.
On April 24, 2013, Centor, Inc., a Nevada corporation (the “Company”), and Achaa Mining Company Limited, a Ghanaian Company ("Achaa") entered into a Memorandum of Understanding (the "MOU'), dated as of April 24, 2013.
Under the MOU, the Company will pay Achaa $10,000 (the "Option Fee") and receive the right to perform due diligence and on-site reconnaissance of the Achaa mining concession (The "Anyinaso Concession") located in the Atwima Mponua district in the Ashanti Region of Ghana approximately 30 km southeast of the Newmont mine at Kenyasi. The Anyinaso Concession covers an area of approximately 26.67 sq km along the eastern margin of the Setwi Belt. The term of the option is six months, subject to certain adjustments. The Company paid the Option Fee on May 7, 2013.
Plan of Operation
Our plan of operation or objective is to conduct exploration activities on our mining claims in order to assess whether they possess commercially exploitable mineral deposits. We are presently in the exploration stage of our business and we can provide no assurance that commercially viable mineral deposits exist on our mineral claims or that we will discover commercially exploitable levels of mineral resources on our properties, or if such deposits are discovered, that we will enter into further substantial exploration programs. Further exploration is required before a final evaluation as to the economic and legal feasibility is required to determine whether our mineral claims possess commercially exploitable mineral deposits. We have not, nor has any predecessor, identified any commercially exploitable reserves of these minerals on our mineral claims.
The claims are accessible all year round; there are periods where our claims may be un-accessible each year due to snow in the area. This means that our exploration activities may be limited to a period of about eight to nine months per year. We plan to commence exploration on our claims during the summer or fall of 2013, and is contingent upon availability of an exploration crew.
During our future exploration activities on the Anyinaso Concession and the Nobewan Concession, our President will devote less than full-time hours per week to our business. We do not foresee this limited involvement as negatively impacting our company over the next twelve months as all exploratory work has been and will continue to be performed by outside consultants. Additionally, we will not have a need to hire any employees over the next twelve months. We do not plan to make any purchases of equipment over the next twelve months due to reliance upon outside consultants to provide all equipment needed for the exploratory work being conducted.
Government Regulation
If we decide to continue with the acquisition and exploration of mineral properties, we will be required to comply with all regulations, rules and directives of governmental authorities and agencies applicable to the exploration of minerals. All mineral exploration activities carried out on a mineral claim or mining lease must be done in compliance within the jurisdiction’s Bureau of Mines. This applies to all mines during exploration, development, construction, production, closure, reclamation and abandonment. It outlines the powers of the Chief Inspector of Mines to inspect mines, the procedures for obtaining permits to commence work in, on or about a mine and other procedures to be observed at a mine.
Additionally, the provisions of the Health, Safety and Reclamation Code for mines contain standards for employment, occupational health and safety, accident investigation, work place conditions, protective equipment, training programs, and site supervision. Also, the Mineral Exploration Code contains standards for exploration activities including construction and maintenance, site preparation, drilling, trenching and work in and about a water body.
Additional approvals and authorizations may be required from other government agencies, depending upon the nature and scope of the proposed exploration program. If the exploration activities require the falling of timber, then either a free use permit or a license to cut must be issued by the state. Items such as waste approvals may be required from the State if the proposed exploration activities are significantly large enough to warrant them. Waste approvals refer to the disposal of rock materials removed from the earth which must be reclaimed. An environmental impact statement may be required.
We will also have to sustain the cost of reclamation and environmental remediation for all exploration work undertaken. Both reclamation and environmental remediation refer to putting disturbed ground back as close to its original state as possible. Other potential pollution or damage must be cleaned-up and renewed along standard guidelines outlined in the usual permits. Reclamation is the process of bringing the land back to its natural state after completion of exploration activities. Environmental remediation refers to the physical activity of taking steps to remediate, or remedy, any environmental damage caused. The amount of these costs is not known at this time as we do not know the extent of the exploration program that will be undertaken beyond completion of the recommended work program. Because there is presently no information on the size, tenor, or quality of any resource or reserve at this time, it is impossible to assess the impact of any capital expenditures on earnings, our competitive position or on us in the event a potentially economic deposit is discovered.
If we anticipate disturbing ground during our mineral exploration activities, we may be required to make an application to the State for a permit. We do not anticipate any difficulties in obtaining a permit, if needed. Initial exploration activities (grid establishment, geological mapping, soil sampling, geophysical surveys) do not involve ground disturbance and as a result do not, at this time, require a work permit. Any follow-up trenching and/or drilling will require permits, applications for which will be submitted well in advance of the planned work.
If we enter the production phase, of which there is no assurance, the cost of complying with permit and regulatory environment laws will be greater because the impact on the project area is greater. Permits and regulations will control all aspects of the production program if the project continues to that stage. The regulatory requirements that we will have to meet will likely include:
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i.
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Ensuring that any water discharge meets drinking water standards;
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ii.
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Dust generation will have to be minimal or otherwise remediated;
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iii.
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Dumping of material on the surface will have to be re-contoured and re-vegetated with natural vegetation;
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iv.
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All material to be left on the surface will need to be environmentally benign;
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v.
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Ground water will have to be monitored for any potential contaminants;
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vi.
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The socio-economic impact of the project will have to be evaluated and if deemed negative, will have to be re-mediated; and
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vii.
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There will have to be an impact report of the work on the local fauna and flora including a study of potentially endangered species.
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We anticipate that we will incur over the next twelve months the following expenses:
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Category
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Planned
Expenditures
Over
The Next 12
Months (US$)
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|
|
|
|
|
|
|
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Legal and Accounting Fees
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$
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20,850
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|
|
Office Expenses
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|
|
-
|
|
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Mineral Property Exploration Expenses
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|
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50,000
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|
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TOTAL
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|
$
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70,850
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|
Our total expenditures over the next twelve months are anticipated to be approximately $70,850. Our cash on hand as of June 30, 2013 is $2,471. We do not have sufficient cash on hand to fund our operations for the next twelve months. We also require additional financing in order to commence exploration on our mining concessions.
RESULTS OF OPERATIONS
Working Capital
|
|
|
June 30,
2013
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|
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March 31,
2013
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets
|
|
$
|
28,190
|
|
|
$
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37,252
|
|
|
Current liabilities
|
|
$
|
331,233
|
|
|
$
|
226,891
|
|
|
Working capital deficit
|
|
$
|
(303,043
|
)
|
|
$
|
(89,639
|
)
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Cash Flows
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|
|
Period Ended
June 30,
2013
|
|
|
Period Ended
June 30,
2012
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows used in operating activities
|
|
$
|
(78,348
|
)
|
|
$
|
(545
|
)
|
|
Cash flows used in investing activities
|
|
$
|
(10,000
|
)
|
|
$
|
-
|
|
|
Cash flows provided by financing activities
|
|
$
|
68,200
|
|
|
$
|
-
|
|
|
Net decrease in cash during the period
|
|
$
|
(20,148
|
)
|
|
$
|
(545
|
)
|
The decrease in our working capital at June 30, 2013 from the period ended March 31, 2013 is reflective of the current state of our business development.
As of June 30, 2013, we had cash on hand of $2,471. Since our inception, we have used our common stock and convertible promissory notes to raise money for our operations and for our property acquisitions. We have not attained profitable operations and are dependent upon obtaining financing to pursue our plan of operation.
Operating Revenues
We have not generated any revenues since inception.
Operating Expenses and Net Loss
Operating expenses for the three month ended June 30, 2013 was $59,079 compared with $545 for the three month ended June 30, 2012. The increase in operating expenditures was a result of the Company's ongoing reporting requirements, accounting, consulting, general and administrative expenses, and exploration costs of $12,213.
Net loss for the quarter ended June 30, 2013 was $108,779 compared with $545 for the period ended June 30, 2012. The overall increase in net loss of $108,234 was attributed to the Company's ongoing reporting requirements, accounting, consulting, general and administrative expenses, exploration costs, and interest expense in conjunction with the Company's outstanding convertible promissory notes.
Liquidity and Capital Resources
As at June 30, 2013, the Company’s cash balance was $2,471.
As at June 30, 2013, the Company had total liabilities of $331,233.
As at June 30, 2013, the Company had a working capital deficit of $303,043.
Cashflow from Operating Activities
During the three month period ended June 30, 2013, the Company used $78,348 of cash for operating activities.
Cashflow from Investing Activities
During the three month period ended June 30, 2013, the Company paid $10,000 to acquire mineral property options.
Cashflow from Financing Activities
During the three month period ended June 30, 2013, the Company received $68,200 of cash from financing activities.
Off-Balance Sheet Arrangements
We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.
Going Concern
We have not attained profitable operations and are dependent upon obtaining financing to pursue any extensive activities. For these reasons, our auditors stated in their report for the year ended March 31, 2013 that they have substantial doubt that we will be able to continue as a going concern without further financing.
Future Financings
We will continue to rely on equity sales of our common shares in order to continue to fund our business operations. Issuances of additional shares will result in dilution to existing stockholders. There is no assurance that we will achieve any additional sales of the equity securities or arrange for debt or other financing to fund planned acquisitions and exploration activities.
Critical Accounting Policies
We have identified certain accounting policies, described below, that are most important to the portrayal of our current financial condition and results of operations. Our significant accounting policies are disclosed in the notes to the financial statements included in this Quarterly Report.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes for the reporting period. Significant areas requiring the use of management estimates relate to the valuation of its mineral leases and claims and our ability to obtain final government permission to complete the project.
Exploration Stage Company
The Company is devoting substantially all of its present efforts to establish a new business and none of its planned principal operations have commenced.
As an exploration stage enterprise, the Company discloses the deficit accumulated during the exploration stage and the cumulative statements of operations and cash flows from inception to the current balance sheet date.
Mineral Property Acquisition and Exploration Costs
The Company is primarily engaged in the acquisition and exploration of mining properties. Mineral property exploration costs are expensed as incurred. Mineral property acquisition costs are initially capitalized when incurred. The Company assesses the carrying costs for impairment under Accounting Standards 930 Extractive Activities – Mining (AS 930). An impairment is recognized when the sum of the expected undiscounted future cash flows is less than the carrying amount of the mineral property. Impairment losses, if any, are measured as the excess of the carrying amount of the mineral property over its estimated fair value. Capitalized costs will be amortized using the units-of-production method over the estimated life of the proven and probable reserves. If mineral properties are subsequently abandoned or impaired, any capitalized costs will be charged to operations.
Recent Accounting Pronouncements
The Company does not expect that the adoption of any recent accounting standards to have a material impact on its financial statements.