Attached files
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EX-99.2 - CERTIFICATE 18 U.S.C. SECT 1350 FELIMON LEE, CEO - SOUTH AMERICAN GOLD CORP. | certsect906felimonleeceo.htm |
EX-99.1 - CERTIFICATE RULE 13A-14A FELIMON LEE, CEO - SOUTH AMERICAN GOLD CORP. | certrule13a14afelimonleeceo.htm |
EX-99.3 - CERTIFICATE RULE 13A-14A RIZANINA RANESES, CFO - SOUTH AMERICAN GOLD CORP. | certrule13a14arranesescfo.htm |
EX-99.4 - CERTIFICATE 18 U.S.C. SECT 1350 R. RANESES, CFO - SOUTH AMERICAN GOLD CORP. | certsect906rranesescfo.htm |
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
10-Q
(X
)
|
QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITES EXCHANGE ACT OF
1934
|
For
the quarter period ended December 31,
2009
|
( )
|
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
For
the transition period
form
to
|
|
Commission
File number 333-132681
|
|
GROSVENOR EXPLORATIONS
INC.
|
(Exact
name of registrant as specified in its charter)
Nevada
|
98-0486676
|
(State or other
jurisdiction of incorporation or organization)
|
(I.R.S. Employer Identification
No.)
|
2431 M. de la Cruz, Pasay City,
Philippines
|
(Address
of principal executive offices)
|
632-887-2131
|
(Registrant’s
telephone number, including area
code)
|
N/A
|
(Former
name, former address and former fiscal year, if changed since last
report)
|
Indicate
by check mark whether the registrant (1) filed all reports required to be filed
by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12
months (or for such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the past 90
days. Yes [X] No
Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a small reporting company. See
definition of “large accelerated filer”, “accelerated filer” and “small
reporting company” Rule 12b-2 of the Exchange Act.
Large
accelerated
filer [ ] Accelerated
filer [ ]
Non-accelerated
filer [ ] (Do not check
if a small reporting
company)
Small reporting company
[X]
Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act) Yes
[ ] No [X]
APPLICABLE
ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS
DURING THE PROCEDING FIVE YEARS
Indicate by check mark whether the
registrant has filed all documents and reports required to be filed by Section
12, 13 or 15(d) of the Securities Exchange Act of 1934 after the distribution of
securities subsequent to the distribution of securities under a plan confirmed
by a court. Yes □ No □
APPLICABLE
ONLY TO CORPORATE ISSUERS
Indicate
the number of shares outstanding of each of the issuer’s classes of common
stock, as of the latest practicable date:
January
31, 2010: 214,611,890 common shares
-1-
Page
Number
|
||
PART
1.
|
FINANCIAL
INFORMATION
|
|
ITEM
1.
|
Financial
Statements (unaudited)
|
3
|
Balance
Sheet as at December 31, 2009 and June 30, 2009
|
4
|
|
Statement
of Operations
For
the three and six months ended December 31, 2009 and 2008 and for the
period May 25, 2005 (Date of Inception) to December 31,
2009
|
5
|
|
Statement
of Changes in Stockholders’ Equity
Period
May 25, 2005 (date of inception) to December 31, 2009
|
6
|
|
Statement
of Cash Flows
For
the six months ended December 31, 2009 and 2008 and for the period May 25,
2005 (Date of Inception) to December 31, 2009
|
7
|
|
Notes
to the Financial Statements.
|
8
|
|
ITEM
2.
|
Management’s
Discussion and Analysis of Financial Condition and Results of
Operations
|
12
|
ITEM
3.
|
Quantitative
and Qualitative Disclosures about Market Risk
|
19
|
ITEM
4.
|
Controls
and Procedures
|
19
|
ITEM
4T.
|
Controls
and Procedures
|
20
|
PART
11.
|
OTHER
INFORMATION
|
20
|
ITEM
1.
|
Legal
Proceedings
|
20
|
ITEM
1A.
|
Risk
Factors
|
20
|
ITEM
2.
|
Unregistered
Sales of Equity Securities and Use of Proceeds
|
24
|
ITEM
3.
|
Defaults
Upon Senior Securities
|
24
|
ITEM
4.
|
Submission
of Matters to a Vote of Security Holders
|
24
|
ITEM
5.
|
Other
Information
|
24
|
ITEM
6.
|
Exhibits
|
25
|
SIGNATURES.
|
26
|
|
-2-
|
PART
1 – FINANCIAL INFORMATION
|
ITEM
1.
|
FINANCIAL
STATEMENTS
|
The
accompanying balance sheets of Grosvenor Explorations Inc. (Pre-exploration
stage company) at December 31, 2009 (with comparative figures as at June 30,
2009) and the statement of operations and statement of cash flows for the three
and six months ended December 31, 2009 and 2008 and for the period from May 25,
2005 (date of incorporation) to December 31, 2009 have been prepared by the
Company’s management in conformity with accounting principles generally accepted
in the United States of America. In the opinion of management, all
adjustments considered necessary for a fair presentation of the results of
operations and financial position have been included and all such adjustments
are of a normal recurring nature.
Operating
results for the quarter ended December 31, 2009, are not necessarily indicative
of the results that can be expected for the year ending June 30,
2010.
-3-
GROSVENOR
EXPLORATIONS INC.
(Pre-exploration
Stage Company)
BALANCE
SHEETS
(Unaudited
– Prepared by Management)
December
31, 2009
|
June
30, 2009
|
|
ASSETS
|
||
CURRENT
ASSETS
|
||
Cash
|
$ 340
|
$ 4,230
|
Total Current
Assets
|
$ 340
|
$ 4,230
|
LIABILITIES
AND STOCKHOLDERS’ DEFICIENCY
|
||
CURRENT
LIABILITIES
|
||
Accounts payable
|
$ 3,641
|
$ 128,522
|
Due to directors
|
174
|
-
|
Total Current
Liabilities
|
3,815
|
128,522
|
STOCKHOLDERS’
DEFICIENCY
|
||
Common
stock
|
||
450,000,000 shares authorized, at
$0.001 par value;
|
||
214,611,890 shares issued and
outstanding (June 30,2009 – 212,100,000 shares issued and
outstanding)
|
214,612
|
212,100
|
Capital in excess of par
value
|
(1,367)
|
(132,250)
|
Deficit accumulated during the
pre-exploration stage
|
(216,720)
|
(204,142)
|
Total Stockholders’
Deficiency
|
(3,475)
|
(124,292)
|
$ 340
|
$ 4,230
|
The
accompanying notes are an integral part of these unaudited financial
statements.
-4-
GROSVENOR
EXPLORATIONS INC.
(Pre-exploration
Stage Company)
STATEMENTS
OF OPERATIONS
For the
three and six months ended December 31, 2009 and 2008 and for the period from
May 25, 2005 (date of inception) to December 31, 2009
(Unaudited
– Prepared by Management)
Three
months
ended
December
31, 2009
|
Three months
ended
December
31, 2008
|
Six
months
ended
December
31, 2009
|
Six
months
ended
December
31,
2008
|
May
25, 2005 to
December 31, 2009
|
|
REVENUES
|
$ -
|
$ -
|
$ -
|
$ -
|
$ -
|
EXPENSES:
|
|||||
Accounting and
audit
|
1,750
|
1,750
|
4,000
|
3,500
|
45,215
|
Bank charges
|
19
|
19
|
39
|
64
|
660
|
Consulting
|
-
|
-
|
-
|
2,000
|
8,800
|
Exploration
expenses
|
-
|
-
|
-
|
-
|
18,968
|
Filing fees
|
-
|
-
|
350
|
-
|
1,187
|
Incorporation
costs
|
-
|
-
|
-
|
-
|
341
|
Legal
|
-
|
-
|
-
|
-
|
12,226
|
Management fees
|
3,000
|
3,000
|
6,000
|
6,000
|
88,000
|
Office
|
55
|
43
|
275
|
(273)
|
9,583
|
Rent
|
600
|
600
|
1,200
|
1,200
|
9,600
|
Telephone
|
300
|
300
|
600
|
600
|
5,308
|
Transfer agent’s
fees
|
114
|
-
|
114
|
-
|
10,697
|
Travel and
entertainment
|
-
|
-
|
-
|
-
|
6,135
|
5,838
|
5,712
|
12,578
|
13,091
|
216,720
|
|
NET
LOSS FROM OPERATIONS
|
$ (5,838)
|
$
(5,712)
|
$ (12,578)
|
$ (13,091)
|
$
(216,720)
|
NET
LOSS PER COMMON SHARE
|
|||||
Basic
and diluted
|
$ (0.00)
|
$ (0.00)
|
$ (0.00)
|
$ (0.00)
|
|
AVERAGE
OUTSTANDING SHARES
|
|||||
Basic
|
213,860,515
|
212,100,000
|
213,860,515
|
212,100,000
|
The
accompanying notes are an integral part of these unaudited financial
statements.
-5-
GROSVENOR
EXPLORATIONS INC.
(Pre-Exploration
Stage Company)
STATEMENT
OF CHANGES IN STOCKHOLDERS' EQUITY
Period
May 25, 2005 (date of inception) to December 31, 2009
(Unaudited
– Prepared by Management)
Common
Shares
|
Stock
Amount
|
Capital
in Excess
of
Par Value
|
Accumulated Deficit
|
|
Balance May 25,
2005
|
-
|
$ -
|
$ -
|
$ -
|
Net
operating loss for the one month ended June 30,
2005
|
-
|
-
|
-
|
(500)
|
Issuance
of common shares for cash - January, 2006
|
168,000,000
|
168,000
|
(164,000)
|
-
|
Issuance
of common shares for cash – January, 2006
|
44,100,000
|
44,100
|
8,350
|
-
|
Net
operating loss for the year ended June 30, 2006
|
-
|
-
|
-
|
(51,140)
|
Balance
as at June 30, 2006
|
212,100,,000
|
212,100
|
(155,650)
|
(51,640)
|
Net
operating loss for the year ended June 30, 2007
|
-
|
-
|
-
|
(80,629)
|
Balance
as at June 30, 2007
|
212,100,000
|
212,100
|
(155,650)
|
(132,269)
|
Net
operating loss for the year ended June 30, 2008
|
-
|
-
|
-
|
(44,486)
|
Capital
contributions – expenses
|
-
|
-
|
7,800
|
-
|
Balance
as at June 30, 2008
|
212,100,000
|
212,100
|
(147,850)
|
(176,755)
|
Net
operating loss for the year ended June 30, 2009
|
-
|
-
|
-
|
(27,387)
|
Capital
contribution – expenses
|
-
|
-
|
15,600
|
-
|
Balance
as at June 30, 2009
|
212,100,000
|
212,100
|
(132,250)
|
(204,142)
|
Issuance
of common shares for debt – August 25, 2009
|
2,511,890
|
2,512
|
123,083
|
-
|
Net
operating loss for the period ended December, 2009
|
-
|
-
|
-
|
(12,578)
|
Capital
contributions - expenses
|
-
|
-
|
7,800
|
-
|
Balance
as at December 31, 2009
|
214,611,890
|
$
214,612
|
$
(1,367)
|
$ (216,720)
|
The
accompanying notes are an integral part of these unaudited financial
statements
-6-
GROSVENOR
EXPLORATIONS INC.
(Pre-exploration
Stage Company)
STATEMENTS
OF CASH FLOWS
For the
six months ended December 31, 2009 and 2008 and for the period from May 25, 2005
(date of inception) to December 31, 2009
(Unaudited
– Prepared by Management)
Six
months
ended
December
31, 2009
|
Six
months
ended
December
31, 2008
|
May
25, 2005
(date
of inception)
to
December 31,
2009
|
|
CASH
FLOWS FROM OPERATING
ACTIVITIES:
|
|||
Net
loss
|
$ (12,578)
|
$
(13,091)
|
$
(216,720)
|
Adjustments
to reconcile net loss to net cash provided by operating
activities:
|
|||
Capital
contribution – expenses
|
7,800
|
7,800
|
31,200
|
Changes
in accounts payable
|
714
|
4,727
|
129,236
|
Net
Cash Provided (Used) in Operations
|
(4,064)
|
(564)
|
(56,284)
|
CASH
FLOWS FROM INVESTING ACTIVITIES:
|
-
|
-
|
-
|
CASH
FLOWS FROM FINANCING ACTIVITIES:
|
|||
Proceeds
from loan from related party
|
174
|
-
|
174
|
Proceeds
from issuance of common stock
|
-
|
-
|
56,450
|
Net
Cash from Financing Activities
|
174
|
-
|
56,624
|
Net
(Decrease) Increase in Cash
|
(3,890)
|
(564)
|
340
|
Cash
at Beginning of Period
|
4,230
|
920
|
-
|
CASH
AT END OF PERIOD
|
$ 340
|
$ 356
|
$ 340
|
NON-
CASH TRANACTIONS
|
|||
Shares
issued for debt
|
$
125,595
|
$ -
|
$ 125,595
|
The
accompanying notes are an integral part of these unaudited financial
statements.
-7-
GROSVENOR
EXPLORATIONS INC.
(Pre-exploration
Stage Company)
NOTES
TO FINANCIAL STATEMENTS
December
31, 2009
(Unaudited
– Prepared by Management)
1. ORGANIZATION
The
Company, Grosvenor Explorations Inc. (formerly Grosvenor Explorations Ltd.), was
incorporated under the laws of the State of Nevada on May 25, 2005 with the
authorized capital stock of 75,000,000 shares at $0.001 par value. In
January 2008, a majority of the shareholders agreed to an increase in the
authorized capital stock to 450,000,000 shares at $0.001 par value.
The
Company was organized for the purpose of acquiring and developing mineral
properties. At the report date mineral claims, with unknown reserves,
had been acquired. The Company has not established the existence of a
commercially minable ore deposit and therefore has not reached the exploration
stage and is considered to be in the pre-exploration stage.
2. SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES
Accounting
Methods
The
Company recognizes income and expenses based on the accrual method of
accounting.
Dividend
Policy
The
Company has not yet adopted a policy regarding payment of
dividends.
|
Basic and Diluted Net
Income (loss) Per Share
|
|
Basic
net income (loss) per share amounts are computed based on the weighted
average number of shares actually outstanding. Diluted
net income (loss) per share amounts are computed using the weighted
average number of common and common equivalent shares outstanding as if
shares had been issued on the exercise of the common share rights unless
the exercise becomes antidilutive and then only the basic per share
amounts are shown in the report.
|
Evaluation of Long-Lived
Assets
The
Company periodically reviews its long term assets and makes adjustments, if the
carrying value exceeds fair value.
-8-
GROSVENOR
EXPLORATIONS INC.
(Pre-exploration
Stage Company)
NOTES
TO FINANCIAL STATEMENTS
December
31, 2009
|
(Unaudited
– Prepared by Management)
|
2. SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES - Continued
Income
Taxes
The
Company utilizes the liability method of accounting for income
taxes. Under the liability method deferred tax assets and liabilities
are determined based on differences between financial reporting and the tax
bases of the assets and liabilities and are measured using the enacted tax rates
and laws that will be in effect, when the differences are expected to be
reversed. An allowance against deferred tax assets is recorded,
when it is more likely than not, that such tax benefits will not be
realized.
On
December 31, 2009, the Company had a net operating loss carry forward of
$216,720 for income tax purposes. The tax benefit of approximately
$65,000 from the loss carry forward has been fully offset by a valuation reserve
because the future tax benefit is undeterminable since the Company is unable to
establish a predictable projection of operating profits for future
years. The losses expire 2025 through 2030.
Revenue
Recognition
Revenue
is recognized on the sale and delivery of a product or the completion of a
service provided.
Advertising and Market
Development
The company expenses advertising and
market development costs as incurred.
Financial
Instruments
|
The
carrying amounts of financial instruments are considered by management to
be their fair value due to their short term
maturities.
|
Estimates and
Assumptions
Management
uses estimates and assumptions in preparing financial statements in accordance
with general accepted accounting principles. Those estimates and
assumptions affect the reported amounts of the assets and liabilities, the
disclosure of contingent assets and liabilities, and the reported revenues and
expenses. Actual results could vary from the estimates that
were assumed in preparing these financial statements.
-9-
|
GROSVENOR
EXPLORATIONS INC.
|
(Pre-exploration
Stage Company)
NOTES
TO FINANCIAL STATEMENTS
December
31, 2009
(Unaudited
– Prepared by Management)
2. SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES - Continued
Statement of Cash
Flows
|
|
For
the purposes of the statement of cash flows, the Company considers all
highly liquid investments with a maturity of three months or less to be
cash equivalents.
|
Unproven Mining Claim
Costs
Cost of
acquisition, exploration, carrying and retaining unproven properties are
expensed as incurred.
|
Environmental
Requirements
|
|
At
the report date environmental requirements related to the mineral claim
acquired are unknown and therefore any estimate of any future cost cannot
be made.
|
Recent Accounting
Pronouncements
The
Company does not expect that the adoption of other recent accounting
pronouncements will have a material impact on its financial
statements.
3. AQUISITION
OF MINERAL CLAIM
|
In
February 2008, the Company purchased the Kon Tum Gold Claims located in
Vietnam for $5,000. The Company had not established the
existence of a commercially minable ore deposit on the Kon Tum Gold
Claims. These claims have no expiry date and only if the
Company decides to abandon them will it no longer have an interest in the
minerals thereon.
|
4. SIGNIFICANT
TRANSACTIONS WITH RELATED PARTY
Officers-directors
have acquired 70% of the common stock issued and have made and have made no
interest, demand loans to the Company of $174 and have made contributions to
capital of $31,200 in the form of expenses paid for the Company.
-10-
|
GROSVENOR
EXPLORATIONS INC.
|
(Pre-exploration
Stage Company)
NOTES
TO FINANCIAL STATEMENTS
December
31, 2009
(Unaudited
– Prepared by Management)
5. CAPITAL
STOCK
During
January 2006, the Company completed a private placement of post-split 28,000,000
common shares for $4,000 to its directors and a private placement of post-split
7,350,000 common shares for $52,450.
On
February 5, 2007, the shareholders approved a forward stock split at the ratio
of seven shares for one share of the Company’s common stock. The
forward split does not affect the Company’s authorized number of shares of
common stock as set forth in its Articles of Incorporation and therefore such
authorized number of shares after the forward split was 75,000,000.
The
authorized share capital was increased from 75,000,000 common shares with a par
value of $0.001 to 450,000,000 common shares with a par value of
$0.001.
On
January 18, 2008, the Company has a forward split of its common shares on the
basis of 6 new shares for each one old share held. On August 25,
2009, certain creditors of the Company accepted 2,511,890 common shares at a
price of $0.05 per share in consideration of amounts owed to them of
$125,595. With this split and the shares issued for debt, there
are now issued and outstanding 214,611,890 common shares outstanding with a par
value of $0.001 per share.
The
post-split shares have been shown from inception.
6. GOING
CONCERN
The
Company intends to seek business opportunities that will provide a
profit. However, the Company does not have the working capital
necessary to be successful in this effort and to service its debt, which raises
substantial doubt about its ability to continue as a going concern.
Continuation
of the Company as a going concern is dependent upon obtaining additional working
capital and the management of the Company has developed a strategy, which it
believes will accomplish this objective through additional loans from related
parties, and equity funding, which will enable the Company to operate for the
coming year.
7. SUBSEQUENT
EVENTS
The
Company has evaluated subsequent events from the balance sheet dated to January
31, 2010 and has found no material subsequent events to report.
-11-
ITEM
2. MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF
OPERATIONS
The
following discussion should be read in conjunction with the information
contained in the financial statements of Grosvenor Explorations, Inc.
(“Grosvenor”) and the notes which form an integral part of the financial
statements which are attached hereto.
The
financial statements mentioned above have been prepared in conformity with
accounting principles generally accepted in the United States of America and are
stated in United States dollars.
The
Company was incorporated under the laws of the State of Nevada on May 25, 2005
under the name of Grosvenor Explorations Ltd. (“Grosvenor”). On June
3, 2005, a Certificate of Correction was filed with the Secretary of State for
Nevada and the name was changed to Grosvenor Explorations Inc. Our fiscal
year end is June 30. Our executive offices are located at 2431 M. de
la Cruz, Pasay City, Philippines. Our telephone and fax number is
632-887-2131. The Company does not have any subsidiaries, affiliated
companies or joint venture partners.
We are a
start-up mineral company in the pre-exploration stage and have not generated any
operating revenues since inception. We have incurred losses since
inception and our auditors have issued a going concern opinion since we must
raise additional capital, through the sale of our securities, in order to fund
our operations. There can be no assurance we will be able to raise
this capital. We are the registered and beneficial owner of a 100%
interest in the Kon Tum Gold Claim (“Kon Tum”) located in Vietnam.
Grosvenor
acquired the Kon Tum for a cash purchase of $5,000 from Norgae Mining LLC, an
unrelated company, including a geological report on the claim prepared by
Charlie Brennan, Professional Geologist.
Presently,
we have no interest in any other mineral property and are not engaged in the
exploration of any other mineral properties. There can be no
assurance that a commercially viable mineral deposit, an ore reserve, exists on
the Kon Tum or can be shown to exist unless and until sufficient and appropriate
exploration work is carried out and a comprehensive evaluation of such work
concludes economic and legal feasibility. Such work could take
many years of exploration and would require expenditure of very substantial
amounts of capital, capital we do not presently have and may never be able to
raise. To date, we have not conducted any exploration work on the Kon
Tum.
We have
no fulltime employees and management of Grosvenor, all or who reside in the
Philippines, devotes a very small percentage of their time to the affairs of the
Company. There might be a conflict with our new directors in that both are
professional geologists and will be introduced to other mineral properties which
they might recommend to both our Company and to other clients of
theirs. Such situations could create a conflict of
interest.
Our
auditors have expressed substantial doubt about our ability to continue as a
going concern in their audit report dated July 25, 2009 attached to the
financial statements dated June 30, 2009 which was filed in our recent Form
10-K. We have cash of $340 as at December 31, 2009 and have
liabilities of $3,815. Since our inception we have incurred
accumulated losses of $216,720. We anticipate minimum operating
expenses for the next twelve months of $xxxxx. It is extremely
unlikely we will earn any revenue for a minimum of 5 years. We do not
have any employees either full or part time.
Grosvenor
has 214,611,890 shares outstanding.
Grosvenor
is responsible for filing various forms with the United States Securities and
Exchange Commission (the “SEC”) such as Form 10K and Form 10Qs.
-12-
The
shareholders may read and copy any material filed by Grosvenor with the SEC at
the SEC’s Public Reference Room at 100 F Street, N.E., Washington, DC,
20549. The shareholders may obtain information on the
operations of the Public Reference Room by calling the SEC at
1-800-SEC-0330. The SEC maintains an Internet site that
contains reports, proxy and information statements, and other information which
Grosvenor has filed electronically with the SEC by assessing the website using
the following address: http://www.sec.gov. Grosvenor
has no website at this time.
Forward
Looking Statements
In
addition to the other information contained in this Form 10-Q, it contains
forward-looking statements which involve risk and uncertainties. When
used in this prospectus, the words “may”, “will”, “expect”, “anticipate”,
“continue”, “estimate”, “project”, “intend”, “believe” and similar expressions
are intended to identify forward-looking statements regarding events, conditions
and financial trends that may affect our future plan of operations, business
strategy, operating results and financial position. Readers are
cautioned that any forward-looking statements are not guarantees of future
performance and are subject to risks and uncertainties and that actual results
could differ materially from the results expressed in or implied by these
forward-looking statements as a result of various factors, many of which are
beyond our control. Any reader should review in detail this entire
Form 10-Q including financial statements, attachments and risk factors before
considering an investment.
LIQUIDITY
AND CAPITAL RESOURCES
Grosvenor
has not made any revenue since its inception on May 25, 2005 and has accumulated
losses as at December 31, 2009 of $216,720. Basically, Grosvenor has
no assets other than cash since, in the past, the cost and exploration of the
Chrome Vanadium claims , which are now abandoned, were treated as a period
expense and written off as incurred. Grosvenor no longer has
any interest in the minerals on the Chrome Vandium claims and had no liability
attached thereto.
Grosvenor
has raised money in the past from its shareholders through the sale of shares
but recently has had to rely upon advances from its directors.
As of
December 31, 2009, Grosvenor’s total asset comprised cash where the cash on hand
was $340. Its total liabilities were $3,815 including $174 advances
from one its directors.
Our
non-elective expenses over the next twelve months, are estimated to be as
follows:
Expense
|
Ref.
|
Amount
|
Accounting
and audit
|
(i)
|
$ 8,500
|
Bank
charges
|
100
|
|
Edgar
filing fees
|
(ii)
|
1,100
|
Filing
fees – Nevada; Sec of State
|
(iii)
|
325
|
Office
and general expenses
|
(iv)
|
1,000
|
Transfer
agent fees
|
(v)
|
1,000
|
Estimated
expenses for the next twelve months
|
12,025
|
|
Account
payable as at December 31, 2009
|
(vi)
|
3,614
|
Cash
requirement before following deductions
|
15,639
|
|
Deduct: Bank
as at December 31, 2009
|
(340)
|
|
Cash
requirements over the next twelve months
|
$ 15,299
|
-13-
(i) Accounting
and audit
|
We
will have to continue to prepare financial statements for submission with
the various 10-Ks and 10-Qs as
follows:
|
Period
|
Form
|
Accountant
|
Auditor
|
Amount
|
March
31, 2010
|
10-Q
|
1,000
|
500
|
1,500
|
June
30, 2010
|
10-K
|
1,500
|
2,500
|
4,000
|
September
30, 2010
|
10-Q
|
1,000
|
500
|
1,500
|
December
31, 2010
|
10-Q
|
1,000
|
500
|
1,500
|
Estimated total
|
$ 4,500
|
$ 4,000
|
$ 8,500
|
(ii) Edgar
filing fees
|
We
will be required to file the annual Form 10-K estimated at $350 and the
three Form 10-Qs at $250 each for a total cost of
$1,100.
|
(iii)
|
Filing
fees in Nevada
|
|
To
maintain the Company in good standing in the State of Nevada an annual fee
of approximately $225 has been paid to the Secretary of State and $100 to
Empire Transfer for being the registered agent for
us.
|
(iv) Office
and general
|
We
have estimated a cost of approximately $1,000 for photocopying, printing,
fax and delivery.
|
(v) Transfer
agent
The annual fee payable to Holladay
Stock Transfer is estimated at $1,000.
(vi) Accounts
Payable
|
During the first period the
Company settled certain of its accounts payable, amount to $125,595, by
way of 2,511,890 shares issued at $0.05 per share. The amount
above represents monies owed to arm-length creditors and not related
parties.
|
|
Business
Development
|
Grosvenor’s
office is located at 2431 M. de la Cruz P.C., Manila, Philippines which is the
personal residence of its new president and director; Feliman A.
Lee. Grosvenor has not been a party to any bankruptcy, receivership
or similar proceedings since its inception. Grosvenor has not been
involved in any reclassification, merger, consolidation, or purchase or sale of
a significant amount of assets not in the ordinary course of
business.
Our sole
mineral property is:
Kon
Tum Gold Claim
In 2008,
we acquired a 100% interest in the Kon Tum Gold Claim that was staked to cover
gold zones within the similar to the La Son Gold Claim which is located
approximately 21 kilometers to the west of the Kon Tum, produced in excess of 15
million ounces of gold and is currently being reactivated on a limited
basis.
Kon Tum
is located 18 km Northeast of Kon Tum, (closest city) lies 18 Km North east of
Doc To and 53 Km Northwest of Pleiku.
Property
Description and Location
Kon Tum
consists of 1 unpatented mineral claim, located 18 km Northeast of Kon Tum,
and 43 km Southwest of Doc To at UTM co-ordinates Latitude 14°21’00”North and
Longitude 108°00’00”East. The
mineral claim was assigned to our Company by Norgae Mining LLC. and the said
assignment was filed with the Mineral Resources Department of the Ministry of
Energy and Mineral Resources of the Government of the Republic of
Vietnam.
-14-
There are
no known environmental concerns or parks designated for any area contained
within the claims. The property has no encumbrances. As advanced
exploration proceeds there may be bonding requirements for
reclamation.
Grosvenor
purchased a 100% interest in the Kon Tum.
Accessibility,
Climate, Local Resources, Infrastructure and Topography
The
common topographical features of Kon Tum are of the highland type. The
remarkable characteristic of the Kon Tum topography is the fairly distinctive
division of tiers from north to south. [Missing Graphic Reference]The north of
the province is high mountains, the Lang Bian plateau, with summits of altitudes
between 1,300m – above 2,000m such as Bidoup (2,287m), Lang Bian (2,167m).
[Missing Graphic Reference]The east and the west are mountains with modest
altitudes (500 – 1,000m). [Missing Graphic Reference]The south is
topographically the transition from the Di Linh – Bảo Lộc plateau to the
semi-flat country.
Kon Tum
province is situated in the Tây Nguyên Highlands climatic zone 4, a tropical
climate with monsoon. On the whole territory, due to a complex topography, there
is a difference in elevation and degree of vegetation covering. However, the
weather of Kon Tum is temperate and mild all the year round, notable changes are
rare in the annual cycle.
The
navigation on the Đồng Nai River is possible only along 60km in the dry season,
chiefly in the Cát Tiên area.
The Kon
Tum zone is the zone of experienced growers of vegetables, fruits and flowers.
The produce of the zone, originally from sub-tropical and temperate zones, is
well-known to the domestic market and the foreign market as well.
History
Vietnam
is constituted mainly by the folded belts surrounding two shields, cratonised in
the Upper Proterozoic: the Yangtze craton and the Indochinese shield, located in
the Mekong basin and occupying most of Cambodia and the contiguous parts of Laos
and Vietnam. The folding occurred during the late-hercynian (early Triassic)
orogenic movements, active mainly in the central and southern Vietnam and the
indosinian (late Triassic, ante-Norian) orogeny. The indosinian folding domain
occupies most of the North Vietnam, down to the Ca river fault. With the latter
orogeny, considered to be the most important of Indochina, was achieved the
stabilization of the region. However several "active" structures
(troughs/grabens) have been formed in the Mesozoic (Tu Le, Sam Nua, Dalat
troughs) and in the Cenozoic
Gold has
been mined in Vietnam since immemorial times. At present, its production is
probably about 1 t/y, part of which is produced by the local population
(panners). Eight major gold fields are known in the northern Vietnam and two in
the south. In the Chiem Hoa area, gold mineralisation consisting of native gold
and calaverite is associated with stibnite. The large Lang Vai Au-Sb deposit
contains several tens of tons of gold. Placers and auriferous quartz vein
occurrences ( Pac Lan deposit) are known in the Ngan Son - Cao Bang area, in
Vinh Phu province (Kim Boi, Cho Binh deposits) and to the south of Thanh Hoa (at
Phu Qui and Lang Chau). Near Cua Rao in the Nge Tinh province, the alluvium of
the Nam Chou River contains 1-5 g/t Au over some 8 km . The rich (10-15 g/t Au)
Bong Mieu deposit, located about 80 km S of Da Nang, was exploited by the
French. A reserve of 5 t Au has been found by a recent exploration. The
mineralisation comprising native gold, auriferous pyrite and minor galena in
quartz veins, 3-4 m in thickness, is hosted in gneisses. As already mentioned,
several antimony, copper, manganese and iron deposits contain gold.
-15-
Numerous
showings of mineralization have been discovered in the area and six prospects
have achieved significant production, with the nearby La Son Gold Mine (21
kilometers away) producing 120,000 ounces of gold annually.
During
the 1990’s several properties East of Kon Tum were drilled by junior mineral
exploration companies.
We are
prepared to conduct preliminary exploration work on the property.
Geological
Setting
The
geological structure of Kon Tum is comprised of sedimentary rocks, eruptive
rocks and intrusive rocks, belonging to the period between the middle Jurassic
to the Quaternary. The sedimentary and eruptive rocks are divided into 14 strata
of different ages and constituents. The intrusive rocks within Kon Tum belong
to 4 systems: Định
Quán, Đèo Cả, Cà Ná and Cù Mông.
Kon Tum
zone is a pre-Cambrian crustal block which subsided in the early-middle
Jurassic, and most of the zone was tectonically subject to the forceful action
of magma in the late Mesozoic and the Kainozoic.
Stratigraphy
The
substratum of Vietnam is formed by various rocks of Precambrian to quaternary
age. The Precambrian formations occur in the Kontum massif, extending over most
of the central Vietnam, and in the north of the country, principally along the
Red river. The crystalline rocks (migmatites, ortho-gneisses) cropping out
between the Song Chay and Red rivers, are considered to be of a probable Archean
age.
Gold at
the La Son Gold Mine (which, as stated above, is in close proximity to the Kon
Tum) is generally concentrated within extrusive Precambrian rocks in the walls
of large volcanic caldera.
Intrusive
Proterozoic
intrusive comprise granites of the Chu Lai and the Tumorong massifs, in the
southern Vietnam, as well as the basic rocks of the Bao Ha - Ca Vinh
complexes and the granitic rocks, often gneissic, of the Song Chay massif in the
north. Several phanerozoic intrusive/magmatic series, have been
distinguished:
·
|
Upper
paleozoic, including granites basic rocks (Vitthulu complexe)
and permian effusions;
|
·
|
Triassic,
emplaced during the indosinian orogeny, most widely spread in Vietnam,
comprising a large variety of rocks, from ultramafic to
granitic.
|
·
|
Upper
Cretaceous-Paleogene, comprising alcaline, effusive rocks, granites,
syenites as well as some gabbros and
peridotites.
|
Structure
CAPSULE
DESCRIPTION: Graphite veins currently mined are from few centimeters to a meter
thick. Typically they cut amphibolite to granulite grade metamorphic rocks
and/or associated intrusive rocks.
-16-
TECTONIC
SETTING(S): Katazone (relatively deep, high-grade metamorphic environments
associated with igneous activity; conditions that are common in the shield
areas).
DEPOSITIONAL
ENVIRONMENT/GEOLOGICAL SETTING: Veins form in high-grade, dynamothermal
metamorphic environment where met sedimentary belts are invaded by igneous
rocks.
AGE OF
MINERALIZATION: Any age; most commonly Precambrian.
HOST/ASSOCIATED
ROCK TYPES: Hosted by paragneisses, quartzites, clinopyroxenites,
wollastonite-rich rocks, pegmatites. Other associated rocks are charnockites,
granitic and intermediate intrusive rocks, quartz-mica schists, granulites,
aplites, marbles, amphibolites, magnetite-graphite iron formations and
anorthosites.
Deposit
Types
Deposits
are from a few millimeters to over a meter thick in places, although usually
less than 0.5 meter thick. Individual veins display a variety of forms,
including saddle-, pod- or lens-shaped, tabular or irregular bodies; frequently
forming anatomizing or stock work patterns.
Mineralization
is located within a large fractured block created where prominent
northwest-striking shears intersect the northstriking caldera fault zone. The
major lodes cover an area of 2 km and are mostly within 350m of the surface.
Lodes occur in three main structural settings:
(i) steeply
dipping northweststriking shears;
(ii) flatdipping
(1040) fractures (flatmakes); and
(iii) shatter
blocks between shears.
Most of
the gold occurs in telluride’s and there are also significant quantities of gold
in pyrite.
Mineralization
No
mineralization has been reported for the area of the property but structures and
shear zones affiliated with mineralization on adjacent properties pass through
it.
Exploration
Previous
exploration work has not to the author’s knowledge included any attempt to drill
the structure on Kon Tum. Records indicate that no detailed
exploration has been completed on the property.
Property
Geology
To the
east of the property is intrusive consisting of rocks such as tonalite,
monzonite, and gabbro while the property itself is underlain by sediments and
volcanic. The intrusive also consist of a large mass of granodiorite towards the
western most point of the property.
Adjacent
Properties
The
adjacent properties are cited as examples of the type of deposit that has been
discovered in the area and are not major facets to this report.
Interpretations
and Conclusions
The area
is well known for numerous productive mineral occurrences including the La Son
Gold Claim.
-17-
The
locale of the Kon Tum is underlain by the units of the Precambrian rocks that
are found at those mineral occurrence sites.
These
rocks consisting of cherts and argillites (sediments) and andesitic to basaltic
volcanic have been intruded by granodiorite. Structures and mineralization
probably related to this intrusion are found throughout the region and occur on
the claim. They are associated with all the major mineral occurrences and
deposits in the area.
Mineralization
found on the claim is consistent with that found associated with zones of
extensive mineralization. Past work however has been limited and sporadic and
has not tested the potential of the property.
Potential
for significant amounts of mineralization to be found exists on the property and
it merits intensive exploration.
Recommendations
by Charlie Brennan, Professional Geologist
A two
phased exploration program to further delineate the mineralized system currently
recognized on Kon Tum is recommended. The program would consist of air photo
interpretation of the structures, geological mapping, both regionally and
detailed on the area of the main showings, geophysical survey using both
magnetic and electromagnetic instrumentation in detail over the area of the
showings and in a regional reconnaissance survey and geochemical soil sample
surveying regionally to identify other areas on the claim that are mineralized
and in detail on the known areas of mineralization. The effort of this
exploration work is to define and enable interpretation of a follow-up diamond
drill program, so that the known mineralization and the whole property can be
thoroughly evaluated with the most up to date exploration
techniques.
The
proposed budget for the recommended work in VND 621,381,266 (US $36,777.95) is
as follows:
Phase
I
Vietnam Dong
|
U.S. Dollars
|
|
1. Geological
mapping
|
110,457,300
|
$ 6,537.68
|
2. Geological
Surveying
|
159,215,710
|
9,423.57
|
Total Phase I
|
269,673,010
|
$15,961.25
|
Phase
II
1. Geochemical
surveying and surface sampling (includes
sample collection and assaying)
|
351,708,256
|
$20,816.70
|
Total Phase II
|
351,708,256
|
$20,816.70
|
Total Exploration
|
621,381,266
|
$36,777.95
|
We intend
to complete Phase I exploration work on the Kon Tum, our sole
property. No exact date has been determined for the commencement of
exploration work on the Kon Tum.
Particularly
since we have a limited operating history, no reserves and no revenue, our
ability to raise additional funds might be limited. If we are unable
to raise the necessary funds, we would be required to suspend Grosvenor's
operations and liquidate our company.
There are
no permanent facilities, plants, buildings or equipment on the Kon
Tum.
-18-
Other
mineral properties
Previously,
Grosvenor concentrated its efforts on the Chrome-Vanadium claims to determine
what mineralization exists thereon. The work program completed in the
last year did not identify any mineralization which would warrant the retention
of these claims and the new directors allowed them to expire without maintaining
them in good standing.
Grosvenor’s
Principal Product or Services
With the
expiry of the minerals claims, Grosvenor does not have any product which might
have been derived from its claims.
Investment
Policies
Grosvenor
does not have an investment policy at this time. Any excess funds it
has on hand will be deposited in interest bearing notes such as term deposits or
short term money instruments. There are no restrictions on what the director is
able to invest or additional funds held by Grosvenor. Presently
Grosvenor does not have any excess funds to invest.
ITEM
3. QUANTITATIVE
AND QUALITATIVE DISCLOSURE ABOUT MAKET RISK
We
believe that there have been no significant changes in our market risk exposures
for the six months ended December 31, 2009.
Trends
We are in
the pre-explorations stage, have not generated any revenue and have no prospects
of generating any revenue in the foreseeable future. We are unaware
of any known trends, events or uncertainties that have had, or are
reasonably likely to have, a material impact on our business or income, either
in the long term of short term.
ITEM
4. CONTROLS
AND PROCEDURES
Our
management has evaluated the effectiveness of Grosvenor’s disclosure controls
and procedures as required by the Exchange Act Rule 13a-15(d) as at December 31,
2009 (the “Evaluation Date”). Our management has concluded these
disclosure controls and procedures were not effective as of the Evaluation Date
as a result of material weaknesses in internal control over financial reporting
as indicated in the following paragraphs.
Under
Rule 13a-15(e)/15d-15(e); Regulation S-K, Item 307, the SEC states that
“disclosure controls and procedures” have the following
characteristics:
●
|
designed
to ensure disclosure of information that is required to be disclosed in
the reports that Grosvenor files or submits under the Exchange
Act;
|
●
|
recorded,
processed, summarized and reported with the time period required by the
SEC’s rules and forms; and
|
●
|
accumulated
and communicated to management to allow them to make timely decisions
about the required disclosures.
|
Realizing
Grosvenor’s internal control is not effective Grosvenor’s management believes
that its financial statements contained in its Quarterly Report on Form 10-Q for
the six months ended December 31, 2009 fairly present its financial condition,
results of operations and cash flows in all material respects.
-19-
Material
Weaknesses
Management
assessed the effectiveness of Grosvenor’s internal control over financial
reporting as of the Evaluation Date and identified the following material
weaknesses:
●
|
As
at December 31, 2009, Grosvenor did not have an audit committee which
complies to the requirements of an audit committee since it did not have
an independent “financial expert” on the committee. Even though
it has a Code of Ethics it does not emphasize fraud and methods to avoid
it. Due to the small size of Grosvenor a whistleblower
policy is not necessary.
|
●
|
Due
to a significant number and magnitude of out-of-period adjustments
identified during the quarterly closing process, management has concluded
that the controls over the quarter-end financial reporting process were
not operating effectively. A material weakness in the
quarter-end financial reporting process could result in Grosvenor not been
able to meet its regulatory filing deadlines and, if not remedied, has the
potential to cause a material misstatement or to miss a filing deadline in
the future. Management override of existing controls is
possible given the small size of the organization and lack of
personnel.
|
●
|
There
is no system in place to review and monitor internal control over
financial reporting. This is due to Grosvenor maintaining an
insufficient complement of personal to carry out ongoing monitoring
responsibilities and ensure effective internal control over financial
reporting.
|
ITEM
4T
|
CONTROLS
AND PROCEDURES
|
There
were no changes in Grosvenor’s internal controls over financial reporting during
the three months ended December 31, 2009 that have materially affected, or are
reasonably likely to material affect, Grosvenor’s internal control over
financial reporting.
ITEM
1. LEGAL
PROCEEDINGS
There are
no legal proceedings to which Grosvenor is a party or to which the Kon Tum Claim
is subject, nor to the best of management’s knowledge are any material legal
proceedings contemplated.
ITEM
1A. RISK
FACTORS
Risks
Associated with our Company:
1.
|
Because our auditors have
issued a going concern opinion and because our officers and directors will
not loan any money to us, we may not be able to achieve our objectives and
may have to suspend or cease exploration
activity.
|
Our
auditors' report on our 2009 financial statements expressed an opinion that
substantial doubt exists as to whether we can continue as an ongoing business
for the next twelve months. Because our officers and directors are unwilling to
commit to loan or advance capital to us, we believe that if we do not raise
additional capital through the issuance of treasury shares, we will be unable to
conduct exploration activity and may have to cease operations and go out of
business.
-20-
2.
|
Because
the probability of an individual prospect ever having reserves is
extremely remote, in all probability our property does not contain any
reserves, and any funds spent on exploration will be
lost.
|
Because
the probability of an individual prospect ever having reserves is extremely
remote, in all probability our sole property, the Kon Tum does not contain any
reserves, and any funds spent on exploration will be lost. If we cannot raise
further funds as a result, we may have to suspend or cease operations entirely
which would result in the loss of our shareholders’ investment.
3.
|
We
lack an operating history and have losses which we expect to continue into
the future. As a result, we may have to suspend or cease exploration
activity or cease operations.
|
We were
incorporated in 2005, have not yet conducted any exploration activities and have
not generated any revenues. We have an insufficient exploration history upon
which to properly evaluate the likelihood of our future success or
failure. Our net loss from inception to December 31, 2009, the date
of our most recent financial statements is $216,720. Our ability to
achieve and maintain profitability and positive cash flow in the future is
dependent upon
*
|
our
ability to locate a profitable mineral property
|
|
*
|
our
ability to locate an economic ore reserve
|
|
*
|
our
ability to generate revenues
|
|
*
|
our
ability to reduce exploration
costs.
|
Based
upon current plans, we expect to incur operating losses in future periods. This
will happen because there are expenses associated with the research and
exploration of our mineral property. We cannot guarantee we will be successful
in generating revenues in the future. Failure to generate revenues will cause us
to go out of business.
4. We
have no known ore reserves. Without ore reserves we cannot generate income and
if we cannot generate income we will have to cease exploration activity which
will result in the loss of our shareholders’ investment.
We have
no known ore reserves. Even if we find gold mineralization we
cannot guarantee that any gold mineralization will
be of sufficient quantity so as to warrant recovery. Additionally, even if we
find gold mineralization in
sufficient quantity to warrant recovery, we cannot guarantee that the ore will
be recoverable. Finally, even if any gold mineralization is
recoverable, we cannot guarantee that this can be done at a profit. Failure to
locate gold deposits in economically recoverable quantities will mean we cannot
generate income. If we cannot generate income we will have to cease
exploration activity, which will result in the loss of our shareholders’
investment.
5.
|
If
we don't raise enough money for exploration, we will have to delay
exploration or go out of business, which will result in the loss of our
shareholders’ investment.
|
We are in
the very early pre-exploration stage. We need to raise additional
capital to undertake our planned exploration activity. We estimate we
do not have sufficient cash on hand, to continue operations for twelve
months. One may be investing in a company that will not have the
funds necessary to conduct any meaningful exploration activity due to our
inability to raise additional capital. If that occurs we will have to delay
exploration or cease our exploration activity and go out of business which will
result in the loss of our shareholders’ investment.
-21-
6.
|
Because we
are small and do not have much capital, we must limit our exploration and
as a result may not find an ore body. Without an
ore body, we cannot generate revenues and our shareholders will lose their
investment.
|
Any
potential development of and production from our exploration property depends
upon the results of exploration programs and/or feasibility studies and the
recommendations of duly qualified engineers and geologists. Because we are small
and do not have much capital, we must limit our exploration activity unless and
until we raise additional capital. Any decision to expand our
operations on the Kon Tum will involve the consideration and evaluation of
several significant factors including, but not limited to:
●
|
Costs
of bringing the property into production including exploration preparation
of production feasibility studies, and construction of production
facilities;
|
●
|
Availability
and cost of financing;
|
●
|
Ongoing
costs of production;
|
●
|
Market
prices for the minerals to be produced;
|
●
|
Environmental
compliance regulations and restraints; and
|
●
|
Political
climate and/or governmental regulations and
controls.
|
Such
programs will require very substantial additional funds. Because we may have to
limit our exploration, we may not find an ore body, even though our property may
contain mineralized material. Without an ore body, we cannot generate revenues
and our shareholders will lose their entire investment in our
Company.
We may
not have access to all of the supplies and materials we need in Vietnam to begin
exploration which could cause us to delay or suspend exploration
activity.
Competition
and unforeseen limited sources of supplies in the industry could result in
occasional spot shortages of supplies, such as dynamite, and certain equipment
such as bulldozers and excavators that we might need to conduct exploration.
These items might be difficult to obtain in Vietnam without some form of
governmental assistance. We have not attempted to locate or negotiate with any
suppliers of products, equipment or materials. We will attempt to locate
products, equipment and materials as and when we are able to raise the requisite
capital. If we cannot find the products and equipment we need, we
will have to suspend our exploration plans until we do find the products and
equipment we need.
7.
|
Because our
officers and directors have other outside business activities and may not
be in a position to devote a majority of their time to our exploration
activity, our exploration activity may be sporadic which may result in
periodic interruptions or suspensions of
exploration.
|
Our
President and CEO, will be devoting only 10% of his time, approximately 15 hours
per month, to our operations and business. Our CFO and
Secretary-Treasurer will be devoting only approximately 10 hours per month to
our operations. As a consequence our business may
suffer. For example, because our officers and directors
have other outside business activities, both being Professional Geologists, and
they may not be in a position to devote a majority of their time to our
exploration activity. Therefore, our exploration activity may be
sporadic or may be periodically interrupted or suspended. Such
suspensions or interruptions may cause us to cease operations altogether and go
out of business.
-22-
|
8. Because
mineral exploration and development activities are inherently risky, we
may be exposed to environmental liabilities. If such an event were to
occur it may result in a loss of your
investment.
|
The
business of mineral exploration and extraction involves a high degree of risk.
Few properties that are explored are ultimately developed into production. At
present, the Kon Tum, our sole property, does not have a known body of
commercial ore. Unusual or unexpected formations, formation pressures, fires,
power outages, labor disruptions, flooding, explosions, cave-ins, landslides and
the inability to obtain suitable or adequate machinery, equipment or labor are
other risks involved in extraction operations and the conduct of exploration
programs. We do not carry liability insurance with respect to our mineral
exploration operations and we may become subject to liability for damage to life
and property, environmental damage, cave-ins or hazards. Previous mining
exploration activities may have caused environmental damage to the Kon Tum. It
may be difficult or impossible to assess the extent to which such damage was
caused by us or by the activities of previous operators, in which case, any
indemnities and exemptions from liability may be ineffective. If the Kon Tum is
found to have commercial quantities of ore, we would be subject to additional
risks respecting any development and production activities. Most exploration
projects do not result in the discovery of commercially mineable deposits of
ore.
|
9. No
matter how much money is spent on the Kon Tum, the risk is that we might
never identify a commercially viable ore
reserve.
|
No matter
how much money is spent over the years on the Kon Tum, we might never be able to
find a commercially viable ore reserve. Over the coming years, we
could spend a great deal of money on the Kon Tum without finding anything of
value. There is a high probability the Kon Tum does not contain any
reserves so any funds spent on exploration will probably be lost.
|
10.
Even with positive results during exploration, the Kon Tum might never be
put into commercial production due to inadequate tonnage, low metal prices
or high extraction costs.
|
We might
be successful, during future exploration programs, in identifying a source of
minerals of good grade but not in the quantity, the tonnage, required to make
commercial production feasible. If the cost of extracting any
minerals that might be found on the Kon Tum is in excess of the selling price of
such minerals, we would not be able to develop the Kon
Tum. Accordingly even if ore reserves were found on the Kon Tum,
without sufficient tonnage we would still not be able to economically extract
the minerals from the Kon Tum in which case we would have to abandon the Kon Tum
and seek another mineral property to develop, or cease operations
altogether.
11.
|
There
is no certain the Company will be able to keep the Kon Tum if a reserve is
discovered since the mineral claim is situated in Vietnam, a country with
a social government.
|
|
The
Government of Vietnam is a socialist government which might result in the
nationalization of the Kon Tum mineral claim in the event a significant
reserve is found on it. There is virtually nothing the
Company can do to ensure this event will not happen. If it does
happen, the Company will be without a mineral claim and the shareholders
might lose their entire investment in our
Company.
|
-23-
Risks
Associated with owning our Shares:
|
12.
We anticipate the need to sell additional treasury shares in the future
meaning that there will be a dilution to our existing shareholders
resulting in their percentage ownership in the Company being reduced
accordingly.
|
We expect
that the only way we will be able to acquire additional funds is through the
sale of our common stock. This will result in a dilution effect to
our shareholders whereby their percentage ownership interest in the Company is
reduced. The magnitude of this dilution effect will be determined by
the number of shares we will have to issue in the future to obtain the funds
required.
|
13. Because our
securities are subject to penny stock rules, you may have difficulty
reselling your shares.
|
Our
shares are "penny stocks" and are covered by Section 15(g) of the Securities
Exchange Act of 1934 which imposes additional sales practice requirements on
broker/dealers who sell the Company's securities including the delivery of a
standardized disclosure document; disclosure and confirmation of quotation
prices; disclosure of compensation the broker/dealer receives; and, furnishing
monthly account statements. For sales of our securities, the broker/dealer must
make a special suitability determination and receive from its customer a written
agreement prior to making a sale. The imposition of the foregoing additional
sales practices could adversely affect a shareholder's ability to dispose of his
stock.
ITEM
2.
|
UNREGISTERED
SALES OF EQUITY SECURITIES AND USE OF
PROCEEDS
|
During
the since its year end of June 30, 2009, the Company settled with several of its
creditor an amount of $125,595 by way of the issuance of 2,511,890 common shares
at a price of $0.05 per share. The share certificates have a
restriction stamped on them which will not allow them to be currently traded in
the open market.
ITEM
3. DEFAULTS
UPON SENIOR SECURITIES
None
ITEM
4.
|
SUBMISSION
OF MATTERS TO A VOTE OF SECURITY
HOLDERS
|
None
ITEM
5. OTHER
INFORMATION
None
-24-
ITEM
6. EXHIBITS
1.
|
Certificate
of Incorporation, Articles of Incorporation and By-laws
|
|
1.1
|
Certificate
of Incorporation (incorporated by reference from Grosvenor’s Registration
Statement on Form SB-2 filed on March 24, 2006)
|
|
1.2
|
Articles
of Incorporation (incorporated by reference from Grosvenor’s Registration
Statement on Form SB-2 filed on March 24, 2006)
|
|
1.3
|
By-laws
(incorporated by reference from Grosvenor’s Registration Statement on Form
SB-2 filed on March 24, 2006)
|
-25-
|
SIGNATURES
|
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant had
duly caused this report to be signed on its behalf by the undersigned thereunto
duly authorized.
GROSVENOR
EXPLORATIONS INC.
(Registrant)
Date:
February 3, 2010
|
FELIMON A. LEE
|
Chief
Executive Officer,
|
|
President
and Director
|
|
Date:
February 3, 2010
|
RIZANINA G. RANESES
|
Chief
Financial Officer, Chief
|
|
Accounting
Officer and Director
|
-26-