Strategic Mining Corp - FORM 10-Q

Attached files

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EX-31.1 - CERTIFICATIONS PURSUANT TO SECTION 302 OF SARBANES OXLEY ACT OF 2002 - Strategic Mining Corp	f10q0311ex31i_strategicminig.htm
EX-32.1 - CERTIFICATIONS PURSUANT TO SECTION 906 OF SARBANES OXLEY ACT OF 2002 - Strategic Mining Corp	f10q0311ex32i_strategicminig.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 SECURITIES EXCHANGE ACT OF 1934

	For the Quarterly Period Ended March 31, 2011

o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Transition Period From to

Commission File Number 000-53434

STRATEGIC MINING CORP.

(Name of small business issuer specified in its charter)

Wyoming		88-0432539
(State or other jurisdiction of		(I.R.S. Employer Identification No.)
incorporation or organization)

130 King Street West, Suite 1800 Toronto, Ontario, Canada		M5X 1E3
(Address of principal executive offices)		(Zip Code)

(416) 865-3391

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 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 T No £

Indicate by check mark whether the registrant is a large accelerated filer, a non –accelerated filer, or a smaller reporting company. See definitions of large accelerated filer, accelerated filer and smaller reporting company in Section 12b-2 of the Exchange Act.

Large accelerated filer	¨	Accelerated filer	¨
Non-accelerated filer	¨	Smaller reporting company	x
(Do not check if a smaller reporting company)

As of May 10, 2011, the issuer had 158,343,294 shares of common stock and 24,634,741 shares of preferred stock outstanding..

Transitional Small Business Disclosure Format: Yes £ No T

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act): Yes £ No T

STRATEGIC MINING CORP.

FORM 10-Q

THREE MONTHS ENDED MARCH 31, 2011 AND 2010

__________________

TABLE OF CONTENTS

___________________

		Page

PART I - FINANCIAL INFORMATION

Item 1.	Financial Statements (unaudited)	3
	Balance Sheets	3
	Statements of Operations	4
	Statement of Stockholders Equity (Deficit)	5
	Statements of Cash Flows	6
	Notes to Financial Statements	7
Item 2.	Management’s Discussion & Analysis or Plan of Operation	12
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	15
Item 4.	Controls and Procedures	16

PART II -- OTHER INFORMATION

Item 1.	Legal Proceedings	18
Item 1A.	Rick Factors	18
Item 2.	Unregistered Sales of Equity securities and Use of Proceeds	18
Item 3.	Defaults Upon Senior Securities	18
Item 4.	Removed and Reserved	18
Item 5	Other Information	18
Item 6.	Exhibits	18

Signatures		19

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

STRATEGIC MINING CORPORATION

(A Exploration Stage Company)

CONSOLIDATED BALANCE SHEETS

AS OF

(Expressed in United States Dollars)

	31 March 2011 (Unaudited)		31 December 2010
ASSETS

Current Assets
Cash	$	174	$	2,600
Prepaid deposits		46,000		41,000
Total Current Assets		46,174		43,600
Non-Current Assets
Infrastructure development		5,932		5,932
Telecom equipment		13,125		13,125
Equipment		47,500		47,500
Vehicle		21,437		30,625
Property		1,187,949		1,162,948
Total Non-Current Assets		1,275,943		1,260,130
Total Assets	$	1,322,117	$	1,303,730

LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities
Accounts payable and accrued liabilities	$	62,513	$	50,511
Accrued interest		11,361		3,320
Loan payable		214,434		88,523
Total Liabilities		288,308		142,354

Stockholders' Equity

Preferred stock $0.0001 par value; Authorized 25,000,000; Issued and outstanding 24,634,741 ( 24,634,741 - Dec, 31, 2010)		2,463			2,463
Common stock $.001 par value; Authorized 400,000,000; Issued and outstanding 158,343,294 (158,343,294 - Dec, 31,2010)		158,344			158,344
Additional paid-in capital		2,662,085			2,657,085
Deficit accumulated during the exploration stage		(1,789,083	)		(1,656,516	)
Total Stockholders' Equity		1,033,809			1,161,376
Total Liabilities and Stockholders' Equity	$	1,322,117		$	1,303,730

The accompanying notes are an integral part of these financial statements.

STRATEGIC MINING CORPORATION

(A Exploration Stage Company)

CONSOLIDATED STATEMENTS OF OPERATIONS

(Expressed in United States Dollars)

	For the Three Months Ended 31 March 2011			For the Three Months Ended 31 March 2010			For the Period from Inception (17 January 2007) to 31 March 2011

EXPENSES
Interest expenses		8,041			26,924			197,532
Accounting		2,500			1,275			53,430
Salaries and wages		21,094			37,222			221,773
Consulting expenses		38,833			35,000			655,315
Legal costs		5,177			6,150			49,706
Depreciation		9,188			-			9,188
Property tax		-			-			38,814
Incorporation tax		-			9,499			11,197
Exploration costs		47,734			56,365			493,194
Permits		-			-			58,934
TOTAL OPERATING EXPENSES		132,567			172,435			1,789,083
NET LOSS	$	(132,567	)	$	(172,435	)	$	(1,789,083	)
LOSS PER WEIGHTED NUMBER OF SHARES OUTSTANDING - BASIC AND DILUTED	$	0.00		$	0.00
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING - BASIC AND DILUTED		158,343,294			99,879,778

The accompanying notes are an integral part of these financial statements.

STRATEGIC MINING CORPORATION

(An Exploration Stage Company)

STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

FOR THE PERIOD FROM THE DATE OF INCEPTION (17 January 2007) TO 31 March 2011

	Common Stock				Preferred Stock
	Shares		Common Stock Amount		Preferred Shares	Preferred Shares	APIC			Accumulated Deficit			Total stockholders' Equity
97.1 million common shares issued at $0.0075 for mining rights on January 17,2007 (Inception date)		97,100,000	$	97,100			$	631,150					$	728,250
Common share issued to acquire shell		2,514,611		2,515				(2,515	)
Issuance of stock options on January 17, 2007								2,249						2,249
Net Income (loss) in 2007											(220,437	)		(220,437	)
Balance December 31, 2007		99,614,611		99,615				630,884			(220,437	)		510,062
Recognition of stock option expense								350						350
Net Income (Loss) in 2008											(277,558	)		(277,558	)
Balance December 31, 2008		99,614,611	$	99,615			$	631,234		$	(497,995	)	$	232,854
Net Income (Loss) in 2009											(489,637	)		(489,637	)

Balance December 31, 2009	99,614,611	$	99,615			$	631,234	$	(987,632	)	$	(256,783	)
Common shares issued at $0.3333 for property	30,000	$	30	-	-	$	9,970		-		$	10,000
Common shares issued at $0.2 for loan	250,000	$	250	-	-	$	49,750		-			50,000
Common shares issued at $0.15 for cash	625,000		625	-	-		94,475					95,100
Common shares issued at $0.15 for cash	1,000,000		1,000	-	-		149,000					150,000
Preferred shares issued at $0.015 for loan	-		-	24,634,741	2,463		367,058		-			369,521
Common shares issued at $0.03 for loan	231,023		231	-	-		6,769		-			7,000
Common shares issued at $0.02 for loan	2,651,523		2,652	-	-		70,132		-			72,784
Common shares issued at $0.04425 for loan	1,355,923		1,356	-	-		58,644		-			60,000
Common shares issued at $0.015 for loan	9,586,226		9,586	-	-		134,207		-			143,793
Common shares issued at $0.015 for loan	9,666,667		9,667	-	-		135,333		-			145,000
Common shares issued at $0.015 for loan	10,033,203		10,033	-	-		140,465		-			150,498
Common shares issued at $0.033 for loan	6,051,902		6,052	-	-		193,660		-			199,712
Common shares issued at $0.033 for loan	3,433,415		3,433	-	-		109,878		-			113,311

Common shares issued at $0.033 for loan	11,850,990	11,851	-	-	379,163	-		391,014

Common shares issued at $0.033 for consulting	1,000,000	1,000	-	-	34,000	-		35,000

Common shares issued at $0.033 for loan	962,811	963	-	-	30,955	-		31,918

Recognition of stock compensation expense	-	-	-	-	62,392	-		62,392

Net Loss from January 1, 2010 to December 31, 2010	-	-	-	-	-	(668,884	)	(668,884	)
Balance December 31, 2010	158,343,294	158,344	24,634,741	2,463	2,657,085	(1,656,516	)	1,161,376
Recognition of stock compensation expense	-	-	-	-	5,000	-		5,000
Net Loss from January 1, 2011 to March 31, 2011	-	-	-	-	-	(132,567	)	(132,567	)
Balance March31, 2011	158,343,294	158,344	24,634,741	2,463	2,662,085	(1,789,083	)	1,033,809

The accompanying notes are an integral part of these financial statements.

STRATEGIC MINING CORPORATION

(A Exploration Stage Company)

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Expressed in United States Dollars)

	For the Three Months Ended 31 March 2011			For the Three Months Ended 31 March 2010			For the Period from Inception (17 January 2007) to 31 March 2011
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(132,567	)	$	(172,435	)	$	(1,789,083	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation		9,188			-			9,188
Stock compensation expense		5,000			10,000			67,742
Shares issued for services provided		-			-			37,249
Interest accrued on converted loans		-			-			39,659
Changes in operating assets and liabilities:
Prepaid deposits		(5,000	)		-			(46,000	)
Accounts payable and accrued interest		20,042			18,786			516,271
CASH USED IN OPERATING ACTIVITIES		(103,337	)		(143,649	)		(1,164,974	)
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of property		(25,000	)		(208,398	)		(538,879	)
CASH FLOWS USED IN INVESTING ACTIVITIES		(25,000	)		(208,398	)		(538,879	)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from loan		125,911			253,727			1,458,927
Issuance of common stock		-			145,100			245,100
CASH FLOWS (USED IN) PROVIDED BY FINANCING ACTIVITIES		125,911			398,827			1,704,027
NET DECREASE IN CASH		(2,426	)		46,780			174
CASH, BEGINNING OF Period		2,600			682			-
CASH, END OF Period	$	174		$	47,462		$	174

Non-Cash Investing and Financing Activities:

Shares issued for property		-			-		$	10,000
Shares issued on conversion of debts		-			-		$	1,663,064
Shares issued in settlement of accounts payable		-			-		$	31,918

The accompanying notes are an integral part of these financial statements.

STRATEGIC MINING CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED MARCH 31, 2011 AND 2010 (UNAUDITED)

1. NATURE OF BUSINESS AND BASIS OF PRESENTATION

Nature of Business

Strategic Mining Corp., formerly known as Gold Coast Mining Corporation (the “Company”) was originally incorporated in Delaware on August 24, 1995 as Infocenter Inc. On February 28, 2000, the company changed its name to Green Dolphin Systems Corporation and new corporate officers were appointed. On January 10, 2006, the Board of Directors adopted a resolution authorizing the assignment of all the assets of Green Dolphin Systems Corporation to Penta Deltex, Ltd., a Canadian corp., in exchange for the forgiveness of $263,717 in debt owing to Nicholas Plessas and an additional $153,683 owing to Penta Deltex, and assumption by Penta Deltex of all obligations owed by Green Dolphin Systems Corporation to suppliers and on other accounts payable. As the result of the above settlements of debts, Green Dolphin Systems Corporation effectively ceased operations on January 10, 2006 with the discontinued operations of its U.S. subsidiary. On December 1, 2006, the Company changed its name to Gold Coast Mining Corporation and new corporate officers were appointed shortly after. On January 17, 2007 Gold Coast Mining Corporation issued 97,100,000 shares of its common stock to unrelated parties in exchange for various mining rights. The issuance of the 97,100,000 represented approximately 97.5% of the then outstanding shares. The transaction resulted in a change in control of the entity. The issuance of shares and change in control has been accounted for as a reverse acquisition followed by a recapitalization of the Company’s equity structure. The stockholders obtaining control in the transaction is considered the accounting acquirer for financial reporting purposes. Accordingly, the equity section of the financial statements have been presented displaying the recapitalization of shares held by the individuals obtaining control followed by the issuance of shares to the minority stockholders.

On November 13, 2009, the Company was reincorporated in the State of Wyoming. On November 23, 2009, the Company changed its name to Strategic Mining Corp. in the State of Wyoming.

Strategic Mining Corp. is engaged in the business of exploration and development of gold properties in Guinea, West Africa. The Company has secured a renewable exploration and mining permit in the Republic of Guinea. The permit issued pertains to a 103 square kilometer zone of gold anomalies located in Siguiri District of North East Guinea. The Company has an option on a second property that covers a 50 square kilometer claim located in Dinguiraye District of North East Guinea in the valley of the Bafing River.

Strategic Mining has also entered into a binding agreement with Ba Dinh Mineral Company, a Vietnamese mineral exploration company based in Ho Chi Minh City, to purchase a 51% interest in the Nat Son property that covers 102 hectares. The company also secured an exploration and mining permit for the property located in northern Vietnam approximately 50 kilometers southwest of Hanoi. Exploration interest in the property is based on the presence of gold-silver bearing quartz-arsenopyrite veins which are exposed at surface and within rudimentary underground mine workings. The veins are now known to extend well beyond the current property boundaries and have been examined and sampled over a strike length of 4.0 km.

Basis of Presentation

The accompanying unaudited interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and the SEC instructions to Form 10-Q. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. The Company is in the exploration stage in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic No. 915 (formerly Statement of Financial Accounting Standards (“SFAS”) No.7, “Accounting and Reporting by Exploration Stage Enterprises”).

Operating results for the three month period ended March 31, 2011 are not necessarily indicative of the results that may be expected for the year ending December 31, 2011. For further information, refer to the financial statements and footnotes thereto included in the Company’s annual report on Form 10K for the year ended December 31, 2010.

2. GOING CONCERN

The Company's financial statements are presented on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The Company has experienced losses from operations since inception of $1,789,083 and has working capital deficiencies that raise substantial doubt as to its ability to continue as a going concern.

The Company's existence is dependent upon management's ability to raise capital and/or to successfully market and sell its products. Management anticipates the Company will attain profitable status and improve its liquidity through continued business development and additional equity investment in the Company.

The financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the possible inability of the Company to continue as a going concern.

3. RECENT ACCOUNTING PRONOUNCEMENTS

In December 2010, the FASB issued accounting guidance which specifies that if a public entity presents comparative financial statements, the entity should disclose revenue and earnings of the combined entity as though the business combination(s) that occurred during the current year had occurred as of the beginning of the comparable prior annual reporting period only. This guidance also expands supplemental pro forma disclosures to include a description of the nature and amount of material, nonrecurring pro forma adjustments directly attributable to the business combination included in reported pro forma revenue and earnings. This guidance will be effective prospectively for business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2010. Early adoption is permitted. Other than requiring additional disclosures for business combinations that the Company enters into in the future, the adoption of this guidance will not have a material impact on the Company’s financial statements.

4. PLANNED MINING OPERATIONS

Guinea, West Africa

SMNG holds 100% interest in a two year exploration permit issued by the Republic of Guinea #2009/1031 dated May 2009 to Gold River of Africa Company. SMNG acquired the interest in exchange for stock. The Guinea government is entitled to a 15% royalty on all extracted minerals covering 103 square kilometers in the Siguiri region of Guinea.

The geologist’s report on the Siguiri exploration permit recommended a two stage program of further exploration. The proposed plan for the first stage entails completion of a 3 month program of termite mound sampling, geological mapping, and geophysical and geochemical surveys budgeted at $630,000. The second stage entails a 12 month program of reverse circulation drilling sampling in areas showing positive assays, totaling $1.2M. It is anticipated that the first stage will commence in the second half of 2010, and the second will continue for a 15 to 18 month duration to be completed in 2012. During the three month rainy season, no work will be performed.

Nat Son, Vietnam

SMNG in a 51% joint venture with Ba Dinh Minerals Joint Stock Company retains the right to mine for profit per license # 39/QD-UBND (dated June 9th, 2009) issued by the Peoples Committee of Hoa Binh Province, Vietnam. This license is valid for five years from the issue date and in renewable for an addition five years. The permitted area covers 40 square hectares in Nat Son Commune, Hoa Binh Province Vietnam.

The geologist’s report on the Nat Son property recommended a detailed drill program to test the subsurface potential of the property. The recommended work program will include geological mapping, geochemical and geophysical surveys and a drilling program spanning 12 months budgeted at $1.6 million. The program will commence in the fall of 2010. Given positive test results, a further drilling program would be initiated that would require another 12 months. There will be a work stoppage during the 2 month rainy season.

In 2009, the Company became licensed and permitted to engage in mining exploration and development of high-yield, precious mineral property in northern Vietnam. The Company has the unique opportunity to take advantage of a mining area that has been dormant for over 50-years. The Company anticipates that it will be provided with the ability to enter into numerous development and exploration opportunities within the relatively under-explored northern regions country. Mineral production in Vietnam has taken place since the Bronze Ages. Systematic mineral exploration and exploitation began with the French in 1884. Most exploitation, especially construction materials, was on a small scale with mainly manual labor and without mechanization. The French were forced to leave the country and cease their mining activity in the mid 1950’s.

5. PROPERTY AND EQUIPMENT

At March 31, 2011 and December 31, 2010, respectively, property and equipment is as follows:

	Mar 31, 2011 (unaudited)		December 31, 2010

Infrastructure development	$	5,932	$	5,932
Telecom Equipment		13,125		13,125
Equipment		47,500		47,500
Vehicle		30,625		30,625
Land rights		1,187,949		1,162,948
Total Property and Equipment	$	1,285,131	$	1,260,130
Less, accumulated depreciation		(9,188)		-
Property and Equipment, net		1,275,943		1,260,130

Depreciation expense for the three months ended March 31, 2011 and March 31, 2010 was $9,188 and $-, respectively.

6. LOANS PAYABLE

At March 31, 2011 and December 31, 2010, respectively, the Company has loans payable as follows.

	March 31, 2011 (unaudited)		December 31, 2010

AGMC Corp.	$	16,000	$	16,000
Frank Brodzik		131,434		42,523
Magma Gold Corporation		67,000		30,000
Total Loans Payable	$	214,434	$	88,523

All loans payable bear interest at 15% per annum and have no definite repayment terms. All loans payable are unsecured.

7. COMMON AND PREFERRED STOCK

Common stock ($0.001 par value); 400,000,000 shares authorized; 158,343,294 common stock issued as of March 31, 2011 (158,343,294 – December 31, 2010).

Preferred Stock – Class A series - Convertible ($0.0001 par value); 24,634,741 preferred stock issued as of March 31, 2011 (24,634,741 l – December 31, 2010).

8. STOCK OPTIONS

The Company has established the “2007 Stock Option” that permits the granting of share options and shares to employees, directors and consultants. The Company believes that such awards better align the interests of the employees and consultants with those of the Company’s shareholders. The 2007 Stock Option provides for the issuance of up to 9,000,000 shares of common stock available for grant as Incentive Stock Options. The exercise price for options awarded is $.015.

Management has valued the options at their date of grant utilizing the Black-Scholes Option Pricing Model. Since there is not a public market for the Company shares, the fair value of the underlying shares was determined based on recent transactions by the Company to sell shares to third parties. Further, the excepted volatility was calculated using the historical volatility of a similar public entity in the gold mining industry in accordance with Question 6 of SAB Topic 14.D.1. In making this determination and finding another similar company, the Company considered the industry, stage of life cycle, size and financial leverage of such other entities. Based on the exploration stage of the Company, similar companies with enough historical data are not available. The Company was able to find an entity that met the industry criterion and as a result has based its expected volatility off this Company’s historical stock prices for a period similar to the expected term of the option. The risk-free interest rate is based on the implied yield available on U.S. Treasury issues with an equivalent term approximating the expected life of the options depending on the date of the grant and expected life of the options. The expected life of options used was based on the contractual life of the option granted. The Company determined the expected dividend rate based on the assumption and expectation that earnings generated from operations are not expected to be adequate to allow for the payment of dividends in the near future.

The following weighted-average assumptions were utilized in the fair value calculations for options granted:

	Three Months Ended			Year Ended
	March 31, 2011			December 31, 2010

Expected dividend yield		0			0
Expected stock price volatility		400	%		400	%
Risk-free interest rate		2.48	%		2.485	%
Expected life of options	5 years			5 years

The following table summarizes the status of the Company’s aggregate stock options granted:

	Number of Shares Options Remaining		Weighted Average Exercise Price		Weighted- Average Remaining Contractual Term		Aggregate Intrinsic Value

Inception Date January 17, 2007		-	$	-		-
Options granted		500,000	$	0.015		5		-
Options exercised		-	$	-
Options canceled		-	$	-
Outstanding at December 31, 2007		500,000	$	0.015		5
Options granted		500,000	$	0.015				-
Options exercised		-	$	-
Options canceled		-	$	-
Outstanding at December 31, 2008		1,000,000	$	0.015		4.5
Options granted		500,000	$	0.015				-
Options exercised		-	$	-
Options canceled		-	$	-
Outstanding at December 31, 2009		1,500,000	$	0.015		4
Options granted		2,000,000	$	0.03		5
Options exercised		-		-		-
Outstanding at December 31, 2010		3,500,000	$	0.127		4
Options granted		-	$	-		-
Options exercised		-		-		-
Exercisable at March 30, 2011		3,500,000	$	0.127		4		-

The weighted average fair value of options granted during the three months ended March 31, 2011 and December 31, 2010 was approximately $0.02 and $0.02, respectively.

The following table summarizes the status of the Company aggregate non-vested shares granted under the its Stock Option Plan.

	Number ofNon-vestedShares Subject to Options			Weighted Average Grant- Date Fair Value
Non-vested granted —year ended December 31, 2010		1,000,000		$	30,000
Vested — three months ended March 31, 2011		(333,000	)	$	(10,000	)
Forfeited — year ended March 31, 2011		-		$	-
Non-vested as of March 31, 2011		666,777		$	20,000

As of March 31, 2011 the unrecognized compensation cost related to non-vested share based compensation arrangements granted under the plan was approximately $20,000. These costs are expected to be recognized on a straight line basis over the relative vesting term of the corresponding award.

9 - General Business Risks

A significant portion of the Company's assets are located in the Republic of Guinea and Vietnam and changes in the political and economic policies of these governments could have a significant impact upon what business we may be able to conduct in these countries and accordingly on the results of our operations and financial condition. Our business operations may be negatively affected by the current and future political environment in the country. The governments of the Republic of Guinea and Vietnam exert substantial influence and control over the manner in which we must conduct our business activities. Our ability to operate in these countries may be affected by changes in laws and regulations, including those relating to taxation, import and export tariffs, raw materials, environmental regulations, land use rights, property and other matters.

Item 2: Management’s Discussion and Analysis or Plan of Operation

Certain statements contained in this quarterly filing, including, without limitation, statements containing the words “believes”, “anticipates”, “expects” and words of similar import, constitute forward-looking statements. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the Company, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements.

Such factors include, among others, the following: international, national and local general economic and market conditions: demographic changes; the ability of the Company to sustain, manage or forecast its growth; the ability of the Company to successfully make and integrate acquisitions; raw material costs and availability; new product development and introduction; existing government regulations and changes in, or the failure to comply with, government regulations; adverse publicity; competition; the loss of significant customers or suppliers; fluctuations and difficulty in forecasting operating results; changes in business strategy or development plans; business disruptions; the ability to attract and retain qualified personnel; the ability to protect technology; and other factors referenced in this and previous filings.

Given these uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements. The following discussion and analysis should be read in conjunction with our Financial Statements and notes appearing elsewhere in this report.

Results of Operations

The Company is an exploration stage mining company with no revenues since entering the exploration stage.

Three months ended March 31, 2011 Compared to the Three months ended March 31, 2010

Revenues

There were no revenues in either three month period ended March 31, 2011 and March 30, 2010.

Operating Expenses

Interest expense for the three months ended March 31, 2011 were $8,041 and $26,924 for the three months ended March 31, 2010. The decrease during the three months ended March 31, 2011, was primarily attributed to debt converted to equity during the fiscal year ended 2010 which resulted in direct decreases in interest bearing loans payable and related accrued interest costs.

Accounting expenses for the three months ended March 31, 2011 were $2,500 and $1,275 for the three months ended March 31, 2010. The increase during the three months ended March 31, 2011, was primarily attributed to the Company’s additional disclosure requirements subsequent to completing its filing of its Form 10A.

Salaries and wages expenses for the three months ended March 31, 2011 were $21,094 and $37,222 for the three months ended March 31, 2010. The decrease during the three months ended March 31, 2011, was primarily attributed to decreases in wages incurred in the Republic of Guinea related to exploration activities. The majority of salary expenses during the three month ended March 31, 2011consisted of an employment contract signed in April 2010 with Todd Sterck, the President of the company at $5,000 per month.

Legal expenses for the three months ended March 31, 2011 were $5,177 and $6,150 for the three months ended March 31, 2010. The decrease during the three months ended March 31, 2011, was primarily attributed to the additional legal fees during the previous quarter as the company was filing its Form 10/A filing with the SEC.

Exploration costs for the three months ended March 31, 2011 were $47,734 and $56,365 for the three months ended March 31, 2010. The decrease during the three months ended March 31, 2011, was primarily attributed to the decreased exploration activity in the Guinea, West Africa and Nat Son, Vietnam planned mining operations.

Depreciation for the three months ended March 31, 2011 was $9,188 and $nil for the three months ended March 31, 2010. The increase during the three months ended March 31, 2011, was primarily attributed to the commencement of depreciation on the vehicle used in exploration activities. The remaining property and equipment have not been placed in service as of March 31, 2011.

Consulting for the three months ended March 31, 2011 were $38,833 and $35,000 for the three months ended March 31, 2010. The increase during the three months ended March 31, 2011, was primarily attributed to consulting contracts with Atlantic Gold Mining Corp. for $5,000 per month and stock option expenses of $5,000 on the amortization of 5,000 stock options vested during the quarter in association with these consulting contracts, valued at $0.03 per share.

Net Income (Loss)

We recorded a net loss of $132,567, for the three months ended March 31, 2011, as compared to a net loss of $172,435 for the three months ended March 31, 2010. The decrease in net loss is primarily attributed to the decrease in interest expense as discussed previously.

Plan of Operations

Our current plan of operations is to complete further exploration, drilling and mapping on our various properties, as follows:

Guinea, West Africa

The geologist’s report on the Siguiri exploration permit recommended a two stage program of further exploration. The proposed plan for the first stage entails completion of a 3 month program of termite mound sampling, geological mapping, and geophysical and geochemical surveys budgeted at $630,000. The second stage entails a 12 month program of reverse circulation drilling sampling in areas showing positive assays, totaling $1,200,000. It is anticipated that the first stage will commence in the first half of 2011, and the second will continue for a 15 to 18 month duration to be completed in 2012. During the three month rainy season, no work will be performed.

Nat Son, Vietnam

The geologist’s report on the Nat Son property recommended a detailed drill program to test the subsurface potential of the property. The recommended work program will include geological mapping, geochemical and geophysical surveys and a drilling program spanning 12 months budgeted at $1,600,000. The program will commence in the winter of 2011. Given positive test results, a further drilling program would be initiated that would require another 12 months. There will be a work stoppage during the 2 month rainy season.

The Plan of Operation in terms of amount of work undertaken, and timing of the work, is dependent upon the successful raising of equity capital to fund the projects. Should the capital be available, it is anticipated that the recommended work programs outlined will take between two to three years to accomplish.

During the next twelve months, the Company plans to satisfy its cash requirements by additional equity financing. The Company has no current material commitments. The Company intends to undertake private placements of its common stock in order to raise future development and operating capital. The Company depends upon capital to be derived from future financing activities such as subsequent offerings of its stock. There can be no assurance that the Company will be successful in raising the capital it requires through the sale of its common stock.

The Company does not contemplate additional product research and development, but it does anticipate additional exploration and development costs on its properties. The Company anticipates and increase in labor force to explore and develop its properties which will be sought from outside contract labor.

The Company has no off balance sheet arrangements that have or are reasonably likely to have a current or future effect on the Company’s financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.

Dinguiraye Property

The Company is still in the process of due diligence on the Dinguiraye property, and will decide whether to exercise its option to acquire the property by June 30, 2011.

Liquidity and Capital Resources

At March 31, 2011, we had an accumulated deficit of $1,789,083 and a working capital deficit of $242,134. For the three months ended March 31, 2011, net cash used in operating activities amounted to $103,337, as compared to $143,649 for the three months ended March 31, 2010.

At March 31, 2011, we had no material commitments for capital expenditures other than for those expenditures incurred for the mining operations.

We will need to raise additional capital through equity or debt financing in the next twelve months in order to fund our planned operations and repay, restructure or refinance our debt obligations. Our current operating plans for the next fiscal year are to meet our existing customer commitments, expand our marketing and sales and engineering capabilities, and continue to develop innovative solutions for our customers. Although we will have to raise additional funds through the issuance of debt and/or equity during the next twelve months, there can be no assurance that financing will be available, or if available, that such financing will be upon terms acceptable to us.

Critical Accounting Estimates and Policies

The discussion and analysis of our financial condition and plan of operations is based upon our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities.

On an on-going basis, we evaluate our estimates including, among others, those affecting revenue, the allowance for doubtful accounts, the salability of inventory and the useful lives of tangible and intangible assets. The discussion below is intended as a brief discussion of some of the judgments and uncertainties that can impact the application of these policies and the specific dollar amounts reported on our financial statements. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form our basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions, or if management made different judgments or utilized different estimates. Many of our estimates or judgments are based on anticipated future events or performance, and as such are forward-looking in nature, and are subject to many risks and uncertainties, including those discussed below and elsewhere in this Registration Statement. We do not undertake any obligation to update or revise this discussion to reflect any future events or circumstances.

Our significant accounting policies are summarized in our Form 10K dated April 15, 2011. While all these significant accounting policies impact its financial condition and results of operations, the Company views certain of these policies as critical. Policies determined to be critical are those policies that have the most significant impact on the Company’s consolidated financial statements and require management to use a greater degree of judgment and estimates. Actual results may differ from those estimates. Our management believes that given current facts and circumstances, it is unlikely that applying any other reasonable judgments or estimate methodologies would cause effect on our consolidated results of operations, financial position or liquidity for the periods presented in this report.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

The Company is not subject to certain market risks, including changes in interest rates and currency exchange rates.

Item 4: Controls and Procedures

Evaluation of disclosure controls and procedures

Under the supervision and with the participation of our management, including our President, Chief Executive Officer/Chief Financial Officer (the “Certifying Officer”) we evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”). Based upon that evaluation, the Certifying Officer concluded that, as of the end of the period covered by this report, our disclosure controls and procedures were not effective. We identified material weaknesses discussed below in the managements report on internal control over financial reporting.

Report of Management on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) under the Exchange Act. Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles. Our internal control over financial reporting includes those policies and procedures that:

(i) Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets;

(ii) Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and

(iii) Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate.

Management conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement to the Company’s annual or interim financial statements will not be prevented or detected.

In the course of management’s assessment, we have identified the following material weaknesses in internal control over financial reporting:

● Segregation of Duties – As a result of limited resources, we did not maintain proper segregation of incompatible duties. Namely the lack of an audit committee, an understaffed financial and accounting function, and the need for additional personnel to prepare and analyze financial information in a timely manner and to allow review and on-going monitoring and enhancement of our controls. The effect of the lack of segregation of duties potentially affects multiple processes and procedures.

● Maintenance of Current Accounting Records – This weakness specifically affects the payments and purchase cycle and therefore we failed to maintain effective internal controls over the completeness and cut off of accounts payable, expenses and other capital transactions.

We are in the continuous process of improving our internal control over financial reporting in an effort to eliminate these material weaknesses through improved supervision and training of our staff, but additional effort is needed to fully remedy these deficiencies. Management has engaged a Certified Public Accountant as a consultant to assist with the financial reporting process in an effort to mitigate some of the identified weaknesses. The Company is still in its exploration stage and intends on hiring the necessary staff to address the weaknesses once full operations have commenced.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.

Changes in Internal Control over Financial Reporting

There have been no changes in internal control over financial reporting sincethe last fiscal quarter of calendar year 2010, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II – OTHER INFORMATION

Item 1. Legal Proceedings

In the normal course of business, the Company is, and in the future may be, subject to various disputes, claims, lawsuits, and administrative proceedings arising in the ordinary course of business with respect to commercial, employment and other matters, which could involve substantial amounts of damages. In the opinion of management, any liability related to any such known proceedings would have a material adverse effect on the business or financial condition of the Company. Additionally, from time to time, we may pursue litigation against third parties to enforce or protect our rights under our contracts, trademarks, trade secrets and our intellectual property rights generally. At the present time, the Company is not the subject of any lawsuits or claims.

Item 1A Risk Factors

There are no material changes to the risk factors disclosed in our Form 10K dated April 15, 2011, which are hereby incorporated herein by referfence.

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

None.

Item 3. Defaults Upon Senior Securities

None.

Item 5. Other Information

None.

Item 6. Exhibits.

Exhibit No.	DESCRIPTION

31.1	Certification of Chief Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a)

32.1	Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350

SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	STRATEGIC MINING CORP.

Date: May 19, 2011	By:	/s/ Todd Sterck
		Todd Sterck
		President, Chief Operating Officer, Chief Financial Officer, Director

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