Attached files
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| EX-31.1 - SILLENGER EXPLORATION CORP. | sillenger10qex311053111.htm |
| EX-32.1 - SILLENGER EXPLORATION CORP. | sillenger10qex321053111.htm |
| EX-31.2 - SILLENGER EXPLORATION CORP. | sillenger10qex312053111.htm |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
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(Mark One)
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X
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QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the quarter period ended May 31, 2011
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or
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TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the transition period from___________ to __________
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Commission file number 000-53420
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SILLENGER EXPLORATION CORP.
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(Name of registrant as specified in its charter)
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NEVADA
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N/A
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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277 Lakeshore Road East, Suite 206, Oakville. ON Canada
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L6J 1H9
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(Address of principal executive offices)
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(Zip Code)
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905-582-2434
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(Registrant’s telephone number, including area code)
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Not Applicable
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(Former name, former address and formal fiscal year, if changed since last report)
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
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x Yes o No
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Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulations S-T (232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
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x Yes o No
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Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
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Large accelerated filer
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Accelerated filer
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Non-accelerated filer
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(Do not check if a smaller reporting company)
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Small Reporting Company
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x
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Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
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Yes x No
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Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
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40,811,000 common shares issued and outstanding as of July 15, 2011.
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i
SILLENGER EXPLORATION CORP.
INDEX
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PART 1 - FINANCIAL INFORMATION .
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1
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ITEM 1. FINANCIAL STATEMENTS .
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1
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION .
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8
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Forward Looking Information .
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8
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Business Environment .
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8
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Results of Operation .
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9
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Financial Condition and Liquidity .
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9
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Expenses .
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10
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Plan of Operations .
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10
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Off-balance sheet arrangements .
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11
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ITEM 3: QUANTITIVE AND QUALITIVE DISCLOSURE ABOUT MARKET RISK .
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11
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ITEM 4: CONTROLS AND PROCEDURES .
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11
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(a) Evaluation of Disclosure Controls and Procedures .
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11
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(b) Internal Controls over financial reporting .
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11
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ITEM 4A(T): CONTROLS AND PROCEDURES .
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12
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PART II - OTHER INFORMATION .
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13
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ITEM 1. LEGAL PROCEEDINGS .
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13
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ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS .
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13
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Unregistered Sales of Equity Securities .
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13
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Use of Proceeds .
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13
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ITEM 3. DEFAULTS UPON SENIOR SECURITIES .
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13
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ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS .
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13
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ITEM 5. OTHER INFORMATION .
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13
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ITEM 6. EXHIBITS .
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13
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Exhibits .
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13
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SIGNATURES .
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14
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ii
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Sillenger Exploration Corp.
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(An Exploration Stage Company)
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Balance Sheets
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May 31,
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February 28,
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2011
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2011
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(Unaudited)
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ASSETS
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Current assets:
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Cash
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$ | 93,374 | $ | 509 | ||||
| 93,374 | 509 | |||||||
| $ | 93,374 | $ | 509 | |||||
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LIABILITIES AND STOCKHOLDERS' DEFICIT
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Current liabilities:
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Accounts payable (Note 3)
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$ | 2,859,220 | $ | 2,709,006 | ||||
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Accrued liabilities
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28,886 | 28,885 | ||||||
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Loans payable (Note 3)
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111,086 | - | ||||||
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Total liabilities
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2,999,192 | 2,737,891 | ||||||
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Stockholders' deficit
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Common stock $0.001 par value,
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75,000,000 shares authorized
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40,811,000 shares issued and outstanding
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40,811 | 40,811 | ||||||
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Additional paid-in-capital
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3,514,139 | 3,514,139 | ||||||
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Accumulated deficit
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(6,460,768 | ) | (6,292,332 | ) | ||||
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Total Stockholders' deficit
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(2,905,818 | ) | (2,737,382 | ) | ||||
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Total Liabilities and Stockholders' Deficit
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$ | 93,374 | $ | 509 | ||||
The Notes to the Financial Statements are an integral part of these financial statements.
Page 1 of 14
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Sillenger Exploration Corp.
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(An Exploration Stage Company)
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Statements of Operations
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Cumulative From
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February 14, 2007
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Three Months Ended May 31,
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(Inception) to
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2011
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2010
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May 31, 2011
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(Unaudited)
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(Unaudited)
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(Unaudited)
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Revenues
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$ | - | $ | - | $ | - | ||||||
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Operating expenses:
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General and Administrative
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18,156 | 189,922 | 1,017,383 | |||||||||
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Travel
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1,885 | 101,728 | 577,851 | |||||||||
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Business development
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- | 61,810 | 664,708 | |||||||||
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Professional services
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140,481 | 30,088 | 600,811 | |||||||||
| 160,522 | 383,548 | 2,860,753 | ||||||||||
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Other income
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Foreign exchange loss (gain)
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$ | 7,914 | $ | (7,436 | ) | $ | 106,215 | |||||
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Net Loss and Comprehensive Loss
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$ | 168,436 | $ | 376,112 | $ | 2,966,968 | ||||||
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Net Loss per share: Basic and Diluted
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$ | (0.00 | ) | $ | (0.01 | ) | ||||||
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Weighted average shares outstanding: Basic and Diluted
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40,811,000 | 40,811,000 | ||||||||||
The Notes to the Financial Statements are an integral part of these financial statements.
Page 2 of 14
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(An Exploration Stage Company)
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Statements of Cash Flows
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Cumulative From
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February 14, 2007
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Three Months Ended May 31,
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(Inception) to
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2011
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2010
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May 31, 2011
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Cash Flows from Operating Activities
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| Net Loss | $ | (168,436 | ) | $ | (376,112 | ) | $ | (2,966,968 | ) | ||||
| Items not affecting cash | |||||||||||||
| Write-off of equipment | - | - | 27,522 | ||||||||||
| (168,436 | ) | (376,112 | ) | (2,939,446 | ) | ||||||||
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Changes in non-cash working capital items
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| Accounts payable | 150,214 | 403,092 | 2,859,220 | ||||||||||
| Accrued expenses | 1 | 15,846 | 28,886 | ||||||||||
| Loan payable | 111,086 | - | 111,086 | ||||||||||
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Cash Flows Generated From (Used in) Operating Activities
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92,865 | 42,826 | 59,746 | ||||||||||
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Cash Flows from Investing Activities
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| Equipment acquired | - | (27,522 | ) | (27,522 | ) | ||||||||
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Cash Flows used in Investing Activities
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- | (27,522 | ) | (27,522 | ) | ||||||||
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Cash Flows from Financing Activities
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| Proceeds from issuance of common stock | - | - | 61,150 | ||||||||||
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Cash Flows Provided by Financing Activities
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- | - | 61,150 | ||||||||||
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Net Increase (Decrease) in Cash
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92,865 | 15,304 | 93,374 | ||||||||||
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Cash, Beginning of Period
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509 | 6,700 | - | ||||||||||
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Cash, End of Period
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93,374 | 22,004 | 93,374 | ||||||||||
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Supplemental Cash Flow Information
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| Interest paid | $ | - | $ | - | $ | - | |||||||
| Income taxes paid | $ | - | $ | - | $ | - | |||||||
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Non-Cash Financing Transaction
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| Increase in paid-in capital from stock dividend | $ | - | $ | $ | 3,458,862 | ||||||||
| Increase in accumulated deficit for stock dividend | $ | - | $ | $ | 3,493,800 | ||||||||
The Notes to the Financial Statements are an integral part of these financial statements.
Page 3 of 14
Sillenger Exploration Corp.
(An Exploration Stage Company)
Notes To Interim Consolidated Financial Statements
Unaudited
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1
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Basis of Presentation and Nature of Business
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The accompanying unaudited interim consolidated financial statements (“interim statements”) are denominated in US$ and have been prepared pursuant to the rules and regulations for reporting on Form 10-Q. Accordingly, certain information and disclosures required by generally accepted accounting principles for complete financial statements are not included herein. The interim statements should be read in conjunction with the financial statements and notes thereto included in the Company’s latest Annual Report on Form 10-K. The results for the three months ended May 31, 2011 may not be indicative of the results for the entire year.
Interim statements are subject to possible adjustments in connection with the annual audit of the Company’s accounts for the fiscal year 2012. In the Company’s opinion, all adjustments necessary for a fair presentation of these interim statements have been included and are of a normal and recurring nature.
Sillenger Exploration Corp. (“Sillenger” or the “Company”) was incorporated in Nevada on February 14, 2007. Sillenger is an exploration stage company and has not yet realized any revenues from its planned operations. During the period ended February 28, 2008, the Company had acquired a 100% interest in three mining claims in the Bulkley mining district of British Columbia, Canada for cash consideration of $379. On May 15, 2009 the Company abandoned the mineral titles and re-staked them in order to reduce exploration costs. The Company’s rights to these claims expired in June 2011.
On May 26, 2010, Sillenger introduced its proprietary CLP Claims Licensing Program which is designed to help governments to provide a fast-track process for issuing the necessary documentation to resource companies. The system helps reduce risk to exploration companies and helps market a country as an attractive investment destination. This program is based on Mr. Gillespie’s (the Company’s majority shareholder, President and CEO) proprietary land claims management system.
On June 1, 2010, Sillenger, through its business partnership with FCMI Global Inc., (“FCMI”) whereby FCMI assigned trademarks, intellectual properties, contracts and agreements to Sillenger in exchange for 5% (percent) of Sillenger’s annual net income per Sillenger’s audited financial statements, entered into a contract with the Government of the Republic of Equatorial Guinea to conduct an airborne geophysical survey of the continental region (27,000 sq. km) of Equatorial Guinea, known as Rio Muni, as well as 30 km of Continental Platform (4,500 sq. km) off the Atlantic coastline. The survey was to provide the Ministry of Mines, Industry and Energy a geological database of the region highlighting the locations where there may be the presence of mineral, hydrocarbon or groundwater deposits, and a preliminary identification of subsurface structures which may present exploration potential, and to identify the likeliest exploration targets within those deposits.
Page 4 of 14
Sillenger Exploration Corp.
(An Exploration Stage Company)
Notes To Interim Consolidated Financial Statements
Unaudited
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1
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Basis of Presentation and Nature of Business (continued)
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In exchange, Sillenger was granted the mineral and hydrocarbon rights to 15% of the claim blocks in the entire area surveyed, as chosen by Sillenger, as well as a preferential right to any other claims that Sillenger desires.
Sillenger had the right to determine which claims it would have retain for its own account, and had the right to market, as principal or joint-venture, any other properties to prospective mining or oil interests, and to retain a carried interest in those properties. The licensing model reduced the Company’s risk, which was to be assumed by the exploration partners, who benefit from the upside when a deposit is discovered, developed, and put into production. Optimally, Sillenger simply retains an interest, either through shares or royalties, in every exploration, mining, and oil venture that occurs on its claims, in essence becoming a claims and portfolio manager, and receiving revenues from multiple sources.
The business partnership with FCMI entailed fully reimbursing FCMI for expenses it incurred in negotiating trademarks, intellectual properties, contracts and agreements that were assigned to Sillenger. At May 31, 2011 the amount included under accounts payable and reimbursable to FCMI amounted to $2,482,801.
On June 11, 2010, Sillenger retained Fugro Airborne Surveys, a subsidiary of Fugro Group, to conduct the airborne geophysical survey of the Rio Muni region of Equatorial Guinea. The survey would have helped to reveal the locations of potential deposits, and provide a detailed reading of the subsurface structures.
In October 2010, the Company entered into negotiations to finance the cost of this survey. As part of these negotiations, Sillenger fully assigned its commitment with Fugro Airborne Surveys to a third party. On April 28, 2011, Sillenger executed an agreement with Ivory Resources, Brilliant Mining and others, whereby Sillenger agreed to accept and receive 7,407,407 units of Brilliant [with a 4 month escrow] in exchange for Ivory acquiring from Sillenger an agreement with the government of the Republic of Equatorial Guinea, which included certain preferential rights to request mining and/or oil concessions. Each Unit consists of one common share of Brilliant and one Common Share purchase warrant. Each Warrant will entitle the holder thereof to acquire one Common Share of Brilliant upon the payment of $0.45 per Warrant at any time until 24 months following the date of issuance. As part of the agreement, all the assets of FCMI Global Inc., including the amounts receivable from Sillenger Exploration Corp., would be transferred to a newly set up wholly owned subsidiary of Sillenger. On, May 5, 2011, the Company incorporated a fully owned subsidiary in Ontario, Canada. As of May 31, 2011, the subsidiary remains inactive.
Page 5 of 14
Sillenger Exploration Corp.
(An Exploration Stage Company)
Notes To Interim Consolidated Financial Statements
Unaudited
On July 12, 2011 the Company closed its transaction with Ivory Resources, Brilliant Mining and others.
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2
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Going Concern
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Sillenger has recurring losses and has accumulated operating losses during the exploration stage of $2,966,968 as of May 31, 2011. Sillenger's financial statements are prepared using generally accepted accounting principles applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. However, Sillenger has not realized any revenues. Without raising additional capital, there would be substantial doubt about Sillenger’s ability to continue as a going concern. Sillenger's management plans on raising cash from public or private debt or equity financing, on an as needed basis, and in the longer term, from revenues from the acquisition and exploration and development of mineral interests, if found. Sillenger's ability to continue as a going concern is dependent on these additional cash financings, and, ultimately, upon achieving profitable operations through the development of mineral interests.
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3
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Related Party Transactions
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During the quarter ended May 31, 2011, the Company received short-term, interest free, loan for working capital financing amounting to $111,086 from a company controlled by a shareholder. The loan is interest free and payable on demand.
Included in general and administration expenses is Canadian $ 9,917 (2010 - $0) of reimbursable business expenses incurred by the CEO and President in the ordinary course of business. At May 31, 2011, Canadian $5,682 (December 31, 2010 – Canadian $5,765) of these expenses remain unpaid and included in accounts payable.
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4
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Stockholders’ Equity
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At inception, Sillenger issued 3,000,000 shares of stock to its founding shareholder for $3,000 cash. During the period ended February 28, 2008, Sillenger issued 2,823,600 shares of stock for $48,150 cash. During the year ended February 28, 2010, the Company issued 50,000 shares of stock for $ 10,000 cash. Also, during the year ended February 28, 2010, the company declared a 6 to 1 stock dividend valued at $0.10 per share at the grant date resulting in the issuance of 34,938,000 shares and a non-cash transaction recorded to additional paid-in capital of $3,458,862 and accumulated deficit of $3,493,800.
There were no transactions affecting shareholders’ deficit in the year ended February 28, 2011 and for the quarter ended May 31, 2011 other than the net loss. The Company has not had any significant transactions that are required to be reported in other comprehensive income.
Page 6 of 14
Sillenger Exploration Corp.
(An Exploration Stage Company)
Notes To Interim Consolidated Financial Statements
Unaudited
As of May 31, 2011 and 2010 there were 40,811,000 shares of common stock issued and outstanding.
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5
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Subsequent Events
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On June 2, 2011, Sillenger entered into a one year consulting agreement with an investor relations firm for an upfront payment of $25,000 plus one million common shares of Sillenger. Sillenger has a right to buy back the one million shares by July 5, 2011 for $25,000. The agreement provides that, in addition to investor relations services, should the investor relations firm introduce Sillenger to a financing source not known to the Sillenger at the time, they will be entitled to a finder’s fee in the amount of 7% of the gross funding provided by such source.
On July 12, 2011, Sillenger closed the agreement with Ivory Resources, Brilliant Mining and others, whereby Sillenger agreed to accept and receive 7,407,407 units of Brilliant [with a 4 month escrow] in exchange for Ivory acquiring from Sillenger an agreement with the government of the Republic of Equatorial Guinea, which included certain preferential rights to request mining and/or oil concessions. Each Unit consists of one common share of Brilliant and one Common Share purchase warrant. Each Warrant will entitle the holder thereof to acquire one Common Share of Brilliant upon the payment of $0.45 per Warrant at any time until 24 months following the date of issuance. As part of the agreement, all the assets of FCMI Global Inc., including the amounts receivable from Sillenger Exploration Corp., would be transferred to a newly set up wholly owned subsidiary of Sillenger.
Page 7 of 14
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
Forward Looking Information
This section includes a number of forward- looking statements that reflect our current views with respect to future events and financial performance. Forward-looking statements are often identified by words like: believe, expect, estimate, anticipate, intend, project and similar expressions, or words which, by their nature, refer to future events. You should not place undue certainty on these forward-looking statements, which apply only as of the date of this prospectus. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from historical results or our predictions.
Business Environment
The disruptions in the credit and financial markets through 2010 have had a significant material adverse impact on a number of financial institutions and have limited access to capital and credit for many companies. While early 2011 seemingly was a turnaround period for stock markets, and a muted positive improvement in consumer optimism and general business conditions, the global economy still appears to be somewhat tepid, and it is still difficult for many junior resource companies to obtain financing. These market conditions could continue to make it difficult for us to obtain, or increase our cost of obtaining, capital and financing for our operations. Our access to additional capital on the equity markets also may not be available on terms acceptable to us or at all.
In late 2009 Sillenger decided to seek a strategic and/or financial partner to help take Sillenger forward. We entered into discussions with an interested party with the goal of raising capital and conducting a work program on the Bulkley claims, and possibly some other projects. Unfortunately the two sides could not reach an acceptable deal and we parted ways. With the price of gold at record levels, management believes it would be prudent to continue seeking potential partners.
On June 2, 2010, Sillenger announced that, through its relationship with FCMI and its African affiliates, the Company had entered into a contract with the Government of the Republic of Equatorial Guinea to conduct an airborne geophysical survey of the continental region (27,000 sq. km) of Equatorial Guinea, known as Rio Muni, as well as 30 km of Continental Platform (4,500 sq. km) off the Atlantic coastline. The survey was intended to provide the Ministry of Mines, Industry and Energy a geological database of the region highlighting the locations where there may be the presence of mineral, hydrocarbon or groundwater deposits, and a preliminary identification of which subsurface structures may present exploration potential, and to identify the likeliest exploration targets within those deposits.
As compensation for assuming the capital risk of the survey, Sillenger was granted the mineral and hydrocarbon rights to 15% of the claim blocks in the entire area surveyed, as chosen by Sillenger, as well as a preferential right to any other claims that Sillenger desired.
In August 2010 Sillenger received a government delegation from Guinea-Bissau. During their visit, Sillenger arranged meetings in Ottawa with Fugro and also with Government of Canada officials from the Ministry of Foreign Affairs. Sillenger also arranged for a meeting and presentation by the Ministry of Forestry and Mines of the Province of Ontario, one of the world’s leading mining jurisdictions.
On April 28, 2011, Sillenger executed a settlement agreement with Ivory Resources, Brilliant Mining and others, whereby Sillenger agreed to accept and receive 7,407,407 units of Brilliant [with a 4 month hold period] in exchange for Ivory acquiring from Sillenger an agreement with the government of the Republic of Equatorial Guinea, which included certain preferential rights to request mining and/or oil concessions. Each Unit consists of one Common Share and one Common Share purchase warrant of Brilliant. Each Warrant will entitle the holder thereof to acquire one Common Share of Brilliant upon the payment of $0.45 per Warrant at any time until 24 months following the date of issuance.
Page 8 of 14
Looking at the year ahead, management believes, Brilliant transaction serves as an endorsement of Sillenger’s business plan, and enables Sillenger to replicate a proven concept for the next countries with which the Company is pursuing partnerships.
Sillenger will need to seek additional funding to continue pursuing it’s business plan.
Subsequent Events
On June 2, 2011, Sillenger entered into a one year consulting agreement with an investor relations firm for an upfront payment of $25,000 plus one million common shares of Sillenger. Sillenger has a right to buy back the one million shares by July 5, 2011 for $25,000. The agreement provides that, in addition to investor relations services, should the investor relations firm introduce Sillenger to a financing source not known to the Sillenger at the time, they will be entitled to a finder’s fee in the amount of 7% of the gross funding provided by such source.
On July 12, 2011, Sillenger closed the agreement with Ivory Resources, Brilliant Mining and others, whereby Sillenger agreed to accept and receive 7,407,407 units of Brilliant [with a 4 month escrow] in exchange for Ivory acquiring from Sillenger an agreement with the government of the Republic of Equatorial Guinea, which included certain preferential rights to request mining and/or oil concessions. Each Unit consists of one common share of Brilliant and one Common Share purchase warrant. Each Warrant will entitle the holder thereof to acquire one Common Share of Brilliant upon the payment of $0.45 per Warrant at any time until 24 months following the date of issuance. As part of the agreement, all the assets of FCMI Global Inc., including the amounts receivable from Sillenger Exploration Corp., would be transferred to a newly set up wholly owned subsidiary of Sillenger.
Results of Operation
For the quarters ended May 31, 2011 and May 31, 2010, and the period from February 14, 2007 (inception) to May 31, 2011:
Financial Condition and Liquidity
REVENUE – Sillenger has not generated revenue from its business operations and does not expect to generate any revenue in the near future.
COMMON STOCK –As of the date of May 31, 2011 and July 15, 2011, Sillenger has 40,811,000 common shares issued and outstanding. There was no common stock issuance in the three months period ended May 31, 2011.
LIQUIDITY - At May 31, 2011, Sillenger had assets of $93,374 consisting of cash ($509 – February 28, 2011, consisting of cash). Sillenger had $2,999,192 in liabilities consisting of accounts payable and accrued liabilities and loan payable ($2,737,891 – February 28, 2011, consisting of accounts payable and accrued liabilities).
Page 9 of 14
Sillenger' internal sources of liquidity will be loans that may be available to Sillenger from management. Although Sillenger has no written arrangements with any of directors and officers, Sillenger expects that the directors and officers will provide Sillenger with internal sources of liquidity, if it is required.
There are no assurances that Sillenger will be able to achieve further sales of its common stock or any other form of additional financing. If Sillenger is unable to achieve the financing necessary to continue its plan of operations, then Sillenger will not be able to continue its exploration programs and its business will fail.
Expenses
SUMMARY – Total expenses were $168,436 for the quarter ended May 31, 2011 ($376,112 – May 31, 2010). Expenses have decreased as compared to the quarter ended May 31, 2011 by $207,676. A total of $2,966,968 in expenses has been incurred by Sillenger since inception on February14, 2007 through to May 31, 2011. The higher costs in the prior year quarter as compared to the current year quarter is primarily related to Sillenger’s transformation into a natural resource development company in the prior year quarter dedicated to bringing a progressive and creative approach to natural resource management and exploration. The costs can be subdivided into the following categories.
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1.
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General and administrative: These primarily consist of salaries, office supplies and telecommunication expenses. $18,156 of administrative expenses were incurred for the quarter as compared to $189,922 for the quarter ended May 31, 2010 while a total of $1,017,383 was incurred in the period from inception on February 14, 2007 to May 31, 2011.
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2.
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Travel: $1,885 of travel expenses were incurred for the quarter as compared to $101,728 for the quarter ended May 31, 2010 while a total of $577,851 was incurred in the period from inception on February 14, 2007 to May 31, 2011.
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3.
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Business development: $0 of business development expenses were incurred for the quarter as compared to $61,810 for the quarter ended May 31, 2010 while a total of $664,708 was incurred in the period from inception on February 14, 2007 to May 31, 2011.
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4.
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Professional fees: These primarily consist of legal, accounting and audit fees. $140,481 of professional fees were incurred for the quarter as compared to $30,088 for the quarter ended May 31, 2010 while a total of $600,811 was incurred in the period from inception on February 14, 2007 to May 31, 2011.
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Sillenger continues to carefully control its expenses and overall costs as it transforms into a natural resource development company. In addition to Mr. Gillespie and Dr. Juhas (a consultant), Sillenger has 3 other consultants.
Plan of Operations
Our business plan up until April 2010 was to proceed with the exploration of the Bulkley claims to determine whether there are commercially exploitable reserves of base and precious metals. Beginning in May 2010, we have concentrated our focus on pursuing opportunities in African countries.
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We will also need to seek additional funding to pursue the new ventures in Africa identified by our new President and Chief Executive Officer Mr. John Gillespie. We anticipate that additional funding will be in the form of equity financing from the sale of our common stock. However, we cannot provide investors with any assurance that we will be able to raise sufficient funding from the sale of our common stock to fund new projects identified in Africa. We believe that debt financing will not be an alternative for funding any potential projects in Africa or elsewhere. The risky nature of these enterprises and lack of tangible assets places debt financing beyond the credit-worthiness required by most banks or typical investors of corporate debt until such time as an economically viable mine or project can be demonstrated. We do not have any arrangements in place for any future equity financing.
Based on the nature of our business, we anticipate incurring operating losses in the foreseeable future. We base this expectation, in part, on the fact that very few mineral claims in the exploration stage ultimately develop into producing, profitable mines. Our future financial results are also uncertain due to a number of factors, some of which are outside our control. These factors include, but are not limited to:
• our ability to raise additional funding;
• the market price for gold;
• the results of our proposed exploration programs on the mineral property; and
• our ability to find joint venture partners for the development of our property interests
Due to our lack of operating history and present inability to generate revenues, our auditors have stated their opinion that there currently exists substantial doubt about our ability to continue as a going concern.
Off-balance sheet arrangements
As of May 31, 2011, Sillenger had no off-balance sheet arrangements.
ITEM 3: QUANTITIVE AND QUALITIVE DISCLOSURE ABOUT MARKET RISK
No disclosure is required hereunder as the Company is a “smaller reporting company,” as defined in Item 10(f) of Regulation S-K.
ITEM 4: CONTROLS AND PROCEDURES
(a) Evaluation of Disclosure Controls and Procedures
Based on the management’s evaluation, our President and Chief Financial Officer has concluded that as of May 31, 2011, the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange of 1934 (the "Exchange Act") are effective to provide reasonable assurance that the information required to be disclosed in this quarterly report on Form 10-Q is recorded, processed, summarized and reported within the time period specified in Securities and Exchange Commission rules and forms and that such information is accumulated and communicated to the Company's management, including the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow for timely decisions regarding required disclosure.
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(b) Internal Controls over financial reporting
Management's quarterly report on internal control over financial reporting
Management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Our internal control over financial reporting is intended to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. GAAP. Our internal control over financial reporting should include those policies and procedures that: pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets; provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with applicable GAAP, and that receipts and expenditures are being made only in accordance with authorizations of management and the Board of Directors; and provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.
Under the supervision and with the participation of our management we have evaluated the effectiveness of our internal control over financial reporting and preparation of our quarterly financial statements as of May 31, 2011 and believe they are effective.
Based upon his evaluation of our controls our President. Chief Executive Officer and Chief Financial Officer has concluded that, there were no significant changes in our internal control over financial reporting or in other factors during our last fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Attestation report of the registered public accounting firm
This quarterly report does not include an attestation report of the company's registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by the Company's registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit the company to provide only management's report in this quarterly report.
Changes in internal control over financial reporting
There were no changes in our internal controls that occurred during the quarter covered by this report that have materially affected, or are reasonably likely to materially affect our internal controls.
Changes in Internal Controls
Based on the evaluation as of May 31, 2011, our President, Chief Executive Officer and Chief Financial Officer has concluded that there were no significant changes in our internal controls over financial reporting or in any other areas that could significantly affect our internal controls subsequent to the date of his most recent evaluation, including corrective actions with regard to significant deficiencies and material weaknesses.
ITEM 4A(T): CONTROLS AND PROCEDURES
See Item 4A – Controls and Procedures above.
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PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
To Sillenger's knowledge, no lawsuits were commenced against Sillenger during the three months ended May 31, 2011, nor did Sillenger commence any lawsuits during the same period. There are no proceedings in which any of our directors, officers or affiliates, or any registered or beneficial shareholder, is an adverse party or has a material interest adverse to our interest.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
Unregistered Sales of Equity Securities
Not Applicable.
Use of Proceeds
Not Applicable.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable.
ITEM 5. OTHER INFORMATION
Not applicable.
ITEM 6. EXHIBITS
Exhibits
The following Exhibits are furnished as part of this Form 10-Q, pursuant to Item 601 of Regulation S-B.
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Exhibit Number
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Exhibit Title
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3.1
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Articles of Incorporation (incorporated by reference from our Form S-1 Registration Statement, filed July 2, 2008).
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3.2
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Bylaws (incorporated by reference from our Form S-1 Registration Statement, filed July 2, 2008)
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10.1
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Buckley Declaration of Trust concerning our mineral claims (incorporated by reference from our Form 10-Q, filed on January 14, 2010)
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31.a
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Section 906 Certificate of CEO
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31.b
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Section 906 Certificate of CFO
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32.a
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Section 302 Certificate of CEO and CFO
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
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SILLENGER EXPLORATION CORP.
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Date: July 15, 2011
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“John Gillespie”
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By:
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John Gillespie, Director, President (Principal Executive Officer),
Principal Financial Officer and Principal Accounting Officer
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Date: July 15, 2011
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“John Gillespie”
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By:
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John Gillespie, Director, President (Principal Executive Officer),
Principal Financial Officer and Principal Accounting Officer
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