Attached files
| file | filename |
|---|---|
| EXCEL - IDEA: XBRL DOCUMENT - Tundra Gold Corp. | Financial_Report.xls |
| EX-31.1 - Tundra Gold Corp. | form10q073111ex31.htm |
| EX-32.1 - Tundra Gold Corp. | form10q073111ex32.htm |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the Quarterly Period Ended July 31, 2011
OR
[ ] 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 333-169066
(Exact name of registrant as specified in its charter)
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Nevada
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27-2019656
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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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200 S Virginia, 8th Floor, Reno, Nevada 89501
(Address of principal executive offices) (Zip Code)
775 398 3012
(Registrant's telephone number, including area code)
________________________________________
(Former name, former address and former fiscal year, if changed since last report)
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. [X] Yes
[ ] No
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 Regulation 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). Yes [ ] No [X]
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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Smaller reporting company [X]
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(Do not check if a smaller reporting company)
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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). Yes [ ] No [X]
Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date: 25,940,000 shares of common stock, $0.0001 par value, issued and outstanding as of September 8, 2011.
1
TABLE OF CONTENTS
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Page
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PART I - Financial Information
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3 | |
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Item 1. Financial Statements
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3 | |
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Balance Sheets July 31, 2011 (unaudited), and April 30, 2011
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3 | |
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Statements of Operations (unaudited) for the three month periods ended
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July 31, 2011 and 2010 and for the period from inception on September 16, 2009 to July 31, 2011
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4 | |
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Statements of Cash Flows (unaudited) for the three month periods ended
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July 31, 2011 and 2010 and for the period from inception on September 16, 2009 to July 31, 2011
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5 | |
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Notes to the Financial Statements
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7 | |
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
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11 | |
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Item 3 Quantitative and Qualitative Disclosures About Market Risk
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15 | |
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Item 4. Controls and Procedures
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15 | |
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PART II – Other Information
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15 | |
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Item 1. Legal Proceedings
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15 | |
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Item 1A. Risk Factors
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16 | |
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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
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16 | |
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Item 3. Defaults Upon Senior Securities
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16 | |
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Item 4. (Removed and Reserved)
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16 | |
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Item 5. Other Information
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16 | |
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Item 6. Exhibits
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16 |
2
Item 1. Financial Statements.
TUNDRA GOLD CORP.
(An Exploration Stage Company)
BALANCE SHEETS
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(Unaudited)
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||||||||
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July 31,
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April 30,
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|||||||
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2011
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2011
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|||||||
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ASSETS
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Current Assets
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||||||||
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Cash
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$ | 279,326 | $ | 203,290 | ||||
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Prepaid Expenses
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2,329 | 1,846 | ||||||
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Total Current Assets
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281,655 | 205,136 | ||||||
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Total Assets
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$ | 281,655 | $ | 205,136 | ||||
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LIABILITIES & STOCKHOLDERS’ EQUITY
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||||||||
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Current Liabilities
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||||||||
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Accounts Payable and Accrued Liabilities
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$ | 17,448 | $ | 5,620 | ||||
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Total Current Liabilities
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17,448 | 5,620 | ||||||
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Stockholders' Equity
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||||||||
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Common Stock, Par Value $.0001
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||||||||
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Authorized 100,000,000 shares,
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||||||||
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25,940,000 shares issued and outstanding at July 31, 2011
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||||||||
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(April 30, 2011 – 25,940,000)
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2,594 | 2,594 | ||||||
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Additional Paid-In Capital
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396,406 | 396,406 | ||||||
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Subscriptions Receivable
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- | (100,000 | ) | |||||
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Deficit Accumulated Since Inception of Exploration Stage
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(134,793 | ) | (99,484 | ) | ||||
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Total Stockholders' Equity
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264,207 | 199,516 | ||||||
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Total Liabilities and Stockholders' Equity
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$ | 281,655 | $ | 205,136 | ||||
The accompanying notes are an integral part of these financial statements.
3
TUNDRA GOLD CORP.
(An Exploration Stage Company)
STATEMENTS OF OPERATIONS
(Unaudited)
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Cumulative
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||||||||||||
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Since
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||||||||||||
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September 16, 2009
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For the Three Months Ended
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Inception of
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July 31,
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Exploration
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|||||||||||
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2011
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2010
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Stage
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Revenues
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$
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—
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$
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—
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$
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—
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||||||
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Cost of Revenues
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—
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—
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—
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|||||||||
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Gross Margin
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—
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—
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—
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Expenses
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||||||||||||
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Mineral Property Exploration Expenditures
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14,214
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756
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36,363
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General and Administrative
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16,095
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16,033
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68,430
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Net Loss from Operations
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(30,309
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)
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(16,789
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)
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(104,793)
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Other Income (Expense)
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||||||||||||
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Interest
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—
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—
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—
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Net Other Income (Expense)
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—
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—
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—
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|||||||||
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Write-down of Mineral Property Acquisition Payments
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(5,000
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)
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(5,000
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)
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(30,000
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)
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||||||
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Net Loss
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$
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(35,309
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)
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$
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(21,789
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)
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$
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(134,793
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)
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Basic and Diluted loss per
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||||||||||||
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Share
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$
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(0.00)
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$
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(0.00)
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Weighted Average Shares
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||||||||||||
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Outstanding
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25,940,000
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24,362,609
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The accompanying notes are an integral part of these financial statements.
4
TUNDRA GOLD CORP.
(An Exploration Stage Company)
STATEMENTS OF CASH FLOWS
(Unaudited)
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Cumulative
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||||||||||||
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Since
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September 16, 2009
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Inception of
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| For the Three Months Ended July 31 |
Exploration
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|||||||||||
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2011
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2010
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Stage
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CASH FLOWS FROM OPERATING ACTIVITIES
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Net Loss
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$
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(35,309
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)
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$
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(21,789)
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$
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(134,793)
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|||||
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Adjustments to Reconcile Net Loss to Net
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||||||||||||
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Cash Used in Operating Activities
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Write-down of Mineral Property Acquisition Costs
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5,000
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5,000
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30,000
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Change in Operating Assets and Liabilities
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(Increase) Decrease in Prepaid Expenses
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(483)
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51
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(2,329)
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Increase (Decrease) in Accounts Payable and Accrued Liabilities
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11,828
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9,480
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17,448
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Net Cash Used in Operating Activities
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(18,964
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)
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(7,258)
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(89,674)
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CASH FLOWS FROM INVESTING ACTIVITIES
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Mineral Property Acquisition Costs
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(5,000
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)
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(5,000)
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(30,000)
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Net Cash Used in Investing Activities
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(5,000
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)
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(5,000)
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(30,000)
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CASH FLOWS FROM FINANCING ACTIVITIES
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Proceeds from the Sale of Common Stock
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—
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62,000
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399,000
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|||||||||
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Collection of Subscriptions Receivable
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100,000
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35,000
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—
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Net Cash Provided by Financing Activities
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100,000
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97,000
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399,000
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Net (Decrease) Increase in
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Cash and Cash Equivalents
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76,036
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84,742
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279,326
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Cash and Cash Equivalents
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at Beginning of Period
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203,290
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1,971
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—
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Cash and Cash Equivalents
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||||||||||||
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at End of Period
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$
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279,326
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$
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86,713
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$
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279,326
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The accompanying notes are an integral part of these financial statements.
5
TUNDRA GOLD CORP.
(An Exploration Stage Company)
STATEMENTS OF CASH FLOWS
(Unaudited)
(Continued)
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Cumulative
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||||||||||||
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Since
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||||||||||||
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September 16, 2009
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For the Three Months Ended
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Inception of
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July 31,
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July 31,
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Exploration
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||||||||||
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2011
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2010
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Stage
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SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
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Cash paid during the year for:
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||||||||||||
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Interest
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$ | — | $ | — | $ | — | ||||||
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Income taxes
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$ | — | $ | — | $ | — | ||||||
The accompanying notes are an integral part of these financial statements.
6
TUNDRA GOLD CORP.
(An Exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
NOTE 1 – NATURE OF BUSINESS AND BASIS OF PRESENTATION
Organization and Basis of Presentation
Tundra Gold Corp. (“the Company”) was incorporated under the name Titan Gold Corp. on September 16, 2009 under the laws of the State of Nevada. On February 25, 2010 the Company amended its articles of incorporation to change its name to Tundra Gold Corp. The accompanying financial statements have been prepared in U.S. dollars and in accordance with accounting principles generally accepted in the United States on a going concern basis.
Nature of Operations
The Company has no products or services as of July 31, 2011. The Company was established to operate in the acquisition, exploration, and if warranted and feasible, development of natural resource properties.
Interim Reporting
The unaudited financial information furnished herein reflects all adjustments, which in the opinion of management are necessary to fairly state the financial position of Tundra Gold Corp. and the results of its operations for the periods presented. This report on Form 10-Q should be read in conjunction with the Company’s financial statements and notes thereto included in the Company’s Form 10-K for the fiscal year ended April 30, 2011. The Company assumes that the users of the interim financial information herein have read or have access to the audited financial statements for the preceding fiscal year and that the adequacy of additional disclosure needed for a fair presentation may be determined in that context. Accordingly, footnote disclosure, which would substantially duplicate the disclosure contained in the Company’s Form 10-K for the fiscal year ended April 30, 2011, has been omitted. The results of operations for the three month period ended July 31, 2011 is not necessary indicative of results for the entire year ending April 30, 2012.
NOTE 2 – ABILITY TO CONTINUE AS A GOING CONCERN
The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. The Company has incurred a net loss of $134,793 for the period from September 16, 2009 (inception) to July 31, 2011, and has no sales.
The Company's ability to continue as a going concern is dependent on its ability to develop its natural resource properties and ultimately achieve profitable operations and to generate sufficient cash flow from financing and operations to meet its obligations as they become payable. The Company expects that it will need approximately $277,000 to fund its operations during the next twelve months which will include property lease payments, initial assessments of its properties, costs associated with maintaining an office, and professional, legal and accounting expenses associated with our being a reporting issuer under the Securities Act of 1934. The Company has raised a total of $399,000 since inception. The Company currently has sufficient cash to fund its planned operations for the next twelve months. However, in order to develop its properties, the Company will need to obtain additional financing in the future. Management plans to seek additional capital through private placements and public offerings of its common stock. Although there are no assurances that management’s plans will be realized, management believes that the Company will be able to continue operations in the future. Accordingly, no adjustment relating to the recoverability and classification of recorded asset amounts and the classification of liabilities has been made to the accompanying financial statements in anticipation of the Company not being able to continue as a going concern.
If the Company were unable to continue as a going concern, then substantial adjustments would be necessary to the carrying values of assets, the reported amounts of its liabilities, the reported expenses, and the balance sheet classifications used.
7
NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Management’s Estimates and Assumptions
The preparation of financial statements in conformity with generally accepted accounting principles requires the Company’s management to make estimates and assumptions that affect the amounts reported in these financial statements and notes. Significant areas requiring the use of estimates relate to the write down of mineral property acquisition costs and accrued liabilities. Management believes the estimates utilized in preparing these financial statements are reasonable and prudent and are based on management’s best knowledge of current events and actions the Company may undertake in the future. Actual results could differ from those estimates.
Cash and Cash Equivalents
For purposes of the statement of cash flows, the Company considers all highly liquid debt instruments purchased with a maturity of three months or less to be cash equivalents to the extent the funds are not being held for investment purposes.
Foreign Currency
The Company’s functional currency is the U.S. dollar and to date has undertaken the majority of its transactions in U.S. dollars. Any transaction gains and losses that may occur will be included in the statement of operations as they occur.
Concentration of Credit Risk
The Company has no off-balance-sheet concentrations of credit risk such as foreign exchange contracts, options contracts or other foreign hedging arrangements. The Company maintains all of its cash balances with one financial institution in the form of a demand deposit.
Loss per Share
Net income (loss) per share is computed by dividing the net income by the weighted average number of shares outstanding during the period. As of July 31, 2011 and 2010, the company had no outstanding common stock options or warrants
Comprehensive Income
The Company has adopted SFAS No. 130, “Reporting Comprehensive Income”, which establishes standards for reporting and display of comprehensive income, its components and accumulated balances. The Company has disclosed this information on its Statement of Operations. Comprehensive income is comprised of net income (loss) and all changes to capital deficit except those resulting from investments by owners and distribution to owners.
Property Holding Costs
Holding costs to maintain a property on a care and maintenance basis are expensed in the period they are incurred. These costs include security and maintenance expenses, lease and claim fees payments, and environmental monitoring and reporting costs.
8
Exploration and Development Costs
Mineral property interests include optioned, leased, and acquired mineral development and exploration stage properties. The amount capitalized related to a mineral property interest represents its fair value at the time it was optioned or acquired, either as an individual asset or as a part of a business combination. The value of such assets is primarily driven by the nature and amount of mineralized material believed to be contained in such properties. Exploration costs are expensed as incurred and development costs are capitalized if proven and probable reserves exist and the property is a commercially minable property. Mine development costs incurred either to develop new ore deposits, expand the capacity of operating mines, or to develop mine areas substantially in advance of current production are capitalized. Costs incurred to maintain assets on a standby basis are charged to operations. Costs of abandoned projects are charged to operations upon abandonment. The Company evaluates, at least quarterly, the carrying value of capitalized mineral interests costs and related property, plant and equipment costs, if any, to determine if these costs are in excess of their net realizable value and if a permanent impairment needs to be recorded. The periodic evaluation of carrying value of capitalized costs and any related property, plant and equipment costs are based upon expected future cash flows and/or estimated salvage value.
Fair Value of Financial Instruments
The book values of cash, prepaid expenses, and accounts payable and accrued liabilities approximate their respective fair values due to the short-term nature of these instruments. The fair value hierarchy under GAAP distinguishes between assumptions based on market data (observable inputs) and an entity’s own assumptions (unobservable inputs). The hierarchy consists of three levels:
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•
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Level one — inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities;
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|
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•
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Level two — inputs are inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly such as interest rates, foreign exchange rates, and yield curves that are observable at commonly quoted intervals; and
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|
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•
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Level three — Unobservable inputs developed using estimates and assumptions, which are developed by the reporting entity and reflect those assumptions that a market participant would use.
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Determining which category an asset or liability falls within the hierarchy requires significant judgment. We evaluate our hierarchy disclosures each quarter.
NOTE 4 – MINERAL PROPERTY INTERESTS
Marietta Property
On May 18, 2010, the Company executed a property lease agreement with MinQuest, Inc. (“MinQuest”) whereby the Company leased certain unpatented mineral claims from MinQuest collectively referred to as the Marietta Property (the “Marietta”). The Marietta Property is located in Mineral County, Nevada and currently consists of five unpatented claims. The lease agreement is for a period of 20 years with annual lease payments of $5,000 due on May 15 of each year. There are no minimum annual exploration expenditures required under the agreement. However, any exploration programs undertaken by the Company during the lease period shall carryforward and be credited against any future property option agreement should such a property option agreement be executed between the Company and MinQuest. Upon execution of the Marietta Agreement, the Company paid MinQuest $5,000 as well as reimbursed MinQuest $756 relating to property holding costs. As a result of the Marietta property not containing any known resource, the Company has written down its $5,000 property lease payment in the statement of operations and comprehensive loss at July 31, 2011.
9
Under the agreement with MinQuest, all of our payment obligations are non-refundable. If we do not make any payments under the agreement we will lose any payments made and all our rights to the property. MinQuest has retained a 3% royalty of the aggregate proceeds received by the Company from any smelter or other purchaser of any ores, concentrates, metals or other material of commercial value produced from the property, minus the cost of transportation of the ores, concentrates or metals, including related insurance, and smelting and refining charges, including penalties. All of the annual lease payments under the agreement shall be treated as advance royalty payments and will be an offset to the production royalty due until the total amount paid to MinQuest has been recouped.
The Company may use MinQuest for its mineral exploration expertise on the property. Furthermore, both the Company and MinQuest have the right to assign, sell, mortgage or pledge their rights in the agreement or on the property.
The agreement will terminate if the Company fails to comply with any of its obligations under either agreement and fails to cure such alleged breach. If the Company gives notice that it denies a default has occurred, the matter shall be determined finally through such means of dispute resolution as such matter has been subjected to by either party. The agreement can be terminated by the Company by providing MinQuest with 60 days written notice.
Crescent Fault Property
On April 4, 2011, the Company executed a property option agreement (the “Agreement”) with MinQuest granting the Company the right to acquire 100% of the mining interests of a Nevada mineral exploration property currently controlled by MinQuest. The property known as the Crescent Fault Property is located in Eureka County, Nevada and currently consists of 33 unpatented claims (the ‘Property”).
Annual option payments and minimum annual exploration expenditures under Agreement are as noted below:
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Property
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Work
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|||
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Payments
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Expenditures
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|||
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Upon Execution of the Agreement
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$
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20,000
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$
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-
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By April 4, 2012
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20,000
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200,000
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||
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By April 4, 2013
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65,000
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200,000
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||
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By April 4, 2014
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45,000
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200,000
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||
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By April 4, 2015
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60,000
|
250,000
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||
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By April 4, 2016
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70,000
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250,000
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||
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By April 4, 2017
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80,000
|
300,000
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||
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By April 4, 2018
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90,000
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300,000
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||
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By April 4, 2019
|
100,000
|
350,000
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||
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By April 4, 2020
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100,000
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400,000
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||
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By April 4, 2021
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250,000
|
750,000
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||
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$
|
900,000
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$
|
3,200,000
|
Upon execution of the Agreement the Company paid MinQuest $20,000 and well as reimbursed MinQuest for the Crescent Fault’s holdings and related property costs in the amount of $7,920. As a result of the Crescent Fault property not containing any known resource, the Company has written down its initial $20,000 property lease payment in the statement of operations and comprehensive loss at April 30, 2011.
Since our payment obligations are non-refundable, if we do not make any payments under the Agreement we will lose any payments made and all our rights to the Property. If all said payments under the Agreement are made, then we will acquire all mining interests in the Property. If the Company fails to make any payment when due, the Agreement gives the Company a 60-day grace period to pay the amount of the deficiency. MinQuest retained a 3% royalty of the aggregate proceeds received by the Company from any smelter or other purchaser of any ores, concentrates, metals or other material of commercial value produced from the Property, minus the cost of transportation of the ores, concentrates or metals, including related insurance, and smelting and refining charges, including penalties. The Company shall have the one time right exercisable for 90 days following completion of a bankable feasibility study to buy up to two thirds (66.7%) of MinQuest’s royalty (i.e. an amount equal to 2% of the royalty) for $4,000,000. The right to purchase the said royalty interest shall be exercised by the Company providing MinQuest with notice of the purchase accompanied by payment in the amount of $4,000,000.
10
The Company may use MinQuest for its mineral exploration expertise on the Property. Furthermore, both the Company and MinQuest have the right to assign, sell, mortgage or pledge their rights in each respective Agreement or on each respective Property. In addition, any mineral interests staked, located, granted or acquired by either the Company or MinQuest which are located within a 1 mile radius of the Property will be included in the option granted to the Company.
The Agreement will terminate if the Company fails to comply with any of its obligations in the Agreement and fails to cure such alleged breach. If the Company gives notice that it denies a default has occurred, the matter shall be determined finally through such means of dispute resolution as such matter has been subjected to by either party. The Agreement provides that all disputes shall be resolved by a sole arbitrator under the rules of the Arbitration Act of Nevada. The Company also has the right to terminate the Agreement by giving notice to MinQuest.
NOTE 5 – RELATED PARTY TRANSACTIONS
During the three-month ended July 31, 2011 the Company paid $1,500 (2010 - $1,500) in directors’ fees to one of our directors.
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
The following discussion should be read in conjunction with the financial statements of Tundra Gold Corp. (an exploration stage company) (the “Company”), which are included elsewhere in this Form 10-Q. Certain statements contained in this report, including statements regarding the anticipated development and expansion of the Company's business, the intent, belief or current expectations of the Company, its directors or its officers, primarily with respect to the future operating performance of the Company and the products it expects to offer and other statements contained herein regarding matters that are not historical facts, are "forward-looking" statements. Future filings with the Securities and Exchange Commission, future press releases and future oral or written statements made by or with the approval of the Company, which are not statements of historical fact, may contain forward-looking statements. Because such statements include risks and uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements. For a more detailed listing of some of the risks and uncertainties facing the Company, please see the Form 10-K for the year ended April 30, 2011 filed by the Company with the Securities and Exchange Commission.
All forward-looking statements speak only as of the date on which they are made. The Company undertakes no obligation to update such statements to reflect events that occur or circumstances that exist after the date on which they are made.
General
Tundra Gold Corp. (“the Company”) was incorporated under the laws of the State of Nevada on September 16, 2009 under the name Titan Gold Corp. On February 25, 2010, the Company amended its articles of incorporation to change its name from Titan Gold Corp. to Tundra Gold Corp. We have a specific business plan that we are pursuing as aggressively as possible within the limits of our resources. We are an exploration-stage company as defined by the SEC and we are in the business of exploring, and if warranted, advancing mineral properties to the discovery point where we believe maximum shareholder returns can be realized. Our primary focus is in the gold sector and currently our two mineral properties are located in Nevada.
We are dependent upon making a gold deposit discovery at our properties for the furtherance of the Company. Should we be able to make an economic find at one of our properties, we would then be solely dependent upon that mining operation for our revenue and profits, if any. The probability that ore reserves that meet SEC guidelines will be discovered on one our properties is undeterminable at this time. Our claims presently do not have any known mineral resources or reserves. There is no mining plant or equipment located within the property boundaries. Currently, there is no power supply to the mineral claims. A great deal of work is required on our properties before a determination as to the economic and legal feasibility of a mining venture on it can be made.
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Business Operations
We are a new company early in the implementation of our business plan and performing those tasks necessary to raise the appropriate funding to complete our business plan. Our primary focus in the natural resource sector is gold. Our strategic initiatives are to undertake cost efficient and effective exploration activities to discover mineralization and potentially mineral reserves.
Though it is possible to take a resource property that hosts a viable ore deposit into mining production, the costs and time frame for doing so are considerable, and the subsequent return on investment for our shareholders would be very long term indeed. Therefore, we intend to develop joint ventures or sell any ore bodies that we may discover to a major mining company. Many major mining companies obtain their ore reserves through the purchase of ore bodies found by junior exploration companies. Although these major mining companies do some exploration work themselves, many of them rely on junior resource exploration companies to provide them with future deposits for them to mine. By selling or partnering a deposit found by us to these major mining companies, it would provide an immediate return to our shareholders without the long time frame and cost of putting a mine into operation ourselves, and it would also provide future capital for the Company to continue operations.
The search for valuable natural resources as a business is extremely risky. We can provide investors with no assurance that the property we have leased in Nevada contains commercially exploitable reserves. Exploration for natural reserves is a speculative venture involving substantial risk. Few properties that are explored are ultimately developed into producing commercially feasible reserves. Problems such as unusual or unexpected formations and other conditions are involved in mineral exploration and often result in unsuccessful exploration efforts. In such a case, we would be unable to complete our business plan and any money spent on exploration would be lost.
Natural resource exploration and development requires significant capital and our assets and resources are limited. Therefore, we anticipate participating in the natural resource industry through the selling or partnering of our property, the purchase of small interests in producing property, the purchase of properties where feasibility studies already exist or by the optioning of natural resource exploration and development projects. To date we have one property under option, and are in the early stages of exploring this property. There has been no indication as yet that any commercially viable mineral deposits exist on this property, and there is no assurance that a commercially viable mineral deposit exists on our property. Further exploration will be required before a final evaluation as to the economic and legal feasibility is determined.
Exploration Program
In the following discussion, there are references to “unpatented” mining claims. An unpatented mining claim on U.S. government lands establishes a claim to the locatable minerals (also referred to as stakeable minerals) on the land and the right of possession solely for mining purposes. No title to the land passes to the claimant. If a proven economic mineral deposit is developed, provisions of federal mining laws permit owners of unpatented mining claims to patent (to obtain title to) the claim. If you purchase an unpatented mining claim that is later declared invalid by the U.S. government, you could be evicted.
Crescent Fault Property
Tundra has not yet undertaken any significant exploration on the Crescent Fault Property. However, the Company has completed a compilation of the available historic data. A budget proposal submitted by MinQuest was approved by the Company’s Board of Directors in August 2011. The budget will include a drill program and an archeological survey. It is anticipated that in 2011 the Company will undertake the steps necessary to prepare and submit the drill permit application and undertake the drill program in the summer of 2012.
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Marietta Property
MinQuest has provided a work plan for the first year that will include scanning all currently available data, georeferencing all maps in order to digitize drill hole locations, geology and geochemistry. A spread sheet of drill hole information will be compiled from the known historical drilling. All drill hole coordinates, drill hole assays, oxidation boundaries and lithology will be entered into a spread sheet allowing the development of cross-sections in electronic form using industry software. A ground truth of drill hole locations will be performed with a GPS to assess the accuracy of the data. If any underground workings are open, mapping and sampling will be carried out on those underground workings that remain open to determine the attitude of bedding, underground grades and depth of oxidation.
MinQuest has commenced work according to the work plan. In October 2010, the process of scanning and digitizing the historical data was begun. The total work plan is expected to incur approximately 1,000 hours that will range from time spent scanning data to analysis by geologists. The work will be completed by MinQuest and its network of contractors. Herb Duerr, a geologist and the Vice President of MinQuest will do the field work, management, and senior level analysis while a junior level geologist of Desert Pacific, is currently performing the data scanning. Nevada Blue has been scanning and printing the larger items. It is not expected that Mr. Eastwood, a director of the Company and a part-time consultant to MinQuest , will be performing any of the work to be done by MinQuest or its network of subcontractors on the Marietta property. While the Company has no written agreements with MinQuest or its network of subcontractors, MinQuest has informed us that the work to be done on the Marietta property will be performed by the Herb Duerr, employees of his company Desert Pacific and Nevada Blue. It is currently anticipated that this work will be completed by the fall of 2011 and in order to complete the work plan in this time frame it will take approximately 40 hours of time per week.
These results will be evaluated to determine if one or more precious metals may exist within the property boundaries. Our planned program includes compilation of all activities to the present with the goal of producing an outline of mineralized areas that will guide further exploration drilling. However, this program is exploratory in nature and no minable reserves may ever be found.
Results of Operations
We did not earn any revenues during the three months ended July 31, 2011or 2010. The Company is in the exploration stage and we will be in the exploration stage of our business for an extended period of time. As a result we do not anticipate earning revenues until we have developed an exploration property. We can provide no assurance that we will discover commercially exploitable levels of mineral resources on our property, or if such resources are discovered, that we will enter into commercial production of our mineral property.
For the three months ended July 31, 2011 we had a net loss of $35,309 compared to a net loss of $21,789 in the corresponding period in 2010. The increase in the net loss was largely due to the Company incurring $14,214 in mineral property exploration expenses related to the archeological survey and mapping of its Crescent Fault Property. Only $756 in claim payments was incurred in 2010 relating to the Marietta Property. General and administrative expenses were consistent between 2011 and 2010 as they were $16,095 for the three-months ended July 31, 2011 and $16,033 for the three months ended July 31, 2010.
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Liquidity and Capital Resources
We had cash of $279,326 and working capital of $264,207 as of July 31, 2011. We anticipate that we will incur the following expenses over the next twelve months:
We anticipate that we will incur the following over the next twelve months:
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$25,000 in connection with property option payments under the Company’s Marietta and Crescent Fault property agreements;
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$209,000 in property exploration expenses and claim payments in order to meet the requirements of the Company’s property option agreements;
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$43,000 for operating expenses, including working capital and general, legal, accounting and administrative expenses associated with reporting requirements under the Securities Exchange Act of 1934.
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Net cash used in operating activities during the three months ended July 31, 2011 was $18,964 compared to $7,258 during the three months ended July 31, 2010. The cash used in operating activities increased partly due to an increase in the net loss to $35,309 in 2011 compared to $21,789 in 2010. The impact of the higher net loss was partially offset by an increase in inflows from accounts payable and accrued liabilities of $11,828 for the three-months ended July 31, 2011 compared to an inflow of $9,480 in 2010. For the three months ended July 31, 2011, cash received from financing activities was $100,000 from the collection of subscriptions receivable while in 2010, $35,000 was collected from subscriptions receivable and $62,000 from the sale of common stock. Investing activities in 2011 and 2010 consisted of $5,000 related to the annual Marietta property lease payments.
Financing over the next twelve months
Over the next twelve months, the Company intends to explore our properties to determine whether they contain commercially exploitable reserves of gold and silver or other metals. The Company does not intend to hire any employees or to make any purchases of equipment over the next twelve months, as it intends to rely upon outside consultants to provide all the tools needed for the exploratory work being conducted.
Current cash on hand is sufficient for all of the Company’s commitments for the next twelve months. However, the Company will need additional funding to explore and develop its properties in the future. We anticipate that the additional funding that we require 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 additional phases of the exploration program, should we decide to proceed. We believe that debt financing will not be an alternative for funding any further phases in our exploration program. The risky nature of this enterprise 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 can be demonstrated. We do not have any arrangements in place for any future equity financing
Notwithstanding, we cannot be certain that the required additional financing will be available or available on terms favorable to us. If additional funds are raised by the issuance of our equity securities, such as through the issuance and exercise of warrants, then existing stockholders will experience dilution of their ownership interest. If additional funds are raised by the issuance of debt or other equity instruments, we may be subject to certain limitations in our operations, and issuance of such securities may have rights senior to those of the then existing holders of common stock. If adequate funds are not available or not available on acceptable terms, we may be unable to fund expansion, develop or enhance services or respond to competitive pressures.
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Going Concern Consideration
As shown in the accompanying financial statements, the Company has incurred a net loss of $134,793 for the period from September 16, 2009 (inception) to July 31, 2011, and has no sales. The future of the Company is dependent upon its ability to obtain financing and upon future profitable operations from the development of its mineral properties. Management has plans to seek additional capital through a private placement and public offering of its common stock. The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts of and classification of liabilities that might be necessary in the event the Company cannot continue in existence.
There is substantial doubt about our ability to continue as a going concern. Accordingly, our independent auditors included an explanatory paragraph in their report on the April 30, 2011 financial statements regarding concerns about our ability to continue as a going concern. Our financial statements contain additional note disclosures describing the circumstances that lead to this disclosure by our independent auditors.
Off-Balance Sheet Arrangements
We have no off-balance sheet arrangements.
Item 3. Quantitative and Qualitative Disclosure About Market Risk.
Smaller reporting companies are not required to provide the information required by this Item.
Item 4. Controls and Procedures.
EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES
Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, the Company conducted an evaluation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) and Rule 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended (Exchange Act), as of July 31, 2011. Based on this evaluation, our principal executive officer and principal financial officer have concluded that the Company’s disclosure controls and procedures were effective to ensure that information required to be disclosed by the Company in the reports filed or submitted under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms and that the Company’s disclosure and controls are designed to ensure that information required to be disclosed by the Company in the reports that we file or submit under the Exchange Act is accumulated and communicated to management, including our principal executive officer and principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING
There were no changes in our internal controls over financial reporting that occurred during our last fiscal quarter 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.
There are no pending legal proceedings to which the Company is a party or in which any director, officer or affiliate of the Company, any owner of record or beneficially of more than 5% of any class of voting securities of the Company, or security holder is a party adverse to the Company or has a material interest adverse to the Company. The Company’s property is not the subject of any pending legal proceedings.
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Item 1A. Risk Factors.
Smaller reporting companies are not required to provide the information required by this Item 1A.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
None
Item 3. Defaults upon Senior Securities.
None.
Item 4. (Removed and Reserved)
Item 5. Other information.
5(a) There are no further disclosures. All information that was required to be disclosed in a Form 8-K during the fiscal quarter ended January 31, 2011 has been disclosed.
5(b) The Company does not have any procedures by which security holders can recommend nominees to the Board of Directors.
Item 6. Exhibits.
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Exhibit 31
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Certification of Principal Executive and Financial Officer pursuant to Rule 13a-14 of the Securities and Exchange Act of 1934 as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
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Exhibit 32
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Certification of Principal Executive and Financial Officer Pursuant to 18 U.S.C Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
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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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Date: September 8, 2011
TUNDRA GOLD CORP.
By: /s/ Gurpartap Singh Basrai
Gurpartap Singh Basrai
President, Chief Executive
Officer, Secretary and Treasurer
(Principal Executive, Financial, and Accounting Officer)
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