NOTE 1 ORGANIZATION
The condensed consolidated financial statements include the accounts of Bullion Monarch Mining, Inc., EnShale, Inc., Dourave Mining and Exploration, Inc., and Dourave Mineracao E Exploracao Mineral LTDA, Dourave-Bullion Limited Partnership and Dourave-Bullion Mineracao E Exploracao Mineral LTDA (collectively referred to as Bullion). All significant intercompany transactions and balances have been eliminated in these consolidated financial statements.
Bullion derives its revenues from royalties as a result of exploring, acquiring and developing mining properties in the western United States and South America. Bullion currently has interests in properties in Nevada, Utah, Oregon and Brazil. Bullion currently has four mines producing royalties in the Carlin Trend, Nevada.
EnShale, Inc. (EnShale), a majority-owned subsidiary of Bullion, is a Wyoming corporation and is engaged in several activities associated with the development of technology for the extraction of oil from oil shale deposits.
Dourave Mining and Exploration Inc. (Dourave Canada) is a wholly owned subsidiary of Bullion. Dourave Mineracao E Exploracao Mineral LTDA (Dourave Brazil) is a majority-owned subsidiary of Dourave Canada. Dourave-Bullion Joint Venture, L.P., DBA Dourave-Bullion Limited Partnership (DB Partnership) is owned 33% by Bullion and 66% by Dourave Brazil. Dourave-Bullion Mineracao E Exploracao Mineral LTDA (DBM) is 99% owned by DB Partnership. Dourave currently holds interests in resource properties in Brazil.
NOTE 2 BASIS OF PRESENTATION
The accompanying financial statements have been prepared in accordance with the requirements of the SEC for unaudited interim financial information. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the three-month period ended July 31, 2011, are not necessarily indicative of the results that may be expected for the fiscal year ending April 30, 2012. For further information, refer to the audited consolidated financial statements for the fiscal year ended April 30, 2011, and footnotes thereto included in Bullions Annual Report on Form 10-K for the fiscal year ended April 30, 2011.
The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements as well as the reported amount of revenues and expenses during the reporting period. Actual results may differ from these estimates.
Certain immaterial reclassifications have been made to the income statements for the three month periods ended July 31, 2010, to conform to the 2011 presentation.
NOTE 3 SIGNIFICANT ACCOUNTING POLICIES
Exploration and Development Costs
In general, exploration costs are expensed as incurred. When Bullion has determined that a mineral property can be economically developed as a result of establishing proven and probable reserves, the costs incurred to acquire and develop such property are capitalized. Costs incurred to maintain current production or to maintain assets on a standby basis are charged to operations. Costs of abandoned projects are charged to operations upon abandonment.