Attached files
| file | filename |
|---|---|
| EXCEL - IDEA: XBRL DOCUMENT - GOLDEN RIVER RESOURCES CORP. | Financial_Report.xls |
| EX-32.2 - EXHIBIT 32.2 - GOLDEN RIVER RESOURCES CORP. | a50065093ex32_2.htm |
| EX-31.1 - EXHIBIT 31.1 - GOLDEN RIVER RESOURCES CORP. | a50065093ex31_1.htm |
| EX-32.1 - EXHIBIT 32.1 - GOLDEN RIVER RESOURCES CORP. | a50065093ex32_1.htm |
| EX-31.2 - EXHIBIT 31.2 - GOLDEN RIVER RESOURCES CORP. | a50065093ex31_2.htm |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
———————
FORM 10-Q
———————
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x
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
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ACT OF 1934
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For the quarterly period ended: September 30, 2011
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or
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
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ACT OF 1934
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For the transition period from: _____________ to _____________
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———————
GOLDEN RIVER RESOURCES CORPORATION
(Exact name of registrant as specified in its charter)
———————
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Delaware
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0-16097
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98-0079697
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(State or Other Jurisdiction
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(Commission
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(I.R.S. Employer
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of Incorporation)
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File Number)
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Identification No.)
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Level 8, 580 St Kilda Road Melbourne, Victoria, 3004, Australia
(Address of Principal Executive Office) (Zip Code)
011 (613) 8532 2860
(Registrant’s telephone number, including area code)
N/A
(Former name, former address and former fiscal year, if changed since last report)
———————
Indicate by check mark whether the registrant (1) 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
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Yes
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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 Regulation S-T 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
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Yes
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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.
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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
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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 Act).
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Yes
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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. There were 56,807,283 outstanding shares of Common Stock as of November 14, 2011.
APPLICABLE ONLY TO REGISTRANTS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.
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Yes
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No
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Table Of Contents
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PAGE NO
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2
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15
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17
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17
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19
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19
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19
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20
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21
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Exh. 31.1
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Certification
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22
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Exh. 31.2
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Certification
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23
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Exh. 32.1
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Certification
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24
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Exh. 32.2
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Certification
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25
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1
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Financial Statements.
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Introduction to Interim Consolidated Financial Statements.
The interim consolidated financial statements included herein have been prepared by Golden River Resources Corporation (“Golden River Resources” or the “Company”) without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (the “Commission”). Certain information and footnote disclosure normally included in consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading. These interim consolidated financial statements should be read in conjunction with the financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended June 30, 2011.
In the opinion of management, all adjustments, consisting of normal recurring adjustments and consolidating entries, necessary to present fairly the consolidated financial position of the Company and subsidiaries as of September 30, 2011, the results of its consolidated operations for the three month periods ended September 30, 2011 and September 30, 2010, and the changes in its consolidated cash flows for the three month periods ended September 30, 2011 and September 30, 2010, have been included. The results of consolidated operations for the interim periods are not necessarily indicative of the results for the full year.
The preparation of consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.
UNLESS OTHERWISE INDICATED, ALL FINANCIAL INFORMATION PRESENTED IS IN CANADIAN DOLLARS.
2
GOLDEN RIVER RESOURCES CORPORATION AND SUBSIDIARIES
(An Exploration Stage Company)
Consolidated Balance Sheet
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September 30,
2011
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June 30,
2011
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|||||||
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CDN$000’s
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CDN$000’s
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|||||||
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ASSETS
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||||||||
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Current Assets
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||||||||
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Cash
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1,810 | 3,792 | ||||||
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Receivables
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285 | 152 | ||||||
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Prepaid expenses and deposits
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96 | 41 | ||||||
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Total Current Assets
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2,191 | 3,985 | ||||||
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Non Current Assets
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||||||||
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Cash held for site remediation (note 10)
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109 | 109 | ||||||
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Property, plant and equipment (note 11)
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783 | 979 | ||||||
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Mineral rights (note 9)
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39,763 | 39,763 | ||||||
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Total Non Current Assets
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40,655 | 40,851 | ||||||
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Total Assets
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42,846 | 44,836 | ||||||
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LIABILITIES AND STOCKHOLDERS' EQUITY
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||||||||
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Current Liabilities
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||||||||
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Accounts payable and accrued expenses
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1,101 | 812 | ||||||
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Note payable
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- | 900 | ||||||
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Total Current Liabilities
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1,101 | 1,712 | ||||||
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Non Current Liabilities
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||||||||
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Advances from affiliates (note 3)
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316 | 54 | ||||||
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Deferred tax liability (note 13)
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6,333 | 6,373 | ||||||
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Total Non Current Liabilities
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6,649 | 6,427 | ||||||
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Total Liabilities
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7,750 | 8,139 | ||||||
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Commitments (Note 6)
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||||||||
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Stockholders’ Equity:
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||||||||
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Common Stock: $.0001 par value
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||||||||
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400,000,000 shares authorized
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||||||||
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56,807,408 issued and outstanding
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5 | 5 | ||||||
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Additional paid-in-capital
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53,767 | 53,578 | ||||||
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Less treasury stock at cost, 250 shares
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(19 | ) | (19 | ) | ||||
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Accumulated other comprehensive loss
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(372 | ) | (372 | ) | ||||
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Retained (deficit) during exploration stage
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(7,697 | ) | (6,553 | ) | ||||
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Retained (deficit) prior to exploration stage
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(24,748 | ) | (24,748 | ) | ||||
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Golden River Resources Stockholders’ Equity
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20,936 | 21,891 | ||||||
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Non Controlling Interests (note 8)
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14,160 | 14,806 | ||||||
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Total Equity
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35,096 | 36,697 | ||||||
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Total Liabilities and Equity
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42,846 | 44,836 | ||||||
The accompanying notes are an integral part of the consolidated financial statements.
3
GOLDEN RIVER RESOURCES CORPORATION AND SUBSIDIARIES
(An Exploration Stage Company)
Consolidated Statements of Operations
Three Months Ended September 30, 2011 and 2010 and for the cumulative period
July 1, 2002 (inception of exploration activities) to September 30, 2011
(Unaudited)
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Three Months
Ended
September 30,
2011
CDN$000’s
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Three Months
Ended
September 30,
2010
CDN$000’s
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July 1, 2002
to
September 30,
2011
CDN$000’s
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||||||||||
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Revenues
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$ | - | $ | - | $ | - | ||||||
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Costs and expenses:
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||||||||||||
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Stock based compensation
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21 | - | 2,943 | |||||||||
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Exploration expenditure
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1,020 | 829 | 9,783 | |||||||||
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Depreciation and amortization
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26 | 125 | 945 | |||||||||
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Interest expense (income), net
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3 | 42 | 486 | |||||||||
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Legal, accounting and professional
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111 | 236 | 2,514 | |||||||||
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Administration expenses
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385 | 571 | 7,773 | |||||||||
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Total costs and expenses
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1,566 | 1,803 | 24,444 | |||||||||
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(Loss) from operations
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(1,566 | ) | (1,803 | ) | (24,444 | ) | ||||||
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Foreign currency exchange (loss)
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(16 | ) | (126 | ) | (375 | ) | ||||||
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Adjustment to fair value on stepped acquisition
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- | - | 7,433 | |||||||||
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Gain on bargain purchase
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- | - | 10,305 | |||||||||
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Profit on disposal of plant and equipment
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- | - | 48 | |||||||||
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Write off on plant and equipment
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- | - | (170 | ) | ||||||||
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Other income:
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||||||||||||
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Profit from sale of equity investment
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- | - | 1,355 | |||||||||
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Gain on settlement of guarantee obligation
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- | - | 1,199 | |||||||||
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Net gain from sale of subsidiary
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- | - | 641 | |||||||||
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Interest (expense) income – net, related entity
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- | - | 5 | |||||||||
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– Other
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- | 35 | 17 | |||||||||
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(Loss) before income taxes and equity in(losses) of unconsolidated entities
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(1,582 | ) | (1,894 | ) | (3,986 | ) | ||||||
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Benefit/(provision) for deferred income taxes (note 13)
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40 | (105 | ) | (6,333 | ) | |||||||
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(Loss) before equity in (losses) of unconsolidated entities
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(1,542 | ) | (1,999 | ) | (10,319 | ) | ||||||
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Equity in (losses) of unconsolidated entities
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- | - | (26 | ) | ||||||||
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Net(loss)
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(1,542 | ) | (1,999 | ) | (10,345 | ) | ||||||
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Net loss attributable to non-controlling interests
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398 | 448 | 2,648 | |||||||||
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Net (loss) attributable to Golden River Resources stockholders
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(1,144 | ) | (1,551 | ) | (7,697 | ) | ||||||
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Basic and diluted net (loss) per common equivalent shares
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||||||||||||
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Net (loss) per share
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(0.02 | ) | (0.06 | ) | (0.78 | ) | ||||||
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Weighted average number of common equivalent shares used per share calculation
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56,807 | 24,158 | 9,888 | |||||||||
The accompanying notes are an integral part of the consolidated financial statements.
4
GOLDEN RIVER RESOURCES CORPORATION AND SUBSIDIARIES
(An Exploration Stage Company)
Consolidated Statements of Cash Flows
Three Months Ended September 30, 2011 and 2010 and for the cumulative period
July 1, 2002 (inception of exploration activities) to September 30, 2011
(Unaudited)
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Three Months
Ended
September 30,
2011
CDN$000’s
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Three Months
Ended
September 30,
2010
CDN$000’s
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July 1, 2002
to
September 30,
2011
CDN$000’s
|
||||||||||
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CASH FLOW FROM OPERATING ACTIVITIES
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||||||||||||
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Net (loss)
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(1,542 | ) | (1,999 | ) | (10,345 | ) | ||||||
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Adjustments to reconcile net (loss) to net cash provided by (used) in operating activities
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||||||||||||
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Foreign currency exchange loss
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16 | 126 | 375 | |||||||||
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Depreciation/amortization of plant and equipment
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26 | 125 | 945 | |||||||||
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Stock based compensation
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21 | - | 2,943 | |||||||||
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Benefit/(provision) for deferred income taxes
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(40 | ) | 105 | 6,333 | ||||||||
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Equity in profits(losses) of unconsolidated entities
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- | - | 26 | |||||||||
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Adjustment to fair value on stepped acquisition
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- | - | (7,433 | ) | ||||||||
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Gain on bargain purchase of controlled entities
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- | - | (10,305 | ) | ||||||||
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Profit from sale of equity investment
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- | - | (1,355 | ) | ||||||||
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Profit on disposal of plant and equipment
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- | - | (48 | ) | ||||||||
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Gain on settlement of guarantee obligation
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- | - | (1,199 | ) | ||||||||
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Net gain from sale of subsidiary
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- | - | (641 | ) | ||||||||
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Write off of exploration costs
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- | - | 377 | |||||||||
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Write off of plant and equipment
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- | - | 170 | |||||||||
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Accrued interest added to principal
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- | - | 259 | |||||||||
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Net change (net of acquisition) in:
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||||||||||||
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Receivables
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(133 | ) | (47 | ) | (292 | ) | ||||||
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Staking deposit
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- | - | 22 | |||||||||
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Prepaid expenses and deposits
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(55 | ) | (27 | ) | (126 | ) | ||||||
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Accounts payable and accrued expenses
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274 | 1,726 | (1,305 | ) | ||||||||
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Accrued site remediation
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- | 400 | (200 | ) | ||||||||
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Net Cash (Used) in/Provided by Operating Activities
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(1,433 | ) | 409 | (21,799 | ) | |||||||
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CASH FLOW FROM INVESTING ACTIVITIES
|
||||||||||||
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Acquisition of majority owned subsidiary, net of cash acquired
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(80 | ) | (1,477 | ) | (10,142 | ) | ||||||
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Proceeds of sale of equity investment
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- | - | 1,963 | |||||||||
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Proceeds from disposal of property, plant and equipment
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221 | - | 297 | |||||||||
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Proceeds of disposal of subsidiary (net)
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- | - | 9,803 | |||||||||
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Purchase of plant and equipment
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(50 | ) | (13 | ) | (420 | ) | ||||||
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Net Cash Provided by/(Used) In Investing Activities
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91 | (1,490 | ) | 1,501 | ||||||||
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CASH FLOW FROM FINANCING ACTIVITIES
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||||||||||||
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Borrowings from affiliates
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(638 | ) | - | 8,203 | ||||||||
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Repayments to affiliates
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- | - | (7,156 | ) | ||||||||
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Proceeds from issuance of stock
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- | 1,475 | 13,861 | |||||||||
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Repayment of borrowings
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- | - | (139 | ) | ||||||||
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Sale of warrants (net)
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- | - | 4,749 | |||||||||
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Re-purchase of warrants
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- | - | (579 | ) | ||||||||
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Proceeds from loan payable
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- | - | 3,261 | |||||||||
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Net Cash (Used) In/Provided by Financing Activities
|
(638 | ) | 1,475 | 22,200 | ||||||||
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Effects of Exchange Rate on Cash
|
(2 | ) | - | (92 | ) | |||||||
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Net Increase/(decrease) in Cash
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(1,982 | ) | 394 | 1,810 | ||||||||
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Cash at Beginning of Period
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3,792 | 957 | - | |||||||||
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Cash at End of Period
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1,810 | 1,351 | 1,810 | |||||||||
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Supplemental Disclosures
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||||||||||||
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Interest Paid
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3 | 42 | 526 | |||||||||
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NON CASH FINANCING ACTIVITY
|
||||||||||||
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Debt repaid through issuance of shares
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- | - | 5,771 | |||||||||
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Write off of plant and equipment
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- | - | 170 | |||||||||
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Stock options recorded as deferred compensation
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- | - | 1,258 | |||||||||
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Extinguishment of related party debt
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- | - | 593 | |||||||||
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Stock issued for acquisition of properties
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- | - | 627 | |||||||||
The accompanying notes are an integral part of the consolidated financial statements.
5
GOLDEN RIVER RESOURCES CORPORATION AND SUBSIDIARIES
(An Exploration Stage Company)
Consolidated Statements of Stockholders’ Equity (Deficit)
September 30, 2011
and for the cumulative period July 1, 2002
(inception of exploration activities) to September 30, 2011
(Unaudited)
|
Shares
|
Common Stock
Amount
|
Treasury
Stock, at
Cost
|
Additional
Paid-in
Capital
|
Retained Profit/(Deficit)
during the Exploration stage
|
Retained
(Deficit)
prior to Exploration stage
|
Deferred Compen-sation
|
Accumulated Other
Compre-
hensive
Loss
|
Non-Controlling Interests
|
Total
|
|||||||||||||||||||||||||||||||
| 000’s |
CDN$000’s
|
CDN$000’s
|
CDN$000’s
|
CDN$000’s
|
CDN$000’s
|
CDN$000’s
|
CDN$000’s
|
CDN$000’s
|
CDN$000’s
|
|||||||||||||||||||||||||||||||
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Balance June 30, 2002
|
635 | - | $ | (19 | ) | $ | 24,061 | - | $ | (24,748 | ) | - | $ | (461 | ) | - | $ | (1,167 | ) | |||||||||||||||||||||
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Net loss
|
- | - | - | - | $ | (639 | ) | - | - | - | - | (639 | ) | |||||||||||||||||||||||||||
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Balance June 30, 2003
|
635 | - | $ | (19 | ) | $ | 24,061 | $ | (639 | ) | $ | (24,748 | ) | - | $ | (461 | ) | - | $ | (1,806 | ) | |||||||||||||||||||
| Issuance of 175,398 shares and | ||||||||||||||||||||||||||||||||||||||||
| warrants in lieu of debt | ||||||||||||||||||||||||||||||||||||||||
|
repayment
|
175 | - | - | $ | 2,331 | - | - | - | - | - | $ | 2,331 | ||||||||||||||||||||||||||||
| Sale of 167,000 shares and | ||||||||||||||||||||||||||||||||||||||||
|
warrants
|
167 | - | - | $ | 2,221 | - | - | - | - | - | $ | 2,221 | ||||||||||||||||||||||||||||
| Issuance of 694,306 shares on | ||||||||||||||||||||||||||||||||||||||||
|
cashless exercise of options
|
694 | - | - | - | - | - | - | - | - | $ | 0 | |||||||||||||||||||||||||||||
| Net unrealized (loss) on foreign | ||||||||||||||||||||||||||||||||||||||||
|
exchange
|
- | - | - | - | - | - | - | $ | (317 | ) | - | $ | (317 | ) | ||||||||||||||||||||||||||
|
Net (loss)
|
- | - | - | - | $ | (1,616 | ) | - | - | - | - | $ | (1,616 | ) | ||||||||||||||||||||||||||
|
Balance June 30, 2004
|
1,671 | - | $ | (19 | ) | $ | 28,613 | $ | (2,255 | ) | $ | (24,748 | ) | - | $ | (778 | ) | - | $ | 813 | ||||||||||||||||||||
| Issuance of 140,000 options under | ||||||||||||||||||||||||||||||||||||||||
|
2004 stock option plan
|
- | - | - | $ | 1,646 | - | - | $ | (1,646 | ) | - | - | $ | 0 | ||||||||||||||||||||||||||
| Amortization of 140,000 options | ||||||||||||||||||||||||||||||||||||||||
|
under 2004 stock option plan
|
- | - | - | - | - | - | $ | 1,095 | - | - | $ | 1,095 | ||||||||||||||||||||||||||||
| Net unrealized (loss) on foreign | ||||||||||||||||||||||||||||||||||||||||
|
exchange
|
- | - | - | - | - | - | - | $ | (17 | ) | - | $ | (17 | ) | ||||||||||||||||||||||||||
|
Net/(loss)
|
- | - | - | - | $ | (3,156 | ) | - | - | - | - | $ | (3,156 | ) | ||||||||||||||||||||||||||
|
Balance June 30, 2005
|
1,671 | - | $ | (19 | ) | $ | 30,259 | $ | (5,411 | ) | $ | (24,748 | ) | $ | (551 | ) | $ | (795 | ) | - | $ | (1,265 | ) | |||||||||||||||||
| To eliminate deferred | ||||||||||||||||||||||||||||||||||||||||
| compensation against Additional | ||||||||||||||||||||||||||||||||||||||||
|
Paid-In Capital
|
- | - | - | $ | (551 | ) | - | - | $ | 551 | - | - | $ | 0 | ||||||||||||||||||||||||||
| Issuance of 1,000,000 shares | ||||||||||||||||||||||||||||||||||||||||
| and 2,000,000 options in lieu of | ||||||||||||||||||||||||||||||||||||||||
|
debt repayment
|
1,000 | - | - | $ | 3,321 | - | - | - | - | - | $ | 3,321 | ||||||||||||||||||||||||||||
| Capital gain on shares and | ||||||||||||||||||||||||||||||||||||||||
| options issued in lieu of debt | ||||||||||||||||||||||||||||||||||||||||
|
repayment
|
- | - | - | $ | (1,610 | ) | - | - | - | - | - | $ | (1,610 | ) | ||||||||||||||||||||||||||
| Sale of 2,000,000 normal | ||||||||||||||||||||||||||||||||||||||||
|
warrants
|
- | - | - | $ | 827 | - | - | - | - | - | $ | 827 | ||||||||||||||||||||||||||||
| Sale of 1,000,000 special | ||||||||||||||||||||||||||||||||||||||||
|
warrants
|
- | - | - | $ | 887 | - | - | - | - | - | $ | 887 | ||||||||||||||||||||||||||||
| Amortization of 140,000 options | ||||||||||||||||||||||||||||||||||||||||
|
under 2004 stock option plan
|
- | - | - | $ | 532 | - | - | - | - | - | $ | 532 | ||||||||||||||||||||||||||||
| Net unrealized gain on foreign | ||||||||||||||||||||||||||||||||||||||||
|
exchange
|
- | - | - | - | - | - | - | $ | 369 | - | $ | 369 | ||||||||||||||||||||||||||||
|
Net (loss)
|
- | - | - | - | $ | (1,588 | ) | - | - | - | - | $ | (1,588 | ) | ||||||||||||||||||||||||||
|
Balance June 30, 2006
|
2,671 | - | $ | (19 | ) | $ | 33,665 | $ | (6,999 | ) | $ | (24,748 | ) | $ | - | $ | (426 | ) | - | $ | 1,473 | |||||||||||||||||||
6
GOLDEN RIVER RESOURCES CORPORATION AND SUBSIDIARIES
(An Exploration Stage Company)
Consolidated Statements of Stockholders’ Equity (Deficit)
September 30, 2011
and for the cumulative period July 1, 2002
(inception of exploration activities) to September 30, 2011
(Unaudited) Continued
|
Shares
|
Common Stock
Amount
|
Treasury
Stock, at
Cost
|
Additional
Paid-in
Capital
|
Retained Profit/(Deficit)
during the Exploration stage
|
Retained
(Deficit)
prior to Exploration stage
|
Deferred Compen-sation
|
Accumulated Other
Compre-
hensive
Loss
|
Non-Controlling Interests
|
Total
|
|||||||||||||||||||||||||||||||
| 000’s |
CDN$000’s
|
CDN$000’s
|
CDN$000’s
|
CDN$000’s
|
CDN$000’s
|
CDN$000’s
|
CDN$000’s
|
CDN$000’s
|
CDN$000’s
|
|||||||||||||||||||||||||||||||
| Costs associated with sale of | ||||||||||||||||||||||||||||||||||||||||
|
normal and special warrants
|
- | - | - | $ | (3 | ) | - | - | - | - | - | $ | (3 | ) | ||||||||||||||||||||||||||
| Amortization of 140,000 options | ||||||||||||||||||||||||||||||||||||||||
|
under 2004 stock option plan
|
- | - | - | $ | 19 | - | - | - | - | - | $ | 19 | ||||||||||||||||||||||||||||
| Amortization of 465,000 options | ||||||||||||||||||||||||||||||||||||||||
|
under 2006 stock option plan
|
- | - | - | $ | 510 | - | - | - | - | - | $ | 510 | ||||||||||||||||||||||||||||
| Net unrealized gain on foreign | ||||||||||||||||||||||||||||||||||||||||
|
exchange
|
- | - | - | - | - | - | - | $ | 48 | - | $ | 48 | ||||||||||||||||||||||||||||
|
Net (loss)
|
- | - | - | - | $ | (1,965 | ) | - | - | - | - | $ | (1,965 | ) | ||||||||||||||||||||||||||
|
Balance June 30, 2007
|
2,671 | $ | - | $ | (19 | ) | $ | 34,191 | $ | (8,964 | ) | $ | (24,748 | ) | $ | - | $ | (378 | ) | - | $ | 82 | ||||||||||||||||||
| Amortization of 465,000 options | ||||||||||||||||||||||||||||||||||||||||
|
under 2006 stock option plan
|
- | - | - | $ | 333 | - | - | - | - | - | $ | 333 | ||||||||||||||||||||||||||||
|
Net unrealized gain on foreign exchange
|
- | - | - | - | - | - | - | $ | 27 | - | $ | 27 | ||||||||||||||||||||||||||||
|
Net (loss)
|
- | - | - | - | $ | (1,073 | ) | - | - | - | - | $ | (1,073 | ) | ||||||||||||||||||||||||||
|
Balance June 30, 2008
|
2,671 | $ | - | $ | (19 | ) | $ | 34,524 | $ | (10,037 | ) | $ | (24,748 | ) | $ | - | $ | (351 | ) | - | $ | (631 | ) | |||||||||||||||||
| Amortization of 465,000 options | ||||||||||||||||||||||||||||||||||||||||
|
under 2006 stock option plan
|
- | - | - | $ | 173 | - | - | - | - | - | $ | 173 | ||||||||||||||||||||||||||||
|
Sale of 10,000,000 shares
|
10,000 | $ | 1 | - | $ | 681 | - | - | - | - | - | $ | 682 | |||||||||||||||||||||||||||
| Net unrealized (loss) on foreign | ||||||||||||||||||||||||||||||||||||||||
|
exchange
|
- | - | - | - | - | - | - | $ | (43 | ) | - | $ | (43 | ) | ||||||||||||||||||||||||||
| Forgiveness of advances from | ||||||||||||||||||||||||||||||||||||||||
|
affiliate
|
- | - | - | $ | 588 | - | - | - | - | - | $ | 588 | ||||||||||||||||||||||||||||
|
Net (loss)
|
- | - | - | - | $ | (1,252 | ) | - | - | - | - | $ | (1,252 | ) | ||||||||||||||||||||||||||
|
Balance June 30, 2009
|
12,671 | $ | 1 | $ | (19 | ) | $ | 35,966 | $ | (11,289 | ) | $ | (24,748 | ) | $ | - | $ | (394 | ) | - | $ | (483 | ) | |||||||||||||||||
| Amortization of 465,000 options | ||||||||||||||||||||||||||||||||||||||||
|
under 2006 stock option plan
|
- | - | - | $ | 39 | - | - | - | - | $ | 39 | |||||||||||||||||||||||||||||
|
Sale of 9,960,351 shares
|
9,960 | $ | 1 | - | $ | 10,763 | - | - | - | - | - | $ | 10,764 | |||||||||||||||||||||||||||
| Issuance of 300,000 shares as | ||||||||||||||||||||||||||||||||||||||||
| part purchase price of mining | ||||||||||||||||||||||||||||||||||||||||
|
properties
|
300 | - | - | $ | 627 | - | - | - | - | - | $ | 627 | ||||||||||||||||||||||||||||
|
Re-purchase of warrants
|
- | - | - | $ | (579 | ) | - | - | - | - | - | $ | (579 | ) | ||||||||||||||||||||||||||
| Net unrealized gain on foreign | ||||||||||||||||||||||||||||||||||||||||
|
exchange
|
- | - | - | - | - | - | - | $ | 22 | - | $ | 22 | ||||||||||||||||||||||||||||
|
Net profit
|
- | - | - | - | $ | 10,261 | - | - | - | - | $ | 10,261 | ||||||||||||||||||||||||||||
| Adjustment for additional | ||||||||||||||||||||||||||||||||||||||||
| investment in consolidated | ||||||||||||||||||||||||||||||||||||||||
|
subsidiary
|
- | - | - | $ | 1,994 | - | - | - | - | $ | (1,994 | ) | $ | 0 | ||||||||||||||||||||||||||
| Fair value of non-controlling | ||||||||||||||||||||||||||||||||||||||||
|
interest
|
- | - | - | - | - | - | - | - | $ | 20,552 | $ | 20,552 | ||||||||||||||||||||||||||||
| Net loss attributable to non- | ||||||||||||||||||||||||||||||||||||||||
|
controlling interests
|
- | - | - | - | $ | 1,404 | - | - | - | $ | (1,404 | ) | $ | 0 | ||||||||||||||||||||||||||
|
Balance June 30, 2010
|
22,931 | $ | 2 | $ | (19 | ) | $ | 48,810 | $ | 376 | $ | (24,748 | ) | $ | - | $ | (372 | ) | $ | 17,154 | $ | 41,203 | ||||||||||||||||||
7
GOLDEN RIVER RESOURCES CORPORATION AND SUBSIDIARIES
(An Exploration Stage Company)
Consolidated Statements of Stockholders’ Equity (Deficit)
September 30, 2011
and for the cumulative period July 1, 2002
(inception of exploration activities) to September 30, 2011
(Unaudited) Continued
|
Shares
|
Common Stock
Amount
|
Treasury
Stock, at
Cost
|
Additional
Paid-in
Capital
|
Retained Profit/(Deficit)
during the Exploration stage
|
Retained
(Deficit)
prior to Exploration stage
|
Deferred Compen-sation
|
Accumulated Other
Compre-
hensive
Loss
|
Non-Controlling Interests
|
Total
|
|||||||||||||||||||||||||||||||
| 000’s |
CDN$000’s
|
CDN$000’s
|
CDN$000’s
|
CDN$000’s
|
CDN$000’s
|
CDN$000’s
|
CDN$000’s
|
CDN$000’s
|
CDN$000’s
|
|||||||||||||||||||||||||||||||
|
Issue of 33,875,000 shares
|
33,876 | $ | 3 | - | $ | 3,094 | - | - | - | - | - | $ | 3,097 | |||||||||||||||||||||||||||
| Amortization of 800,000 options | ||||||||||||||||||||||||||||||||||||||||
| under employee stock option | ||||||||||||||||||||||||||||||||||||||||
|
plan
|
- | - | - | $ | 162 | - | - | - | - | - | $ | 162 | ||||||||||||||||||||||||||||
|
Net (loss)
|
- | - | - | - | $ | (7,775 | ) | - | - | - | - | $ | (7,775 | ) | ||||||||||||||||||||||||||
| Adjustment for additional | ||||||||||||||||||||||||||||||||||||||||
| investment in consolidated | ||||||||||||||||||||||||||||||||||||||||
|
subsidiary
|
- | - | - | $ | 1,512 | - | - | - | - | $ | (1,512 | ) | $ | 0 | ||||||||||||||||||||||||||
| Adjustment due to issue of | ||||||||||||||||||||||||||||||||||||||||
|
shares by subsidiary
|
- | - | - | - | - | - | - | - | $ | 10 | $ | 10 | ||||||||||||||||||||||||||||
| Net loss attributable to non- | ||||||||||||||||||||||||||||||||||||||||
|
controlling interests
|
- | - | - | - | $ | 846 | - | - | - | $ | (846 | ) | $ | 0 | ||||||||||||||||||||||||||
|
Balance June 30, 2011
|
56,807 | $ | 5 | $ | (19 | ) | $ | 53,578 | $ | (6,553 | ) | $ | (24,748 | ) | $ | - | $ | (372 | ) | $ | 14,806 | $ | 36,697 | |||||||||||||||||
| Amortization of 900,000 options | ||||||||||||||||||||||||||||||||||||||||
| under employee stock option | ||||||||||||||||||||||||||||||||||||||||
|
plan
|
- | - | - | $ | 21 | - | - | - | - | - | $ | 21 | ||||||||||||||||||||||||||||
|
Net (loss)
|
- | - | - | - | $ | (1,542 | ) | - | - | - | - | $ | (1,542 | ) | ||||||||||||||||||||||||||
| Adjustment for additional | ||||||||||||||||||||||||||||||||||||||||
| investment in consolidated | ||||||||||||||||||||||||||||||||||||||||
|
subsidiary
|
- | - | - | $ | 168 | - | - | - | - | $ | (248 | ) | $ | (80 | ) | |||||||||||||||||||||||||
| Net loss attributable to non- | ||||||||||||||||||||||||||||||||||||||||
|
controlling interests
|
- | - | - | - | $ | 398 | - | - | - | $ | (398 | ) | $ | 0 | ||||||||||||||||||||||||||
|
Balance September 30, 2011
|
56,807 | $ | 5 | $ | (19 | ) | $ | 53,767 | $ | (7,697 | ) | $ | (24,748 | ) | $ | - | $ | (372 | ) | $ | 14,160 | $ | 35,096 | |||||||||||||||||
The accompanying notes are an integral part of the consolidated financial statements.
8
GOLDEN RIVER RESOURCES CORPORATION AND SUBSIDIARIES
(An Exploration Stage Company)
Notes to Consolidated Financial Statements
September 30, 2011
|
(1)
|
Organisation
|
Golden River Resources Corporation (“Golden River Resources” or the “Company”) is incorporated in the State of Delaware. The principal shareholders of Golden River Resources are companies associated with the President of Golden River Resources and his spouse. These companies owned 96.6% of Golden River Resources as of September 30, 2011.
In May 2002, the Company incorporated a new wholly owned subsidiary, Golden Bull Resources Corporation (formerly 4075251 Canada Inc), a corporation incorporated under the laws of Canada. Golden Bull Resources Corporation is undertaking exploration activities for gold in Canada.
Golden River Resources, as part of its business strategy, is increasing its gold and base metal exploration activity in Canada and is continually sourcing new ground in Canada which is one of the most prospective areas for new gold discoveries. On March 17, 2009, the Company announced that it had reached agreement with Acadian Mining Corporation (TSX: ADA) ("Acadian") to subscribe in a private placement transaction giving Golden River Resources a 68.67% holding of Acadian. As of September 30, 2011, Golden River Resources held 38,994,020 common shares in Acadian for a 71.96% interest. On November 17, 2010, Acadian consolidated its outstanding common shares on the basis of one post-consolidated share for every ten pre-consolidated shares as approved by Acadian shareholders.
The financial statements presented herein have been prepared on a consolidated basis to include the accounts of Golden River Resources, Acadian and its other subsidiaries (collectively “the Company”). All intercompany balances and transactions have been eliminated in consolidation.
The Company's consolidated 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, Golden River Resources is an exploration stage company which has not yet commenced revenue producing operations and has sustained recurring losses since inception, all of which raises substantial doubt as to its ability to continue as a going concern.
In addition, Golden River Resources has historically relied on loans and advances from corporations affiliated with the President of Golden River Resources and fund raising through the sale of equity instruments. Based on discussions with these affiliate companies, the Company believes this source of funding will continue to be available.
Other than the arrangements noted above, the Company has not confirmed any other arrangement for ongoing funding. The Company’s ability to continue operations through fiscal 2012 is dependent upon future funding from capital raisings, or its ability to commence revenue producing operations and positive cash flows.
|
(2)
|
Recent Accounting Pronouncements
|
In September 2011, FASB issued Accounting Standard Update (“ASU”) No. 2011-08, Testing Goodwill for Impairment. This ASU is intended to simplify how entities test goodwill for impairment. ASU 2011-08 permits an entity to first assess qualitative factors to determine whether it is “more likely than not” that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test described in Topic 350, Intangibles-Goodwill and Other. The more-likely-than-not threshold is defined as having a likelihood of more than 50%. This new guidance is effective for fiscal years and interim periods beginning after December 15, 2011. The Company does not expect this guidance to have a significant impact on our consolidated financial position, results of operations or cash flows.
|
(3)
|
Affiliate Transactions
|
Golden River Resources advances to and receives advances from various affiliates. All advances between consolidated affiliates are eliminated on consolidation.
The Company has entered into an agreement with AXIS Consultants Pty Ltd (“AXIS”) to provide geological, management and administration services to the Company. AXIS is affiliated through common management. The Company is one of ten affiliated companies to which AXIS provides services. Each of the companies has some common Directors, officers and shareholders. Golden River Resources holds a 9.09% interest in AXIS at a cost of A$1 and is accounted for under the cost method. Any profits generated by AXIS are returned to its shareholders in the form of dividends.
During the three months ended September 30, 2010, AXIS advanced the Company CDN$222,996 and provided services in accordance with the service agreement of CDN$61,413. During the three months ended September 30, 2010 AXIS did not charge interest. The amount owed to AXIS at June 30, 2011 CDN$54,242 and is reflected in non-current liabilities – advances from affiliates.
9
During the three months ended September 30, 2011, AXIS advanced the Company CDN$168,310 and provided services in accordance with the service agreement of CDN$92,985. The amount owed to AXIS at September 30, 2011 was CDN$315,537 and is reflected in non-current liabilities – advances from affiliates. During the three months ended September 30, 2011, AXIS did not charge interest.
During fiscal 2010, the Company sold shares of common stock to Northern Capital Resources Corp, a Nevada corporation (“NCRC”), pursuant to certain subscription agreements. Mr Joseph Gutnick, the Company’s President, is the Chairman and Chief Executive Officer of NCRC and certain companies with which Mr Gutnick is affiliated owned approximately 38.08% of the outstanding common stock of NCRC. In addition, Legend International Holdings, Inc., of which Mr. Gutnick is the Chairman and Chief Executive Officer and a principal stockholder, owns 31.46% of NCRC. As of September 30, 2011, NCRC owned approximately 96.6% of the outstanding common stock of the Company.
In July 2009, Acadian acquired the remaining 50% of the 15 Mile Stream mineral claims for a cash payment of CDN$70,000 and a non-interest bearing note for CDN$1.0 million due July 2010 and a 1% net smelter royalty payable to Mr. Will Felderhof, the former President and CEO of Acadian, and members of his family. On July 8, 2010, the Company extended the terms of the CDN$1.0 million note for a further 12 months and paid a CDN$100,000 principal payment. On July 8, 2011, the Company repaid the amount owing in full.
|
(4)
|
Issue of Options under Stock Option Plan
|
In October 2004, the Board of Directors and Remuneration Committee of the Company adopted a Stock Option Plan. The Company issued 605,000 options under the plan. At September 30, 2011, the options are fully vested.
Since the issue of the options, 120,000 options have lapsed following the termination of participants to the issue.
A summary of the options outstanding and exercisable at September 30, 2011 are as follows:
|
Outstanding
|
Outstanding
|
Exercisable
|
Exercisable
|
|
|
Number of options
|
80,000
|
405,000
|
80,000
|
405,000
|
|
Exercise price
|
CDN$10.00
|
CDN$3.08
|
CDN$10.00
|
CDN$3.08
|
|
Expiration date
|
October 15, 2014
|
October 15, 2016
|
October 15, 2014
|
October 15, 2016
|
Acadian
At the annual and special meeting of shareholders of Acadian held on June 14, 2007, the shareholders adopted a 10% "rolling" incentive stock option plan (the "Plan"). Options granted under the Plan have a five-year term. Options are granted at a price no lower than the market price of the common shares at the time of the grant. The rules of the Toronto Stock Exchange ("TSX") provide that all unallocated options issuable under a "rolling" stock option plan must be approved by shareholders every three years after institution of the stock option plan. The plan was approved at the Annual General Meeting of Acadian held June 24, 2010. In determining the stock-based compensation expense, in fiscal 2011, the fair value of the options issued were estimated using a Black-Scholes option pricing model with the weighted average assumptions used of risk-free interest rate of 1.50%, expected dividend yield of 0.00% expected stock price volatility of 62%, expected life of options of 5 years and grant date fair value CDN$0.30.
Acadian options currently outstanding are:
On June 15, 2010, the Company granted 500,000 options to one director of the Company with an exercise price of CDN$0.45 per share expiring June 15, 2015, to be vested one-third on grant date, one-third after 12 months from grant date and one-third after 24 months from grant date. The total value of the options equates to CDN$138,765 and such amount is amortized over the vesting period. For the three months ending September 30, 2011, stock based compensation expense relating to stock options was CDN$5,782.
A summary of the Acadian options outstanding and exercisable at September 30, 2011 are as follows:
|
Outstanding
|
Exercisable
|
|
|
Number of options
|
500,000
|
333,333
|
|
Exercise price
|
CDN$0.45
|
CDN$0.45
|
|
Expiration date
|
June 15, 2015
|
June 15, 2015
|
10
As at September 30, 2011, there was CDN$17,346 of unrecognized compensation cost, before income taxes, related to unvested stock options.
On August 18, 2010, the Company granted 300,000 Acadian options to three directors of the Company with an exercise price of CDN$0.45 per share expiring August 18, 2015, to be vested one-third on grant date, one-third after 12 months from grant date and one-third after 24 months from grant date. The total value of the options equates to CDN$56,349 and such amount is amortized over the vesting period. For the three months ending September 30, 2011, stock based compensation expense relating to stock options was CDN$5,748.
A summary of the options outstanding and exercisable at September 30, 2011 are as follows:
|
Outstanding
|
Exercisable
|
|
|
Number of options
|
300,000
|
200,000
|
|
Exercise price
|
CDN$0.45
|
CDN$0.45
|
|
Expiration date
|
August 18, 2015
|
August 18, 2015
|
As at September 30, 2011, there was CDN$8,609 of unrecognized compensation cost, before income taxes, related to unvested stock options.
On June 23, 2011, Acadian granted 100,000 options to its Chief Financial Officer with an exercise price of CDN$0.45 per share, expiry date of June 23, 2016 to be vested one third on grant date, one third after 12 months from grant date and one third after 24 months from grant date. The total value of the options equates to CDN$12,338 and such amount is amortized over the vesting period. For the three months ended September 30, 2011, stock based compensation expense relating to stock options was CDN$1,542.
A summary of the options outstanding and exercisable at September 30, 2011 are as follows:
|
Outstanding
|
Exercisable
|
|
|
Number of options
|
100,000
|
33,333
|
|
Exercise price
|
CDN$0.45
|
CDN$0.45
|
|
Expiration date
|
June 23, 2016
|
June 23, 2016
|
As at September 30, 2011, there was CDN$6,683 of unrecognized compensation cost, before income taxes, related to unvested stock options.
On July 13, 2011, the Company granted an aggregate of 200,000 options to seven employees with an exercise price of $0.45 per share, expiring July 13, 2016, to be vested one third on grant date, one third 12 months from grant date and one third 24 months from grant date. The total value of the options equates to CDN$20,712 and such amount is amortised over the vesting period. For the three months ending September 30, 2011, stock based compensation expense relating to stock options was CDN$8,630.
A summary of the options outstanding and exercisable at September 30, 2011 are as follows:
|
Outstanding
|
Exercisable
|
|
|
Number of options
|
200,000
|
66,666
|
|
Exercise price
|
CDN$0.45
|
CDN$0.45
|
|
Expiration date
|
July 13, 2016
|
July 13, 2016
|
As at September 30, 2011, there was CDN$12,082 of unrecognized compensation cost, before income taxes, related to unvested stock options.
|
(5)
|
Profit(Loss) per share
|
The Company calculates profit/(loss) per share in accordance with ASC Topic 260, Earnings per Share. Basic profit/(loss) per share is computed based on the weighted average number of common shares outstanding during the period.
11
The following table reconciles the diluted weighted average shares outstanding used for the computation:
|
Three months ended
September 30
|
|||||
|
Diluted weighted average shares
|
2011
‘000
|
2010
‘000
|
|||
|
Basic
|
56,807 | 24,158 | |||
|
Effect of employee stock based awards
|
- | - | |||
|
Diluted weighted average shares outstanding
|
56,807 | 24,158 | |||
Options to acquire 485,000 shares of common stock were not included in the diluted weighted average shares outstanding as such effects would be anti-dilutive.
|
(6)
|
Commitments
|
In July 2011, the Company entered into a lease for an office premises with minimum annual lease payments of CDN$112,682. The lease begins on July 1, 2011 and ends on June 30, 2016 with a right to terminate after June 30, 2013 for a penalty equal to four months base rent.
The Company is committed to minimum annual lease payments of CDN$103,607 on its office premises until October 2013. Effective September 1, 2010, the Company has sublet the office premises for a rental equivalent of the lease commitment.
Future minimum contractual obligations under operating leases are as follows:
|
CDN$
|
||||
|
2012
|
216,289 | |||
|
2013
|
216,289 | |||
|
2014
|
112,682 | |||
|
2015
|
112,682 | |||
|
2016
|
112,682 | |||
| 770,624 | ||||
The Company has an obligation to spend CDN$611,252 on its exploration properties or make payments in lieu of expenditure during fiscal 2012 to maintain its properties.
Total rent expense incurred by the Company amounted to CDN$15,061 for the three months ended September 30, 2011and CDN$27,811 for the three months ended September 30, 2010
Acadian has an obligation to spend CDN$363,100 and issue 29,118 Acadian shares on its exploration properties during fiscal 2012 to maintain its properties.
|
(7)
|
Fair Value Of Financial Instruments
|
The Company’s financial instruments consist of cash, receivables, accounts payable, accrued expenses and advances from affiliates. The carrying amounts of receivables, accounts payable and accrued expenses approximate their respective fair values because of the short maturities of these expenses. The fair values of advances from affiliates are not practicable to estimate as no similar market exists for these instruments and as it does not have a specified date of repayment.
|
(8)
|
Investments/Subsidiaries
|
At June 30, 2011, the Company’s holding in Acadian was 71.48%. During the three months ended September 30, 2011, the Company purchased an additional 259,500 shares in Acadian through on-market purchases in the Toronto Stock Exchange, increasing its holding in Acadian to 71.96% at September 30, 2011. The cost to the Company was CDN$79,985. As a result of this transaction, the Company recorded a CDN$168,000 adjustment to additional paid in capital and CDN$248,000 to non-controlling interest, representing the difference between the amount paid for such additional shares and the carry amount of the investment.
The amount of revenue of Acadian for the three months ended September 30, 2011 and September 30, 2010 included in the Consolidated Statement of Operations were CDN$nil and CDN$nil and the amount of loss was CDN$1,417,000 and CDN$1,599,000 respectively.
12
|
(9)
|
Mineral Rights
|
The fair-value of the mineral rights acquired in the acquisition of Acadian was based upon a valuation report prepared by an investment banking firm with substantial experience in merger and acquisition transactions including provision of fairness opinions and valuations. Accordingly, the Company had attributed a fair value of CDN$43,790,000 to mineral rights. On May 31, 2011, Acadian sold 100% of its shares in ScoZinc Limited, a wholly owned subsidiary, the attributed fair value of CDN$4,026,855 to ScoZinc mineral rights was included in the assets sold.
The carrying value of mineral rights at September 30, 2011 is CDN$39,763,000.
Under US GAAP, exploration expenditure is expensed to the income statement as incurred, unless there is a reserve on the property.
|
(10)
|
Cash held for Site Remediation
|
Acadian has agreed with the relevant authorities in Canada to remediate exploration and mine sites to an agreed status at the end of exploration and/or mining operations at the sites. Currently, Acadian has CDN$109,000 on deposit with the relevant authorities in Canada to cover the cost of this remediation work.
|
(11)
|
Property, Plant and Equipment
|
Property, plant and equipment is stated at cost. The Company records depreciation and amortization, when appropriate, using the straight-line method over the estimated useful lives of the assets. Expenditures for maintenance and repairs are charged to expense as incurred. Additions, major renewals and replacements that increase the property's useful life are capitalized. Assets sold or retired, together with the related accumulated depreciation are removed from the appropriate accounts and the resultant gain or loss is included in net income (loss).
|
At September 30, 2011
|
At June 30, 2011
|
||||||||||||
|
Cost
|
Accumulated Depreciation
|
Net Book
Value
|
Cost
|
Accumulated Depreciation
|
Net Book
Value
|
||||||||
|
CDN$
|
CDN$
|
CDN$
|
CDN$
|
CDN$
|
CDN$
|
||||||||
|
Office
|
274,371 | (25,141 | ) | 249,230 | 260,119 | (21,986 | ) | 238,133 | |||||
|
Automotive equipment
|
93,726 | (15,699 | ) | 78,027 | 93,726 | (9,373 | ) | 84,353 | |||||
|
Office fixtures and computer equipment
|
375,430 | (104,175 | ) | 271,255 | 339,238 | (88,321 | ) | 250,917 | |||||
|
Land
|
184,717 | - | 184,717 | 405,617 | - | 405,617 | |||||||
| 928,244 | (145,015 | ) | 783,229 | 1,098,700 | (119,680 | ) | 979,020 | ||||||
The depreciation expense for the three months ended September 30, 2011 amounted to CDN$26,000 and for the three months ended September 30, 2010 amounted to CDN$125,000. Net book value of assets disposed of for the three months ended September 30, 2011 amounted to CDN$221,000.
|
(12)
|
Comprehensive Income (Loss)
|
The Company follows ASC Topic 220 Comprehensive Income (“ASC 220”). ASC 220 requires a company to report comprehensive profit/(loss) and its components in a full set of financial statements. Comprehensive profit/(loss) is the change in equity during a period from transactions and other events and circumstances from non-owner sources, such as unrealized gains (losses) on foreign currency translation adjustments. Changes in unrealized foreign currency translation adjustments during the three months ended September 30, 2011 and 2010 amounted to CDN$nil and CDN$nil respectively. Accordingly, comprehensive (loss) for the three months ended September 30, 2011 and 2010 amounted to CDN$(1,144,000) and CDN$(1,551,000) respectively.
|
(13)
|
Income Taxes
|
The Company recognises deferred tax assets or liabilities for the expected future consequences attributable to differences between the financial statement carrying amount of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using the enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled.
The Company’s net deferred taxes at September 30, 2011 is summarized as follows:
|
USA
CDN$000s
|
Canada
CDN$000s
|
Total
CDN$000s
|
||||||||||
|
Deferred tax assets
|
||||||||||||
|
Net operating loss carry-forward
|
2,060 | 150 | 2,210 | |||||||||
|
Exploration expenditure
|
556 | 1,560 | 2,116 | |||||||||
| 2,616 | 1,710 | 4,326 | ||||||||||
|
Less valuation allowance
|
(2,616 | ) | (1,710 | ) | (4,326 | ) | ||||||
13
|
USA
CDN$000s
|
Canada
CDN$000s
|
Total
CDN$000s
|
||||||||||
| - | - | - | ||||||||||
|
Deferred tax liability
|
||||||||||||
|
Investment in subsidiary
|
(6,333 | ) | - | (6,333 | ) | |||||||
|
Net deferred taxes
|
(6,333 | ) | - | (6,333 | ) |
Total available net operating loss carryforwards in the United States, which are subject to limitations, amount to approximately CDN$5,900,000 at June 30, 2011 and expire in years 2023 through 2030. Net operating loss carryforwards in Canada do not have a definite expiration date and amounted to CDN$4,869,000.
Included in accounts payable and accrued expenses is an amount of CDN$260,688 being an estimated liability to the IRS in relation to late filing of prior year tax returns. The Company has estimated the potential maximum liability and is making representations to the IRS in relation to the quantum of this liability.
|
(14)
|
Subsequent Events
|
The Company has evaluated significant events subsequent to the balance sheet date and has determined that there were no subsequent events or transactions which would require recognition or disclosure in the consolidated financial statements.
14
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
FUND COSTS CONVERSION
The consolidated statements of operations and other financial and operating data contained elsewhere here in and the consolidated balance sheets and financial results have been reflected in Canadian dollars unless otherwise stated.
The following table shows the average rate of exchange of the Canadian dollar as compared to the US dollar and Australian dollar during the periods indicated:
|
3 months ended September 30, 2010
|
CDN$1.00 = US$0.97190
|
|
3 months ended September 30, 2011
|
CDN$1.00 = US$.96818
|
|
3 months ended September 30, 2010
|
CDN$1.00 = A$1.00210
|
|
3 months ended September 30, 2011
|
CDN$1.00 = A$0.98860
|
Prior to July 1, 2009, the Company’s functional and reporting currency was the Australian dollar and its subsidiary, Golden Bull Resources Corporation’s functional currency was the Canadian dollar. However, as a result of the purchase of the controlling interest in Acadian Mining Corporation in Canada in July 2009, the Company’s fiscal 2010 revenue and expenses are primarily denominated in Canadian dollars (CDN$). ASC Topic 830 Foreign Currency Matters states that the functional currency of an entity is the currency of the primary economic environment in which the entity operates. Accordingly the Company determined that from July 1, 2009 the functional and reporting currency of the Company is the Canadian dollar. Assets, liabilities and portions of equity were translated at the rate of exchange at July 1, 2009 and portions of equity were translated at historical exchange rates. Revenue and expenses were translated at actual rates. Translation gains and losses were included as part of accumulated other comprehensive loss.
The Company’s financial statements are prepared in Canadian dollars (CDN$). A number of the costs and expenses of the Company are incurred in US and Australian dollars and the conversion of these costs to CDN$ means that the comparison of the three months ended September 30, 2011 to the three months ended September 30, 2010 does not always present a true comparison.
GENERAL
Golden River Resources as part of its business strategy increased its gold exploration activity in Canada. As part of this strategy in fiscal 2009, the Company acquired an interest in Acadian Mining Corporation (“Acadian”), a Canadian gold, lead and zinc exploration corporation. Effective May 31, 2011, Acadian sold its lead and zinc assets, including Scotia Mine for CDN$10 million. During the three months ended September 30, 2011, the Company purchased an additional 259,500 shares in Acadian at a cost of CDN$79,985. As at September 30, 2011, Golden River Resources held a 71.96% interest in Acadian.
RESULTS OF OPERATIONS
Three Months Ended September 30, 2011 vs. Three Months Ended September 30, 2010.
As a result of the sale by Acadian of all of the shares in ScoZinc Limited on May 31, 2011, there is a lack of comparability between the Company’s results for the three months ended September 30, 2011 compared to the three months ended September 30, 2010.
Costs and expenses decreased from CDN$1,803,000 in the three months ended September 30, 2010 to CDN$1,566,000 in the three months ended September 30, 2011.
The decrease in costs and expenses is a net result of:
|
|
a)
|
an increase in stock based compensation from CDN$nil for the three months ended September 30, 2010 to CDN$21,000 for the three months ended September 30, 2011 as a result of options issued to Directors by Acadian which are being progressively expensed over the vesting period. See Note 4 concerning the Company’s outstanding stock options.
|
|
|
b)
|
an increase in the exploration expenditure expense from CDN$829,000 for the three months ended September 30, 2010 to CDN$1,020,000 for the three months ended September 30, 2011. For Golden River Resources, the costs related to consultants providing exploration reviews and advice on the Slave and Committee Bay properties as no field work was undertaken during the three months ended September 30, 2010 or 2011 by the Company. Included within exploration expenditure expense for the three months ended September 30, 2011 is CDN$962,000 for work undertaken by Acadian for field exploration activities on its gold properties. The increase in exploration expenditure during the three months ended September 30, 2011 was primarily due to completion by Acadian of a drill program on the Fifteen Mile project. Included within exploration expenditure expense for the three months ended September 30, 2010 is CDN$460,000 for certain maintenance work undertaken by Acadian on its Scotia mine which was on care and maintenance until its sale on May 31, 2011.
|
15
|
|
c)
|
a decrease in depreciation and amortization expense from CDN$125,000 for the three months ended September 30, 2010 to CDN$26,000 for the three months ended September 30, 2011. The depreciation and amortization expense relates to the activities of Acadian. For the three months ending September 30, 2010 depreciation and amortization for Acadian included amortization of the ScoZinc mine and mill and equipment.
|
|
|
d)
|
a decrease in interest expense from CDN$42,000 for the three months ended September 30, 2010 to CDN$3,000 for the three months ended September 30, 2011. The interest expense for the three months ended September 30, 2010 relates to the activities of Acadian which was paying interest on capital debt and the final cost of having the debtor in possession financing in place. During May 2011 the debt was settled and satisfied.
|
|
|
e)
|
a decrease in legal, accounting and professional expense from CDN$236,000 for the three months ended September 30, 2010 to CDN$111,000 for the three months ended September 30, 2011. Included within legal, accounting and professional expense for the three months ended September 30, 2011 is CDN$24,000 for costs associated with the Company’s SEC compliance obligations and CDN$87,000 for Acadian which relates to general legal work, audit and stock transfer costs. The decrease is primarily the result of a reduction in secretarial services, financial reporting reviews and taxation services.
|
|
|
f)
|
a decrease in administrative costs including salaries from CDN$571,000 in the three months ended September 30, 2010 to CDN$385,000 in the three months ended September 30, 2011. Included within administrative expense for the three months ended September 30, 2011 is CDN$321,000 for Acadian compared to CDN$535,000 for the three months ended September 30, 2010 which includes head office salaries, rent, office related costs and travel. The decrease relates to the decrease in head office salaries, and a decrease in office and statutory filing costs.
|
As a result of the foregoing, the loss from operations increased from CDN$1,803,000 for the three months ended September 30, 2010 to CDN$1,566,000 for the three months ended September 30, 2011.
The Company recorded a foreign currency exchange loss of CDN$16,000 for the three months ended September 30, 2011 and CDN$126,000 for the three months ended September 30, 2010, primarily due to revaluation of advances from affiliates which are denominated in Australian dollars.
The loss before income taxes and equity in (losses) of unconsolidated entities for the three months ended September 30, 2011 was CDN$1,582,000 compared to CDN$1,894,000 for the three months ended September 30, 2010.
The Company has recorded a benefit for deferred tax of CDN$(40,000) for the three months ended September 30, 2011 compared to a provision for tax of CDN$105,000 for the three months ended September 30, 2010, as a result of acquisition of further shares in Acadian and an update of net operating loss carry-forward in Canada..
The loss before equity in (losses) of unconsolidated entities for the three months ended September 30, 2011 was CDN$1,542,000 compared to CDN$1,999,000 for the three months ended September 30, 2010.
The net loss was CDN$1,542,000 for the three months ended September 30, 2011 compared to CDN$1,999,000 for the three months ended September 30, 2010.
The share of the loss attributable to the non-controlling interests of Acadian amounted to CDN$398,000 for the three months ended September 30, 2011 compared to CDN$448,000 for the three months ended September 30, 2010. At September 30, 2010, the Company’s interest in Acadian was 71.48% and at September 30, 2011, its interest was 71.96%. During the three months ended September 30, 2011, the Company purchased a further 259,500 shares in Acadian through on-market purchase in the Toronto Stock Exchange at a cost of CDN$79,985, which resulted in a decrease in non-controlling interest of CDN$248,000
The net loss attributable to Golden River Resources stockholders amounted to CDN$1,144,000 for the three months ended September 30, 2011 compared to CDN$1,551,000 for the three months ended September 30, 2010.
16
Liquidity and Capital Resources
For the three months ended September 30, 2011, net cash used by operating activities was CDN$1,433,000 primarily consisting of the net loss of CDN$1,542,000; and a decrease in accounts payable and accrued expenses of CDN$274,000; net cash provided by investing activities of CDN$91,000 being primarily proceeds from sale of land CDN$221,000 and the net cost of the additional investment in Acadian; and net cash used in financing activities of CDN$638,000 consisting of net repayment to affiliates.
As of September 30, 2011, the Company had short-term obligations of CDN$1,101,000 comprising accounts payable and accrued expenses.
We have CDN$1,810,000 in cash at September 30, 2011.
Since fiscal 2004, we have undertaken field exploration programs on our Committee Bay and Slave properties. In relation to the Committee Bay properties, this was more than the minimum required expenditure and as a result, we have not had a legal obligation to undertake further exploration on these properties. However, our properties are prospective for gold and other minerals and commencing in fiscal 2013, we will be required to bring the Committee Bay properties to lease status by completing a survey and making application for lease status. In respect to the Slave properties, the Company will be required to incur expenditure or make payments in lieu of expenditure of CDN$577,000 prior to the end of 2011 and CDN$611,252 prior to the end of 2012. Further, Acadian has an obligation to spend amounts on its mineral properties in order to maintain the leases and is required to spend CDN$363,100 and issue 29,118 Acadian shares on gold exploration properties during fiscal 2012. Our budget for general and administration costs for fiscal 2012 is CDN$500,000 and Acadian’s budget for the general and administration costs for fiscal 2012 is CDN$1,400,000. We are currently investigating capital raising opportunities which may be in the form of either equity or debt, to provide funding for working capital purposes and future exploration programs. There can be no assurance that such capital raising will be successful, or that even if an offer of financing was received by the Company, it is on terms acceptable to the Company.
Cautionary Safe Harbor Statement under the United States Private Securities Litigation Reform Act of 1995.
Certain information contained in this Form 10-Q’s forward looking information within the meaning of the Private Securities Litigation Act of 1995 (the “Act”) which become law in December 1995. In order to obtain the benefits of the “safe harbor” provisions of the act for any such forwarding looking statements, the Company wishes to caution investors and prospective investors about significant factors which among others have affected the Company’s actual results and are in the future likely to affect the Company’s actual results and cause them to differ materially from those expressed in any such forward looking statements. This Form 10-Q report contains forward looking statements relating to future financial results. Actual results may differ as a result of factors over which the Company has no control including, without limitation, the risks of exploration and development stage projects, political risks of development in foreign countries, risks associated with environmental and other regulatory matters, mining risks and competition and the volatility of gold and copper prices, movements in the foreign exchange rate and the availability of additional financing for the Company. Investors are cautioned not to put undue reliance on forward-looking statements. We disclaim any intent or obligation to update publicly these forward-looking statements, whether as a result of new information, future events or otherwise. Additional information which could affect the Company’s financial results is included in the Company’s Form 10-K on file with the Securities and Exchange Commission.
|
Quantitative and Qualitative Disclosures About Market Risk.
|
The Company reports in CDN$ and holds cash in Australian dollars. At September 30, 2011, this amounted to A$40,001. A change in the exchange rate between the A$ and the CDN$ will have an effect on the amounts reported in the Company’s consolidated financial statements, and create a foreign exchange gain or loss. A movement of 1% in the A$ versus the CDN$ exchange rate will have a CDN$400 effect on the consolidated balance sheet and statement of operations.
|
Controls and Procedures.
|
(a) Disclosure Controls and Procedures
Our principal executive officer and our principal financial officer evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934 as amended) as of the end of the period covered by this report. Based on that evaluation, such principal executive officer and principal financial officer concluded that, the Company’s disclosure controls and procedures were effective as of the end of the period covered by this report at the reasonable level of assurance.
(b) Changes in Internal Control Over Financial Reporting
There were no changes in our internal control over financial reporting during the first quarter of fiscal 2012 that materially affected, or are reasonably likely to materially affect, internal control over financial reporting.
17
|
(c)
|
Other
|
We believe that a controls system, no matter how well designed and operated, cannot provide absolute assurance that the objectives of the controls system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected. Therefore, a control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Our disclosure controls and procedures are designed to provide such reasonable assurance of achieving our desired control objectives, and our principal executive officer and principal financial officer have concluded, as of September 30, 2011, that our disclosure controls and procedures were effective in achieving that level of reasonable assurance.
18
|
Legal Proceedings.
|
Not Applicable
|
Risk Factors.
|
Not Applicable for Smaller Reporting Company
|
Unregistered Sales of Equity Securities and Use of Proceeds.
|
Not Applicable
|
Defaults Upon Senior Securities.
|
Not Applicable
|
Removed and Reserved.
|
Not Applicable
|
Other Information.
|
See Item 2 above.
|
Exhibits.
|
|
(a)
|
Exhibit No.
|
Description
|
|
|
31.1
|
Certification of Chief Executive Officer required by Rule 13a-14(a)/15d-14(a) under the Exchange Act
|
||
|
31.2
|
Certification of Chief Financial Officer required by Rule 13a-14(a)/15d-14(a) under the Exchange Act
|
||
|
32.1
|
Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of Sarbanes-Oxley act of 2002
|
||
|
32.2
|
Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of Sarbanes-Oxley act of 2002
|
||
|
101
|
The following materials from the Golden River Resources Corporation Quarterly Report on Form 10-Q for the quarter ended September 30, 2011 formatted in Extensible Business Reporting Language (XBRL): (i) the Consolidated Statements of Operations, (ii) the Consolidated Balance Sheets, (iii) the Consolidated Statements of Cash Flows and (iv) related notes.
|
||
| #101.INS XBRL Instance Document. | |||
| #101.SCH XBRL Taxonomy Extension Schema Document. | |||
| #101.CAL XBRL Taxonomy Extension Calculation Linkbase Document. | |||
| #101.LAB XBRL Taxonomy Extension Label Linkbase Document. | |||
| #101.PRE XBRL Taxonomy Extension Presentation Linkbase Document. | |||
| #101.DEF XBRL Taxonomy Extension Definition Linkbase Document. | |||
|
__________________
|
|||
|
# Filed herewith. In accordance with Rule 406T of Regulation S-T, these interactive data files are deemed “not filed” for purposes of section 18 of the Exchange Act, and otherwise are not subject to liability under that section.
|
19
(FORM 10-Q)
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.
|
Golden River Resources Corporation
|
||
|
By:
|
/s/ Joseph I. Gutnick
|
|
|
Joseph I. Gutnick
|
||
|
Chairman of the Board, President and
|
||
|
Chief Executive Officer
|
||
|
(Principal Executive Officer)
|
||
|
By:
|
/s/ Peter Lee
|
|
|
|
Peter Lee
|
|
|
|
Director, Secretary and
|
|
|
|
Chief Financial Officer
|
|
|
|
(Principal Financial Officer)
|
|
|
Dated: November 14, 2011
|
20
|
Exhibit No.
|
Description
|
|
|
31.1
|
Certification of Chief Executive Officer required by Rule 13a-14(a)/15d-14(a) under the Exchange Act
|
|
|
31.2
|
Certification of Chief Financial Officer required by Rule 13a-14(a)/15d-14(a) under the Exchange Act
|
|
|
32.1
|
Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of Sarbanes-Oxley act of 2002
|
|
|
32.2
|
Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of Sarbanes-Oxley act of 2002
|
|
|
101
|
The following materials from the Golden River Resources Corporation Quarterly Report on Form 10-Q for the quarter ended September 30, 2011 formatted in Extensible Business Reporting Language (XBRL): (i) the Consolidated Statements of Operations, (ii) the Consolidated Balance Sheets, (iii) the Consolidated Statements of Cash Flows and (iv) related notes.
|
|
| #101.INS XBRL Instance Document. | ||
| #101.SCH XBRL Taxonomy Extension Schema Document. | ||
| #101.CAL XBRL Taxonomy Extension Calculation Linkbase Document. | ||
| #101.LAB XBRL Taxonomy Extension Label Linkbase Document. | ||
| #101.PRE XBRL Taxonomy Extension Presentation Linkbase Document. | ||
| #101.DEF XBRL Taxonomy Extension Definition Linkbase Document. | ||
|
__________________
|
||
|
# Filed herewith. In accordance with Rule 406T of Regulation S-T, these interactive data files are deemed “not filed” for purposes of section 18 of the Exchange Act, and otherwise are not subject to liability under that section.
|
21