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EXCEL - IDEA: XBRL DOCUMENT - TRESORO MINING CORP. | Financial_Report.xls |
EX-32.1 - SECTION 906 CERTIFICATION - TRESORO MINING CORP. | exhibit32-1.htm |
EX-31.2 - SECTION 302 CERTIFICATION - TRESORO MINING CORP. | exhibit31-2.htm |
EX-31.1 - SECTION 302 CERTIFICATION - TRESORO MINING CORP. | exhibit31-1.htm |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
20549
FORM 10-Q
[ x ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended November 30, 2011
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _____to _____
Commission File Number: 000-52660
TRESORO MINING CORP.
(Exact
name of small business issuer as specified in its charter)
Nevada | 20-1769847 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
880-666 Burrard Street, Vancouver, British Columbia | V6C 2G3 |
(Address of principal executive offices) | (Zip Code) |
(604) 681-3130
Registrants 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 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.
Yes[ x ] 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 during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such files).
Yes[ x ] No[ ]
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, non-accelerated filer, and smaller reporting company in Rule 12b-2 of the Exchange Act.
Large accelerated filer [ ] | Accelerated filer [ ] |
Non-accelerated filer [ ] (Do not check if a smaller reporting company) | Smaller reporting company [ x ] |
Indicate by check mark whether the registrant is a shell company
(as defined in Rule 12b-2 of the Exchange Act).
Yes[ ] No[ x ]
State the number of shares outstanding of each of the issuers classes of common equity, as of the latest practicable date. 20,459,369 shares of common stock as of January 19, 2012.
TRESORO MINING CORP. |
Quarterly Report on Form 10-Q |
For The Quarterly Period Ended |
November 30, 2011 |
INDEX |
2
FORWARD-LOOKING STATEMENTS
This quarterly report contains forward-looking statements that involve risks and uncertainties. Any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as may, will, should, expect, plan, intend, anticipate, believe, estimate, predict, potential or continue, the negative of such terms or other comparable terminology. In evaluating these statements, you should consider various factors, including the assumptions, risks and uncertainties outlined in this quarterly report under Risk Factors. These factors or any of them may cause our actual results to differ materially from any forward-looking statement made in this quarterly report. Forward-looking statements in this quarterly report include, among others, statements regarding:
-
our capital needs;
-
business plans; and
-
expectations.
While these forward-looking statements, and any assumptions upon which they are based, are made in good faith and reflect our current judgment regarding future events, our actual results will likely vary, sometimes materially, from any estimates, predictions, projections, assumptions or other future performance suggested herein. Some of the risks and assumptions include:
-
our need for additional financing;
-
our exploration activities may not result in commercially exploitable quantities of ore on our mineral properties;
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the risks inherent in the exploration for minerals such as geologic formation, weather, accidents, equipment failures and governmental restrictions;
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our limited operating history;
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our history of operating losses;
-
the potential for environmental damage;
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our lack of insurance coverage;
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the competitive environment in which we operate;
-
the level of government regulation, including environmental regulation;
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changes in governmental regulation and administrative practices;
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our dependence on key personnel;
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conflicts of interest of our directors and officers;
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our ability to fully implement our business plan;
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our ability to effectively manage our growth; and
-
other regulatory, legislative and judicial developments.
We advise the reader that these cautionary remarks expressly qualify in their entirety all forward-looking statements attributable to us or persons acting on our behalf. Important factors that you should also consider, include, but are not limited to, the factors referred to under Risk Factors in our annual report on Form 10-K file with the SEC.
The forward-looking statements in this quarterly report are made as of the date of this quarterly report and we do not intend or undertake to update any of the forward-looking statements to conform these statements to actual results, except as required by applicable law, including the securities laws of the United States.
3
PART I FINANCIAL INFORMATION
Item 1. Interim Consolidated Financial Statements
The following unaudited interim consolidated financial statements of Tresoro Mining Corp. (sometimes referred to as we, us or our Company) are included in this quarterly report on Form 10-Q:
It is the opinion of management the unaudited condensed interim consolidated financial statements for the nine months ended November 30, 2011 and 2010 include all adjustments necessary in order to ensure that the unaudited condensed interim consolidated financial statements are not misleading. These unaudited condensed interim consolidated financial statements reflect all adjustments which are, in the opinion of management, necessary to present fairly the financial position, results of operations and cash flows for the interim periods presented in accordance with accounting principles generally accepted in the United States of America. Except where noted, these unaudited interim condensed consolidated financial statements follow the same accounting policies and methods of their application as our Companys audited annual consolidated financial statements for the year ended February 28, 2011. All adjustments are of a normal recurring nature. These unaudited condensed interim consolidated financial statements should be read in conjunction with our Companys audited annual consolidated financial statements as of and for the year ended February 28, 2011.
4
TRESORO MINING CORP. |
(formerly Mercer Gold Corporation) |
(An Exploration Stage Company) |
CONSOLIDATED BALANCE SHEETS |
(Expressed in U.S. Dollars) |
November 30, | February 28, | |||||
2011 | 2011 | |||||
(unaudited) | (audited) | |||||
ASSETS | ||||||
CURRENT ASSETS | ||||||
Cash and cash equivalents | $ | 7,806 | $ | 126,134 | ||
Amounts receivable | 35,009 | 15,690 | ||||
Prepaid expense | 47,026 | 40,120 | ||||
TOTAL CURRENT ASSETS | 89,841 | 181,944 | ||||
PROPERTY AND EQUIPMENT (Note 4) | 6,064 | 7,211 | ||||
MINERAL PROPERTY COSTS (Note 5) | 5,650,000 | 5,415,000 | ||||
TOTAL ASSETS | $ | 5,745,905 | $ | 5,604,155 | ||
LIABILITIES AND STOCKHOLDERS EQUITY | ||||||
CURRENT LIABILITIES | ||||||
Accounts payable and accrued liabilities (Note 6) | $ | 1,107,795 | $ | 421,486 | ||
Due to related parties (Note 7) | 85,001 | 55,877 | ||||
Promissory notes payable (Note 8) | 1,544,150 | 1,016,237 | ||||
TOTAL CURRENT LIABILITIES | 2,736,946 | 1,493,600 | ||||
PROMISSORY NOTE PAYABLE (Note 8) | - | 52,500 | ||||
TOTAL LIABILITIES | 2,736,946 | 1,546,100 | ||||
NATURE OF OPERATIONS AND BASIS OF
PRESENTATION, COMMITMENTS AND CONTINGENCIES AND SUBSEQUENT EVENTS (Notes 1, 11 and 13) |
||||||
STOCKHOLDERS EQUITY | ||||||
Capital stock (Note 9) Authorized 140,625,000 shares of common stock, $0.001 par value Issued and outstanding 20,459,375 common shares (February 28, 2011 17,159,375) |
20,459 | 17,159 | ||||
Additional paid-in-capital | 35,264,589 | 33,684,688 | ||||
Warrants | - | 1,009,318 | ||||
Shares to be issued | 100,000 | - | ||||
Accumulated other comprehensive income | 7,428 | - | ||||
Deficit accumulated during exploration stage | (32,383,517 | ) | (30,653,110 | ) | ||
TOTAL STOCKHOLDERS EQUITY | 3,008,959 | 4,058,055 | ||||
TOTAL LIABILITIES AND STOCKHOLDERS EQUITY | $ | 5,745,905 | $ | 5,604,155 |
The accompanying notes are an integral part of these consolidated financial statements.
5
TRESORO MINING CORP. |
(formerly Mercer Gold Corporation) |
(An Exploration Stage Company) |
CONSOLIDATED STATEMENTS OF OPERATIONS |
(Expressed in U.S. Dollars) |
(unaudited) |
For the period | |||||||||||||||
from October | |||||||||||||||
11, 2004 | Three months ended | Nine months ended | |||||||||||||
(inception) to | |||||||||||||||
November 30, | November 30, | November 30, | |||||||||||||
2011 | 2011 | 2010 | 2011 | 2010 | |||||||||||
GENERAL AND ADMINISTRATIVE EXPENSES | |||||||||||||||
Write down of mineral property (Note 5) | $ | 14,625,000 | $ | - | $ | - | $ | - | $ | 100,000 | |||||
Amortization | 1,635 | 213 | - | 768 | 90,000 | ||||||||||
Bank charges and interest | 27,712 | 1,975 | 2,597 | 4,781 | 4,645 | ||||||||||
Consulting fees | 351,477 | 3,740 | 31,147 | 23,740 | 124,194 | ||||||||||
Interest expense (Note 8) | 619,350 | 37,035 | - | 85,318 | 9,607 | ||||||||||
Legal and accounting | 1,173,396 | 226,888 | 25,189 | 329,356 | 237,333 | ||||||||||
Management fees (Note 7) | 516,545 | 36,463 | 49,928 | 69,038 | 14,085 | ||||||||||
Marketing and promotion | 250,423 | 5,894 | 62,668 | 41,484 | 101,591 | ||||||||||
Mineral property exploration | 2,153,892 | - | 516,334 | 776,294 | 754,566 | ||||||||||
Office and miscellaneous | 397,437 | 8,923 | 57,418 | 99,714 | 167,174 | ||||||||||
Rent | 180,457 | 18,085 | 16,660 | 74,304 | 50,668 | ||||||||||
Stock-based compensation (Note 9) | 12,025,148 | 89,888 | 143,625 | 213,883 | 2,702,937 | ||||||||||
Transfer agent fees | 61,152 | 1,043 | 2,127 | 11,834 | 10,107 | ||||||||||
Gain on sale of equipment (Note 4) | (107 | ) | (213 | ) | - | (107 | ) | - | |||||||
TOTAL GENERAL AND ADMINISTRATIVE EXPENSES | 32,383,517 | 429,934 | 907,693 | 1,730,407 | 4,276,997 | ||||||||||
NET LOSS | $ | (32,383,517 | ) | $ | (429,934 | ) | $ | (907,693 | ) | $ | (1,730,407 | ) | $ | (4,276,997 | ) |
OTHER COMPREHENSIVE INCOME | |||||||||||||||
Foreign currency translation adjustment | 7,428 | 9,155 | - | 7,428 | - | ||||||||||
COMPREHENSIVE LOSS | $ | (32,376,089 | ) | $ | (420,779 | ) | $ | (907,693 | ) | $ | (1,722,979 | ) | $ | (4,276,997 | ) |
BASIC AND
DILUTED LOSS AND COMPREHENSIVE LOSS PER COMMON SHARE |
$ | (0.02 | ) | $ | (0.05 | ) | $ | (0.10 | ) | $ | (0.25 | ) | |||
WEIGHTED
AVERAGE NUMBER OF COMMON SHARES OUTSTANDING - BASIC AND DILUTED |
18,085,749 | 17,159,375 | 17,619,739 | 16,930,907 |
The accompanying notes are an integral part of these consolidated financial statements.
6
TRESORO MINING CORP. |
(formerly Mercer Gold Corporation) |
(An Exploration Stage Company) |
CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY (DEFICIENCY) |
FOR THE PERIOD FROM INCEPTION (OCTOBER 11, 2004) TO NOVEMBER 30, 2011 |
(Expressed in U.S. Dollars) |
(unaudited) |
Deficit | ||||||||||||||||||||||||
Accumulated | accumulated | Total | ||||||||||||||||||||||
Common stock | Additional | Shares | other | during | stockholders | |||||||||||||||||||
Number of | paid in | to be | comprehensive | exploration | equity | |||||||||||||||||||
shares | Amount | capital | Warrants | issued | income | stage | (deficiency) | |||||||||||||||||
Balance, October 11, 2004 (inception) | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | |||||||||
Common stock issued for cash
at $0.00013 per share November 29, 2004 (Note 9) |
7,500,000 | 7,500 | (3,500 | ) | - | - | - | - | 4,000 | |||||||||||||||
Common stock issued for cash at $0.00013 per share January 10, 2005 (Note 9) |
4,500,000 | 4,500 | (2,100 | ) | - | - | - | - | 2,400 | |||||||||||||||
Common stock issued for cash at $0.00013 per share January 21, 2005 (Note 9) |
2,812,500 | 2,812 | 12,188 | - | - | - | - | 15,000 | ||||||||||||||||
Common stock issued for cash at $0.00013 per share January 25, 2005 (Note 9) |
375,000 | 375 | 1,625 | - | - | - | - | 2,000 | ||||||||||||||||
Common stock issued for cash at $0.00013 per share February 1, 2005 (Note 9) |
46,875 | 47 | 2,453 | - | - | - | - | 2,500 | ||||||||||||||||
Net loss for the period | - | - | - | - | - | - | (3,051 | ) | (3,051 | ) | ||||||||||||||
Balance, February 28, 2005 | 15,234,375 | 15,234 | 10,666 | - | - | - | (3,051 | ) | 22,849 | |||||||||||||||
Net loss for the year | - | - | - | - | - | - | (12,401 | ) | (12,401 | ) | ||||||||||||||
Balance, February 28, 2006 | 15,234,375 | 15,234 | 10,666 | - | - | - | (15,452 | ) | 10,448 | |||||||||||||||
Contributions to capital by related parties | - | - | 24,000 | - | - | - | - | 24,000 | ||||||||||||||||
Net loss for the year | - | - | - | - | - | - | (64,770 | ) | (64,770 | ) | ||||||||||||||
Balance, February 28, 2007 | 15,234,375 | $ | 15,234 | $ | 34,666 | $ | - | $ | - | $ | - | $ | (80,222 | ) | $ | (30,322 | ) |
The accompanying notes are an integral part of these consolidated financial statements.
7
TRESORO MINING CORP. |
(formerly Mercer Gold Corporation) |
(An Exploration Stage Company) |
CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY (DEFICIENCY) |
FOR THE PERIOD FROM INCEPTION (OCTOBER 11, 2004) TO NOVEMBER 30, 2011 |
(Expressed in U.S. Dollars) |
(unaudited) |
Deficit | ||||||||||||||||||||||||
Accumulated | accumulated | Total | ||||||||||||||||||||||
Common stock | Additional | Shares | other | during | stockholders | |||||||||||||||||||
Number of | paid in | to be | comprehensiv | exploration | equity | |||||||||||||||||||
shares | Amount | capital | Warrants | issued | e income | stage | (deficiency) | |||||||||||||||||
Balance, February 28, 2007 | 15,234,375 | $ | 15,234 | $ | 34,666 | $ | - | $ | - | $ | - | $ | (80,222 | ) | $ | (30,322 | ) | |||||||
Restricted common shares
returned and cancelled (Note 9) |
(3,750,000 | ) | (3,750 | ) | 3,750 | - | - | - | - | - | ||||||||||||||
Common shares issued per Nose Rock Agreement
(Note 9) |
1,875,000 | 1,875 | 13,998,125 | - | - | - | - | 14,000,000 | ||||||||||||||||
Common shares issued for cash at $6.68 per share February 26, 2008 (Note 9) |
150,000 | 150 | 816,766 | - | - | - | - | 816,916 | ||||||||||||||||
Warrants issued for cash February 26, 2008 (Note 9) | - | - | - | 183,084 | - | - | - | 183,084 | ||||||||||||||||
Net loss for the year | - | - | - | - | - | - | (15,075,151 | ) | (15,075,151 | ) | ||||||||||||||
Balance, February 29, 2008 | 13,509,375 | 13,509 | 14,853,307 | 183,084 | - | - | (15,155,373 | ) | (105,473 | ) | ||||||||||||||
Stock-based compensation (Note 9) | - | - | 7,956,905 | - | - | - | - | 7,956,905 | ||||||||||||||||
Warrants expired during the year | - | - | 183,084 | (183,084 | ) | - | - | - | - | |||||||||||||||
Net loss for the year | - | - | - | - | - | - | (8,685,803 | ) | (8,685,803 | ) | ||||||||||||||
Balance, February 28, 2009 | 13,509,375 | 13,509 | 22,993,296 | - | - | - | (23,841,176 | ) | (834,371 | ) | ||||||||||||||
Stock-based compensation (Note 9) | - | - | 1,091,640 | - | - | - | - | 1,091,640 | ||||||||||||||||
Net loss for the year | - | - | - | - | - | - | (1,264,929 | ) | (1,264,929 | ) | ||||||||||||||
Balance, February 28, 2010 | 13,509,375 | $ | 13,509 | $ | 24,084,936 | $ | - | $ | - | $ | - | $ | (25,106,105 | ) | $ | (1,007,660 | ) |
The accompanying notes are an integral part of these consolidated financial statements.
8
TRESORO MINING CORP. |
(formerly Mercer Gold Corporation) |
(An Exploration Stage Company) |
CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY (DEFICIENCY) |
FOR THE PERIOD FROM INCEPTION (OCTOBER 11, 2004) TO NOVEMBER 30, 2011 |
(Expressed in U.S. Dollars) |
(unaudited) |
Deficit | ||||||||||||||||||||||||
Accumulated | accumulated | Total | ||||||||||||||||||||||
Common stock | Additional | Shares | other | during | stockholders | |||||||||||||||||||
Number of | paid in | to be | comprehensive | exploration | equity | |||||||||||||||||||
shares | Amount | capital | Warrants | issued | income (loss) | stage | (deficiency) | |||||||||||||||||
Balance, February 28, 2010 | 13,509,375 | $ | 13,509 | $ | 24,084,936 | $ | - | $ | - | $ | - | $ | (25,106,105 | ) | $ | (1,007,660 | ) | |||||||
Common shares issued for debt
April 5, 2010 at $0.20 per share (Note 9) |
2,000,000 | 2,000 | 398,000 | - | - | - | - | 400,000 | ||||||||||||||||
Common shares issued for cash at $2.00 per share April 14, 2010 (Note 9) |
1,025,000 | 1,025 | 2,048,975 | - | - | - | - | 2,050,000 | ||||||||||||||||
Fair value of warrants April 14, 2010 (Note 9) | - | - | (1,009,318 | ) | 1,009,318 | - | - | - | - | |||||||||||||||
Common shares issued per Mercer Option
Agreement (Notes 5 and 9) |
2,500,000 | 2,500 | 4,997,500 | - | - | - | - | 5,000,000 | ||||||||||||||||
Common shares cancelled per
Nose Rock Termination Agreement May 28, 2010 (Note 9) |
(1,875,000 | ) | (1,875 | ) | 1,875 | - | - | - | - | - | ||||||||||||||
Beneficial conversion feature | - | - | 400,000 | - | - | - | - | 400,000 | ||||||||||||||||
Stock-based compensation (Note 9) | - | - | 2,762,720 | - | - | - | - | 2,762,720 | ||||||||||||||||
Net loss for the year | - | - | - | - | - | - | (5,547,005 | ) | (5,547,005 | ) | ||||||||||||||
Balance, February 28, 2011 | 17,159,375 | 17,159 | 33,684,688 | 1,009,318 | - | - | (30,653,110 | ) | 4,058,055 | |||||||||||||||
Commons shares issued for debt April 4,
2011 at $0.20 per share (Notes 8 and 9) |
300,000 | 300 | 59,700 | - | - | - | - | 60,000 | ||||||||||||||||
Shares to be issued (Note 9) | - | - | - | - | 100,000 | - | - | 100,000 | ||||||||||||||||
Common shares issued for cash at $0.10 per share-November 11, 2011 ( Note 9) |
3,000,000 | 3,000 | 297,000 | 300,000 | ||||||||||||||||||||
Expiry of warrants (Note 9) | - | - | 1,009,318 | (1,009,318 | ) | - | - | - | - | |||||||||||||||
Stock-based compensation (Note 9) | - | - | 213,883 | - | - | - | - | 213,883 | ||||||||||||||||
Foreign currency translation adjustment | - | - | - | - | - | 7,428 | - | 7,428 | ||||||||||||||||
Net loss for the period | - | - | - | - | - | - | (1,730,407 | ) | (1,730,407 | ) | ||||||||||||||
Balance, November 30, 2011 | 20,459,375 | $ | 20,459 | $ | 35,264,589 | $ | $ | 100,000 | $ | 7,428 | $ | (32,383,517 | ) | $ | 3,008,959 |
The accompanying notes are an integral part of these consolidated financial statements.
9
TRESORO MINING CORP. |
(formerly Mercer Gold Corporation) |
(An Exploration Stage Company) |
CONSOLIDATED STATEMENTS OF CASH FLOWS |
(Expressed in U.S. Dollars) |
(Unaudited) |
For the period | |||||||||
from October | Nine months ended | ||||||||
11, 2004 | November 30, | ||||||||
(inception) to | |||||||||
November 30, | |||||||||
2011 | 2011 | 2010 | |||||||
CASH FLOWS USED IN OPERATING ACTIVITIES | |||||||||
Net loss for the period | $ | (32,383,517 | ) | $ | (1,730,407 | ) | $ | (4,276,997 | ) |
Adjustments to reconcile net loss to net cash used in operating activities: | |||||||||
Interest on related party promissory note | 610,076 | 85,713 | 9,607 | ||||||
Depreciation | 1,635 | 768 | 90 | ||||||
Contributions to capital by related parties | 24,000 | - | - | ||||||
Write down of mineral property acquisition costs | 14,625,000 | - | 100,000 | ||||||
Gain on sale of equipment | (107 | ) | (107 | ) | - | ||||
Write down of management fee | (88,170 | ) | - | - | |||||
Stock-based compensation | 12,025,148 | 213,883 | 2,702,937 | ||||||
Non-cash gain on settlement of debt | (120,843 | ) | - | (120,843 | ) | ||||
Changes in operating assets and liabilities | |||||||||
Increase in amounts receivable | (35,009 | ) | (19,319 | ) | (5,240 | ) | |||
Increase in prepaid expenses | (47,026 | ) | (6,906 | ) | (134,207 | ) | |||
Increase in accounts payable and accrued liabilities | 1,132,795 | 686,309 | 101,805 | ||||||
Increase in due to related parties | 282,514 | 29,124 | 19,875 | ||||||
NET CASH USED IN OPERATING ACTIVITIES | (3,973,504 | ) | (740,942 | ) | (1,602,973 | ) | |||
CASH FLOWS USED IN INVESTING ACTIVITIES | |||||||||
Acquisition of mineral property interests | (1,275,000 | ) | (235,000 | ) | (350,000 | ) | |||
Sale (purchase) of property and equipment | (7,592 | ) | 486 | (7,857 | ) | ||||
NET CASH FLOWS USED IN INVESTING ACTIVITIES | (1,282,592 | ) | (234,514 | ) | (357,857 | ) | |||
CASH FLOWS FROM FINANCING ACTIVITIES | |||||||||
Bank overdraft | - | - | (340 | ) | |||||
Promissory note / related party advances (repayments) | 1,780,574 | 449,700 | (151,233 | ) | |||||
Common shares issued for cash / subscribed for cash | 3,475,900 | 400,000 | 2,200,000 | ||||||
NET CASH FROM FINANCING ACTIVITIES | 5,256,474 | 849,700 | 2,048,427 | ||||||
INCREASE (DECREASE) IN CASH | 378 | (125,756 | ) | 87,597 | |||||
EFFECT OF FOREIGN EXCHANGE ON CASH | 7,428 | 7,428 | - | ||||||
CASH, BEGINNING OF PERIOD | - | 126,134 | - | ||||||
CASH, END OF PERIOD | $ | 7,806 | $ | 7,806 | $ | 87,597 | |||
SUPPLEMENTAL DISCLOSURES WITH RESPECT TO CASH FLOWS | |||||||||
Cash paid for interest | $ | 127,733 | $ | - | $ | 127,733 | |||
Cash paid for income taxes | $ | - | $ | - | $ | - | |||
Non-cash transactions: | |||||||||
Donated rent and services | $ | 24,000 | $ | - | $ | - | |||
Shares issued for exploration expenses and mineral properties | $ | 19,000,000 | $ | - | $ | 5,000,000 | |||
Shares issued on settlement of debts | $ | 510,000 | $ | 60,000 | $ | 400,000 |
The accompanying notes are an integral part of these consolidated financial statements.
10
TRESORO MINING CORP. |
(formerly Mercer Gold Corporation) |
(An Exploration Stage Company) |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
NOVEMBER 30, 2011 |
(Expressed in U.S. Dollars) |
(Unaudited) |
NOTE 1 NATURE OF OPERATIONS AND BASIS OF PRESENTATION
Tresoro Mining Corp. (the Company) was incorporated under the laws of the State of Nevada on October 11, 2004 to promote and carry on any lawful business for which a corporation may be incorporated under the laws of the State of Nevada. On May 24, 2007 the Company filed Articles of Merger with the Secretary of State of Nevada in order to effectuate a merger whereby the Company (as Ancor Resources, Inc.) would merge with its newly incorporated and wholly-owned subsidiary, Nu-Mex Uranium Corp. (Nu-Mex). This merger became effective June 4, 2007 and the Company, being the surviving entity, changed its name to Nu-Mex Uranium Corp. On February 26, 2008 the Company filed Articles of Merger with the Secretary of State of Nevada in order to effectuate a merger whereby the Company (as Nu-Mex) would merge with its newly incorporated and wholly-owned subsidiary, Uranium International Corp. (UIC). This merger became effective as of March 11, 2008 and the Company, being the surviving entity, changed its name to Uranium International Corp. On May 17, 2010 the Company filed Articles of Merger with the Secretary of State of Nevada in order to effectuate a merger whereby the Company (as UIC) would merge with its newly incorporated and wholly-owned subsidiary, Mercer Gold Corporation (Mercer). This merger became effective on the OTC Bulletin Board and effective with the State of Nevada on June 17, 2010 and the Company, being the surviving entity, changed its name to Mercer Gold Corporation. On August 30, 2011, the Company filed Articles of Merger with the Secretary of State of Nevada in order to effectuate a merger whereby the Company (as Mercer) would merge with its wholly-owned subsidiary, Tresoro Mining Corp. (Tresoro). This merger became effective September 15, 2011 and the Company, being the surviving entity, changed its name to Tresoro Mining Corp. The Company intends to engage in the acquisition and exploration of mining properties. The Company is in the exploration stage and its operations principally involve research and development, market analysis, property evaluation and other business planning activities, and no revenue has been generated to date.
Effective June 6, 2007 the Company completed a forward stock split by the issuance of 5 new shares for each 1 outstanding share of the Companys common stock. Effective March 11, 2008 the Company completed a forward stock split by the issuance of 1.5 new shares for each 1 outstanding share of the Companys common stock. Effective May 12, 2011, the Company completed a reverse stock split by the issuance of 1 new share for 4 outstanding shares of the Companys common stock (Note 9). Unless otherwise noted, all references herein to number of shares, price per share or weighted average shares outstanding have been adjusted to reflect these stock splits on a retroactive basis.
The Company is an exploration stage enterprise, as defined in Accounting Standards Codification (the Codification or ASC) 915-10, Development Stage Entities. The Company is devoting all of its present efforts to securing and establishing a new business and its planned principal operations have not commenced. Accordingly, no revenue has been derived during the organization period.
Going Concern
The Companys interim consolidated
financial statements as at November 30, 2011, and for the nine month period then
ended have been prepared based on a going concern basis, which contemplates the
realization of assets and the settlement of liabilities and commitments in the
normal course of business. The Company has incurred operating losses since
inception of $32,383,517. The Company requires additional funding to meet its
ongoing obligations and anticipated ongoing operating losses. The ability of the
Company to continue as a going concern is dependent on raising capital to fund
its initial business plan and ultimately to attain profitable operations.
Accordingly, these factors raise substantial doubt as to the Companys ability
to continue as a going concern. The Company intends to continue to fund its
exploration business by way of private placements and advances from shareholders
as may be required.
11
TRESORO MINING CORP. |
(formerly Mercer Gold Corporation) |
(An Exploration Stage Company) |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
NOVEMBER 30, 2011 |
(Expressed in U.S. Dollars) |
(Unaudited) |
NOTE 1 NATURE OF OPERATIONS AND BASIS OF PRESENTATION (continued)
Unaudited Interim Consolidated Financial
Statements
The accompanying unaudited interim consolidated financial
statements have been prepared in accordance with generally accepted accounting
principles for interim financial information and with the instructions to Form
10-Q. They do not include all information and footnotes required by United
States generally accepted accounting principles (U.S. GAAP) for complete
consolidated financial statements. However, except as disclosed herein, there
have been no material changes in the information disclosed in the notes to the
consolidated financial statements for the year ended February 28, 2011 included
in the Companys Annual Report on Form 10-K filed with the Securities and
Exchange Commission. The interim unaudited consolidated financial statements
should be read in conjunction with those consolidated financial statements
included in the Form 10-K. In the opinion of Management, all adjustments
considered necessary for a fair presentation, consisting solely of normal
recurring adjustments, have been made. Operating results for the nine months
ended November 30, 2011 are not necessarily indicative of the results that may
be expected for the year ending February 28, 2012.
Comparative Figures
Certain comparative figures have
been reclassified in order to conform to the current periods financial
statement presentation.
NOTE 2 CHANGES IN ACCOUNTING POLICIES
In December 2010, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2010-28, Intangibles, Goodwill and Other. The amendments in this ASU are effective for fiscal years, and interim periods within those years, beginning after December 15, 2010. The adoption of ASU 2010-28 during the period did not have a material impact on the Companys financial position, cash flows or results of operations.
In December 2010, the FASB issued ASU 2010-29, Business Combinations. The amendments in this ASU are effective for fiscal years, and interim periods within those years, beginning after December 15, 2010. The adoption of ASU 2010-29 during the period did not have a material impact on the Companys financial position, cash flows or results of operations.
NOTE 3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies used in the preparation of these consolidated financial statements.
Basis of Presentation
The accounting and reporting
policies of the Company conform to U.S. GAAP applicable to exploration stage
enterprises. The functional currency is the U.S. dollar, and the interim
consolidated financial statements are presented in U. S. dollars.
Mineral Property Expenditures
Mineral property
acquisition costs are initially capitalized as tangible assets when purchased.
At the end of each fiscal quarter end, the Company assesses the carrying costs
for impairment. If proven and probable reserves are established for a property
and it has been determined that a mineral property can be economically
developed, costs will be amortized using the units-of-production method over the
estimated life of the probable reserve.
Mineral property exploration costs are expensed as incurred.
Estimated future removal and site restoration costs, when determinable are provided over the life of proven reserves on a units-of-production basis. Costs, which include production equipment removal and environmental remediation, are estimated each period by management based on current regulations, actual expenses incurred, and technology and industry standards. Any charge is included in exploration expense or the provision for depletion and depreciation during the period and the actual restoration expenditures are charged to the accumulated provision amounts as incurred.
12
TRESORO MINING CORP. |
(formerly Mercer Gold Corporation) |
(An Exploration Stage Company) |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
NOVEMBER 30, 2011 |
(Expressed in U.S. Dollars) |
(Unaudited) |
NOTE 3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
As of the date of these interim consolidated financial statements, the Company has not established any proven or probable reserves on its mineral properties and incurred only acquisition and exploration costs.
Although the Company has taken steps to verify title to mineral properties in which it has an interest, according to the usual industry standards for the stage of exploration of such properties, these procedures do not guarantee the Companys title. Such properties may be subject to prior agreements or transfers and title may be affected by undetected defects.
Asset Retirement Obligations
The Company has adopted
ASC 410, Asset Retirement and Environmental Obligations, which requires that
the fair value of a liability for an asset retirement obligation be recognized
in the period in which it is incurred. ASC 410 requires the Company to record a
liability for the present value of the estimated site restoration costs with a
corresponding increase to the carrying amount of the related long-lived assets.
The liability will be accreted and the asset will be depreciated over the life
of the related assets. Adjustments for changes resulting from the passage of
time and changes to either the timing or amount of the original present value
estimate underlying the obligation will be made. There were no asset retirement
obligations as at November 30, 2011.
Use of Estimates
The preparation of financial
statements in conformity with U.S. GAAP 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 and the reported amounts of revenues and expenses during the period.
Actual results could differ from those estimates. Significant areas requiring
managements estimates and assumptions are the determination of the fair value
of transactions involving common stock and financial instruments. Other areas
requiring estimates include deferred tax balances and asset impairment
tests.
Cash and Cash Equivalents
For the statements of cash
flows, all highly liquid investments with maturity of three months or less are
considered to be cash equivalents. There were no cash and cash equivalents as of
November 30, 2011 that exceeded federally insured limits.
Net Income (Loss) per Common Share
The Company
computes income (loss) per share in accordance with ASC 260, Earnings Per
Share which requires presentation of both basic and diluted earnings per share
on the face of the statement of operations. Basic income (loss) per share is
computed by dividing net income (loss) available to common shareholders by
weighted average number of outstanding common shares during the period. Diluted
income (loss) per share gives effect to all dilutive potential common shares
outstanding during the period. Dilutive loss per share excludes all potential
common shares if their effect is anti-dilutive.
Fair Value Financial Instruments
A fair value
hierarchy was established that prioritizes the inputs used to measure fair
value. The hierarchy gives the highest priority to unadjusted quoted prices in
active markets for identical assets or liabilities (Level 1 measurement) and the
lowest priority to unobservable inputs (Level 3 measurements).
The fair values of the financial instruments were determined using the following input levels and valuation techniques:
Level 1: |
classification is applied to any asset or liability that has a readily available quoted market price from an active market where there is significant transparency in the executed/quoted price. |
Level 2: |
classification is applied to assets and liabilities that have evaluated prices where the data inputs to these valuations are observable either directly or indirectly, but do not represent quoted market prices from an active market. |
Level 3: |
classification is applied to assets and liabilities when prices are not derived from existing market data and requires us to develop our own assumptions about how market participants would price the asset or liability. |
As at November 30, 2011, the fair value of cash and cash equivalents, amounts receivables, accounts payable, amounts due to related parties and promissory notes payable approximate carrying value due to their short maturities.
13
TRESORO MINING CORP. |
(formerly Mercer Gold Corporation) |
(An Exploration Stage Company) |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
NOVEMBER 30, 2011 |
(Expressed in U.S. Dollars) |
(Unaudited) |
NOTE 3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Credit Risk
Credit risk arises primarily from the
Companys cash and cash equivalents and amounts receivable. The Company manages
its credit risk relating to cash and cash equivalents by dealing only with
highly-rated financial institutions. As at November 30, 2011, amounts receivable
was comprised of Harmonized Sales Tax receivable of $35,009 (February 28, 2011 -
$15,690). As a result, credit risk is considered insignificant.
Liquidity Risk
The Company manages liquidity risk by
continuously monitoring actual and projected cash flows and matching the
maturity profile of financial assets and liabilities. The Company currently has
a working capital deficit of $2,647,105 (February 28, 2011 -$1,311,656).
Current Risk
The Company is exposed to currency risk
on its acquisition and exploration expenditures on its Colombian properties
since it has to convert U.S. dollars raised through equity financing in U.S.
dollars to Colombian Pesos. The Companys expenditures will be negatively
impacted if the Colombian Pesos increases versus the US dollar.
The majority of the Companys cash flows and financial assets and liabilities are denominated in U.S. dollar, which is the Companys functional and reporting currency. Foreign currency risk is limited to the portion of the Companys business transactions denominated in currencies other than the U.S. dollar.
The Company monitors and forecasts the values of net foreign currency cash flow and balance sheet exposures and from time to time could authorize the use of derivative financial instruments such as forward foreign exchange contracts to economically hedge a position of foreign currency fluctuations. Currently, the Company does not use derivative instruments to reduce its exposure to foreign currency risk.
Other Risks
Unless otherwise noted, the Company is
not exposed to significant interest rate risk and commodity price risk.
Income Taxes
The Company follows the liability method
of accounting for income taxes. Under this method, deferred tax assets and
liabilities are recognized for the future tax consequences attributable to
differences between the financial statement carrying amounts of existing assets
and liabilities and their respective tax balances. Deferred tax assets and
liabilities are measured using enacted or substantially enacted tax rates
expected to apply to the taxable income in the years in which those differences
are expected to be recovered or settled. The effect on deferred tax assets and
liabilities of a change in tax rates is recognized in income in the period that
includes the date of enactment or substantive enactment. As at November 30,
2011, the Company had net operating loss carryforwards, however, due to the
uncertainty of realization, the Company has provided a full valuation allowance
for the deferred tax assets resulting from these loss carryforwards.
Foreign Currency Translation
The financial statements
are presented in U.S. dollars. In accordance with ASC 830, Foreign Currency
Matters, foreign denominated monetary assets and liabilities are translated to
their U.S. dollar equivalents using foreign exchange rates which prevailed at
the balance sheet date. Revenue and expenses are translated at average rates of
exchange during the period. Related translation adjustments are reported as a
separate component of stockholders equity, whereas gains or losses resulting
from foreign currency transactions are included in results of operations.
14
TRESORO MINING CORP. |
(formerly Mercer Gold Corporation) |
(An Exploration Stage Company) |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
NOVEMBER 30, 2011 |
(Expressed in U.S. Dollars) |
(Unaudited) |
NOTE 3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Stock-Based Compensation
On June 1, 2006, the Company
adopted ASC 718, Compensation Stock Compensation, which establishes
accounting for equity instruments exchanged for employee services. Under the
provisions of ASC 718, stock-based compensation cost is measured at the grant
date, based on the calculated fair value of the award, and is recognized as an
expense over the employees requisite service period (generally the vesting
period of the equity grant). The Company adopted ASC 718 using the modified
prospective method, which requires the Company to record compensation expense
over the vesting period for all awards granted after the date of adoption, and
for the unvested portion of previously granted awards that remain outstanding at
the date of adoption. Accordingly, financial statements for the periods prior to
January 1, 2006 have not been restated to reflect the fair value method of
expensing share-based compensation. Adoption of ASC 718 does not change the way
the Company accounts for share-based payments to non-employees, with guidance
provided by ASC 505-50, Equity-Based Payments to Non-Employees.
Property and Equipment
Property and equipment are
recorded at cost and are depreciated over their estimated useful lives using the
declining balance method at the following annual rates:
Furniture and fixtures | 10% |
Machinery and equipment | 10% |
Computer equipment | 20% |
Recently Issued Accounting Pronouncements
In June
2011, the FASB issued ASU 2011-05, Presentation of Comprehensive Income. This
ASU presents an entity with the option to present the total of comprehensive
income, the components of net income, and the components of other comprehensive
income either in a single continuous statement of comprehensive income or in two
separate but consecutive statements. In both choices, an entity is required to
present each component of other comprehensive income along with a total for
other comprehensive income, and a total amount for comprehensive income. This
update eliminates the option to present the components of other comprehensive
income as part of the statement of changes in stockholders equity. The
amendments in this update do not change the items that must be reported in other
comprehensive income or when an item of other comprehensive income must be
reclassified to net income. As ASU 2011-05 relates only to the presentation of
comprehensive income, the Company does not expect that the adoption of this
update will have a material effect on its consolidated financial statements.
NOTE 4 PROPERTY AND EQUIPMENT
Net Book Value | ||||||||||||
Accumulated | November 30, | February 28, | ||||||||||
Cost | amortization | 2011 | 2011 | |||||||||
Furniture and fixtures | $ | 649 | $ | 123 | $ | 526 | $ | 584 | ||||
Machinery and equipment | 6,837 | 1,299 | 5,538 | 6,153 | ||||||||
Computer equipment | - | - | - | 474 | ||||||||
$ | 7,486 | $ | 1,422 | $ | 6,064 | $ | 7,211 |
During the nine months ended November 30, 2011, total additions to property and equipment were $Nil (February 28, 2011 -$8,078). During the nine months ended November 30, 2011, total disposition of property and equipment was $379, resulting in a gain of $107 (February 28, 2011 - $Nil).
15
TRESORO MINING CORP. |
(formerly Mercer Gold Corporation) |
(An Exploration Stage Company) |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
NOVEMBER 30, 2011 |
(Expressed in U.S. Dollars) |
(Unaudited) |
NOTE 5 MINERAL PROPERTY COSTS
(a) Guayabales Property
On April 5, 2010, the Company
entered into a letter of intent (the LOI), dated April 3, 2010 with Mercer
Gold Corp., a private Canadian corporation (Mercer Canada). Pursuant to the
LOI, Mercer Canada has granted to the Company an exclusive option (the Option)
to acquire all of Mercer Canadas current underlying option interests under an
option agreement, dated March 4, 2010 (the Underlying Option Agreement), as
entered into between Mercer Canada and Comunidad Mineral Guayabales (the
Underlying Property Owner). Pursuant to the Underlying Option Agreement,
Mercer Canada acquired from the Underlying Property Owner an option (the
Underlying Option) to acquire a 100% legal, beneficial and registerable
interest in and to certain mineral property concession interest which are held
by way of license. The mineral property interests are located in the
Municipality of Marmato, Colombia and are better known and described as the
Guayabales property (collectively, the Property).
On April 13, 2010, the Company entered into a definitive Mineral Assets Option Agreement with Mercer Canada (the Mercer Option Agreement). The Mercer Option Agreement replaces the previous underlying LOI. The Mercer Option Agreement, as amended on December 30, 2010 and again on March 22, 2011, provides that, in order to exercise its Option, the Company is obligated to:
1. |
Pay to Mercer Canada $200,000 immediately upon the execution of the Mercer Option Agreement (the Effective Date) (paid on April 14, 2010); | |
2. |
Issue to Mercer Canada, both prior to and after the due and complete exercise of the Options, an aggregate of up to 5,000,000 restricted shares of the Companys common stock, as follows: | |
an initial issuance of 2,500,000 shares within two business days of the Effective Date (issued on April 15, 2010) (Note 9); and | ||
a final issuance of 2,500,000 shares within five business days of the Companys prior receipt of a technical report (as that term is defined in section 1.1 of National Instrument 43-101 of the Canadian Securities Administrators, Standards of Disclosure for Mineral Projects (NI 43-101) meeting certain criteria); | ||
3. |
Provide funding for or expend minimum cumulative Expenditures for Exploration and Development (as defined in the Mercer Option Agreement) work on or in connection with any of the mineral interests comprising the Property interests of not less than $3,000,000, as follows: | |
no less than an initial $1,000,000 of the Expenditures shall be expended on the Property by December 31, 2011 (incurred); | ||
no less than a further $1,000,000 of the Expenditures shall be expended on the Property by December 31, 2012; and | ||
no less than a final $1,000,000 of the Expenditures shall be expended on the Property by December 31, 2013; and |
16
TRESORO MINING CORP. |
(formerly Mercer Gold Corporation) |
(An Exploration Stage Company) |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
NOVEMBER 30, 2011 |
(Expressed in U.S. Dollars) |
(Unaudited) |
NOTE 5 MINERAL PROPERTY COSTS (continued)
4. |
Pay on Mercer Canadas behalf all underlying option, regulatory and governmental payments and assessment work required to keep the Property in good standing during the Option period (being that period from the Effective Date to the closing date in respect of the due and complete exercise of the Option as described in the Mercer Option Agreement, which shall not be later than January 13, 2013), and including, without limitation, all remaining cash payments required to be made to the Underlying Property Owner under the Underlying Option Agreement. The Company must pay the Underlying Property Owner an aggregate of $4,000,000 in the instalments by the dates specified as follows: | |
Pay $20,000 by October 14, 2009 (paid); | ||
Pay additional $40,000 on or by 90 days from October 14, 2009 (paid); | ||
Pay additional $40,000 on or by April 14, 2010 (paid); | ||
Pay additional $55,000 on or by July 14, 2010 (paid); | ||
Pay additional $55,000 on or by October 14, 2010 (paid); | ||
Pay additional $65,000 on or by January 14, 2011 (paid); | ||
Pay additional $75,000 on or by April 14, 201l (paid); | ||
Pay additional $75,000 on or by July 14, 201l (paid); | ||
Pay additional $85,000 on or by October 14, 201l (paid); | ||
Pay additional $85,000 on or by January 14, 2012 (Note 13); | ||
Pay additional $160,000 on or by July 14, 2012; | ||
Pay additional $160,000 on or by January 14, 2013; | ||
Pay additional $190,000 on or by July 14, 2013; | ||
Pay additional $190,000 on or by January 14, 2014; | ||
Pay additional $230,000 on or by July 14, 2014; | ||
Pay additional $230,000 on or by January 14, 2015; and | ||
Pay additional $2,245,000 on or by July 14, 2015. |
(b) Geoforum Scandinavia AB Property
Effective
December 9, 2008, the Company entered into a written letter option agreement
with Geoforum Scandinavia AB ("Geoforum") for the exclusive option to acquire a
100% undivided interest in four mineral properties in Sweden (the "Geoforum
Properties"), subject to a 3% NSR royalty ("Geoforum Letter Option Agreement").
A payment of $25,000 was required on or before the earlier of the expiration of
the due diligence period or February 28, 2009 (the "Geoforum Effective Date")
(accrued as at February 28, 2009 and paid on March 6, 2009). On October 29,
2009, the Company entered into a Formal Option Agreement with Geoforum (the
"Geoforum Option Agreement").
Under the terms of the Geoforum Option Agreement, in order to exercise the Option, the Company must:
1. |
Pay $25,000 at the date of the execution of the Formal Option Agreement (the Effective Date) (paid on November 5, 2009); | |
2. |
Pay an additional $25,000 upon the first twelve month anniversary of the Effective Date (the Anniversary Date); | |
3. |
Pay an additional $25,000 upon each and every Anniversary Date thereafter until the Company acquires 100% undivided interest in the properties or the option is terminated; | |
4. |
Issue 12,500 shares of the Companys common stock upon the first Anniversary Date; | |
5. |
Issue an additional 12,500 shares of the Companys common stock upon the second Anniversary Date; and | |
6. |
Incur exploration expenses of $3.7 million over the seven year period as follows; | |
$300,000 after the Effective Date and prior to the first Anniversary Date; | ||
$400,000 between the first and second Anniversary Date; and | ||
$3,000,000 between the third and seventh Anniversary Date. |
17
TRESORO MINING CORP. |
(formerly Mercer Gold Corporation) |
(An Exploration Stage Company) |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
NOVEMBER 30, 2011 |
(Expressed in U.S. Dollars) |
(Unaudited) |
NOTE 5 MINERAL PROPERTY COSTS (continued)
The Company had the option to extend the period in which to incur the exploration expenses from seven years to nine years by paying Geoforum an additional $100,000.
The Board of Directors determined that it was not in the best interests of the Company and its shareholders to proceed with the acquisition and development of the Leases in accordance with the terms and provisions of the Option Agreement and the Company authorized the termination of the Option Agreement. The Company and Geoforum agreed that the Option Agreement would be terminated and the Company and Geoforum would be released from their respective duties and obligations. The Company has forfeited its deposit of the $50,000 paid to Geoforum which was recorded as a loss during fiscal 2011.
(c) Trans Atlantic Metals AB Property
Effective
January 15, 2009, the Company entered into a written letter option agreement
with Trans Atlantic Metals AG ("TAM") and its wholly owned subsidiary, T.A.
Metal, Sweden AG for exclusive options to acquire up to an 80% undivided
interest in four mineral properties in Sweden (collectively, the "TAM
Properties"), subject to a 3% NSR royalty (the "TAM Option"). A payment of
$25,000 was required on or before the earlier of the expiration of the due
diligence period or February 28, 2009 (the "TAM Effective Date") (accrued as at
February 28, 2009 and paid on March 2, 2009). On November 17, 2009, the Company
entered into a Formal Option Agreement with TAM (the "TAM Option
Agreement").
Under the terms of the TAM Option Agreement, in order to exercise the first TAM Option for 51%, the Company must:
1. |
Pay $25,000 at the date of execution of the Formal Option Agreement (paid on November 23, 2009); | |
2. |
Pay an additional $25,000 on or before one year from the date of execution of this Agreement (the Anniversary Date); | |
3. |
Pay an additional $25,000 upon each and every Anniversary Date thereafter until either the Company acquires 80% interest in the properties or the agreement is terminated. | |
4. |
Issue 12,500 shares of the Companys common stock on or before the first Anniversary Date; | |
5. |
Issue an additional 12,500 shares of the Companys common stock on or before the second Anniversary Date; and | |
6. |
Incur exploration expenses of $700,000 over the next two years as follows: | |
$300,000 prior to the first Anniversary Date; and | ||
$400,000 prior to the second Anniversary Date. |
Following the exercise of the 51% option, in order to exercise the second Option for an additional 29% interest, the Company must incur further exploration expenses of $3,000,000 prior to the seventh Anniversary Date.
The Board of Directors determined that it was not in the best interests of the Company and its shareholders to proceed with the acquisition and development of the Leases in accordance with the terms and provisions of the Option Agreement and the Company authorized the termination of the Option Agreement. The Company and TAM agreed that the Option Agreement would be terminated and the Company and TAM would be released from their respective duties and obligations. The Company has forfeited its deposit of the $50,000 paid to TAM which was recorded as a loss during fiscal 2011.
18
TRESORO MINING CORP. |
(formerly Mercer Gold Corporation) |
(An Exploration Stage Company) |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
NOVEMBER 30, 2011 |
(Expressed in U.S. Dollars) |
(Unaudited) |
NOTE 6 ACCOUNTS PAYABLE AND ACCRUED LIABILITIES
Accounts payable and accrued liabilities are non-interest bearing, unsecured and have settlement dates within one year.
NOTE 7 DUE TO RELATED PARTIES AND RELATED PARTY TRANSACTIONS
The balance due to related parties of $85,001 at November 30, 2011 (February 28, 2011 - $55,877) is due to directors, and a company controlled by a director and/or shareholder of the Company and is unsecured, non-interest bearing and payable on demand.
During the nine months ended November 30, 2011, the Company paid or accrued management fees of $69,038 to directors of the Company (November 30, 2010 - $134,929).
The amounts charged to the Company for the services provided have been determined by negotiation among the parties and in certain cases, are covered by signed agreements. It is the position of the management of the company that these transactions were in the normal course of operations and were measured at the exchange value which represented the amount of consideration established and agreed to by the related parties.
NOTE 8 PROMISSORY NOTES PAYABLE
(a) Current
The promissory notes payable of
$1,544,150 at November 30, 2011 (February 28, 2011 - $1,016,237) consists of
principal and accrued interest of $1,452,200 (February 28, 2011 - $1,010,000)
and $91,950 (February 28, 2011 - $6,237), respectively. This total amount is
secured by a general security agreement charging all of the Companys present
and after acquired personal property, bears interest at 10% per annum and is due
on demand.
(b) Non-current
On November 19, 2010, the Company
issued a promissory note with a principal value of $52,500 to a former CEO and
director of the Company. The amount is unsecured, bears no interest and is due
and payable on or before November 26, 2012. During the nine months ended
November 30, 2011, a further $7,500 was advanced by the former CEO and director
bringing the note payable to $60,000. The promissory note was converted for
300,000 common shares at $0.20 per share on April 4, 2011 (Notes 9 and 11).
NOTE 9 CAPITAL STOCK
Authorized
The total authorized capital is
140,625,000 common shares with par value of $0.001 per share. On June 4, 2007,
the Company increased the authorized share capital from 75,000,000 shares of
common stock to 375,000,000 shares of common stock with the same par value of
$0.001 per share. On June 8, 2010, the Company filed a Certificate of Change
with the Nevada Secretary of State in relation to the 1.5 for one forward split
of the Companys common shares on March 11, 2008 to effect the 1.5 for one
forward split of the Companys authorized common shares. As a result, the
Companys authorized capital was increased from 375,000,000 shares, par value of
$0.001 per share, to 562,500,000 shares, par value of $0.001 per share.
Effective May 12, 2011, the Company filed a Certificate of Change and
Certificate of Correction with the Nevada Secretary of State in relation to the
1 for 4 reverse stock split of the Companys common shares to effect the 1 for 4
reverse stock split of the Companys authorized common shares. As a result, the
Companys authorized capital was decreased from 562,500,000 shares, par value of
$0.001 per share to 140,625,000 shares, par value of $0.001 per share (Note
1).
Issued and Outstanding
On June 4, 2007, the directors
of the Company approved a special resolution to undertake a forward split of the
common stock of the company on a basis on 5 new common shares for 1 old common
share. On February 26, 2008, and effective March 11, 2008, the directors of the
company approved a special resolution to undertake a further forward split of
the common stock of the company on a basis on 1.5 new common shares for 1 old
share. Effective May 12, 2011, the Company effected a 1 for 4 reverse stock
split (Note 1).
19
TRESORO MINING CORP. |
(formerly Mercer Gold Corporation) |
(An Exploration Stage Company) |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
NOVEMBER 30, 2011 |
(Expressed in U.S. Dollars) |
(Unaudited) |
NOTE 9 CAPITAL STOCK (continued)
All references in these financial statements to number of common shares, price per share and weighted average number of common shares have been adjusted to reflect these stock splits on a retroactive basis, unless otherwise noted.
The total issued and outstanding capital stock is 20,459,375 commons shares with par value of $0.001 per share. The Companys common stock issuances to date are as follows:
1. |
On November 29, 2004, 7,500,000 common shares of the Company were issued to an officer and director of the Company for cash proceeds of $4,000. |
2. |
On January 10, 2005, 4,500,000 common shares of the Company were issued for cash proceeds of $2,400. |
3. |
On January 21, 2005, 2,812,500 common shares of the Company were issued for cash proceeds of $15,000. |
4. |
On January 25, 2005, 375,000 common shares of the Company were issued for cash proceeds of $2,000. |
5. |
On February 1, 2005, 46,875 common shares of the Company were issued for cash proceeds of $2,500. |
6. |
On May 30, 2007, 3,750,000 restricted common shares of the company were returned and subsequently cancelled by the Company. The shares were returned to treasury for no consideration to the shareholder. |
7. |
On September 14, 2007, 1,875,000 common shares of the Company, valued at $14,000,000, were issued to Strathmore in accordance with the terms of the Option and Joint Venture Agreement. On November 18, 2008, the Company entered into a written agreement with Strathmore to terminate the Nose Rock Property Option Agreements. Pursuant to the terms of the termination agreement, the 1,875,000 common shares previously issued were required to be returned to the Companys treasury for cancellation. The 1,875,000 shares were returned to treasury and cancelled on May 28, 2010. |
8. |
On February 26, 2008, the Company issued 150,000 units at a price of $6.68 per unit for proceeds of $1,000,000. Each unit consists of one common share and one-half non-transferable share purchase warrant. Each whole share purchase warrant entitles the holder to purchase an additional common share at a price of $8.00 up to February 26, 2009. These warrants expired during the year ended February 28, 2009. |
9. |
On April 5, 2010, the Company issued 2,000,000 restricted common shares at $0.20 per share pursuant to the conversions of the convertible promissory notes in the amount of $400,000 (Notes 6 and 8). |
10. |
On April 14, 2010, the Company issued 1,025,000 units at a price of $2.00 per unit for proceeds of $2,050,000. Each unit consists of one common share and one-half non-transferable share purchase warrant. Each whole share purchase warrant entitles the holder to purchase an additional common share at a price of $4.00 per share up to April 14, 2011. These warrants expired during the nine months ended November 30, 2011. |
11. |
On April 15, 2010, 2,500,000 common shares of the Company, valued at $5,000,000, were issued to Mercer Canada in accordance with the terms of the Mercer Option Agreement (Note 5). |
12. |
On April 4, 2011, the Company issued 300,000 common shares at $0.20 per share to a former CEO and director of the Company for consulting services rendered during and subsequent to the year ended February 28, 2011 (Notes 8 and 11). |
13. |
On November 11, 2011, the Company issued 3,000,000 common shares of the Company for cash proceeds of $300,000. |
20
TRESORO MINING CORP. |
(formerly Mercer Gold Corporation) |
(An Exploration Stage Company) |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
NOVEMBER 30, 2011 |
(Expressed in U.S. Dollars) |
(Unaudited) |
NOTE 9 CAPITAL STOCK (continued)
Stock Options
On April 2, 2008 the Board of Directors
of the company ratified, approved and adopted a Stock Option Plan for the
Company in the amount of 1,250,000 shares with an exercisable period up to 10
years. In the event an optionee ceases to be employed or to provide services to
the Company for reasons other than cause, any Stock Option that is vested and
held by such optionee may be exercisable within up to ninety calendar days after
the effective date that his position ceases. No Stock Option granted under the
Stock Option Plan is transferable. Any Stock Option held by an optionee at the
time of his death may be exercised by his estate within one year of his death or
such longer period as the Board of Directors may determine.
As approved by the Board of Directors, on April 2, 2008, the Company granted 687,500 stock options to certain officers, directors and management of the Company at $7.00 per share for terms of ten years. The total fair value of these options at the date of grant was estimated to be $4,134,405, and was determined using the Black-Scholes Option Pricing Model with an expected life of 5 years, a risk free interest rate of 3.18%, a dividend yield of 0% and expected volatility of 106% and has been recorded as stock-based compensation expense during the year ended February 28, 2009.
As approved by the Board of Directors, on July 9, 2008 and August 18, 2008, the Company granted a total of 437,500 stock options to certain officers and directors of the Company at $12.00 per share for terms of ten years. The total fair value of these options at the date of grant was estimated to be $3,822,500, and was determined using the Black-Scholes Option Pricing Model with an expected life of 5 years, a risk free interest rate of 3.09%, a dividend yield of 0% and expected volatility of 120% and has been recorded as stock-based compensation expense during the year ended February 28, 2009.
On April 17, 2009, the Company cancelled 1,125,000 stock options previously granted to certain officers, directors and management of the Company.
As approved by the Board of Directors, on April 17, 2009, the Company granted 687,500 stock options to certain officers, directors and management of the Company at $2.00 per share for terms of ten years. The total fair value of these options at the date of grant was estimated to be $1,091,640 ($1.59 per stock option), and was determined using the Black-Scholes Option Pricing Model with an expected life of 5 years, a risk free interest rate of 1.91%, a dividend yield of 0% and expected volatility of 193% and has been recorded as stock-based compensation expense during the year ended February 28, 2010.
As approved by the Board of Directors, on April 5, 2010, the Company granted 812,500 stock options to certain officers, directors and management of the Company at $2.00 per share for terms of ten years. The total fair value of these options at the date of grant was estimated to be $1,601,828 ($1.97 per stock option), and was determined using the Black-Scholes Option Pricing Model with an expected life of 10 years, a risk free interest rate of 4.01%, a dividend yield of 0% and expected volatility of 150% and has been recorded as stock-based compensation expense during the year ended February 28, 2011.
As approved by the Board of Directors, on April 5, 2010, the Company granted 250,000 stock options to certain consultants of the Company at $2.00 per share for terms of two years. The total fair value of these options at the date of grant was estimated to be $436,550 ($1.75 per stock option), and was determined using the Black-Scholes Option Pricing Model with an expected life of 2 years, a risk free interest rate of 1.18%, a dividend yield of 0% and expected volatility of 215% and has been recorded as stock-based compensation expense during the year ended February 28, 2011.
As approved by the Board of Directors, on June 14, 2010, the Company granted 75,000 stock options to a consultant of the Company at $2.00 per share for terms of ten years. The total fair value of these options at the date of grant was estimated to be $176,178 ($2.35 per stock option), and was determined using the Black-Scholes Option Pricing Model with an expected life of 10 years, a risk free interest rate of 3.28%, a dividend yield of 0% and expected volatility of 144% and has been recorded as stock-based compensation expense during the year ended February 28, 2011. Subsequent to the grant date, the Company entered into an amending agreement with the holder of the 75,000 existing stock options amending the expiry date from June 14, 2020 to August 1, 2012. The stock-based compensation expense related to this amendment of 75,000 stock options during the year ended February 28, 2011 was $Nil.
21
TRESORO MINING CORP. |
(formerly Mercer Gold Corporation) |
(An Exploration Stage Company) |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
NOVEMBER 30, 2011 |
(Expressed in U.S. Dollars) |
(Unaudited) |
NOTE 9 CAPITAL STOCK (continued)
As approved by the Board of Directors, on August 1, 2010, the Company granted 150,000 stock options to a consultant of the Company at $2.00 per share for terms of three years. The total fair value of these options at the date of grant was estimated to be $365,790 ($2.44 per stock option), and was determined using the Black-Scholes Option Pricing Model with an expected life of 3 years, a risk free interest rate of 0.85%, a dividend yield of 0% and expected volatility of 187% and has been recorded as stock-based compensation expense during the year ended February 28, 2011.
As approved by the Board of Directors, on August 1, 2010, the Company granted 25,000 stock options to a consultant of the Company at $2.00 per share for terms of two years. A total of 3,125 of these stock options vested on the grant date of August 1, 2010. A total of 21,875 of these stock options vest quarterly over two years. The total fair value of these options which vested during the year ended February 28, 2011 was estimated to be $11,134 ($1.78 per stock option), and was determined using the Black-Scholes Option Pricing Model with an expected life of 4 years, a average risk free interest rate of 1.24%, a average dividend yield of 0% and average expected volatility of 186% and has been recorded as stock-based compensation expense during the year ended February 28, 2011.
Effective November 30, 2010, the Board of Directors approved the termination of the 2008 Stock Option Plan and the cancellation of all related options outstanding. Certain of the options then outstanding were then replaced by options in the Companys newly adopted 2010 Stock Option Plan (see below).
2010 Stock Option Plan
Effective November 30, 2010
the Board of Directors of the Company ratified, approved and adopted a Stock
Option Plan (the 2010 Stock Option Plan) for the company in the amount of
3,431,875 shares. In the event an optionee ceases to be employed or to provide
services to the Company for reasons other than cause, any Stock Option that is
vested and held by such optionee may be exercisable within up to ninety calendar
days after the effective date that his position ceases. No Stock Option granted
under the Stock Option Plan is transferable. Any Stock Option held by an
optionee at the time of his death may be exercised by his estate within one year
of his death or such longer period as the Board of Directors may determine.
Effective November 30, 2010, concurrent with the cancellation of the 2008 Stock Option Plan, 1,125,000 outstanding options were cancelled and immediately replaced with 1,125,000 options in the newly adopted 2010 Stock Option Plan. The replacement options have an exercise price of $2.00 per share for terms of four years. These options vest at a rate of 25% on grant and 25% at the end of each of six, twelve and eighteen months from the date of grant. The incremental fair value resulting from the modification / replacement of the original options was estimated to be $151,015 which will be recorded over the vesting period of the options. A total of $37,754 relating to vested options has been recorded as stock-based compensation expense and was determined using the Black-Scholes Option Pricing Model with an expected life of 2 years, a average risk free interest rate of 0.45%, a average dividend yield of 0% and average expected volatility of 194% and was recorded as stock-based compensation expense during the year ended February 28, 2011. During the period ended November 30, 2011, a total of 700,000 of these options expired and were cancelled. In connection with vesting of the remaining options, a further $34,817 was recorded as stock-based compensation during the nine month period ended 30 November 2011.
As approved by the Board of Directors, on November 30, 2010, the Company granted 337,500 stock options under the 2010 Stock Option Plan to certain directors of the Company at $2.00 per share for terms of four years. These options vest at a rate of 25% on grant and 25% at the end of each of six, twelve and eighteen months from the date of grant. The total fair value of these options was estimated to be $465,048 ($1.38 per stock option) and was determined using the Black-Scholes Option Pricing Model with an expected life of 4 years, a risk free interest rate of 1.16%, a dividend yield of 0% and expected volatility of 187%. A total of $116,262 relating to vested options was recorded as stock-based compensation expense during the year ended February 28, 2011. During the period ended November 30, 2011, a total of 225,000 of these options expired and were cancelled. In connection with vesting of the remaining options, a further $109,803 was recorded as stock-based compensation during the nine month period ended 30 November 2011.
22
TRESORO MINING CORP. |
(formerly Mercer Gold Corporation) |
(An Exploration Stage Company) |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
NOVEMBER 30, 2011 |
(Expressed in U.S. Dollars) |
(Unaudited) |
NOTE 9 CAPITAL STOCK (continued)
As approved by the Board of Directors, on November 30, 2010, the Company granted 50,000 stock options under the 2010 Stock Option Plan to certain consultants of the Company at $2.00 per share for terms of four years. A total of 12,500 of these stock options vested on the grant date of December 1, 2010. A total of 37,500 of these stock options vest 25% at the end of each of six, twelve and eighteen months from the date of grant. The total fair value of these options which vested during the year ended February 28, 2011 was estimated to be $17,224 ($1.38 per stock option), and was determined using the Black-Scholes Option Pricing Model with an expected life of 4 years, a risk free interest rate of 1.16%, a dividend yield of 0% and expected volatility of 187% and was recorded as stock-based compensation expense during the year ended February 28, 2011. During the period ended November 30, 2011, a total of 37,500 of these options expired and were cancelled. The total fair value of these options which vested during the period ended November 30, 2011 was estimated to be $1,506 ($0.16 per stock option), and was determined using the Black-Scholes Option Pricing Model with an expected life of 3.33 years, a risk free interest rate of 0.76%, a dividend yield of 0% and expected volatility of 207% and was recorded as stock-based compensation expense during the period ended November 30, 2011.
As approved by the Board of Directors, on March 14, 2011, the Company granted 93,750 stock options under the 2010 Stock Option Plan to a director of the Company at $2.00 per share for terms of five years. These options vest at a rate of 25% on grant and 25% at the end of each of six, twelve and eighteen months from the date of grant. The total fair value of these options was estimated to be $126,563 ($1.35 per stock option) and was determined using the Black-Scholes Option Pricing Model with an expected life of 5 years, a risk free interest rate of 2.00%, a dividend yield of 0% and expected volatility of 145%. A total of $67,757 relating to vested options was recorded as stock-based compensation expense during the period ended November 30, 2011. During the period ended November 30, 2011, a total of 93,750 of these options expired and were cancelled.
During the nine months ended November 30, 2011, 1,056,250 stock options with an exercise price of $2.00, previously granted to certain officers, directors and management of the Company, expired and were cancelled.
The Companys stock option activity for the year ended February 28, 2011 and for the nine months ended November 30, 2011 is summarized as follows:
Weighted average exercise | Weighted average remaining | ||||||||
Number of options | price per share | in contractual life (in years) | |||||||
Balance, February 28, 2010 | 687,500 | $ | 8.96 | 9.13 years | |||||
Granted | 2,825,000 | 2.00 | |||||||
Expired cancelled | (2,000,000 | ) | 8.96 | ||||||
Exercised | - | - | |||||||
Balance, February 28, 2011 | 1,512,500 | 2.00 | 3.75 years | ||||||
Granted | 93,750 | 2.00 | |||||||
Expired cancelled | (1,056,250 | ) | 2.00 | ||||||
Exercised | - | - | |||||||
Balance, November 30, 2011 | 550,000 | $ | 2.00 | 3.00 years |
A total of 413,500 stock options are exercisable as at November 30, 2011.
Share Purchase Warrants
As part of the private
placement on April 14, 2010, the Company issued 512,500 share purchase warrants
at $4.00 per share for terms of one year. The total fair value of these warrants
at the date of grant was estimated to be $1,009,318 ($1.97 per warrant), and was
determined using the Black-Scholes Option Pricing Model with an expected life of
1 year, a risk free interest rate of 0.45%, a dividend yield of 0% and expected
volatility of 182%.
23
TRESORO MINING CORP. |
(formerly Mercer Gold Corporation) |
(An Exploration Stage Company) |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
NOVEMBER 30, 2011 |
(Expressed in U.S. Dollars) |
(Unaudited) |
NOTE 9 CAPITAL STOCK (continued)
As of February 28, 2011, 512,500 share purchase warrants were outstanding entitling the holder to purchase a common share at a price of $4.00 per share up to April 14, 2011. These share purchase warrants expired unexercised on April 14, 2011.
Shares to be issued
During the nine months ended
November 30, 2011, the Company received $100,000 related to common shares that
were not yet issued at November 30, 2011.
NOTE 10 INCOME TAXES
The Company has losses carry forward for income tax purposes to November 30, 2011. There are no current or deferred tax expenses for the nine months ended November 30, 2011 due to the Companys loss position. The Company has fully reserved for any benefits of these losses. The deferred tax consequences of temporary differences in reporting items for financial statement and income tax purposes are recognized, as appropriate. Realization of the future tax benefits related to the deferred tax assets is dependent on many factors, including the Companys ability to generate taxable income within the net operating loss carryforward period. Management has considered these factors in reaching its conclusion as to the valuation allowance for financial reporting purposes.
The provision for refundable federal income tax consists of the following:
Nine month period ended | ||||||
November 30, | November 30, | |||||
2011 | 2010 | |||||
(unaudited) | (unaudited) | |||||
Deferred tax asset attributable to | ||||||
Current operations | $ | 582,366 | $ | 1,404,020 | ||
Non-deductible items | (72,904 | ) | (923,028 | ) | ||
Less: Change in valuation allowance | (509,462 | ) | (480,992 | ) | ||
Net refundable amount | $ | - | $ | - |
The composition of the Companys deferred tax asset as at November 30, 2011 and February 28, 2011 are as follows:
As at | ||||||
November 30, | February 28, | |||||
2011 | 2011 | |||||
(unaudited) | (audited) | |||||
Net operation loss carry-forward | $ | 19,932,947 | $ | 18,416,978 | ||
Statutory federal income tax rate | 33.93% | 33.96% | ||||
Deferred tax assets | 6,763,437 | 6,253,975 | ||||
Less: Valuation allowance | (6,763,437 | ) | (6,253,975 | ) | ||
Net deferred tax assets | $ | - | $ | - |
The potential income tax benefit of these losses has been offset by a full valuation allowance.
24
TRESORO MINING CORP. |
(formerly Mercer Gold Corporation) |
(An Exploration Stage Company) |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
NOVEMBER 30, 2011 |
(Expressed in U.S. Dollars) |
(Unaudited) |
NOTE 10 INCOME TAXES (continued)
As at November 30, 2011, the Company has an unused net operating loss carry forward balance of approximately $19,932,947 that is available to offset future taxable income. This unused net operation loss carry forward balance for income tax purposes expires as follows:
United States | Colombia | |||||
2025 | $ | 3,051 | $ | - | ||
2026 | 12,401 | - | ||||
2027 | 40,770 | - | ||||
2028 | 15,075,151 | - | ||||
2029 | 728,899 | - | ||||
2030 | 173,289 | - | ||||
2031 | 1,603,662 | - | ||||
2032 | 919,275 | - | ||||
No expiry | - | 1,376,449 | ||||
$ | 18,556,498 | $ | 1,376,449 |
NOTE 11 COMMITMENTS AND CONTINGENCIES
The Company is subject to certain outstanding and future commitments related to its mineral property interests (Note 5).
During the year ended February 28, 2011, the Company wrote down amounts due to the Plaintiff of $88,170 related to the Companys former CEO and director. This write down has been recorded as a recovery of expenses and a decrease in due to related parties.
On June 9, 2011, a former officer and director of the Company and Mercer Canada, a company controlled by the former officer and director of the Company (the Plaintiff), filed an action against the Company in the Supreme Court of British Columbia. The Plaintiff alleges that the Company owes him certain monies for payment under an alleged promissory note as well as pursuant to certain alleged management fees, expenses and disbursements which is asserted were incurred by the plaintiff in the plaintiffs prior role as an officer and director of the Company. The Company is of the view that such allegations are without merit and has and intends to vigorously contest the action. On July 13, 2011, the Company filed a defence to this action and a counterclaim against the plaintiff denying that any monies are owing and seeking damages against the plaintiff for breach of contract, breach of fiduciary duty and misrepresentation.
On July 11, 2011, the Plaintiff delivered a letter to the Company which purported to allege defaults under the Company's existing Mercer Option Agreement, dated for reference effective as at April 13, 2010, with respect to the Guayabales Property in Colombia (Note 5). It is the Company's position that the allegations of default are without merit and the letter was not valid notice of default under the Mercer Option Agreement.
On July 19, 2011, the Company responded and advised the Plaintiff as to its position with respect to each allegation of default.
On August 25, 2011, the Plaintiff delivered a letter to the Company, which purported to terminate the Mercer Option Agreement on the basis that the alleged defaults had not been cured. The Company regards the plaintiffs position as without merit and considers the purported termination to be invalid. The Company intends to continue as operator of the mineral property interests underlying the project as set forth in the Mercer Option Agreement.
On September 9, 2011, the Company gave notice to the Plaintiff that it intends to commence arbitration proceedings to address the validity of the termination of the Mercer Option Agreement.
On September 13, 2011, the Company filed an amended counterclaim as against the Plaintiff.
25
TRESORO MINING CORP. |
(formerly Mercer Gold Corporation) |
(An Exploration Stage Company) |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
NOVEMBER 30, 2011 |
(Expressed in U.S. Dollars) |
(Unaudited) |
NOTE 11 COMMITMENTS AND CONTINGENCIES (continued)
On September 20, 2011 the Company filed a notice of application against the Plaintiff, seeking an injunction against the Plaintiff to restrain them from interfering with the Company's activities as operator of the Guayabales Property in Colombia and from interfering with the Company's rights as optionee under the Mercer Option Agreement, pending conclusion of arbitration.
On October 3, 2011, the Plaintiff filed a response to civil claim, and on October 11, 2011, the Plaintiff filed a counterclaim, joining the members of the Company's Board of Directors as defendants. These pleadings have been filed in opposition to the Company's claim seeking an interlocutory injunction pending arbitration of the parties' dispute concerning the Plaintiff's purported termination of the Mercer Option Agreement. The counterclaim seeks, among other things, a declaration that the Mercer Option Agreement is void and/or rescission of the Mercer Option Agreement. The counterclaim also seeks damages. The Company denies all of the claims made in the counterclaim as malicious, spurious and without factual basis.
The Company applied to stay the claims advanced against it in the counterclaim pending the outcome of the arbitration. The Plaintiff has applied for a stay of the arbitration proceedings commenced by the Company on September 21, 2011. The hearing of both applications was heard by the Supreme Court of British Columbia on October 26 and 27, 2011.
On December 6, 2011 the British Columbia Supreme Court (the "Court") issued Reasons for Judgment (the "Reasons for Judgment") granting an injunction against both Mr. Jivraj and Mercer Canada, enjoining each of them from taking any steps to interfere with the Company's role as operator of the Guayabales Gold Project located in Colombia (the "Property") and interfering with the Option Agreement, pending completion of the arbitration proceeding commenced by the Company with respect to such matter (the "Arbitration Proceeding"). The Court has also ordered that a counterclaim filed by Mercer Canada in the Court shall be stayed.
The Court rejected Mercer BC's application to stay the Arbitration Proceeding commenced by the Company. Mercer BC had argued that the Company was barred from seeking arbitration to challenge Mercer BC's termination of the Option Agreement. The Court determined that the Company was not barred and that the issues sought to be determined by the Company are appropriately advanced in the Arbitration Proceeding now being administered by the British Columbia International Commercial Arbitration Centre.
In the Reasons for Judgment, the Court has also ordered each of Mercer BC and Mr. Jivraj to disclose, within 24 hours, the names of all persons and entities with whom Mr. Jivraj has discussed a possible sale or deal concerning the Property since March 28, 2011, and to refrain from communicating with any person or entity for the purpose of discussing a possible agreement concerning the Property in a manner inconsistent with the Company's continuing role as optionee and operator of the Property, pending the Arbitration Proceeding. The Court has further restrained Mr. Jivraj from taking any steps to transfer his shares in Mercer BC and the Company to any third party.
On December 21, 2011, Mercer BC delivered a letter to the Company providing notice of default (the Second Notice of Default) which purported to allege default by the Company under section 2.2(c)(i) of the Option Agreement as amended by the Company and Mercer BC on or about March 22, 2011.
On December 29, 2011, the Company responded and advised Mercer BC that the Company disputes the validity of the Second Notice of Default, that it denies that such default has occurred and that it is submitting the question to arbitration.
On January 9, 2012, the Company filed a notice to arbitrate the Second Notice of Default with Mercer BC and the British Columbia International Commercial Arbitration Centre pursuant to Article 16.2 of the Option Agreement, whereby the Company is seeking: (i) a declaration that the Second Notice of Default is invalid; (ii) in the alternative, a declaration that the Company was not in default as alleged in the Second Notice of Default; and (ii) an order requiring Mercer BC to pay to the Company costs of the arbitration.
The Company continues to take the position that the actions of the Plaintiff are both spurious and without merit. As a loss is not deemed to be likely, no accruals have been made as of November 30, 2011.
26
TRESORO MINING CORP. |
(formerly Mercer Gold Corporation) |
(An Exploration Stage Company) |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
NOVEMBER 30, 2011 |
(Expressed in U.S. Dollars) |
(Unaudited) |
NOTE 12 SEGMENTED INFORMATION
The Companys only business activity is exploration and development of mineral properties. This activity is carried out in Colombia.
The breakdown by geographic area for the nine month period ended November 30, 2011 is as follows:
United States | Colombia | Total | |||||||
Net loss | $ | 1,133,158 | $ | 597,249 | $ | 1,730,407 | |||
Current assets | $ | 89,583 | $ | 258 | $ | 89,841 | |||
Property and equipment | - | 6,064 | 6,064 | ||||||
Other assets | - | 5,650,000 | 5,650,000 | ||||||
Total assets | $ | 89,583 | $ | 5,656,322 | $ | 5,745,905 |
The breakdown by geographic area for the nine month period ended November 30, 2010 is as follows:
United States | Colombia | Total | |||||||
Net loss | $ | 3,874,016 | $ | 402,981 | $ | 4,276,997 | |||
Current assets | $ | 139,832 | $ | 87,597 | $ | 227,429 | |||
Property and equipment | - | 7,767 | 7,767 | ||||||
Other assets | - | 5,350,000 | 5,350,000 | ||||||
Total assets | $ | 139,832 | $ | 5,445,364 | $ | 5,585,196 |
NOTE 13 - SUBSEQUENT EVENTS
The following events occurred during the period from the date of the nine month period ended on November 30, 2011 to the date the consolidated financial statements were available to be issued on January 19, 2012:
a) |
The Company paid $85,000 to the Underlying Property Owner required on or by January 14, 2012 under the Underlying Option Agreement related to the Guayables Property (Note 5). |
b) |
On December 21, 2011, Mercer BC delivered a letter to the Company providing notice of default (the Second Notice of Default) which purported to allege default by the Company under section 2.2(c)(i) of the Option Agreement as amended by the Company and Mercer BC on or about March 22, 2011. |
On December 29, 2011, the Company responded and advised Mercer BC that the Company disputes the validity of the Second Notice of Default, that it denies that such default has occurred and that it is submitting the question to arbitration. | |
On January 9, 2012, the Company filed a notice to arbitrate the Second Notice of Default with Mercer BC and the British Columbia International Commercial Arbitration Centre pursuant to Article 16.2 of the Option Agreement, whereby the Company is seeking: (i) a declaration that the Second Notice of Default is invalid; (ii) in the alternative, a declaration that the Company was not in default as alleged in the Second Notice of Default; and (ii) an order requiring Mercer BC to pay to the Company costs of the arbitration. |
27
Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
The following discussion of our financial condition, changes in financial condition and results of operations for the three and nine months ended November 30, 2011 and 2010 should be read in conjunction with our unaudited interim consolidated financial statements and related notes for the thee and nine months ended November 30, 2011 and 2010. The following discussion contains forward-looking statements that involve risks, uncertainties and assumptions. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors, including, but not limited to, those referred to under the heading Risk Factors below.
Overview of Our Business
We are an exploration stage company and there is no assurance that a commercially viable mineral deposit exists on any of our property interests. Further exploration will be required before a final evaluation as to the economic and legal feasibility is determined with respect to any of our mineral property interests.
At the present time, our primary property of interest is the Guayabales Property, Colombia as described below.
Mineral Properties Guayabales Property, Colombia
Mineral Assets Option Agreement
On April 13, 2010, we entered into a definitive Mineral Assets Option Agreement (the Definitive Option Agreement) with Mercer Gold Corporation, a private mining company (MGC), pursuant to which MGC formally granted to us an exclusive option (the Option) to acquire all of MGCs current underlying option interests under a certain Option Agreement, dated for reference March 4, 2010 (the Underlying Option Agreement), as entered into between MGC and Comunidad Minera Guayabales (the Underlying Property Owner or CMG), pursuant to which MGC acquired from the Underlying Property Owner an option (the Underlying Option) to acquire a 100% legal, beneficial and registerable interest in and to certain mineral property concession interests which are held by way of license and which are located in the municipality of Marmato, Colombia, and which are better known and described as the Guayabales property (collectively, the Guayabales Property). The Definitive Option Agreement replaces an underlying letter of intent by and between and MGC and us, dated April 3, 2010.
The Definitive Option Agreement provides that, in order to exercise our Option, we are obligated to:
1. |
Pay to MGC $200,000 immediately upon the execution of the Definitive Option Agreement (the Effective Date) (paid on April 14, 2010); | |
2. |
Issue to MGC, both prior to and after the due and complete exercise of the Option, an aggregate of up to 5,000,000 restricted shares of the Companys common stock, as follows: | |
an initial issuance of 2,500,000 shares within two business days of the Effective Date (issued on April 15, 2010); and | ||
a final issuance of 2,500,000 shares within five business days of the Companys prior receipt of a technical report (as that term is defined in section 1.1 of National Instrument 43-101 of the Canadian Securities Administrators, Standards of Disclosure for Mineral Projects (NI 43-101) meeting certain criteria); | ||
3. |
Provide funding for or expend minimum cumulative Expenditures for Exploration and Development (as defined in the Definitive Option Agreement) work on or in connection with any of the mineral interests comprising the Property interests of not less than $11,500,000 in the following manner: | |
no less than an initial $1,500,000 of the Expenditures shall be expended on the Property by December 31, 2010 (incurred); | ||
no less than a further $5,000,000 of the Expenditures shall be expended on the Property by December 31, 2011; and | ||
no less than a final $5,000,000 of the Expenditures shall be expended on the Property by December 31, 2012; and | ||
4. |
Pay on MGCs behalf all underlying option, regulatory and governmental payments and assessment work required to keep the Property in good standing during the Option period (being that period from the Effective Date to the closing date in respect of the due and complete exercise of the Option as described in the Definitive Option Agreement, which shall not be later than January 13, 2013), and including, without limitation, all remaining cash payments required to be made to the Underlying Property Owner under the Underlying Option Agreement. The Company must pay the Underlying Property Owner an aggregate of $4,000,000 in the instalments by the dates specified as follows: |
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- Pay $20,000 by October 14, 2009 (paid);
- Pay additional $40,000 on or by 90 days from October 14, 2009 (paid);
- Pay additional $40,000 on or by April 14, 2010 (paid);
- Pay additional $55,000 on or by July 14, 2010 (paid);
- Pay additional $55,000 on or by October 14, 2010 (paid);
- Pay additional $65,000 on or by January 14, 2011 (paid);
- Pay additional $75,000 on or by April 14, 201l (paid);
- Pay additional $75,000 on or by July 14, 201l (paid);
- Pay additional $85,000 on or by October 14, 2011 (paid);
- Pay additional $85,000 on or by January 14, 2012 (paid);
- Pay additional $160,000 on or by July 14, 2012;
- Pay additional $160,000 on or by January 14, 2013;
- Pay additional $190,000 on or by July 14, 2013;
- Pay additional $190,000 on or by January 14, 2014;
- Pay additional $230,000 on or by July 14, 2014;
- Pay additional $230,000 on or by January 14, 2015; and
- Pay additional $2,245,000 on or by July 14, 2015.
On December 30, 2010, an amendment was agreed to whereby the funding for minimum cumulative Expenditures for Exploration and Development (as defined in the Definitive Option Agreement) work on or in connection with any of the mineral interests comprising the Property interests of not less than $11,500,000 was revised in the following manner:
- no less than an initial $750,000 of the Expenditures shall be expended on the Property by December 31, 2010 (incurred);
- no less than a further $5,750,000 of the Expenditures shall be expended on the Property by December 31, 2011; and
- no less than a final $5,000,000 of the Expenditures shall be expended on the Property by December 31, 2012.
On March 22, 2011, a further amendment was agreed to whereby the funding for minimum cumulative Expenditures for Exploration and Development (as defined in the Mercer Option Agreement) work on or in connection with any of the mineral interests comprising the Property interests was reduced from $11,500,000 to $3,000,000 to be incurred in the following manner:
- no less than an initial $1,000,000 of the Expenditures shall be expended on the Property by December 31, 2011 (incurred);
- no less than a further $1,000,000 of the Expenditures shall be expended on the Property by December 31, 2012; and
- no less than a final $1,000,000 of the Expenditures shall be expended on the Property by December 31, 2013.
Title to Property and Underlying Option Agreement
CMG, a Colombian legal entity, is the rightful owner of the concession contract #LH 0071-17, an exploitation license valid until March 28, 2032, that was registered on March 28, 2008 by INGEOMINAS in the Department of Caldas (registration #HHXB 01). As described above, MGC, a privately-held, Canadian entity registered in British Colombia, entered into an Option Agreement Underlying Option Agreement with CMG on March 4, 2010 to acquire a 100% interest in Guayabales. The Company entered into the Definitive Option Agreement with MGC as described above to acquire the 100% interest of Guayabales subject to the terms of the Underlying Option Agreement. No surface agreements are in place; however, CMG represents and warrants reasonable surface access to Guayabales in the Underlying Option Agreement and the Colombian Mining Code guarantees surface access.
In Colombia, all mineral rights are the property of the government of Colombia. Obtaining a mining right does not transfer ownership of the mineral estate, but creates a temporary right to explore and benefit from minerals in exchange for royalty payments so long as the mining title remains in good standing. Under Colombian mining law, foreign individuals and corporations have the same rights as Colombian individuals and corporations, and Colombian governmental regulatory bodies are specifically prohibited from requiring any additional or different requirements than would be required of a Colombian individual or corporation.
Subject to the Definitive Option Agreement as described above, the Company is responsible for all obligations established in the Underlying Option Agreement between MGC and CMG in order to complete the 100% acquisition of the Guayabales Property. These obligations include cash payments; provision for allowing continued Limited Mining Rights as described below; property maintenance; and quarterly reports. More specifically, these include:
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1. |
Cash Payments: The Company is responsible to make cash payments to CMG as described above. | |
2. |
Limited Mining Rights: The Company provides CMG with Limited Mining Rights, allowing the cooperative group of miners belonging to the entity to continue mining operations on the property. Operations are not to exceed 80 metric tonnes per day, providing that the mining operations are restricted to geographic areas in which mining operations are currently being conducted. The Company has the right to terminate this right to mine, by either completing the cash payment schedule described above, or by making a one time cash payment of $600,000. | |
3. |
Property Maintenance: The Company is obligated to maintain the property in good standing, free and clear of all liens, charges and encumbrances. | |
4. |
Property Reports: The Company is obligated to provide CMG with summary operating reports on a 3 month/quarterly schedule. |
Technical Report
We received a technical report in accordance with the provisions of National Instrument 43-101, Standards of Disclosure for Mineral Projects (NI 43-101), of the Canadian Securities Administrators for the Guayabales Property, which is located in the Department of Caldas, Colombia. The complete technical report, which was authored by Dean D. Turner, C.P.G., a qualified person as defined in NI 43-101, was filed under our Companys profile on the Canadian Securities Administrators public disclosure website, at www.sedar.com, on May 28, 2010. Mr. Turner prepared an update to this technical report, dated February 8, 2011. The technical report, as updated, is referred to herein as the Technical Report.
As required by NI 43-101, the Technical Report contains certain disclosure relating to measured, indicated and inferred mineral resource estimates for the Guayabales Project. Such mineral resources have been estimated in accordance with the definition standards on mineral resources of the Canadian Institute of Mining, Metallurgy and Petroleum referred to in NI 43-101. Measured mineral resources, indicated mineral resources and inferred mineral resources, while recognized and required by Canadian regulations, are not defined terms under the SECs Industry Guide 7, and are normally not permitted to be used in reports and registration statements filed with the SEC. Accordingly, we have not reported them in this quarterly report or otherwise in the United States.
Investors are cautioned not to assume that any part or all of the mineral resources in these categories will ever be converted into mineral reserves. These terms have a great amount of uncertainty as to their existence, and great uncertainty as to their economic and legal feasibility. In particular, it should be noted that mineral resources which are not mineral reserves do not have demonstrated economic viability. It cannot be assumed that all or any part of measured mineral resources, indicated mineral resources or inferred mineral resources discussed in the Technical Report will ever be upgraded to a higher category. In accordance with Canadian rules, estimates of inferred mineral resources cannot form the basis of feasibility or other economic studies. Investors are cautioned not to assume that any part of the reported measured mineral resources, indicated mineral resources or inferred mineral resources referred to in the Technical Report are economically or legally mineable.
Plan of Operations
Our Plan of Operations for the next twelve months is to pursue Phase I of the recommended exploration program on the Guayabales Property, as described in more detail in our Annual Report on Form 10-K for the year ended February 28, 2011, under Item 1. Business Mineral Properties Guayabales Property, Colombia Companys Planned Exploration Program.
We have decided to reduce the work program for the next 12 months while we review our forward plan in depth and estimate we will spend about $1,000,000 over the next 12 months. Further, we expect to spend approximately $300,000 in the next 12 months in office and general expenses and professional, consulting and management fees.
Based on our current plan of operations as set forth above, we estimate that we will require approximately $1.3 million to pursue our plan of operations over the next twelve months. As at November 30, 2011, we had cash of $7,806 and a working capital deficit of $2,647,105. We will require additional financing to pursue our plan of operations over the next twelve months. There can be no assurance that we will obtain any additional financing in the amounts required or on terms favorable to us. If we are unable to obtain additional financing, we may have to re-evaluate or abandon our business activities and revise our plan of operations.
We anticipate that additional funding will be in the form of equity financing from the sale of our common stock. However, we cannot provide investors with any assurance that we will be able to raise sufficient funding from the sale of our common stock to fund our plan of operations going forward. In the absence of such financing, our business plan will fail. Even if we are successful in obtaining equity financing, there is no assurance that we will obtain the funding necessary to pursue our business plan. If we do not continue to obtain additional financing going forward, we will be forced to re-evaluate or abandon our plan of operations.
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We are an exploration stage company and have not generated any revenue to date. The following table sets forth selected financial information relating to our Company for the periods indicated:
For the period | |||||||||||||||
from the date of | |||||||||||||||
inception | |||||||||||||||
(October 11, | For the three | For the three | For the nine | For the nine | |||||||||||
2004) to | months ended | months ended | months ended | months ended | |||||||||||
November 30, | November 30, | November 30, | November 30, | November 30, | |||||||||||
2011 | 2011 | 2010 | 2011 | 2010 | |||||||||||
(unaudited) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | |||||||||||
GENERAL & ADMINISTRATIVE EXPENSES | |||||||||||||||
Write down of mineral property acquisition costs | $ | 14,625,000 | $ | - | $ | - | $ | - | $ | 100,000 | |||||
Amortization | 1,635 | 213 | - | 768 | - | ||||||||||
Bank charges | 27,712 | 1,975 | 2,597 | 4,781 | 4,645 | ||||||||||
Consulting fees | 351,477 | 3,740 | 31,147 | 23,740 | 124,194 | ||||||||||
Interest expense | 619,350 | 37,035 | - | 85,318 | 9,607 | ||||||||||
Legal and accounting | 1,173,396 | 226,888 | 25,189 | 329,356 | 237,333 | ||||||||||
Management fees | 516,545 | 36,463 | 49,928 | 69,038 | 14,085 | ||||||||||
Marketing and promotion | 250,423 | 5,894 | 62,668 | 41,484 | 101,591 | ||||||||||
Mineral property development expenditures | 2,153,892 | - | 516,334 | 776,294 | 754,566 | ||||||||||
Office and miscellaneous | 397,437 | 8,923 | 57,418 | 99,714 | 167,264 | ||||||||||
Rent | 180,457 | 18,085 | 16,660 | 74,304 | 50,668 | ||||||||||
Stock-based compensation | 12,025,148 | 89,888 | 143,625 | 213,883 | 2,702,937 | ||||||||||
Transfer agent fees | 61,152 | 1,043 | 2,127 | 11,834 | 10,107 | ||||||||||
Gain on sale of equipment | (107 | ) | (213 | ) | - | (107 | ) | - | |||||||
TOTAL GENERAL & ADMINISTRATIVE EXPENSES | 32,383,517 | 429,934 | 907,693 | 1,730,407 | 4,276,997 | ||||||||||
NET LOSS FOR THE PERIOD | $ | (32,383,517 | ) | $ | (429,934 | ) | $ | (907,693 | ) | $ | (1,730,407 | ) | $ | (4,276,997 | ) |
OTHER COMPREHENSIVE LOSS | |||||||||||||||
Foreign currency translation | 7,428 | 9,155 | - | 7,428 | - | ||||||||||
COMPREHENSIVE LOSS | $ | (32,376,089 | ) | $ | (420,779 | ) | $ | (907,693 | ) | $ | (1,722,979 | ) | $ | (4,276,997 | ) |
Nine Months Ended November 30, 2011 Compared to Nine Months Ended November 30, 2010
During the nine months ended November 30, 2011 and November 30, 2010 we did not generate any revenue.
During the nine months ended November 30, 2011, we incurred general and administrative expenses of $1,730,407 compared to $4,276,997 incurred during the nine months ended November 30, 2010. The major components of our general and administrative expenses for the nine months ended November 30, 2011 and 2010 consisted of the following:
-
write down of mineral property acquisition costs of $Nil in 2011 (2010 - $100,000);
-
consulting fees of $23,740 in 2011 (2010 - $124,194), which decreased between 2010 and 2011 due to reduced activity associated with the Guayabales property;
-
interest expense of $85,318 in 2011 (2010 - $9,607), increased between 2010 and 2011 due to increase in debt;
-
legal and accounting fees of $329,356 in 2011 (2010 $237,333), which increased between 2010 and 2011 due primarily to increased legal costs in connection with the Guayabales property, our reverse stock split and name change during the period, and legal proceedings;
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-
management fees of $69,038 in 2011 (2010 - $14,085);
-
marketing and promotion costs of $41,484 in 2011 (2010 - $101,591), which decreased between 2010 and 2011 as we decreased focus on these activities;
-
mineral property development expenditures of $776,294 in 2011 (2010 - $754,566), which were quite consistent between 2010 and 2011;
-
office and miscellaneous expenses of $99,714 (2010 $167,264), which decreased between 2010 and 2011 due to foreign exchange gains on operations in Colombia and reduced administrative activities;
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rent of $74,304 in 2011 (2010 - $50,668) which increased from 2010 to 2011 as we increased our activity; and
-
stock-based compensation of $213,883 in 2011 (2010 - $2,702,937), which decreased between 2010 and 2011 due to reduced issuance of stock options.
Our net loss during the nine months ended November 30, 2011 was $1,730,407 compared to a net loss of $4,276,997 during the nine months ended November 30, 2010.
Three Months Ended November 30, 2011 Compared to Three Months Ended November 30, 2010
During the three months ended November 30, 2011 and November 30, 2010 we did not generate any revenue.
During the three months ended November 30, 2011, we incurred general and administrative expenses of $429,934 compared to $907,693 incurred during the three months ended November 30, 2010. The major components of our general and administrative expenses for the three months ended November 30, 2011 and 2010 consisted of the following:
-
consulting fees of $3,740 in 2011 (2010 - $31,147), which decreased between 2010 and 2011 due to reduced activity associated with the Guayabales property;
-
interest expense of $37,035 in 2011 (2010 - $Nil), increased between 2010 and 2011 due to increase in debt;
-
legal and accounting fees of $226,888 in 2011 (2010 $25,189), which increased between 2010 and 2011 due to increased legal costs in connection with the Guayabales property, our name change during the period, and legal proceedings;
-
management fees of $36,463 in 2011 (2010 - $49,928);
-
marketing and promotion costs of $5,894 in 2011 (2010 - $62,668), which decreased between 2010 and 2011 as we decreased focus on these activities;
-
mineral property development expenditures of $Nil in 2011 (2010 - $516,334), which decreased between 2010 and 2011 due to decreased exploration activity;
-
office and miscellaneous expenses of $8,923 (2010 $57,418), which decreased between 2010 and 2011 due to foreign exchange gains on operations in Colombia and reduced administrative activities;
-
rent of $18,085 in 2011 (2010 - $16,660) which increased from 2010 to 2011 as we increased our activity; and
-
stock-based compensation of $89,888 in 2011 (2010 - $143,625), which decreased between 2010 and 2011 due to reduced issuance of stock options.
Our net loss during the three months ended November 30, 2011 was $429,934 compared to a net loss of $907,693 during the three months ended November 30, 2010.
Liquidity and Capital Resources
As at the nine months ended November 30, 2011, our current assets were $89,841 (February 28, 2011 - $181,944) and our current liabilities were $2,736,946 (February 28, 2011 - $1,493,600), which resulted in a working capital deficit of $2,647,105 compared to a working capital deficit of $1,311,656 at February 28, 2011.
Total Stockholders equity decreased from $4,058,055 at February 28, 2011 to $3,008,959 at November 30, 2011.
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Cash Flows Used in Operating Activities
We have not generated positive cash flows from operating activities. For the nine months ended November 30, 2011, net cash flows used in operating activities was $740,942 consisting primarily of a net loss of $1,730,407. Net cash flows used in operating activities was adjusted by $85,713 in accrued interest on a related party promissory note, $768 in depreciation of property and equipment, $107 in gain on sale of equipment, and $213,883 in stock based compensation. Net cash flows used in operating activities was further changed by $19,319 in increase in amounts receivable, $6,906 in increase of prepaid expenses, $686,309 in increase of accounts payable and accrued liabilities, and $29,124 in increase due to related parties.
For the nine months ended November 30, 2010, net cash flows used in operating activities was $1,602,973 consisting primarily of a net loss of $4,276,997. Net cash flows used in operating activities was adjusted by $9,607 in settlement of accrued interest on related party promissory note, $90 in depreciation of property and equipment, $100,000 in write down of mineral property acquisition costs, $2,702,937 in stock based compensation and $120,843 non-cash gain on settlement of debt. Net cash flows used in operating activities was further changed by $101,805 in increase of accounts payable and accrued liabilities, $19,875 in increase due to related parties, $134,207 in increase of prepaid expenses and $5,240 in amounts receivable.
Cash Flows Used in Investing Activities
For the nine months ended November 30, 2011, net cash flows used in investing activities was $234,514 compared to net cash flows used in investing activities during the nine months ended November 30, 2010 of $357,857. This change was primarily as a result of option payments to Mercer Canada for the Guayabales Property.
Cash Flows Provided by Financing Activities
We have financed our operations primarily from either advancements or the issuance of equity and debt instruments. For the nine months ended November 30, 2011, net cash flows provided from financing activities was $849,700 compared to $2,048,427 for the nine months ended November 30, 2010. Cash flows from financing activities for the nine months ended November 30, 2011 consisted primarily of $449,700 of advances from related parties and promissory note, and $400,000 for common shares issued for cash or cash subscribed for common shares. Cash flows from financing activities for the nine months ended November 30, 2010 consisted of $340 in bank overdraft, $151,233 in repayment of advances from related parties and promissory note, and $2,200,000 for common shares issued for cash.
We expect that working capital requirements will continue to be funded through a combination of our existing funds and further issuances of securities. Our working capital requirements are expected to increase as we expand our exploration activities as set forth above under Plan of Operations.
Critical Accounting Policies and Estimates
Our condensed interim financial statements and accompanying notes have been prepared in accordance with U.S. generally accepted accounting principles (U.S. GAAP) applied on a consistent basis. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods.
We regularly evaluate the accounting policies and estimates that we use to prepare our financial statements. In general, managements estimates are based on historical experience, on information from third party professionals, and on various other assumptions that are believed to be reasonable under the facts and circumstances. Actual results could differ from those estimates made by management.
Basis of Presentation
The accounting and reporting policies of the Company conform to U.S. GAAP applicable to exploration stage enterprises. The functional currency is the U.S. dollar, and the financial statements are presented in U. S. dollars.
The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Mercer One Panama Corp. and Mercer Two Panama Corp. All significant inter-company transactions and account balances have been eliminated upon consolidation.
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Mineral Property Expenditures
Mineral property acquisition costs are initially capitalized as tangible assets when purchased. At the end of each fiscal quarter end, the Company assesses the carrying costs for impairment. If proven and probable reserves are established for a property and it has been determined that a mineral property can be economically developed, costs will be amortized using the units-of-production method over the estimated life of the probable reserve.
Mineral property exploration costs are expensed as incurred.
Estimated future removal and site restoration costs, when determinable are provided over the life of proven reserves on a units-of-production basis. Costs, which include production equipment removal and environmental remediation, are estimated each period by management based on current regulations, actual expenses incurred, and technology and industry standards. Any charge is included in exploration expense or the provision for depletion and depreciation during the period and the actual restoration expenditures are charged to the accumulated provision amounts as incurred.
As of the date of these financial statements, the Company has not established any proven or probable reserves on its mineral properties and incurred only acquisition and exploration costs.
Although the Company has taken steps to verify title to mineral properties in which it has an interest, according to the usual industry standards for the stage of exploration of such properties, these procedures do not guarantee the Companys title. Such properties may be subject to prior agreements or transfers and title may be affected by undetected defects.
Asset Retirement Obligations
The Company has adopted ASC 410, Asset Retirement and Environmental Obligations, which requires that the fair value of a liability for an asset retirement obligation be recognized in the period in which it is incurred. ASC 410 requires the Company to record a liability for the present value of the estimated site restoration costs with corresponding increase to the carrying amount of the related long-lived assets. The liability will be accreted and the asset will be depreciated over the life of the related assets. Adjustments for changes resulting from the passage of time and changes to either the timing or amount of the original present value estimate underlying the obligation will be made. There were no asset retirement obligations as at November 30, 2011.
Use of Estimates
The preparation of financial statements in conformity with GAAP 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 and the reported amounts of revenues and expenses during the period. Actual results could differ from those estimates. Significant areas requiring managements estimates and assumptions are the determination of the fair value of transactions involving common stock and financial instruments. Other areas requiring estimates include deferred tax balances and asset impairment tests.
Cash and Cash Equivalents
For the statements of cash flows, all highly liquid investments with maturity of three months or less are considered to be cash equivalents. There were no cash and cash equivalents as of November 30, 2011 and February 28, 2011 that exceeded federally insured limits.
Net Income (Loss) per Common Share
The Company computes income (loss) per share in accordance with ASC 260, Earnings Per Share which requires presentation of both basic and diluted earnings per share on the face of the statement of operations. Basic income (loss) per share is computed by dividing net income (loss) available to common shareholders by weighted average number of outstanding common shares during the period. Diluted income (loss) per share gives effect to all dilutive potential common shares outstanding during the period. Dilutive loss per share excludes all potential common shares if their effect is anti-dilutive.
Financial Instruments
The fair value of the Companys financial assets and financial liabilities approximate their carrying values due to the immediate or short-term maturity of these financial instruments.
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Income Taxes
The Company follows the liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax balances. Deferred tax assets and liabilities are measured using enacted or substantially enacted tax rates expected to apply to the taxable income in the years in which those differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the date of enactment or substantive enactment. As at November 30, 2011, the Company had net operating loss carryforwards, however, due to the uncertainty of realization, the Company has provided a full valuation allowance for the deferred tax assets resulting from these loss carryforwards.
Foreign Currency Translation
The financial statements are presented in U.S. dollars. In accordance with ASC 830 Foreign Currency Matters, foreign denominated monetary assets and liabilities are translated to their U.S. dollar equivalents using foreign exchange rates which prevailed at the balance sheet date. Revenue and expenses are translated at average rates of exchange during the period. Related translation adjustments are reported as a separate component of stockholders equity, whereas gains or losses resulting from foreign currency transactions are included in results of operations.
Stock-Based Compensation
On June 1, 2006, the Company adopted ASC 718, Compensation Stock Compensation, which establishes accounting for equity instruments exchanged for employee services. Under the provisions of ASC 718, stock-based compensation cost is measured at the grant date, based on the calculated fair value of the award, and is recognized as an expense over the employees requisite service period (generally the vesting period of the equity grant). The Company adopted ASC 718 using the modified prospective method, which requires the Company to record compensation expense over the vesting period for all awards granted after the date of adoption, and for the unvested portion of previously granted awards that remain outstanding at the date of adoption. Accordingly, financial statements for the periods prior to January 1, 2006 have not been restated to reflect the fair value method of expensing share-based compensation. The adoption of ASC 718 does not change the way the Company accounts for share-based payments to non-employees, with guidance provided by ASC 505-50, Equity-Based Payments to Non-Employees.
Other Updates
In December 2010, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2010-28, Intangibles, Goodwill and Other. The amendments in this ASU are effective for fiscal years, and interim periods within those years, beginning after December 15, 2010. The adoption of ASU 2010-28 during the period did not have a material impact on the Companys financial position, cash flows or results of operations.
In December 2010, the FASB issued ASU 2010-29, Business Combinations. The amendments in this ASU are effective for fiscal years, and interim periods within those years, beginning after December 15, 2010. The adoption of ASU 2010-29 during the period did not have a material impact on the Companys financial position, cash flows or results of operations.
Recently Issued Accounting Pronouncements
In June 2011, the FASB issued ASU 2011-05, Presentation of Comprehensive Income. This ASU presents an entity with the option to present the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. In both choices, an entity is required to present each component of other comprehensive income along with a total for other comprehensive income, and a total amount for comprehensive income. This update eliminates the option to present the components of other comprehensive income as part of the statement of changes in stockholders equity. The amendments in this update do not change the items that must be reported in other comprehensive income or when an item of other comprehensive income must be reclassified to net income. As ASU 2011-05 relates only to the presentation of Comprehensive Income, the Company does not expect that the adoption of this update will have a material effect on its consolidated financial statements.
Funding for Plan of Operations
As set forth above under Plan of Operations, we anticipate that we will required approximately $1.3 million over the next twelve months to pursue our Plan of Operations. We will require additional financing in order to be able to fund our plan of operations. Generally, we have financed operations to date through the proceeds of the private placement of equity and debt instruments. In connection with our business plan, management anticipates additional increases in exploration expenses and capital expenditures relating to: (i) exploration properties; and (ii) future exploration property acquisitions. We intend to finance these expenses with further issuances of securities, and debt issuances. Thereafter, we expect we will need to raise additional capital and generate revenues to meet long-term operating requirements. Additional issuances of equity or convertible debt securities will result in dilution to our current shareholders. Further, such securities might have rights, preferences or privileges senior to our common stock. Additional financing may not be available upon acceptable terms, or at all. If adequate funds are not available or are not available on acceptable terms, we may not be able to take advantage of prospective new business endeavors or opportunities, which could significantly and materially restrict our business operations.
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Off-Balance Sheet Arrangements
We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.
Item 3. Quantitative and Qualitative Disclosures about Market Risk
We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item.
Item 4. Controls and Procedures
Disclosure Controls and Procedures
We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the SECs rules and forms, and that such information is accumulated and communicated to our principal executive officer, Gary Powers, and our principal financial officer, William Thomas, to allow for timely decisions regarding required disclosure. Our Chief Executive Officer and our Chief Financial Officer are responsible for establishing and maintaining disclosure controls and procedures for our Company.
Gary Powers, our principal executive officer, and William Thomas, our principal financial officer, have evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) of the Exchange Act) as of November 30, 2011. Based on this evaluation, our principal executive officer and principal financial officer have concluded that our disclosure controls and procedures were effective as of November 30, 2011.
Changes in Internal Control over Financial Reporting
There have not been any changes in our internal control over financial reporting that occurred during our fiscal quarter ended November 30, 2011 that have materially affected, or are likely to materially affect, our internal control over financial reporting.
PART II OTHER INFORMATION
Item 1. Legal Proceedings
On June 9, 2011, Rahim Jivraj, a former officer and director of the Company filed an action against the Company in the Supreme Court of British Columbia. The plaintiff alleges that the Company owes him certain monies for payment under an alleged promissory note as well as pursuant to certain alleged management fees, expenses and disbursements which is asserted were incurred by the plaintiff in the plaintiff's prior role as an officer and director of the Company. The Company is of the view that such allegations are without merit and intends to vigorously contest the action. On July 13, 2011, the Company filed a defence to this action and a counterclaim against the plaintiff denying that any monies are owing and seeking damages against the plaintiff for breach of contract, breach of fiduciary duty and misrepresentation
On July 11, 2011, Mercer Gold Corp. ("Mercer BC"), a privately held British Columbia company which is owned and/or controlled by Mr. Jivraj, delivered a letter to the Company which purported to allege defaults under the Company's existing Mineral Assets Option Agreement, dated for reference effective as at April 13, 2010 (the "Option Agreement"), with Mercer BC, with respect to the Guayabales Gold Project in Columbia. It is the Company's position that the allegations of default are without merit and the letter was not valid notice of default under the Option Agreement.
On July 19, 2011, the Company responded and advised Mercer BC as to its position with respect to each allegation of default.
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On August 25, 2011, Mercer BC delivered a letter to the Company, which purported to terminate the Option Agreement on the basis that the alleged defaults had not been cured. The Company regards Mercer BC's position as without merit and considers the purported termination to be invalid. The Company intends to continue as operator of the mineral property interests underlying the project as set forth in the Option Agreement.
On September 9, 2011, the Company gave notice to Mercer BC that it intends to commence arbitration proceedings to address the validity of the termination.
On September 13, 2011, the Company filed an amended counterclaim as against Mr. Jivraj. The counterclaim seeks an order requiring Mr. Jivraj to disgorge to the Company all of his shares in Mercer BC together with restitution of all benefits he received from the Company while serving as its President. The Company also seeks damages, including aggravated and punitive damages. The counterclaim alleges that Mr. Jivraj acted in a conflict of interest, while President of the Company, by reason of his failure to divest himself of his interest in Mercer BC. It alleges that he formed a plan to use funds raised by the Company to develop the Option Agreement property interests, and then took active steps to put the Company in a position where it might default under the Option Agreement. It is alleged that he then resigned from the Company and resumed his position as President of Mercer BC in order to assist Mercer BC in reacquiring these property interests so that he could vend the property interests to another third party for new consideration. The counterclaim alleges that Mr. Jivraj has attempted to usurp a mature business opportunity belonging to the Company by assisting Mercer BC in issuing the default notice and the termination notice, in breach of fiduciary duty. In addition, the counterclaim alleges that Mr. Jivraj has interfered with the Company's economic interests using unlawful means, including fraud, deceit, conversion, slander of title and defamation. The counterclaim includes particulars of unlawful conduct, including an attempt by Mr. Jivraj to convince a Company consultant to assist him in triggering a default under the Option Agreement by ensuring that a third party service supplier was not paid.
On September 20, 2011 the Company filed a notice of application against each of Mr. Jivraj and Mercer BC, seeking an injunction against Mr. Jivraj and Mercer BC to restrain them from interfering with the Company's activities as operator of the Guayabales Gold Project in Columbia and from interfering with the Company's rights as optionee under the Option Agreement, pending conclusion of arbitration.
On October 3, 2011, Mercer BC filed a Response to Civil Claim, and on October 11, 2011 Mercer BC filed a Counterclaim, joining the members of the Company's Board of Directors as defendants. These pleadings have been filed in opposition to the Company's claim seeking an interlocutory injunction pending arbitration of the parties' dispute concerning Mercer BC's purported termination of the Option Agreement. The Counterclaim seeks, among other things, a declaration that the Option Agreement is void and/or rescission of the Option Agreement. The Counterclaim also seeks damages. The Company denies all of the claims made in the Counterclaim as malicious, spurious and without factual basis.
On December 6, 2011 the British Columbia Supreme Court (the "Court") issued Reasons for Judgment (the "Reasons for Judgment") granting an injunction against both Mr. Jivraj and Mercer BC, enjoining each of them from taking any steps to interfere with the Company's role as operator of the Guayabales Gold Project located in Colombia (the "Property") and interfering with the Option Agreement, pending completion of the arbitration proceeding commenced by the Company with respect to such matter (the "Arbitration Proceeding"). The Court has also ordered that a counterclaim filed by Mercer BC in the Court shall be stayed.
The Court rejected Mercer BC's application to stay the Arbitration Proceeding commenced by the Company. Mercer BC had argued that the Company was barred from seeking arbitration to challenge Mercer BC's termination of the Option Agreement. The Court determined that the Company was not barred and that the issues sought to be determined by the Company are appropriately advanced in the Arbitration Proceeding now being administered by the British Columbia International Commercial Arbitration Centre.
In the Reasons for Judgment, the Court has also ordered each of Mercer BC and Mr. Jivraj to disclose, within 24 hours, the names of all persons and entities with whom Mr. Jivraj has discussed a possible sale or deal concerning the Property since March 28, 2011, and to refrain from communicating with any person or entity for the purpose of discussing a possible agreement concerning the Property in a manner inconsistent with the Company's continuing role as optionee and operator of the Property, pending the Arbitration Proceeding. The Court has further restrained Mr. Jivraj from taking any steps to transfer his shares in Mercer BC and the Company to any third party.
On December 21, 2011, Mercer BC delivered a letter to the Company providing notice of default (the Second Notice of Default) which purported to allege default by the Company under section 2.2(c)(i) of the Option Agreement as amended by the Company and Mercer BC on or about March 22, 2011.
On December 29, 2011, the Company responded and advised Mercer BC that the Company disputes the validity of the Second Notice of Default, that it denies that such default has occurred and that it is submitting the question to arbitration.
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On January 9, 2012, the Company filed a notice to arbitrate the Second Notice of Default with Mercer BC and the British Columbia International Commercial Arbitration Centre pursuant to Article 16.2 of the Option Agreement, whereby the Company is seeking: (i) a declaration that the Second Notice of Default is invalid; (ii) in the alternative, a declaration that the Company was not in default as alleged in the Second Notice of Default; and (ii) an order requiring Mercer BC to pay to the Company costs of the arbitration.
Item 1A. Risk Factors
We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item.
In addition to the other information set forth in this report, you should carefully consider the factors discussed under the heading Risk Factors in Item 1A. to Part I of our Annual Report on Form 10-K for the fiscal year ended February 28, 2011, which could materially affect our business, financial condition or operating results. The risks described in our Annual Report on Form 10-K are not the only risks facing our Company. Additional risks and uncertainties not currently known to us, or that we currently consider to be immaterial, may also prove to be material and adversely affect our business, financial condition and/or operating results.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
On November 11, 2011, the Company completed a private placement financing involving the sale of 3,000,000 common shares of the Company to seven subscribers at a subscription price of $0.10 per share for cash proceeds of $300,000. The Company relied on exemptions from registration under the United States Securities Act of 1933, as amended, provided by Regulation S.
Item 3. Defaults Upon Senior Securities
None.
Item 4. (Removed and Reserved)
Not applicable.
Item 5. Other Information
None.
Item 6. Exhibits
Exhibit | |
Number | Description of Exhibit |
3.1 | Articles of Incorporation, as amended (1) |
3.2 | Certificate of Change filed with the Nevada Secretary of State on April 15, 2011 (14) |
3.3 | Certificate of Correction filed with the Nevada Secretary of State on April 28, 2011 (14) |
3.4 | Articles of Merger as filed with the Nevada Secretary of State on August 30, 2011(15) |
3.5 | Bylaws (1) |
10.1 | Mineral Property Staking and Purchase Agreement dated January 28, 2005 between Ancor Resources Inc. and Laurence Stephenson (1) |
10.2 | Nose Rock Property - Option and Joint Venture Agreement between Nu-Mex Uranium Corp. and Strathmore Resources (US) Ltd. dated September 14, 2007 (2) |
10.3 | Dalton Pass Property - Option and Joint Venture Agreement between Nu-Mex Uranium Corp. and Strathmore Resources (US) Ltd. dated October 5, 2007 (3) |
10.4 | NWT Uranium Corp. and Nu-Mex Uranium Corp. Terminate Arrangement Agreement dated February 13, 2008 (4) |
10.5 | Executive Services Agreement dated April 1, 2008 among Uranium International Corp., Cleary Petroleum Corp. and Richard M. Cherry (5) |
10.6 | Letter Option Agreement dated December 9, 2008 between Uranium International Corp. and Geoforum Scandinavia AB (6) |
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Exhibit | |
Number | Description of Exhibit |
10.7 | Letter Option Agreement dated January 15, 2009 between Uranium International Corp. and Trans Atlantic Metals AG (7) |
10.8 | Letter Agreement dated April 21, 2009, effective April 23, 2009, between Uranium International Corp. and Continental Precious Metals Inc. (8) |
10.9 | Option Agreement dated October 29, 2009 between Uranium International Corp. and Geoforum Scandinavia AB (9) |
10.10 | Option Agreement dated November 17, 2009 between Uranium International Corp. and Trans Atlantic Metals AG (10) |
10.11 | Mineral Assets Option Agreement between Mercer Gold Corp. and Uranium International Corp., dated April 13, 2010 (11) |
10.12 | 2010 Stock Incentive Plan (12) |
10.13 | Amendment to Mineral Assets Option Agreement dated December 30, 2010 (13) |
Subsidiaries of the Issuer: | |
21.1 | Subsidiaries of the Issuer:
Mercer One Panama Corp. (Incorporated under the laws of the Republic of Panama) Mercer Two Panama Corp. (Incorporated under the laws of the Republic of Panama) |
Certifications | |
31.1 | Certification of Chief Executive Officer pursuant to Securities Exchange Act of 1934 Rule 13a-14(a) or 15d-14(a) * |
31.2 | Certification of Chief Financial Officer pursuant to Securities Exchange Act of 1934 Rule 13a-14(a) or 15d-14(a) * |
32.1 | Certification of Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350 * |
Interactive Data File | |
101.INS | XBRL Instance Document* |
101.SCH | XBRL Taxonomy Extension Schema* |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase* |
101.DEF | XBRL Taxonomy Extension Definition Linkbase* |
101.LAB | XBRL Taxonomy Extension Label Linkbase* |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase* |
* | Filed herewith |
(1) |
Incorporated by reference from our Form SB-2, filed with the SEC on September 13, 2006. |
(2) |
Incorporated by reference from our Form 8-K, filed with the SEC on September 14, 2007. |
(3) |
Incorporated by reference from our Form 8-K, filed with the SEC on October 12, 2007. |
(4) |
Incorporated by reference from our Form 8-K, filed with the SEC on February 19, 2008. |
(5) |
Incorporated by reference from our Form 8-K, filed with the SEC on April 7, 2008. |
(6) |
Incorporated by reference from our Form 8-K, filed with the SEC on December 19, 2008. |
(7) |
Incorporated by reference from our Form 8-K, filed with the SEC on January 23, 2009. |
(8) |
Incorporated by reference from our Form 8-K, filed with the SEC on May 1, 2009. |
(9) |
Incorporated by reference from our Form 8-K, filed with the SEC on November 12, 2009. |
(10) |
Incorporated by reference from our Form 8-K, filed with the SEC on November 27, 2009. |
(11) |
Incorporated by reference from our Form 8-K, filed with the SEC on April 19, 2010. |
(12) |
Incorporated by reference from our Form 10-K, filed with the SEC on June 16, 2010. |
(13) |
Incorporated by reference from our Form 8-K, filed with the SEC on January 18, 2011. |
(14) |
Incorporated by reference from our Form 8-K, filed with the SEC on May 12, 2011. |
(15) |
Incorporated by reference from our Form 8-K, filed with the SEC on November 4, 2011. |
39
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.
TRESORO MINING CORP. | ||
By: | Gary Powers | |
Gary Powers | ||
President and Chief Executive Officer | ||
Date: January 20, 2012 | ||
By: | William D. Thomas | |
William D. Thomas | ||
Secretary, Treasurer and Chief Financial Officer | ||
Date: January 20, 2012 |