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EX-32.1 - CERTIFICATION - Lake Victoria Mining Company, Inc.exhibit32-1.htm
EX-31.2 - CERTIFICATION - Lake Victoria Mining Company, Inc.exhibit31-2.htm
EX-32.2 - CERTIFICATION - Lake Victoria Mining Company, Inc.exhibit32-2.htm
EX-31.1 - CERTIFICATION - Lake Victoria Mining Company, Inc.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 December 31, 2011

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _________to ________

Commission File No. 000-53291

LAKE VICTORIA MINING COMPANY, INC.
(Exact name of registrant as specified in its charter)

Nevada Not Applicable
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)

Suite 810 – 675 West Hastings Street, Vancouver, British Columbia, Canada V6B 1N2
(Address of principal executive offices) (zip code)

604.681.9635
(Registrant’s telephone number, including area code)

Not Applicable
(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
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 (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
Yes [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 definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer [ ] Accelerated filer [ ]
Non-accelerated filer [ ] Smaller reporting company [x]
(Do not check if a smaller reporting company)      

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes [ ]    No [x]


2

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS

Check whether the registrant filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Exchange Act after distribution of securities under a plan confirmed by a court.
Yes [ ]    No [ ]

APPLICABLE ONLY TO CORPORATE ISSUERS

State the number of shares outstanding of each of the issuer’s classes of common equity as of the latest practicable date:
As of February 14, 2011, there were 97,458,733 shares of common stock, par value $0.00001, outstanding.


3

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.

Lake Victoria Mining Company, Inc.
(An Exploration Stage Company)

December 31, 2011

  Index
   
Consolidated Balance Sheets F–1
   
Consolidated Statements of Operations F–2
   
Consolidated Statements of Cash Flows F–3
   
Notes to the Consolidated Financial Statements F–4



Lake Victoria Mining Company, Inc.
(An Exploration Stage Company)
Consolidated Balance Sheets
(Expressed in US dollars)

    December 31,     March 31,  
    2011     2011  
     
    (Unaudited)     (Audited)  
ASSETS            
Current Assets            
             
   Cash and cash equivalents   390,390     2,282,902  
   Advances and deposits (Note 3(e))   71,190     32,684  
   Amounts receivable (Note 7(e))       256,968  
   Advances to related party (Note 3)       499,043  
Total Current Assets   461,580     3,071,597  
Property and Equipment (Note 5)   138,774     103,302  
Mineral Properties (Note 7)   611,400      
Total Assets   1,211,754     3,174,899  
             
LIABILITIES AND STOCKHOLDERS’ EQUITY            
             
Current Liabilities            
             
   Accounts payable   39,853     212,721  
   Accounts payable to related party (Note 3)   12,920     624,773  
   Accrued expenses       119,540  
   Other payables (Note 6)   27,581     4,386  
Total Liabilities   80,354     961,420  
             
Commitments (Note 10)            
Subsequent Events (Note 11)            
             
Stockholders’ Equity            
             
Preferred Stock, 100,000,000 shares authorized, $0.00001 par value;
No shares issued and outstanding (Note 8)












             
Common Stock, 250,000,000 shares authorized, $0.00001 par value;
97,485,733 shares issued and outstanding (March 31, 2011 - 96,346,900) (Note 8)


975



964

Additional Paid-in Capital   16,142,289     15,620,475  
Common Stock and Warrants Issuable (Notes 8(c))       35,000  
Deficit Accumulated During the Exploration Stage   (15,011,864 )   (13,442,960 )
Total Stockholders’ Equity   1,131,400     2,213,479  
Total Liabilities and Stockholders’ Equity   1,211,754     3,174,899  

The accompanying notes are an integral part of these consolidated financial statements

F-1



Lake Victoria Mining Company, Inc.
(An Exploration Stage Company)
Consolidated Statements of Operations
(Expressed in US dollars)
(Unaudited)

                            Accumulated From  
                            December 11, 2006  
    Three Months Ended     Nine Months Ended     (Date of Inception) to  
    December 31,     December 31,     December 31,  
    2011     2010     2011     2010     2011  
           
                               
Revenue                        
                               
Expenses                              
   Amortization and depreciation   9,991     6,030     26,042     17,617     64,144  
   Exploration costs (Notes 3 and 7)   324,110     599,097     668,106     1,041,498     3,681,018  
   General and administrative   57,679     57,790     244,275     183,842     2,205,048  
   Impairment of mineral property acquisition
            costs (Note 7)
 
   
187,426
   
371,612
   
468,491
   
11,514,703
 
   Management and director fees   9,000     28,500     23,000     88,500     547,017  
   Professional and consulting fees (Note 3)   33,148     116,678     198,535     616,783     3,490,681  
   Salaries   141,822     25,004     434,052     77,095     577,734  
   Stock-based compensation   213,825     1,593,989     213,825     1,593,989     1,807,814  
   Travel and accommodation   23,877     18,515     51,044     56,018     383,675  
                               
Total Operating Expenses   813,452     2,593,029     2,230,491     4,143,833     24,271,834  
                               
Operating Loss   (813,452 )   (2,593,029 )   (2,230,491 )   (4,143,833 )   (24,271,834 )
                               
Other Income (Expenses)                              
   Loss on sales of short-term investments
      (Note 4)
 
 
  (757,489 )
 
  (752,489 )
   Foreign exchange loss   (707 )   (4,528 )   (70,361 )   (5,224 )   (156,123 )
   Interest income   671     487     2,014     2,164     10,601  
   Interest expense       (156 )       (518 )   (1,045 )
   Loss on debt settlement       (47,762 )       (47,762 )   (63,752 )
   Other income                   15,900  
   Income from options granted on                              
   mineral properties (Note 7)           1,487,423         1,487,423  
Total Other Income (Expenses)   (36 )   (51,959 )   661,587     (51,340 )   540,515  
                               
Net Loss   (813,488 )   (2,644,988 )   (1,568,904 )   (4,195,173 )   (23,731,319 )
Net loss attributable to non-controlling                              
interest                   8,719,455  
Net Loss Attributable to the Company   (813,488 )   (2,644,988 )   (1,568,904 )   (4,195,173 )   (15,011,864 )
                               
Net Loss Per Share – Basic and Diluted   (0.01 )   (0.04 )   (0.02 )   (0.06 )      
                               
Weighted Average Shares Outstanding   97,485,733     74,178,000     97,150,295     70,343,000        

The accompanying notes are an integral part of these consolidated financial statements

F-2



Lake Victoria Mining Company, Inc.
(An Exploration Stage Company)
Consolidated Statements of Cash Flows
(Expressed in US dollars)
(Unaudited)

    Nine Months Ended     December 11, 2006  
    December 31,     (Date of Inception) to  
    2011     2010     December 31, 2011  
       
Operating Activities                  
Net Loss   (1,568,904 )   (4,195,173 )   (15,011,864 )
Adjustments to reconcile net loss to cash used in operating activities                  
   Amortization and depreciation   26,042     17,617     64,144  
   Directors’ compensation share payments           35,000  
   Impairment of mineral property acquisition cost   371,612     468,491     11,514,703  
   Loss in subsidiary attributed to non-controlling interest           (8,719,455 )
   Loss on debt settlement           63,752  
   Loss on sales of investments   757,489         752,489  
   Restructuring charges           (110,019 )
   Share payment for consulting services   48,900     118,200     2,746,498  
   Share payments received for options granted on mineral properties   (990,000 )       (990,000 )
   Stock-based compensation   213,825     1,593,989     1,807,814  
Changes in operating assets and liabilities:                  
   Increase in advances and deposits   (38,506 )   (33,160 )   (71,190 )
   Decrease in amounts receivable   256,968          
   Decrease (Increase) in advances to related parties   499,043     (21,125 )   12,920  
   Decrease (Increase) in accounts payable   (784,721 )   69,618     39,856  
   Decrease in accounts payable – acquisition       (61,482 )    
   Decrease in accrued expenses   (119,540 )        
   Increase (Decrease) in other payables   23,195     (18,591 )   27,581  
Net Cash Used In Operating Activities   (1,304,597 )   (2,061,616 )   (7,837,771 )
Investing Activities                  
   Acquisition of property and equipment   (61,514 )   (6,182 )   (202,918 )
   Cash payment for acquisition of mineral properties   (758,912 )   (468,491 )   (4,221,703 )
   Proceeds of subsidiary stock issuances           1,600,300  
   Purchase of investment           (5,000 )
   Proceeds from sales of investments   232,511         242,511  
Net Cash Used In Investing Activities   (587,915 )   (474,673 )   (2,586,810 )
Financing Activities                  
   Proceeds from note payable       12,750      
   Repayment of note payable       (12,750 )    
   Proceeds from issuance of stock, net       1,700,362     10,828,971  
   Payment for cancellation of stock           (14,000 )
Net Cash Provided By Financing Activities       1,700,362     10,814,971  
Net (Decrease) Increase In Cash   (1,892,512 )   (835,927 )   390,390  
Cash at Beginning of Period   2,282,902     955,401      
Cash at End of Period   390,390     119,474     390,390  
                   
Non-cash Investing and Financing Activities                  
   Accounts receivable exchanged for long-term investment           460,019  
   Accounts receivable exchanged for mineral property acquisition           1,039,981  
   Investment acquired through payable   12,500         12,530  
   Receivable exchange for long-term investment           10,000  
   Share payments received for options granted on mineral properties   990,000         990,000  
   Stock issued for mineral interest acquisition costs   224,100         7,904,400  
   Stock issued for services       118,200     2,382,523  
   Stock issued for subscription receivable       102,037     33,275  
   Stock issued to settle debt   83,900         230,227  
Supplemental Disclosures                  
   Interest paid       518     1,045  
   Income taxes paid            

The accompanying notes are an integral part of these consolidated financial statements

F-3



Lake Victoria Mining Company, Inc.
(An Exploration Stage Company)
Notes to the Consolidated Financial Statements
December 31, 2011
(Expressed in US dollars)
(Unaudited)

1.

Nature of Operations

     

Lake Victoria Mining Company, Inc. (the “Company”) was incorporated on December 11, 2006 under the laws of the State of Nevada. The Company’s administrative office is located in Vancouver, Canada. The Company is an Exploration Stage Company, as defined by Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 915, Development Stage Entities. The Company has been in the exploration stage since inception and has not yet realized any revenues from its planned operations.

     

The principal business of the Company is to search for mineral deposits or reserves which are not in either the development or production stage. The Company is conducting exploration activities on gold and uranium properties located in Tanzania.

     

As of December 31, 2011, none of the Company’s mineral property interests had proven or probable reserves as determined under the requirements of SEC Industry Guide No. 7. Planned principal activities have not yet begun. The ability of the Company to emerge from the exploration stage with respect to any planned principal business activity is dependent upon its successful efforts to raise additional debt or equity financing and/or attain profitable mining operations. As shown in the accompanying financial statements, the Company has an accumulated deficit of $15,011,864 incurred through December 31, 2011. The Company has no revenues. Management intends to seek additional capital from new equity securities offerings that will provide funds needed to continue the exploration for gold and uranium. The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classification of liabilities that might be necessary in the event the Company cannot continue as a going concern.

     
2.

Summary of Significant Accounting Policies

     
a)

Basis of Presentation and Interim Financial Statements

     

These consolidated financial statements and related notes are presented in accordance with accounting principles generally accepted in the United States, and are expressed in U.S. dollars. These consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Kilimanjaro Mining Company, Inc. (“Kilimanjaro”), Lake Victoria Resources Company, (T) Ltd., Jin 179 Company Tanzania Ltd. and Chrysos 197 Company Tanzania Ltd. Significant intercompany accounts and transactions have been eliminated. The Company’s fiscal year-end is March 31.

     

These interim unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions to Securities and Exchange Commission (“SEC”) Form 10-Q. They do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. Therefore, these interim financial statements should be read in conjunction with the Company’s audited financial statements and notes thereto for the year ended March 31, 2011, included in the Company’s Annual Report on Form 10-K filed July 14, 2011 with the SEC.

     

The financial statements included herein are unaudited; however, they contain all normal recurring accruals and adjustments that, in the opinion of management, are necessary to present fairly the Company’s financial position at December 31, 2011, and the results of its operations and cash flows for the nine-month periods ended December 31, 2011 and 2010. The results of operations for the period ended December 31, 2011 are not necessarily indicative of the results to be expected for future quarters or the full year.

     
b)

Use of Estimates

     

The preparation of financial statements in accordance with United States generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses in the reporting period. The Company regularly evaluates estimates and assumptions related to long-lived assets, mineral property costs, asset retirement obligations, stock-based compensation, financial instrument valuations and deferred income tax asset valuations. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.

F-4



Lake Victoria Mining Company, Inc.
(An Exploration Stage Company)
Notes to the Consolidated Financial Statements
December 31, 2011
(Expressed in US dollars)
(Unaudited)

2.

Summary of Significant Accounting Policies (continued)

     
c)

Business Combinations

     

The Company follows the guidance in ASC 805, Business Combinations, and ASC 810, Consolidation. The net loss attributable to non-controlling interest recognized from inception to quarter ended December 31, 2011 was previously the minority interest held by certain passive shareholders at the consolidated financial statement level of Kilimanjaro, and whose interests were eliminated for accounting purposes by the August 7, 2009 share exchange agreement. The Company, after August 7, 2009, had no further non-controlling interests.

     

As of December 31, 2011, a cumulative loss of $8,719,455 had been attributed to the non-controlling interest of the Company’s controlled subsidiary.

     
d)

Basic and Diluted Net Income (Loss) Per Share

     

The Company computes net income (loss) per share in accordance with ASC 260, Earnings per Share, which requires presentation of both basic and diluted earnings per share (EPS) on the face of the income statement. Basic EPS is computed by dividing net income (loss) available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti dilutive. As of December 31, 2011, the Company had 26,004,901 dilutive securities outstanding.

     
e)

Cash and Cash Equivalents

     

The Company considers all highly liquid instruments with a maturity of three months or less at the time of issuance to be cash equivalents.

     

As of December 31, 2011, the Company has approximately $15,000 deposited at FDIC insured banks in the United States. FDIC deposit insurance covers the balance of each depositor’s account up to $250,000 per insured bank.

     

As of December 31, 2011, the Company has approximately $262,000 deposited in Canada including $147,066 (CAD$157,000) of guaranteed investment certificates bearing variable interest at prime rate less 1.95% that is cashable any time without any penalties and $33,825 (CAD$ 34,500) of guaranteed investment certificates bearing variable interest at primate less 2.05% which is restricted in use for corporation credit cards.

     

As of December 31, 2011, the Company has 8,423,000 Tanzania Shillings (approximately $5,200) and $107,000 deposited in Tanzania. The Deposit Insurance Board in Tanzania insures up to 1,500,000 Tanzanian Shillings (approximately $960 as of December 31, 2011) per customer per bank. Any amount beyond the basic insurance amount may expose the Company to loss.

     
f)

Property and Equipment

     

Property and equipment consists of mining tools and equipment, motor vehicle, furniture and equipment and computers and software which are depreciated on a straight line basis over their expected lives of five years.

     
g)

Mineral Property Costs

     

Under US GAAP mineral property acquisition costs are ordinarily capitalized when incurred using FASB ASC Topic 805-20-55-37, Whether Mineral Rights are Tangible or Intangible Assets. The carrying costs are assessed for impairment under ASC Topic 360-36-10-35-20, Accounting for Impairment or Disposal of Long- Lived Assets, whenever events or changes in circumstances indicate that the carrying costs may not be recoverable. The Company expenses as incurred all property maintenance and exploration costs.

     

The Company also evaluates the carrying value of acquired mineral property rights in accordance with ASC Topic 930-360-35-1, Mining Assets: Impairment and Business Combinations, using the Value Beyond Proven and Probable (VBPP) method. The fair value of a mining asset generally includes both VBPP and an estimate of the future market price of the minerals.

     

When the Company has capitalized mineral property costs, these properties will be periodically assessed for impairment of value. Once a property reaches the production stage, the related capitalized costs will be amortized, using the units of production method. During the nine months ended December 31, 2011, the Company records its interests in mining properties and areas of geological interest at cost. The Company has capitalized mineral properties costs of $611,400 and $Nil for the nine months ended at December 31, 2011 and 2010, respectively.

F-5



Lake Victoria Mining Company, Inc.
(An Exploration Stage Company)
Notes to the Consolidated Financial Statements
December 31, 2011
(Expressed in US dollars)
(Unaudited)

2.

Summary of Significant Accounting Policies (continued)

     
h)

Long-Lived Assets

     

In accordance with ASC 360, Property Plant and Equipment the Company tests long-lived assets or asset groups for recoverability when events or changes in circumstances indicate that their carrying amount may not be recoverable. Circumstances which could trigger a review include, but are not limited to: significant decreases in the market price of the asset; significant adverse changes in the business climate or legal factors; accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of the asset; current period cash flow or operating losses combined with a history of losses or a forecast of continuing losses associated with the use of the asset; and current expectation that the asset will more likely than not be sold or disposed significantly before the end of its estimated useful life. Recoverability is assessed based on the carrying amount of the asset and the sum of the undiscounted cash flows expected to result from the use and the eventual disposal of the asset, as well as specific appraisal in certain instances. An impairment loss is recognized when the carrying amount is not recoverable and exceeds fair value.

     
i)

Asset Retirement Obligations

     

The Company accounts for asset retirement obligations in accordance with the provisions of ASC 440, Asset Retirement and Environmental Obligations which requires the Company to record the fair value of an asset retirement obligation as a liability in the period in which it incurs a legal obligation associated with the retirement of tangible long-lived assets that result from the acquisition, construction, development and/or normal use of the assets. The Company did not have any asset retirement obligations as of December 31, 2011.

     
j)

Financial Instruments

     

ASC 825, Financial Instruments requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 825 establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. ASC 825 prioritizes the inputs into three levels that may be used to measure fair value:

     

Level 1

     

Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.

     

Level 2

     

Level 2 applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data.

     

Level 3

     

Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.

     

The Company’s financial instruments consist principally of cash, advances and deposits, amounts receivable, accounts payable, accounts payable to related party and other payables.

     

Pursuant to ASC 825, the fair values of cash and short-term investments are determined based on “Level 1” inputs, which consist of quoted prices in active markets for identical assets. The Company believes that the recorded values of advances and deposits, amounts receivable, accounts payable, and other payables approximate their current fair values because of their nature and respective relatively short maturity dates or durations.

     

Assets measured at fair value on a recurring basis were presented on the Company’s balance sheet as of December 31, 2011 as follows:

F-6



Lake Victoria Mining Company, Inc.
(An Exploration Stage Company)
Notes to the Consolidated Financial Statements
December 31, 2011
(Expressed in US dollars)
(Unaudited)

2.

Summary of Significant Accounting Policies (continued)

   
  i) Financial Instruments (continued)

      Fair Value Measurements Using  
      Quoted Prices in     Significant              
      Active Markets     Other     Significant        
      For Identical     Observable     Unobservable     Balance  
      Instruments     Inputs     Inputs     December 31,  
      (Level 1)   (Level 2)   (Level 3)   2011  
           
  Assets:                        
  Cash and cash equivalents   390,390             390,390  
      390,390             390,390  

  k)

Foreign Currency Translation

     
 

The Company’s functional and reporting currency is the United States dollar. Monetary assets and liabilities denominated in foreign currencies are translated to United States dollars in accordance with ASC 740, Foreign Currency Matters, using the exchange rate prevailing at the balance sheet date. Gains and losses arising on translation or settlement of foreign currency denominated transactions or balances are included in the determination of income.

     
 

To the extent that the Company incurs transactions that are not denominated in its functional currency, they are undertaken in Canadian dollars and the Tanzanian Schilling. A portion of business transactions in Tanzania and mineral option purchase agreements are denominated in the Tanzanian Schilling. The Company has not, to the date of these financials statements, entered into derivative instruments to offset the impact of foreign currency fluctuations.

     
  l)

Segment Information

     
 

At December 31, 2011, $120,000 of property and equipment and $611,400 of mineral properties are located in Tanzania. Although Tanzania is considered economically stable, it is always possible that unanticipated events in foreign countries could disrupt the Company’s operations.

     
  m)

Income Taxes

     
 

The Company accounts for income taxes using the asset and liability method in accordance with ASC 740, Income Taxes. The asset and liability method provides that deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities, and for operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using the currently enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company records a valuation allowance to reduce deferred tax assets to the amount that is believed more likely than not to be realized.

     
  n)

Stock-Based Compensation

     
 

The Company records stock-based compensation in accordance with ASC 718, Compensation – Stock Based Compensation and ASC 505, Equity Based Payments to Non-Employees, which requires the measurement and recognition of compensation expense based on estimated fair values for all share-based awards made to employees, directors and consultants, including stock options.

     
 

ASC 718 requires companies to estimate the fair value of share-based awards on the date of grant using an option-pricing model. The Company uses the Black-Scholes option-pricing model as its method of determining fair value. This model is affected by the Company’s stock price as well as assumptions regarding a number of subjective variables. These subjective variables include, but are not limited to the Company’s expected stock price volatility over the term of the awards, and actual and projected employee stock option exercise behaviors. The value of the portion of the award that is ultimately expected to vest is recognized as an expense in the statement of operations over the requisite service period.

     
 

All transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable.

F-7



Lake Victoria Mining Company, Inc.
(An Exploration Stage Company)
Notes to the Consolidated Financial Statements
December 31, 2011
(Expressed in US dollars)
(Unaudited)

2.

Summary of Significant Accounting Policies (continued)

     
o)

Recent Accounting Pronouncements

     

The Company has evaluated all recent accounting pronouncements and determined that they would not have a material impact on the Company’s financial statements or disclosures.

     
p)

Reclassifications

     

Certain reclassifications have been made to the prior period’s financial statements to conform to the current period’s presentation.

     
3.

Related Party Transactions and Balances

     
a)

Prior to incorporation of the Company’s wholly-owned subsidiary in Tanzania, the Company contracted with Geo Can Resources Company Ltd (Geo Can), a related company with a shared common director, to perform exploration services on all of the properties. On June 1, 2011, the Company paid Geo Can $121,480 which was the difference between amounts owing for exploration services totaling $620,523 and advances of $499,043 made to Geo Can through Company’s subsidiary, Kilimanjaro Mining Company.

     

As of December 31, 2011, the Company owed $9,920 (March 31, 2011 - $121,480) to Geo Can for reimbursement of licenses holding costs paid on behalf of the Company which has been included in accounts payable to related parties. Refer to Note 7.

     
b)

At December 31, 2011, the Company owed $3,000 (2010 - $nil) of directors fees to the directors of the Company which has been included in accounts payable to related parties. During the nine months ended December 31, 2011, the Company incurred $23,000 (2010 - $88,500) of directors fees to a Director of the Company.

     
c)

During the nine months ended December 31, 2011, the Company incurred $3,750 (2010 - $nil) of accounting fees to the individual related to an officer.

     
d)

During the nine months ended December 31, 2011, the Company incurred $31,500 (2010 - $70,500) of geologist consulting fees to a director.

     
e)

As at December 31, 2011, the Company held $27,750 in trust with a company sharing a common director, which has been included in advances and deposits.

     
4.

Short-term Investments

     

The Company classifies its short-term investments as available-for-sale securities and carries them at fair value. The Company determines fair values for investments in public companies using quoted market prices with unrealized gains and losses included in accumulated other comprehensive income or loss. Realized gains and losses and unrealized losses that are other than temporary are recognized in earnings.

     

The Company received 2,200,000 of common shares of stock from Otterburn Ventures Inc. pursuant to four option and joint venture agreements dated May 6, 2011(Refer to Note 7) regarding four Tanzanian properties. The fair value of shares was valued at $990,000 on the grant date.

     

On July 22, 2011, the Company entered into agreements to sell 2,200,000 of common shares of Otterburn to private purchasers unrelated to the Company at a price of CAD$0.10 (approximate $0.11) per share for total proceeds of $232,511. These shares were held in escrow and released on September 22, 2011. The Company recognized a loss of $757,489 on the sale of the shares.

     
5.

Property and Equipment

     

At December 31, 2011 and March 31, 2011, property and equipment consisted of the following:


      As at December 31, 2011     As at March 31, 2011  
                  Net                 Net  
            Accumulated     Book           Accumulated     Book  
      Cost     Amortization     Value     Cost     Amortization     Value  
               
  Mining tools and equipment   143,271     43,690     99,581     101,495     25,278     76,217  
  Vehicle   12,800     1,493     11,307              
  Furniture and equipment   12,077     3,164     8,913     10,101     1,794     8,307  
  Computer and software   34,770     15,797     18,973     29,808     11,030     18,778  
      202,918     64,144     138,774     141,404     38,102     103,302  

F-8



Lake Victoria Mining Company, Inc.
(An Exploration Stage Company)
Notes to the Consolidated Financial Statements
December 31, 2011
(Expressed in US dollars)
(Unaudited)

6.

Other Payables

   

As of December 31, 2011 and March 31, 2011, the Company withheld payroll deductions of $27,581 and $4,386, respectively, to conform to local tax law.

   
7.

Mineral Property Acquisition and Exploration Costs

   

On May 4, 2009, Kilimanjaro completed a Property Acquisition Agreement (the “Geo Can Agreement”) with Geo Can (a related party, see Note 3). Under the terms of the agreement Kilimanjaro acquired a 100% interest in the mineral property assets, which included 33 gold prospecting licenses and 13 uranium licenses. Included in this agreement were the Kalemela project’s licenses, Geita project’s license, Uyowa Project’s licenses, Kinyambwiga project’s license and other projects’ licenses. Geo Can had entered into property option agreements, regarding some of these resource properties, with Lake Victoria before the share exchange agreement between Lake Victoria and Kilimanjaro on August 7, 2009, and as a consequence Geo Can no longer has any interest in those prior property agreements.

   

The mineral property acquisition costs are capitalized and the carrying values are periodically assessed for impairment of value and any diminution in value. When a property reaches the development stage, the related costs will be capitalized and amortized, using the units of production method on the basis of periodic estimates of ore reserves. Costs to maintain the mineral rights and leases are expensed as incurred.

   

All of the Company’s mineral property interests are located in Tanzania. Geo Can holds some resource properties in trust for the Company. Most of the resource property interests are still formally registered to Geo Can to save on registration fees. When the annual filing for each property comes due then the formal registration of each property will be transferred to Kilimanjaro or as directed by Kilimanjaro.

The following is a summary of the continuity of mineral property acquisition costs during the nine-month period ended December 31, 2011 :





  Kalemela
Gold
Project
$
(a)
    Geita
Project
$
(b)
    Kinyambwiga
Project
$
(c)
    Singida
Project
$
(e)
    Uyowa
Project
$
(f)
    North
Mara
$
(g)
    Handeni
Project
$
(h)
    Buhemba
Project
$
(i)
    Other
Projects
$


 
Total
$


March 31, 2011   -     -     -     -     -     -     -     -     -     -  
Related payments:                                                            
Cash consideration   -     -     -     350,512     40,000     -     226,250     142,150     -     758,912  
Shares issued   -     -     -     -     -     -     116,100     108,000     -     224,100  
Impairment   -     -     -     (350,512 )   -     -     (21,100 )   -     -     (371,612 )
December 31, 2011   -     -     -     -     40,000     -     321,350     250,150     -     611,400  

F-9



Lake Victoria Mining Company, Inc.
(An Exploration Stage Company)
Notes to the Consolidated Financial Statements
December 31, 2011
(Expressed in US dollars)
(Unaudited)

7.

Mineral Property Acquisition and Exploration Costs (continued)

The following is a summary of mineral property exploration costs incurred during the nine-month period ended December 31, 2011:





 
Kalemela
$
(a)
   
Geita
$
(b)
    Kinyamb
wiga
$
(c)
   
Suguti
$
(d)
   
Singida
$
(e)
   
Uyowa
$
(f)
    North
Mara
$
(g)
   
Handeni
$
(h)
    Buhem
ba
$
(i)
    Other
Project
$

 
Total
$

Camp, Field Supplies and Travel   -     -     15,534     11,608     27,093     36,138     4,266     15,670     5,071     4,209     119,589  
Drilling Cost   -     -     -     -     364,159     151,425     -     -     -     -     515,584  
Geological consulting and Wages   288     1,992     55,995     19,029     110,988     104,074     16,448     59,730     16,602     27,617     412,764  
Geophysical and Geochemical   -     -     3,207     7,691     56,056     47,016     167     13,982     743     (124 )   128,739  
Parts and equipment   -     -     6,153     2,192     1,235     9,992     101     2,068     330     72     22,144  
Vehicle and Fuel expenses   -     -     11,059     11,631     14,309     21,992     5,656     15,552     4,372     2,074     86,646  
Report and Study   -     -     -     -     1,018     4,913     -     -     -     -     5,931  
Expense reimbursements   -     -     -     -     (623,290 )   -     -           -     -     (623,290 )
    288     1,992     91,947     52,151     (48,431 )   375,550     26,638     107,003     27,118     33,849     668,106  

  a)

Kalemela Gold Project

     
 

As a part of the Geo Can Agreement, Kilimanjaro owns 100% interest in the Kalemela Gold Project’s original three prospecting licenses PL2747/2004, PL3006/2005 and PL2910/2004. The original three prospecting licenses have been divided and the project is now comprised of six licenses: PL2747/2004, PL3006/2005, PL2910/2004, PL5892/2009, PL5912/2009 and PL5988/2009. The Kalemela Gold Project is located within the Southeastern Lake Victoria Goldfields in Northern Tanzania in Magu District, Mwanza Region.

     
 

On May 6, 2011, the Company entered into an option and joint venture agreement with Otterburn. On May 20, 2011, the Company received option payment of $61,898 in cash and 300,000 common shares of Otterburn with a fair value of $135,000. On July 8, 2011, Otterburn terminated the option and joint venture agreement. On July 22, 2011, the Company sold 300,000 Otterburn shares to unrelated parties at a price of CAD$0.10 per share. Refer to Note 4.

     
  b)

Geita Project

     
 

As a part of the Geo Can Agreement, the Company owns 100% interest in the Geita project’s original one prospecting license as at March 31, 2011. The original prospecting license PL2806 has been divided and the project is now comprised of two licenses: PL2806/2004 and PL5958/2009. The Geita Gold Project is located in Northern Tanzania within the Lake Victoria Goldfields in the Geita District, Mwanza Region.

     
 

On May 6, 2011, the Company entered into an option and joint venture agreement with Otterburn. On May 20, 2011, the Company received option payment of $42,740 in cash and 300,000 common shares of Otterburn with a fair value of $135,000. On July 8, 2011, Otterburn terminated the option and joint venture agreement. On July 22, 2011, the Company sold 300,000 Otterburn shares to unrelated parties at a price of CAD$0.10 per share. Refer to Note 4.

     
  c)

Musoma Bunda - Kinyambwiga Project

     
 

The Musoma Bunda Gold Project comprise of three prospecting licenses that are located on the eastern side of Lake Victoria.

     
 

Kinyambwiga project is part of the Musoma Bunda Gold Project. As a part of the Geo Can Agreement, the Company owns 100% interest of Kinyambwiga project’s one prospecting license and 24 primary mining licenses. The Kinyambwiga Gold Project is about 208 kilometers northeast of the city of Mwanza in northern Tanzania.

     
 

A director of the Company entered into Mineral Purchase agreements on behalf of the Company with 24 Primary Mining Licenses (PMLs) which are part of the Kinyambwiga Project and which are recorded in his name and are to be transferred over to the Company at a future date when a Special Mining License is achieved for these PMLs.

F-10



Lake Victoria Mining Company, Inc.
(An Exploration Stage Company)
Notes to the Consolidated Financial Statements
December 31, 2011
(Expressed in US dollars)
(Unaudited)

7.

Mineral Property Acquisition and Exploration Costs (continued)

     
d)

Musoma Bunda - Suguti Project

     

Suguti project is part of the Musoma Bunda Gold Project. As a part of the Geo Can Agreement, the Company owns 100% interest of Suguti project’s one prospecting license.

     
e)

Singida Project

     

On May 15, 2009, the Company signed a Mineral Financing Agreement with one director of the Company authorizing him, on behalf of the Company, to acquire Primary Mining Licenses (“PMLs”) in the Singida area. As of December 31, 2010, this director has entered into Mineral Properties Sales and Purchase agreements with various PML owners. At the option of the Company, any PMLs may be relinquished at any time during the agreement and the title transferred back to the original owner.

     

Under the terms of these agreements, if the option to purchase is completed on all these PMLs, then the total purchase consideration would be approximately $4,682,074 (TZS7,551,733,325,outstanding option payments in US Dollar amount is estimated with an exchange rate of 0.00062 as at December 31, 2011), payable by February 24, 2013. At the option of the Company, a 2% Net Smelter Production royalty or 2% of the Net Sale Value may be substituted in place of the final payment for each PML and paid on a pro rata basis determined by the total final number of PMLs involved in a special mining license.

     

In September 2009, pursuant to the agreement, the Company completed an Addendum to the Mineral Properties and Sale and provided notification to all the PML owners involved in Singida Mineral Properties and Sale Agreements that the Company would extend their due diligence period for an additional 120 days as upon paying $48,782.

     

On January 19, 2010, a director on behalf of the Company signed second addendums to Singida mineral properties sales and purchase agreements. The addendums revised and extended the second payment of the mineral agreements. The second payment was divided into three payments with $470,927 due on January 27, 2010, $470,927 due on July 27, 2010 and $922,900, due on January 27, 2011.

     

On July 27, 2010, the director signed third addendums to the Singida mineral properties sales and purchase agreements on behalf of the Company. The third addendums revised the payment terms of the second addendum. Based on the revised terms, the second installment of $470,927 was divided into two payments, with $281,065 due on July 27, 2010 and $187,426 due on October 24, 2010. The Company made the payment of $281,065 on July 27, 2010, and the payment of $187,426 on October 26, 2010.

     

On February 7, 2011, a director signed fourth addendums to the Singida mineral properties sales and purchase agreements on behalf of the Company. The fourth addendums revised the payment terms of the second addendum. Based on the revised terms, the third instalment of approximately $922,900 was divided into three payments, with $92,065 paid on February 9, 2011, $181,998 paid on March 10, 2011 and $646,030 due on August 9, 2011. On August 9, 2011, the Company relinquished 17 PMLs and paid $350,512 to retain the option to acquire 20 additional PMLs. The option payment of $350,512 was impaired and recorded in the consolidated statement of operations. At December 31, 2011, the Company has 100% acquired 23 PML agreements.

     

On May 6, 2011, the Company entered into an option and joint venture agreement with Otterburn. On May 20, 2011, the Company received option payment of $300,770 in cash and 1,100,000 common shares of Otterburn with a fair value of $495,000.

     

On June 21, 2011, Lake Victoria Resources, a subsidiary of the Company, entered into a service agreement with Otterburn to perform all recommended exploration work on optioned properties. As per the agreement, Otterburn agreed to reimburse exploration costs incurred on Singida project from March 2011 up to the day of termination. As of December 31, 2011, the Company received total reimbursements from Otterburn were $880,258. As of March 31, 2011, $256,968 was receivable from Otterburn under this agreement.

     

On July 8, 2011, Otterburn terminated the option and joint venture agreement. On July 22, 2011, the Company sold 1,100,000 Otterburn shares to unrelated parties at a price of CAD$0.10 per share. Refer to Note 4.

     

As of December 31, 2011, under the terms of the mineral properties sales and purchase agreements the Company has completed option payments in the amount of $2,058,322. Pursuant to the original agreement and the subsequent addendums, the Company will pay approximately final payment $360,000 on January 23, 2013 and $2,340,000 on February 24, 2013. At the option of the Company, a 2% Net Smelter Production royalty or 2% of the Net Sale Value may be substituted in place of the final payment for each PML.

F-11



Lake Victoria Mining Company, Inc.
(An Exploration Stage Company)
Notes to the Consolidated Financial Statements
December 31, 2011
(Expressed in US dollars)
(Unaudited)

7.

Mineral Property Acquisition and Exploration Costs (continued)

     
f)

Uyowa Project

     

As a part of the Geo Can Agreement the Company owns 100% interest in the Uyowa project’s prospecting licenses. The Uyowa Gold project consists of seven prospecting licenses and a total of eleven legal PMLs.

     

On July 19, 2011, Guardian Investment Ltd, a related party, on behalf of the Company, entered into a mineral properties option agreement to acquire four primary mining licenses within the northern most prospecting license of the seven comprising the Uyowa Gold project. Total consideration includes:


  1)

paying $20,000 within 7 days after execution date. The payment was made on July 21, 2011;

     
  2)

paying $20,000 on or before the earlier of location of a drilling rig on each PML in good working condition or January 16, 2012. The payment was made on September 6, 2011.

     
  3)

paying a total amount of $450,000, of which $50,000 due in 2012, $360,000 due in 2013 and $40,000 due in 2014.

     
  4)

A royalty of 1% of net profit interest may be purchased at any time after completing $400,000 payment by paying $250,000 per PML.


  g)

North Mara Project

     
 

As of December 31, 2011, the North Mara Project comprised of nine prospecting licenses.

     
 

On May 6, 2011, the Company entered into an option and joint venture agreement with Otterburn. On May 20, 2011, the Company received option payment of $92,015 in cash and 500,000 common shares of Otterburn with a fair value of $225,000. On July 8, 2011, Otterburn terminated the option and joint venture agreement. On July 22, 2011, the Company sold 500,000 Otterburn shares to unrelated parties at a price of CAD$0.10 per share. Refer to Note 4.

     
  h)

Handeni Project

     
 

On April 20, 2011, the Company signed license purchase agreement to acquire one prospecting license. The total consideration was $113,250, of which $77,250 was paid on April 29, 2011 and $36,000 was paid on July 14, 2011. On June 14 and June 20, 2011 the Company paid a finder’s fee of $30,000 in cash and issued 400,000 common shares with a fair value of $108,000.

     
 

On May 30, 2011, the Company signed prospecting license purchase agreement to acquire a second prospecting license. The total consideration was $450,000 of which $10,000 paid on June 16, 2011. On June 14 and 20, 2011, the Company paid $3,000 in cash and issued 30,000 common shares with a fair value of $8,100. On September 20, 2011, the Company terminated this purchase agreement. Capitalized acquisition costs of $21,100 were determined to be impaired.

     
 

On July 1, 2011, the Company signed prospecting license purchase agreement to acquire a third prospecting license. The total consideration includes:


  1)

paying a total amount of $470,000 to earn up to 90% of interest, of which $20,000 paid on July 6, 2011 and $50,000 paid on Sept 21, 2011, $150,000 due in 2012, $125,000 and $125,000 due in 2013.

     
  2)

paying $1,500,000 on or before September 21, 2015 to earn final 10% interest.


  i)

Buhemba Project

     
 

Buhemba Project consists of two prospecting licenses. One prospecting license is a part of the Geo Can Agreement the Company owns 100% interest.

     
 

On April 20, 2011, the Company signed license purchase agreement to acquire one prospecting license. The total consideration was $112,150, of which $89,650 was paid on April 29, 2011 and $22,500 was paid on July 14, 2011. On June 14 and June 20, 2011 the Company paid a finder’s fee of $30,000 in cash and issued 400,000 common shares with a fair value of $108,000.

     
  j)

Mbinga Project

     
 

The Mbinga Uranium Project is comprised of three prospecting licenses and two Reconnaissance Licenses. The Reconnaissance Licenses, located along the eastern shoreline of Lake Nyasa are currently under application.

     
 

As of December 31, 2011, the Company owns 100% interest of Mbinga project’s prospecting licenses.

F-12



Lake Victoria Mining Company, Inc.
(An Exploration Stage Company)
Notes to the Consolidated Financial Statements
December 31, 2011
(Expressed in US dollars)
(Unaudited)

8.

Capital Stock

   

Preferred Stock

   

The Company is authorized to issue 100,000,000 shares of preferred stock with a par value of $0.00001. As of December 31, 2011, the Company has not issued any preferred stock.

   

Common Stock

   

On December 7, 2010, the Company’s shareholders approved a resolution to amend the Company’s articles of incorporation to increase the number of authorized shares of common stock from 100,000,000 shares to 250,000,000 shares. All shares have equal voting rights, are non-assessable and have one vote per share.


  a)

On April 20 and May 30, 2011, the Company entered into three prospecting licenses purchase agreements to acquire three prospecting licenses. As per the agreements, the Company agreed to pay a finder’s fee of 830,000 common shares. On June 20, 2011, the Company issued 830,000 common shares with a fair value of $224,100 as finders’ fee to a company.

     
  b)

On April 8, 2011, the Company signed a debt settlement agreement with a consultant to settle a consulting fee of $80,614 for geological and business development services provided. The Company agreed to pay $31,714 cash and issue 163,000 shares with a market value of $48,900 to settle the outstanding balance. On June 20, 2011, the Company issued the shares to the consultant.

     
  c)

On February 24, 2011, the Company signed debt settlement and subscription agreement with a director to settle a consulting fee of $35,000 in exchange for 145,833 shares of common stock at $0.24 per share. On June 20, 2011, the Company issued the shares to the director.


9.

Stock Options and Warrants

   

On October 7, 2010, the Company adopted the 2010 Stock Option Plan under which the Company is authorized to grant stock options to acquire up to a total of 10,000,000 shares of common stock.

   

On November 4, 2011, the Company re-priced the exercise price of 120,000 stock options with an exercise price of $0.29 per share to $0.15 per share. The maturity date was also extended from October 7, 2013 to November 4, 2014. These stock options were granted on October 7, 2010 and originally expire on October 7, 2013. Modifications to the terms of an award are treated as an exchange of the original award for a new award. Incremental stock based compensation is measured as the excess, if any, of the fair value of the original award immediately before its terms are modified, measured based on the share price and other pertinent factors at that date. During the nine months ended December 31, 2011, the Company recognized an incremental compensation cost of $3,510 for these modified stock options.

   

On November 4, 2011, the Company re-priced the exercise price of 4,080,000 stock options with an exercise price of $0.45 per share to $0.15 per share. The maturity date was also extended from October 21, 2013 to November 4, 2014. These stock options were granted on October 21, 2010 and originally expire on October 21, 2013. Modifications to the terms of an award are treated as an exchange of the original award for a new award. Incremental stock based compensation is measured as the excess, if any, of the fair value of the original award immediately before its terms are modified, measured based on the share price and other pertinent factors at that date. During the nine months ended December 31, 2011, the Company recognized an incremental compensation cost of $161,531 for these modified stock options.

   

On November 4, 2011, the Company granted 100,000 stock options to an officer and 300,000 stock options to a senior geological consultant at an exercise price of $0.15 per share which will expire on November 4, 2014. All stock options are non-qualified and vested immediately. The weighted average grant date fair value of stock options granted during the nine months ended December 31, 2011 was $0.12. The fair value of the options was estimated using the Black-Scholes pricing model based on the following assumptions: dividend yield of 0%; risk-free interest rate of 0.37%; expected life of three years; and volatility of 263%. During the nine months ended December 31, 2011, the Company recorded stock-based compensation of $48,784 for these stock options.

F-13



Lake Victoria Mining Company, Inc.
(An Exploration Stage Company)
Notes to the Consolidated Financial Statements
December 31, 2011
(Expressed in US dollars)
(Unaudited)

9.

Stock Options and Warrants (continued)

   

The following table summarizes the continuity of the Company’s stock options:


                Weighted-        
          Weighted     Average        
          Average     Remaining     Aggregate  
    Number of     Exercise     Contractual     Intrinsic  
    Options     Price     Life (years)     Value  
                 $  
                         
Outstanding, March 31, 2011   4,200,000     0.15*              
Granted   400,000     0.15              
Exercised                    
Cancellation                    
                         
Outstanding, December31, 2011   4,600,000     0.15     2.85      
                         
Exercisable, December 31, 2011   4,600,000     0.15     2.85      

*March 31, 2011 weighted average exercise price was revised to the November 4, 2011 option amendment agreement

At December 31, and March 31, 2011, the Company did not have any unvested options.

The following table summarizes the continuity of the Company’s warrants:

    Number of           Weighted-        
    Shares     Weighted     Average        
    Issuable     Average     Remaining     Aggregate  
    Upon     Exercise     Contractual     Intrinsic  
    Exercise     Price     Term (years)     Value  
                 
                         
Outstanding, March 31, 2011   41,404,901     1.08     1.27        
Expired   (20,000,000 )   0.30           -  
                         
Outstanding, December 31, 2011   21,404,901     0.93     1.26     -  

The Company had the following warrants outstanding as of December 31, 2011:

    Exercise Price per        
    Share     Shares Issuable  
Expiration Date     Upon Exercise  
             
September 9, 2012   1.25     1,350,501  
January 28, 2013 (1)   1.25     10,473,000  
August 13, 2013 (2)   0.40     4,790,700  
August 13, 2013 (2)   0.60     4,790,700  
          21,404,901  

(1) These redeemable warrants are callable by the Company upon 30 days written notice to the warrant holder. If the redeemable warrants are not exercised within 30 days of being called, they will terminate and may not be exercised thereafter.

(2) These redeemable warrants are callable by the Company upon 20 days written notice to the warrant holder. If the redeemable warrants are not exercised within 20 days of being called, they will terminate and may not be exercised thereafter.

F-14



Lake Victoria Mining Company, Inc.
(An Exploration Stage Company)
Notes to the Consolidated Financial Statements
December 31, 2011
(Expressed in US dollars)
(Unaudited)

10.

Commitments

     
a)

On May 15, 2009, Kilimanjaro signed a Mineral Financing Agreement with a director of the Company authorizing him, on behalf of the Company, to acquire Primary Mining Licenses (PMLs) in the Singida area of Tanzania. As of December 31, 2011, this director has entered into Mineral Properties Sales and Purchase agreements with various PML owners of which 23 PML Option to Purchase agreements have been completed. These PMLs have been 100% acquired and the Company has the option to acquire 20 additional and different PMLs in the Singida area. Under the terms of the mineral properties sales and purchase agreements the Company has completed option payments in the amount of $2,058,322. Pursuant to the original agreement and the subsequent addendums, the Company will pay approximately final payment $360,000 on January 23, 2013 and $2,340,000 on February 24, 2013. At the option of the Company, a 2% Net Smelter Production royalty or 2% of the Net Sale Value may be substituted in place of the final payment for each PML. (see Note 7(e)).

     
b)

The same director of the Company entered into Mineral Purchase agreements with 24 PML’s which are part of the Kinyambwiga Project and which are recorded in his name and are to be transferred over to the Company at a future date (see Note 7(c)).

     
c)

On January 4, 2010, the Company entered into a finder’s fee agreement with Robert A. Young, The RAYA Group (“Young”) wherein we agreed to pay Young fees limited to introductions that Young makes to the Company of investors who invest in the Company’s private placements or become involved with the Company through joint venture property agreements. No finder’s fees will be paid in connection with any introduction to any existing contacts of the Company. The fee will be 10% of the first $10,000,000 and 5% of amounts in excess of $10,000,000. The term of the finder’s fee agreement is five years.

     
d)

On May 11, 2010, the Company entered into an agreement with a consultant to provide services as a Senior Geological Consultant. In consideration of the foregoing the Company will pay a base compensation of $15,000 per month for the first six months, to be increased to $20,000 per month after the initial six months; eligibility of a bonus of 100,000 shares of common stock at the end of six months; and at the end of 12 months the Company will grant the consultant 300,000 stock options. On November 9, 2010, the Company issued 100,000 shares of common stock to the consultant. On October 21, 2010, the Company passed a board resolution to grant the Consultant 500,000 stock options at an exercise price of $0.45 per share. On November 11, 2010, the Company signed an amendment with the consultant to the original May 11th consulting agreement. The amendment extended the term of the agreement to three years and the Company agreed to pay $17,500 per month for the first 12 months and $20,000 per month thereafter. The Company granted the Consultant 300,000 stock option on November 4, 2011 (Refer to Note 9). The Company will grant the Consultant 300,000 stock options on each of November 1, 2012 and 2013.

     
e)

On October 7, 2010, the Company entered into a consulting agreement with Misac Noubar Nabighian to provide geophysical data processing and geophysical data interpretation services to the Company in consideration for:


  i.

granting the Consultant an option to acquire 120,000 shares of common stock of the Company pursuant to the terms of the Company’s 2010 Stock Option Plan, at an exercise price of $0.29 per share, exercisable until October 7, 2013 and vesting immediately. On October 7, 2010, the Company granted 120,000 options to the Consultant;

     
  ii.

paying the Consultant 0.5% of the net proceeds from the sale of any mining properties;

     
  iii.

granting the Consultant a royalty on producing properties as follows: (a) $1.00 per ounce of gold produced or 0.25% of net smelter returns (as such term is defined in the Agreement), whichever is greater, and (b) 0.25% of net smelter returns for all other commercial production.

The agreement is for a term of 36 months and may be renewed at the option of the Company upon 30 days written notice.

  f)

On April 26, 2011, the Company entered into two consulting agreements to provide consulting services commencing April 1, 2011 for a period of two years. The Company will pay one consultant Cdn$10,000 per month, and will grant 500,000 stock options annually at each anniversary of the agreement. The Company will pay the second consultant $3,500 per month, and will grant 250,000 stock options annually at each anniversary of the agreement.

     
  g)

On April 26, 2011, the Company entered into two employment agreements for the positions of Corporate Secretary and Chief Financial Officer. The Company will pay aggregate annual salaries of Cdn$192,000 and paid each employee a one-time bonus of Cdn$1,000.

F-15



Lake Victoria Mining Company, Inc.
(An Exploration Stage Company)
Notes to the Consolidated Financial Statements
December 31, 2011
(Expressed in US dollars)
(Unaudited)

11.

Subsequent Events


  a)

On February 8, 2012, the Company engaged Jones, Gable & Company Limited (the “Sponsor”) to sponsor the Company’s listing application to the TSX Venture Exchange to close by April 30, 2012. The Sponsor will conduct due diligence of the Company and its directors and officers and be paid fees estimated to be CDN $40,000 plus taxes and reimbursement of the Sponsor’s expenses. The Sponsor has a first right of refusal to manage any brokered financing of the Company until February 1, 2014.

F-16


ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

Forward Looking Statements

This quarterly report contains forward-looking statements. Forward-looking statements are projections of events, revenues, income, future economic performance or management’s plans and objectives for our future operations. In some cases, you can identify forward-looking statements by terminology such as “may”, “should”, “expects”, “plans”, “anticipates”, “believes”, “estimates”, “predicts”, “potential” or “continue” or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks in the section entitled “Risk Factors” and the risks set out below, any of which may cause our or our industry’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. These risks include, by way of example and not in limitation:

  • risks and uncertainties relating to the interpretation of sampling results, the geology, grade and continuity of mineral deposits;

  • risks and uncertainties that results of initial sampling and mapping will not be consistent with our expectations;

  • mining and development risks, including risks related to accidents, equipment breakdowns, labor disputes or other unanticipated difficulties with or interruptions in production;

  • the potential for delays in exploration activities;

  • risks related to the inherent uncertainty of cost estimates and the potential for unexpected costs and expenses;

  • risks related to commodity price fluctuations;

  • the uncertainty of profitability based upon our limited history;

  • risks related to failure to obtain adequate financing on a timely basis and on acceptable terms for our planned exploration project;

  • risks related to environmental regulation and liability;

  • risks that the amounts reserved or allocated for environmental compliance, reclamation, post-closure control measures, monitoring and on-going maintenance may not be sufficient to cover such costs;

  • risks related to tax assessments;

  • political and regulatory risks associated with mining development and exploration; and

  • other risks and uncertainties related to our mineral property and business strategy.

This list is not an exhaustive list of the factors that may affect any of our forward-looking statements. These and other factors should be considered carefully and readers should not place undue reliance on our forward-looking statements.

Forward looking statements are made based on management’s beliefs, estimates and opinions on the date the statements are made and we undertake no obligation to update forward-looking statements if these beliefs, estimates and opinions or other circumstances should change. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.


In this quarterly report, unless otherwise specified, all dollar amounts are expressed in United States dollars and all references to “common stock” refer to the common shares in our capital stock.

As used in this quarterly report, the terms “we”, “us”, “our”, the “Company” and “Lake Victoria” mean Lake Victoria Mining Company, Inc., and our wholly owned subsidiaries Kilimanjaro Mining Company, Inc. and Lake Victoria Resources (T) Limited, Chrysos 197 Company Tanzania Ltd. and Jin 179 Company Tanzania Ltd., unless otherwise indicated.

Recent Corporate Developments

During the nine months period ended December 31, 2011, we experienced the following significant corporate developments:

  1.

On May 10, 2011, the Company entered into four joint venture and option agreements with Otterburn Ventures Inc. (“Otterburn”) pursuant to which Otterburn had the right to acquire up to an undivided 70% interest (the “Options”) in and to certain Primary Mineral Licenses (“PML’s”) and Prospecting Licenses (“PL’s”). As of December 31, 2011 Otterburn paid cash of US$1,487,423 and completed the issuance of 2,200,000 common shares to Lake Victoria.

       
  2.

On May 30, 2011, the Company entered into a prospecting license purchase agreement with Manga Mining Corp, to acquire a 100% interest of one prospecting license located in the Handeni District of Tanzania. On September 20, 2011, the Company terminated this agreement. The Company has paid $13,000 in cash and issued 30,000 common shares with a fair value of $8,100.

       
  3.

On July 1, 2011, the Company entered into a prospecting license purchase agreement with I. M. Kwematuku Export Trade Ltd, to acquire up to 100% interest of one prospecting license located in the Handeni District of Tanzania. The toal consideration includes to pay $470,000 to earn up to 90% of interest and pay $1,500,000 on or before September 21, 2015 to earn final 10% interest. The Company has completed payment of $70,000 to the vendor as at the date of this quarterly report.

       
  4.

On July 19, 2011, Guardian Investment Ltd, a related party, on behalf of the Company, entered into a mineral properties option agreement to acquire four primary mining licenses on Uyowa project. Total consideration includes:

       
  a)

paying $20,000 within 7 days after execution date. The payment was made on July 21, 2011;

       
  b)

paying $20,000 on or before the earlier of location of a drilling rig on each PML in good working condition or January 16, 2012. The payment was made on September 6, 2011.

       
  c)

paying a total amount of $450,000, of which $50,000 due in 2012, $360,000 due in 2013 and $40,000 due in 2014.

       
 

A royalty of 1% of net profit interest may be purchased at any time after completing $400,000 payment by paying $250,000 per PML.

       
  5.

Pursuant to share purchase agreements dated July 22, 2011, the Company sold 2,200,000 of common shares of Otterburn to private purchasers unrelated to the Company for total consideration of $232,511 received on September 22, 2011.

       
  6.

On November 4, 2011, the Company cancelled 4,200,000 stock options granted on October 7 and October 21, 2010 to directors, officers and consultants, and issued 4,200,000 stock options at an exercise price of $0.15 to the same directors, officers and consultants which expire on November 4, 2014. The Company also granted 100,000 stock options to an officer and 300,000 stock options to a senior geological consultant at an exercise price of $0.15 per share which expire on November 4, 2014.

       
  7.

At the Company’s 720 square kilometer Uyowa Gold Project, reverse circulation drilling during the latter part of 2011 identified two narrow, but continuous, gold rich zones extending about 1.3 kilometers in strike length. Reconnaissance investigation is currently underway on the Uyowa block of licenses, located 40 kilometers southeast of the Kahama South license. A number of ground magnetic anomalies within the licenses are being targeted with soil and termite sampling programs. During the second quarter of 2012, a second phase drilling program of 3000 meters of Reverse Circulation and 1000 meters of diamond drilling are planned at the Target 1 location. At least seven ground magnetic targets within the northern license are to be prioritized for a Rotary Air Blast (RAB) drilling program during the course of this year.




  8.

Towards the latter part of 2011, the Company had commenced opening a number of the old collapsed trenches across the BIF hill at the Kiabakari East Prospect located within the central part of the Musoma- Mara Greenstone Belt in the Musoma District in northeastern Tanzania. Sampling of some of the artisanal workings and shafts on the hill returned encouraging results. Mapping and channel sampling were completed before cessation of field activities and samples were submitted to SGS Laboratories, Mwanza for analysis of gold. Additional infill trenches have been planned, pending results of from this initial trench program. At the nearby Kinyambwiga property, an auger drill program is currently in progress to test strike extensions of the Kanunga 1 gold rich vein beneath areas of thin clay rich soil cover. Once completed, the auger rig will be utilised to explore coincident ground magnetic and IP gradient targets, overlain by similar soil cover, on nearby Suguti and Murangi licenses.

     
  9.

At Kahama South, the Company has commenced a ground magnetic survey and a geologic mapping program of this 245 square kilometer project.

     
  10.

During 2012, early stage exploration programs are planned for a number of additional Company licenses within the North Mara Greenstone Belt of northeastern Tanzania.

Our Current Business

We are an exploration stage corporation focused on acquiring, exploring and developing gold deposits in the Lake Victoria Greenstone Belt in Tanzania, East Africa. We hold prospective gold projects, consisting of 32 Prospecting Licenses (PLs) and 71 Primary Mining Licenses (PMLs) and five uranium projects consisting of 9 Prospecting and Reconnaissance Licenses plus two licenses currently under application, within its Tanzania property portfolio, covering approximately 3,865 square kilometers (955,062 acres). We carry out our business by acquiring, exploring and evaluating mineral properties through our ongoing exploration program. Following exploration, we intend to either advance them to a commercially feasible mining stage, enter joint ventures to further develop these properties, sell or dispose of them if the properties do not meet our requirements. Our properties are all early stage exploration properties. Within our mineral exploration land in Tanzania our focus is primarily on gold, although our portfolio also contains uranium prospects.

We have no revenues, we have incurred losses since inception and we have relied upon the sale of our securities to fund operations. To date, we have not discovered a commercially viable ore body, mineral deposit or mineral reserve on any of our properties and we will be unable to do so until further exploration is done and a comprehensive evaluation concludes an economic and legal feasibility study.

Our property portfolio is large, therefore we may interest other companies in our properties to either participate by means of option or joint venture agreements in the exploration of them or to finance and establish production if mineralization is found.

Prospective Gold Projects

The following is a brief overview of our portfolio of prospective mineral properties, the exploration developments on them where applicable and some of the details of the historical option agreements for them. During the three months ended December 31, 2011, our exploration work was primarily concentrated on the Singida, Musoma Bunda Murangi, Uyowa, North Mara and Handeni gold projects.

Musoma Bunda Murangi Gold Project

Exploration Strategy

The Company recently purchased a mobile auger rig to provide soil sampling services to its gold projects


Much of the low-lying areas, including the drainages around Lake Victoria, in the northern part of Tanzania, are covered by a blanket of dark grey clays known as Black Cotton Soil or locally as “mbuga” clays. These clays, believed to be lacustrine sediments derived from periodic flooding of Lake Victoria, have masked the underlying land surface, covering both in-situ soils and rock outcrops and allowing little to no chemical dispersion from the underlying substrate to pass through to the surface. Depths of the “mbuga” vary between a few centimeters to in excess of 10 meters thick. Exploration for mineral deposits is thus both difficult and costly.

Exploration over these “mbuga” covered areas is largely done by various geophysical techniques to map out the geophysical properties of the underlying rock sequences and the structural imprint in order to interpret potential gold targets. Follow up drilling is required to test these targets.

The Company intends to test the geophysical targets interpreted across many of their “mbuga” covered Project areas, including but not limited to the Suguti, Murangi, Kinyambwiga, Kalemela and the Tarime licenses in the Lake Victoria District by utilising the recently acquired auger rig to sample the soil/saprock interface beneath the “mbuga” by systematic sampling programs. The auger rig has the capability to drill holes to depths in excess of 20 meters and, with the specially designed sampling tool, can collect a sample at the bottom of the hole.

During this reporting period, exploration work has largely been focused on the Kinyambwiga license.

Kinyambwiga PL4653/2007

Exploration has been focused around Kanunga 1 Prospect as a continuation of the exploration activities undertaken during the 3rd Quarter which included:

i.

Schlumberger N-S profiles (17) completed along strike to the east and west of Kanunga 1 Prospect delineated 2 distinct chargeability anomalies consistent with the strike of the known structure (Map 1)

Map 1: Plan showing the location of the Schlumberger IP profiles across the interpolated mineralized structure of Kanunga 1.

ii.

Follow-up pitting and soil sampling, in which 135 soil samples were collected, was undertaken on 4 target areas:




 

Kanunga 1 Far East – within the Kanunga school perimeter and close to the eastern boundary license. Soil sampling on 25 meters centers along 100 meter spaced N-S traverses on either side of the school did reveal a slight increase in anomalous soil values from 30 to 200 ppb Au (Map 2).

     
 

Kanunga 1 East – some 400 meters east along strike of the artisanal working at Kanunga 1. Two N-S traverse lines spaced 50m apart and sampled at an interval of 10 meters returned low, although anomalies gold values ranging from 10 to 30 ppb gold and include 2 narrow ENE trending zones of 24- 30 ppb gold.

     
 

Kanunga 1 West – 300 meters east of an interpolated intrusive body. Sampling undertaken along 3 N-S traverses spaced 100 meters apart on a sample interval of 25 meters. Results returned low gold-in-soil anomalies ranging between 18 to 30 ppb Au. Repeat sampling taken at the sample position that returned 400 ppb Au (2009) returned 25 ppb Au (Map 2).

     
 

Schlumberger coincident chargeability/resistivity anomalies. Samples collected from pits spaced 10 meters apart across the IP anomaly, returned low gold values of <14ppb gold.

Map 2 Plan showing the position of soil anomalies


iii.

Trenching:- a pitting and trenching program was undertaken at Kanunga Far East to validate the anomalous Rotary Air Blast (RAB) intercepts reported in 2009. Of the planned 94 meters of trenching, only 76 meters were completed due to the presence of the school. Granite was encountered in all the trenches with no gold values. However, a sample of the quartz stone layer lying above the basement granite did return a value of 2.28 g/t Au. In conclusion, it appears that the anomalous RAB intercepts may have been the result of contamination from the stone layer and therefore would not represent an in situ anomaly.

   
iv.

Auger drilling



The auger rig arrived in country in November and has been deployed in testing the immediate strike extensions of the subsurface Kanunga 1 gold vein at the Kinyambwiga Prospect. A number of additional N-S sample traverses are planned further east along strike of the Kanunga 1 vein to validate previously reported soil anomalies (Table 1).

Table 1. Auger drill Program

KINYAMBWIGA AUGER TARGETS NORTHINGS  
KANUNGA 1 EXTENSION-
WEST






SECTION
E

FROM

TO

LENS

INTERVAL

SPACING
TOTAL
HOLES
DATE
COMPLETED
TOTAL
meterS
581020 9776805 9776815 2 10 5 3 8/11/2011 9
  9776840 9776850 1 10 5 3 8/11/2011 7.1
580980 9776785 9776800 2 15 5 4 8/11/2011 11.5
  9776810 9776830 1 20 5 5 8/11/2011 8.8
580940 9776765 9776785 2 20 5 5 9/11/2011 14
  9776795 9776815 1 20 5 5 9/11/2011 14
580900 9776740 9776795 2 55 5 10 9/11/2011 5.6
KANUNGA 1 EXTENSION-
EAST
581180 9776940 9777010 2 70 5 15    
581250 9776975 9777015   40 5 9    
SCHOOL SOIL ANOMALY











583250 9776940 9777000   60 10 7    
583350 9776960 9777030   70 10 8 10/11/2011 22.5
583250 9776930 9777010   80 10 9    
583150 9776910 9776990   80 10 9    
583100 9776900 9776980   80 10 9    
583050 9776870 9776960   90 10 10    
583000 9776895 9776965   70 10 8    
582950 9776870 9776950   80 10 9    
582900 9776860 9776940   80 10 9    
582850 9776850 9776920   70 10 8    
582750 9776730 9776900   170 10 18    
582700 9776730 9776890   160 10 17    
582650 9776690 9776880   190 10 20    
KANUNGA 1
582000 9776930 9777140   210 10 22    
582150 9776970 9777290   320 10 33    
KANUNGA 1 WEST
(Intrusive)
579000 9776750 9776870   120 10 13    
578900 9776750 9776860   110 10 12    
KANUNGA 3



581120 9777990 9778050   60 5 13    
581050 9778000 9778050   50 5 11    
581200 9778090 9778110   20 5 5    
581150 9778090 9778110   20 5 5    
581100 9778070 9778105   35 5 8    
TOTAL 322    
Completed 4th Quarter 2011  


Results

A total of 39 auger holes were drilled in the latter part of 2011. Progress was seriously hampered by the onset of the rainy season. The thickness of “mbuga” cover was found to average 2.61 meters. Sampling of the immediate underlying granitic saprock was taken with care in order to ensure no contamination with the overlying “mbuga” clays. Logging of the auger hole is undertaken on site, a 1 kilo sample is collected at the bottom of the hole with the designed sample catcher, emptied into a plastic sample bag, labeled and stapled closed. The sample is then packed with the other samples in a rice sack and kept in the vehicle until the end of the day when the samples are returned for safe keeping at the field camp.

A number of N-S sample traverses on a sample spacing of 5 meters was completed on the western end of the known Kanunga 1 mineralized quartz veins in and attempt to detect the western strike extension of both Lens 1 and 2. Slightly anomalous gold values of between 20 to 40 ppb were detected in the expected strike position of both lenses for a distance of between 40 to 80 meters along strike before dropping to below detection limit (Map 3).

Map 3. Plan of Kanunga 1 Prospect showing results of Auger drill fences in tracing westerly strike of gold veins


One N-S drill fence of 8 Auger holes, spaced 10 meters apart, was completed on the eastern side of the Kanunga School Anomaly. Results indicate a cluster of anomalous values ranging between 30 ppb to 180 ppb gold and averaging 77 ppb gold over a 40 meter interval. A sample of the quartz stone layer was collect for analysis which returned 2.56 g/t gold. It is the same stone layer, located on the contact between the gramite and overlying “mbuga” and representing a transported horizon, that is responsible for the anomalous gold values noted in the RAB holes to the north (Map 4).

The auger drill program is planned to be completed in the 1st Quarter of 2012. Should results prove favorable, a trenching program will be initiated to further explore the soil anomalies.


Map 4. Kanunga 1 East and School soil anomalies


Suguti (PL3966/2006)

Previous exploration undertaken during the course of 2011, has focused mainly on the northern part of the Suguti License, north od the major NW trending Suguti Fault zone which bisects the the central part of the license.

Exploration has included:

  i.

Ground Magnetic survey

     
  ii.

IP Gradient survey

     
  iii.

Regional Soil sampling surveys on 400 meter x 50 meter grid (554 samples) .

 

Regolith and geological mapping . Exposure is limited to minor rock out crops on the northern side of the Suguti Fault. Granite, containing magnetite, occurs as a hill in the northern part of the license. The granite/greenstone contact is masked by coarse textured laterite consisting of laterised basaltic and quartz fragments. The underlying greenstone rocks have been intensely sheared and iron stained along to the NW-SE trending granite contact. Brick-red soils make up the NE part of the license before being masked by the overlying “mbuga” further south.

 

The southern part of the license, south of the Suguti fault comprises of hills of Banded Iron Formation.

     
  iv.

Infill soil sampling surveys on 25 meter centers along the existing soil sample traverses at Target 1 and 2 , were completed during 2nd quarter (106 samples). A number of low order threshold soil anomalies, attaining a maximum of 50 ppb gold, appear to form at least three NE trending, parallel zones of up to 2.5 kilometers strike length (Target 1).

     
  v.

Pitting.



Orientation pits were dug to determine the depth of the “mbuga” as well as to test the contact between the granite and the greenstone rocks in the northern part of the license. A total of 14 pits were dug, and on average, the thickness of the “mbuga” varied between 0.8 to 1.20 meters (Table 2). Assay results have been received for the pits sampled (Table 2) and are shown in Map 5.

Table 2. Pits indicate the depth of the underlying lithologies in the northern part of Suguti License.


SUGUTI

Target

Section

Stations
Mbuga
Depth (m)
Laterite
Depth(m)
Pits
Depth(m)

Sample No

Au ppb

Lithology
Suguti NW 2 578000 9802150 0.40 0.90 1.60 A32105 <10 Saprock
  2 578000 9802174 0.30 0.30 1.40 A32106 10 Saprock
  2 578002 9802201 0.60 - 1.60 A32107 <10 Granite
  2 578000 9802224 0.60 - 0.90 A32108 20 Granite
                   
  2 577601 9802298 0.80 0.70 1.80 A32109 <10 Saprock
  2 577602 9802326 0.80 0.20 1.20 A32110 <10 Saprock
  2 577597 9802348 0.60 0.50 1.50 A32111 <10 Granite
  2 577596 9802372 0.70 0.70 1.60 A32112 <10 Granite
                   


2

577200

9802352

0.80

-

1.40

A32113

pending
Dk grey
soil


2

577201

9802372

0.90

-

1.40

A32114

pending
Dk grey
soil


2

577201

9802400

0.80

-

1.40

A32115

pending
Dk grey
soil
  2 577200 9802420 0.90 - 1.40 A32116 pending Granite
  2 577198 9802446 0.90 - 1.30 A32117 pending Granite
    577198 9802478 0.70 - 1.30 A32118 pending Granite

All Arsenic values below detection limit (<20 ppm)

Most of the pits encountered granite and failed to intersect the greenstone lithologies whose contact is further south than expected. Consequently the samples collected were barren of gold.

   
vi.

Schlumberger VES survey. Five N-S profiles totaling 3.6 line-kilometers have been planned across Targets 1 and 2 (Table 3). One N-S profile of 1200 meters in length was completed on the eastern side of Target 1. Results revealed two sets of coincident chargeability/resistivity anomalies underlying two of the 3 ENE trending soil anomalies in Target 1 (Map 5).



Map 5: Residual Gradient IP map of the Suguti North Prospect showing main lithologic contacts, soil anomalies, termitaria and Schlumberger VES surveys across Targets 1 and 2.


Table 3: Schlumberger VES survey proposed across Targets 1 and 2, Suguti North prospect

      From To    
Target Section Easting Northing Northing Length Status
1 582600E 582600 9802500 9802100 400 Completed
1   582600 9802100 9801700 400 Completed
1   582600 9801700 9801300 400 Completed
1 581400E 581400 9801900 9801500 400 Pending
1   581400 9801500 9801100 400 Pending
1   581400 9801100 9800700 400 Pending
2 579000E 579000 9802100 9801700 400 Pending
2 578100E 578100 9802500 9802100 400 Pending
2 577500E 577500 9802700 9802300 400 Pending

vii. Termite samples

Termite sampling has been undertaken across the brown-red soils over Target 1 and in the south of the PL. A total of 89 samples have been collected and have been assayed. Results are generally poor (below detection limit). However, a single anomalous termite mound, located within the soil anomaly of Target 1, returned 70 ppb Au.

A cluster of termites were sampled close to the contact with the lower slopes of the BIF outcrop and the “mbuga” cover on the south-western side of the PL, south of the Suguti Fault. A number of anomalous termite mounds ranging from 40 to 230 ppb gold was identified (Map 5). Field investigation is required before any follow-up exploration is proposed.


Planned Exploration
Additional infill sampling along 200 meter spaced N-S travers lines at sample interval of x 25 meters is planned across Target 1 and 2. (Table 4 ).

Table 4. Planned infill soil sample traverses across Targets 1 and 2

    From To    

Target

Easting

Northing

Length

No of samples
1 582000 9801450 9801050 400 17
1 582400 9801650 9801250 400 17
1   9802300 9801900 400 17
1 581600 9801300 9800950 350 15
1 583200 9802750 9802200 550 23
1 583800 9802500 9802050 450 19
2 578800 9802000 9801750 250 11
Total         119

Once the Auger rig has completed the planned drill program at Kinyambwiga, it will be mobilised onto the Suguti Project within the 1st quarter of 2012. The rig will test the 3 soil anomalies under the “mbuga” cover within the Suguti Fault basin. An initial program of some 460 holes are planned along a number of N-S traverse on a collar spacing (sample positions) of 20 meters apart (Table 5 , Map 6)

Table 5. Auger drill program to trace the soil anomalies beneath the “mbuga” cover.

SUGUTI AUGER TARGETS      NORTHINGS            

TARGET 1





SECTION
E

FROM

TO

LENS

INTERVAL

SPACING
TOTAL
HOLES
DATE
COMPLETED
TOTAL
METERS
581600 9800940 9801800   860 20 44    
581000 9800750 9801550   800 20 41    
580600 9800600 9801400   800 20 41    
580200 9800400 9801200   800 20 41    
579800 9800200 9801000   800 20 41    
579400 9800150 9800950   800 20 41    
TARGET 2



579200 9801840 9802100   260 20 14    
578800 9801790 9802050   260 20 14    
578400 9801650 9801800   150 20 9    
578000 9801440 9801800   360 20 19    
577600 9801340 9801700   360 20 19    
TARGET 3

577700 9798810 9799650   840 20 43    
577300 9798850 9799750   900 20 46    
576900 9798790 9799650   860 20 44    
TOTAL HOLES & SAMPLES 457
Standards 23    


Map 6. Auger drill program


Murangi(PL4511/2007)

No exploration was undertaken on the Murangi Permit during this reporting period. Furthermore, there is no record of previous exploration undertaken on this license.

Exploration is planned in January 2012 and is planned to be focused primarily on 5 ground magnetic targets. This is planned to include:

  1.

Mapping of the target areas on 1:2000 scale

     
  2.

Gradient IP survey across the entire license

     
  3.

Auger drilling, with the Company’s recently purchased Auger Rig, across each of the Ground magnetic and IP Targets to soil sample beneath the “mbuga” cover.

Singida Gold Project

Company personnel first visited the Singida project area during March, 2009 and became aware of the high level of artisanal (small scale) gold mining that was being conducted along an estimated five (5) kilometer mineralized zone. Subsequently, on May 15, 2009, the Company signed a Mineral Financing Agreement with one director of the Company authorizing him, on behalf of the Company, to acquire Primary Mining Licenses (“PMLs”) in the Singida area. As of July 13, 2011, this director has entered into several different Mineral Properties Sales and Purchase agreements with multiple PML owners that hold title to the licenses along the mineralized zone at the Singida project area. Twenty-three (23) PML agreements were executed for an outright purchase of the PMLs and they have been completed. These twenty-three PMLs have been 100% acquired by this director in behalf of the Company. On August 9, 2011, the Company relinquished 17 PMLs. The Company also has option agreements to acquire an additional twenty (20) PMLs within a targeted area at the Singida project. Under the terms of all the agreements, if we complete all sixty (60) of the various agreements, that when combined form the Singida project area, then our total purchase consideration will be approximately $4,531,040 (TZS7,551,733,325) by February, 2013. At the option of the Company, a 2% Net Smelter Production royalty or 2% of the Net Sale Value may be substituted in place of the final payment for each PML and paid on a pro rata basis determined by the total final number of PMLs involved in a special mining license.


The Company completed a 2nd Phase Reverse Circulation drilling March 2011, centered at the Sambaru 2, 3, 4 and 5 Prospects in which 92 boreholes, totaling 9,023 meters were drilled.

An evaluation of the drill results for both Phase 1 and 2 programs has shown that gold mineralization at the Singida-Londoni project consists of narrow medium to low grade and often discontinuous lenses. The shear structures hosting the gold-rich zones typically “pinch and swell” along strike, which in places, has resulted in larger pods of limited size as at Sambaru 3 and Sambaru 4 which indicates that the gold deposits have limited potential to be developed into a major ore resource contrary to the Company’s vision of discovering substantially larger and economically viable gold deposits in the short term. In this regard, the Company believes that the nature and extent of the mineralization revealed thus far may lend itself rather towards a small-scale commercial mining operation, a joint venture or a possible sale.The Company will therefore endeavor to utilize through Joint Venture or sale the Singida assets to assist in funding its other projects.

The Company has reduced the number of PMLs that were under option from 37 to 20 PMLs and together with the remaining 23 PMLs, the mineral rights of which are owned exclusively (100%) by the Company, encompass the Sambaru 2, 3 and 4 Prospects.

The Company has recently completed a Technical report in compliance with Canadian National Instrument 43-101 and this report includes work completed on the Singida-Londoni Gold Project and the Phase 1 drilling program. It does not include results for the Phase 2 drilling program.

Buhemba Gold Project

The Buhemba Gold Project consists of two (2) Prospecting Licenses (PLs) that cover an area about 107km2.

1. Nyanza PL4892/2007

The Nyanza PL4892/2007 is currently under renewal application . No work was undertaken during the quarter.

Previously, field investigation of the work undertaken by Randgold Resources has confirmed the presence of at least 4 areas of artisanal workings. Follow-up exploration is planned to target the known areas of artisanal mining as well as to investigate the western sheared basalt/granite contact in PL4892/2007. Although the PMLs of the artisanal workings do not form part of the PL license, we believe that the owners will be amenable to entering an option agreement. Once the Minister of Mines approves the application to renew the license, a number of E-W Schlumberger profiles are planned across the sheared contact in order to prioritize target delineation with a subsequent follow-up reverse circulation (RC) drilling program shortly thereafter.

2. Mageta PL2979/2005 & PL5159/20090

A reconnaissance visit to the two, narrow E-W licenses, PL2979/2005 and PL5159/2009, southeast of Buhemba town and directly south of Mageta Village, was made during the quarter. Both licenses are located within granite terrain. Hills of granite outcrop along the northern part of PL 2979/2005 that forms a gently valley slope to the south where streams drain into the Ruvana River. The area is largely covered by black cotton soil (“mbuga”) . No outcrops rise out from the depositional plain. Furthermore no artisanal activity appears to have ever taken place on the any of the two licenses (pers.comm from local inhabitants). The area is considered not prospective for gold and is to be relinquished.


Kiabakari East (PL7142/2011)

The Kiabakari East Project is located approximately 55 kilometers southeast of Musoma town, in the Mara Region. The PL, covering 15.2 square kilometers and lying within the central part of the Musoma-Mara Greesntone Belt, was granted by the Ministry of Mines in April 2011.

The PL was previously investigated by Randgold Resources who excavated a number of N-S trenches across a small hill, rising some 50 meters above the landscape, comprising of Banded Iron Formation (BIF) rocks in the central to southern part of the PL. They also undertook 3 N-S drill fences, totalling 24 reverse circulation drill holes, along strike to the east of the BIF hill. No information is currently available. Minor artisanal mining activities are present on the BIF hill. Recently, the eastern part of the license has been invaded by + 500 artisanal miners who have exposed a N-S trending gold bearing structure hosted by a quartz porphory dyke within a metasedimentary rock sequence.

Exploration Strategy

Detailed mapping of the BIF hill and immediate environs were initially undertaken. A number of trenches and artisanal pits were cleared of bush and selective sampling, including grab samples and 2 meter composite channel samples along the sidewall of the trenches and at the base of the pits, were collected (33 samples). The results of this sampling program is presented in the 2nd Quarterly review. The BIF is intensely folded and in places sheared. Fold axes trend NW-SE with an apparent plunge to the SE. Artisanal activity is selectively mining the quartz veinlets within the shear zones.

Follow-up trench program, in which a number of the old existing trenches, totalling 264 meters , were re-opened and sampled prior to the onset of the rainy season in December.Results are summarised in Table 6 and Map 7.

Table 6. Summary of trench results

Trench ID Interval (m) Au g/t
KT003 11.90 1.31
KT004 33.69 1.87
       Including 4.03 6.96
KT005 2.10 1.31
KT008 28.35 1.22
KT009 22.70 1.54
KT010a 6.00 1.09


Map 7. Geology of BIF Hill showing position of sampled trenches and proposed trenches

A number of additional trenches are currently being excavated across the BIF hill to further define and trace the strike of the gold zone.

Regional geological mapping and in-house ground magnetic survey along 200 meter spaced N-S traverse lines and totalling 78.2 line-kilometers, were completed across the license. A number of infill and repeat ground magnetic N-S traverses across the southern portion of the license was undertaken to improve the quality of the data. A total of 20 lines amounting to 103.9 line-kilometers was completed and the data processed and imaged.

The license is divided by the eastward flowing Kyarano river which appears to flow along the contact beween the granite hills to the north and the meta-sedimentary rocks to the south which comprise mainly of argillites and BIF. A outcrop of basalt containing disseminated pyrite is note in the NW corner of the license, north of the Kyarano river and forms the western contact with the granite hills. Results of the rock samples are shown in Table 7

Table 7. Rock samples collected from various localities on the Kiabakari PL.

East(Arc
60)

North (Arc 60)
SANO
Au
ppm

COMMENTS
597525 9799486 A28691 0.14 5cm silicified & Fe altered unit on limb of fold (IN Trench KP013)
597517 9799488 A28696 4.47 Bottom of 12m deep shaft (KP017) – BIF Hill
597024 9800548 A32247 0.02 Basalt + dessim pyrite
597226 9800638 A32248 0.02 Basalt + dessim pyrite
597086 9800718 A32249 0.01 Basalt + dessim pyrite
596944 9800614 A32250 0.04 Basalt + dessim pyrite
596200 9800782 A32454 0.02 Silicified BIF
596200 9800790 A32455 0.16 Slightly weathered BIF
596851 9800502 A32456 0.02 Quartz pophry
596886 9800530 A32457 0.04 Argillite
596855 9800604 A32458 0.02 Argillite + pyrite
596909 9800608 A32459 0.02 Argillite + pyrite


A total of 206 termites was collected during mapping . No VG was noted in any of the panned samples. Selective termites samples, based on the regolith profile and totalling 100 samples were submitted to SGS Laboratory for 500 gm BLEG analysis for gold. Results are shown in Table 8.

Table 8. Summary of termite sample results collected across the southern part of PL7142/2011

Range (ppb Au) Samples
<10 24
10-20 44
20-30 17
30-40 9
40-50 3
>50 3

Two linear anomalies, approximately 800 meters apart and trending northwest for a strike length of some 2 kilometers occur across low topographic hills in the central to southern part of the license. The northern trend encompasses the BIF hill. Furthermore, a similar geochemical anomaly is seen to exist in the eastern side of the license where some 500 artisanal miners have been active. An in-house electrical IP survey is currently in progress, results of which, together with the ground magnetic image, will assist in understanding the geological structure of the area. A soil sampling program is to be undertaken shortly, followed by a planned diamond and reverse circulation drill program in the near future.

Planned exploration

  • A number of trenches has been planned across BIF Hill (Table 9)

Table 9. Trench program at BIF Hill, Kiabakari Gold Project

  From To    

TRID
East (Arc
60)

North (Arc 60)

East (Arc 60)

North (Arc 60)

Length(m)
Az
(o)
KT001 597486.50 9799550.00 597477.10 9799501.00 50 190
KT002 597512.00 9799570.00 597504.30 9799530.00 41 190
  597504.30 9799530.00 597495.37 9799480.64 48 190
KT002b 597504.75 9799528.00 597495.52 9799480.21 49 190
KT003 597531.30 9799523.80 597540.39 9799556.92 33.5 194
KT003b 597531.30 9799523.80 597524.50 9799487.20 38 190
KT004 597550.62 9799525.66 597564.35 9799561.89 39.04 202
KT004b 597551.50 9799527.80 597548.20 9799520.10 8.5 202
KT004c 597547.90 9799519.00 597539.40 9799482.30 38 194
KT005 597579.44 9799497.43 597593.74 9799534.22 42 195
KT006 597610.80 9799525.80 597593.50 9799467.60 60 195
KT007 597644.00 9799466.00 597655.48 9799505.30 44 195
KT008 597469.40 9799535.30 594488.34 9799519.64 24 130
KT008a 594488.34 9799519.64 597508.10 9799503.50 22 130
KT008b 597508.10 9799503.50 597513.90 9799495.00 11.5 147
KT008c 597513.90 9799495.00 597524.50 9799485.70 14 135
KT009 597531.30 9799523.80 597498.40 9799511.40 35 250
KT009b 597498.40 9799511.40 5974934.00 9799510.70 5 265
KT009c 597493.40 9799510.70 597486.10 9799505.50 9 235
KT010* 597534.40 9799498.30 597528.10 9799488.80 11 214
KT010b 597528.10 9799488.80 597513.60 9799477.70 18 234
Total 640.54  
Completed   284.04  
Outstanding 356.5  

* To be deepened


  • Gradient IP survey across the central and southern part of the license (Map 8)

  • Select N-S Schlumberger VES traverses across the BIF Hill as well as a number of E-W traverses across the artisanal workings on the eastern side of the license

  • Soil sampling survey on a 200 meter x 50 meter grid across the central and southern part of the license


Map 8. Gradient IP survey grid planned across PL7142/2011



Uyowa Gold Project

The Uyowa Gold project, located 120 kilometers northwest of Tabora town, consists of seven (7) Prospecting Licenses (PLs) that cover a total area of 720 square kilometers in the west-central area of Tanzania. Exploration has been focused in the northern license block PL5153/2008.

Exploration Strategy

Exploration has been focused in the northern license block PL5153/2008 during the third quarter.

An option agreement was made on 4 of the 15 locally owned PMLs that cover the main area of artisanal mining. At the same time there was a local gold rush into the area with the artisanal miners targeting the previously known workings.

Exploration by Ashanti in 2009 identified 4 narrow zones of gold mineralization having an east-west strike length of some 300 meters with grades upto 27.16 g/t gold over 4 meters across a zone of artisanal pits. Artisanal mining has currently exposed the mineralizing E-W structures across some 900 meters in strike length with pitting continuing across the lateritic soils further out along strike to the east.

Exploration was immediately focused on mapping in detail the zone of artisanal workings as well as evaluating the mineralization being exposed by the artisanal miners. A number of shafts were selectively chosen on approximately 80 meters spaced centers along the trend in order to coincide with the planned N-S drilling grid. A total of 25 shafts and pits were channeled sampled across the working face at the base of the shafts having depths of between 5 to 22 meters. Samples were collected across the narrow mineralized vein, which ranged between 10 to 35 centimeters wide as well as hanging and footwall zones. Mapping indicated a narrow, high grade quartz-rich gold bearing zone containing disseminated pyrite, striking ENE and dipping steeply to the north beneath a 10 meter thick sand and lateritic duricrust cover.

A Reverse Circulation drill program was planned and executed during September and October in which a total of 2,470 meters of drilling was completed. Details and results of this drilling program were presented in the 3rd Quarter report.

In-house Gradient Array survey had commenced prior to the drilling program and continued throughout the 4th Quarter. The survey area covering 40 square kilometers on PL 5153/2008 was divided into 28 blocks of 1.1 kilometer x 2 kilometer with a N-S line spacing of 200 meters. A total of 16 survey blocks, amounting to 145 line-kilometers, was completed by the end of the year (Map 9).


Map 9. Map showing completed Gradient IP survey blocks


Twelve of the 24 planned Schlumberger N-S VES profiles, amounting to 3.60 line-kilometers, of the 24 planned profiles were completed before the end of the drilling program (Table 10).

Table 10. Schlumberger Survey - Uyowa PL 5153/2008

  From To        

Section
East (Arc
60)

North (Arc 60)

North (Arc 60)

Az

Length

Comments

Status
390040E 390040 9506300 9506000 180 300 Central (Orientation) Completed
390120E 390120 9506300 9506000 180 300 Central (Orientation) Completed
389960E 389960 9506300 9506000 180 300 Central (Orientation) Completed
390600E 390600 9506350 9506050 180 300 East Completed
391000E 391000 9506400 9506100 180 300 East Completed
391400E 391400 9506450 9506150 180 300 East Completed
389700E 389700 9506250 9505950 180 300 West Pending
389320E 389320 9506150 9505850 180 300 West Pending
388920E 388920 9506100 9506800 180 300 West Pending
390760E 390760 9505500 9505200 180 300 Target 3 Completed
391400E 391400 9505350 9505050 180 300 Target 3 Completed
392000E 392000 9505450 9505150 180 300 Target 2 Pending-Priority



392920E 392920 9506700 9506400 180 300 Target 2 Completed
392120E 392120 9506600 9506300 180 300 Target 2 Completed
394340E
394340 9506800 9506500 180 300 Target 2 Completed
394340 9506500 9506200 180 300 Target 2 Completed
395700E
395700 9506500 9506200 180 300 Target 2 Pending-Priority
395700 9506200 9505900 180 300 Target 2 Pending-Priority
392040E 392040 9505400 9505100 180 300 Target 3 Pending
394340E 394340 9505300 9505000 180 300 Target 3 Pending
392920E 392920 9505400 9505100 180 300 Target 3 Pending
388760E 388760 9506900 9506600 180 300 Target 4 Pending
389720E 389720 9507300 9507000 180 300 Target 4 Pending
390600E 390600 9507600 9507300 180 300 Target 4 Pending

Regolith mapping continued in the eastern part of PL5153-2008 (Map 10). Cuirasse (laterite) and quartzite rocks were noted in places although the area is largely flat lying and covered by black cotton soil (“mbuga”) . No granitic gneiss rocks were noted although reddish brown laterite soils are present. No soil sampling was undertaken across this eastern area.

Map 10. Regolith map of PL5153-2008


Soil sampling, in which 533 samples from a total batch of 1151 samples, were analysed by SGS Laboratory, Mwanza and reported in the 3rd Quarter report.


Planned exploration

  Completion of the 5 remaining IP blocks in the eastern and northwestern parts of the grid in PL5153/2008 (Map 9).
   
  Select N-S Schlumberger profiling across ground magnetic targets in PL5153/2008 (Map 11)
     
  Diamond drill program to define the structural controls in the western part of the ENE trending mineralized shear zone at Target 1
   
  RC program is to be planned to further evaluate Target 1

On going exploration on PL3425/2007 to the south will include:

  Ground checking of Landsat and ASTER imaging by following up on a number of iron alteration zones
     

Field investigation and follow up sampling through termitaria/soil/pitting/trenching on any of the delineated soil anomalies as delineated from the earlier soil sampling program that was completed prior to the rainy season earlier in the year.

     
  Field investigation of a number of aeromagnetic targets as interpreted from the Government survey data.
     
  Selected Gradient IP surveys and Schlumberger VES profiling across delineated targets.
     
  RAB/RC drilling over prioritized targets.

Map 11. Exploration targets on PL5153/2008


Handeni Gold Project

The Handeni Project, comprising of three (3) Prospecting Licenses and covering a total area of 200.59 square kilometers (Table 11), is located approximately 240 kilometers by road north-west of Dar es Salaam and some 30 kilometers south of Handeni town within the Handeni District (Map 12). The Company has acquired 100% of the mineral rights for PL7148/2011 as well as entering into an “option-to-purchase” agreement for 100% of PL7002/2001 and PL4816/2807 (Table 11).

Map 12. Location map of the Handeni Project showing the PLs in red.


Table 11. Details of Handeni Region Prospecting Licenses

License ID Area Area (km2)
7002/2011 Amani 172.36
7148/2011 Mkulima East 12.00
4816/2007 Mkulima 16.23
Total 200.59

Gold was discovered in 2003 centered around the t Magambazi village. However, the area has recently come under the spotlight as a potentially new gold district. High grade gold intersections are being reported by Canaco Resources from their drilling programs that are being conducted on their 197 square kilometer Kilindi PL located immediately west of the Company PLs (Map 12) .


The area, situated outside the known boundary of the Tanzanian Craton, has long been overlooked as a major exploration target due primarily to the nature of the high grade metamorphic rocks not being considered suitable to host major gold deposits. Increased attention is now being paid to this area that is situated between the known Tanzanian Craton and the Proterozoic Mozambique Mobile Belt.

The geology of the region is represented by high grade metamorphic rocks within the amphibolite to granulite facies comprising of feldspar-quartz–biotite and garnet-hornblende-biotite gneisses and pegmatites aligned along a regional northwest-southeast trend. The host lithologies for gold mineralisation as reported by Canaco Resources comprise of garnet-silica altered amphibolite together with minor biotite-kyanite-quartz-feldspar gneisses. Folding, with fold axes aligned along the regional structure are evident at Magambazi, where they form, in conjunction with the favourable mafic lithologies, the primary controls to the gold mineralisation.

Exploration Strategy

Prior to commencing fieldwork, the following desktop studies were undertaken:

  • Structural interpretation of the regional Government Aerognetic data across the area

  • Landsat interpretation using the various mineral indexes and alteration ratios.

Stream sediment sampling and follow-up, select soil sampling programs were undertaken on the Handeni licenses in order to evaluate the potential of the licenses under option as swiftly as possible (Table 12)

Table 12. Summary of samples collected on the Handeni licenses

Prospect Stream Sediment Soil Rock
Mkulima 198 142 7
Mkulima East 170
Amani 367 671 11
Total 564 979 18

The dominant drainage patterns are from the north-west to the south-east and are generally defined along major lithological contacts particularly between units of amphibolite and quartz-feldspar gneiss. The Mligazi River, transecting the SW corner of Mkulima PL4816/2007 and the Kwale River draining the Amani PL7002/2011 are the main river systems that drain both license areas. Secondary tributaries are developed along the NE-SW cross-cutting structures. Regional stream sediment sampling is in progress on 1st, 2nd, 3rd and 4th order tributaries as planned from the 1:50,000 scale topography maps (Map 13).


Map 13. Stream Sediment Sampling Program for Handeni Region Prospecting Licenses


Mkulima PL 4816/2007&Mkulima East PL7148/2011

Stream sediment sampling and mapping of the drainages have been undertaken across the adjoining licenses. Samples were collected above the confluences of streams from the gravel layer whenever possible, sieved to 1mm in the field and bagged as two x 500 gm samples – one of the samples to be panned at site for visible gold and the other sample being submitted to SGS Laboratory, Mwanza to test for bottle–leachable-extractable gold (BLEG).

Based on the first round of pan results, a number of areas within the PLs were selected for follow-up stream sediment sampling. Selective soil sampling was undertaken across prospective lithologies of amphibolite gneiss.

A total of 198 stream sediment samples were collected from both the Mkulima and Mkulima East Licenses.

Table 15. Summary of stream sediment and soil geochemistry results across the Mkulima PLs

Range (ppb Au) Stream sediment Soil sample
<10 152 120
10-20 21 6
20-30 18 2
30-40 4 -
40-50 - -
>50 3 -
Total 198 128


Map 14: Stream Sediment Sampling Program for Handeni Region Prospecting Licenses

Two main targets (Targets 1 and 1a) were identified on Mkulima PL 4816/2008 (Map 14). Selective soil sampling traverses were undertaken across the targets but results were mostly below detection (<10 ppb Au) as reported in the 3rd Quarterly report. The License was relinquished and returned to the owner at the end of the 3 month option period.


Map 15. Stream sediment anomaly map showing soil sampling targets



At the end of the 3 month option period PL4816/2007 was considered to have little potential to host a gold deposit and was subsequently retuned to the owner.

One target (Target 2) was identified to the east on the adjoining Mkulima East PL 7148/2011. Results of the stream sediment sampling indicated gold-in-streams draining to the west off a small NW-SE trending ridge in the central part of the license (Map 14). Old artisanal working were noted on the western hill slope in which outcrops of garnet-kyanite- biotite and amphibolite gneisses occur. A follow-up 200 meter x 25 meter E-W soil sample grid (Map 14), in which 170 soil samples, including 8 QA-QC samples, have been submitted to SGS Laboratory Mwanza for Aqua Regia analysis. The results are summarized in Table 16 and Map 15.

Table 16. Summary of soil sample results

Range (Au ppb/As
ppm)

Au Samples

As samples
<10 46 77
10-20 68 7
20-30 20  
30-40 16 11
40-50 4  
50-100 7 2
>100 1  
Total 162 98


Map 16. Soil sample results of the Mkulima East Prospect


Four, NW-trending, low threshold soil anomalies have been delineated from the soil sampling program and appear to occur on either side of the hill. The largest of the four anomalies has an apparent strike length of 550 meters by 100 meters wide. Follow-up infill soil sampling is planned to better define these anomalies (Table 17)

Table 17. Proposed infill soil sampling at Mkulima east

Northings          Easting    

Section

From

To
Length
(m)
No. of
samples
9356300 408200 408500 300 13
9357100 408400 408650 250 11
9359900 408200 408750 550 23
9357000 408350 408900 550 23
9356500 408500 409450 950 39
9356250 409200 409550 350 15
Total     2950 124
Blanks       6
Standards       6
Total       136


Amani PL 7002/2011

The PL, covering an area of 170 square kilometers, is located 32 kilometers southeast of Handeni town and 5 kilometers northeast of the Mkata junction which lies on the main tar road to Tanga. The Magambazi gold occurrence of Canaco is situated 26 kilometers due west of the license.

The license is underlain by alternating lithologies of amphibolites, biotite-garnet-amphibolite gneisses and quartz-feldspar and pegmatatic gneisses striking NW-SE. Low angle reverse thrusts trending NNW-SSW to N-S are noted in the central and western parts of the license (Map 9). These thrust planes are considered to be related to the Proterozic Mozambique Mobile Belt that becomes increasingly evident towards the SE. Streams, often defining lithological contacts, drain the area to the southeast.

Exploration Strategy

Stream sediment sampling has been undertaken across the whole of the license. Soil sampling has been undertaken across selective grids (Map 16). A total of 342 stream sediment and 656 soil samples have been collected and panned, the results of which are indicate in Table 18 and Map 17.

At least 5 target areas were outlined from the anomalous gold-in-streams for follow up soil sampling and mapping (Map 16) .

Table 18. Summary of stream sediment and soil geochemistry results across the Amani PL

Range (ppb Au) Stream sediment Soil*
<10 242 513
20-30 48 59
20-30 27 43
30-40 8 11
40-50 5 5
>50 12 25
Total 342 656

                                                          * Of the 447 soil samples collected, 246 samples have been submitted for analysis

Generally the results of the stream sediment sampling returned no visible gold in the panned sample and low assay values. The best gold values were reported from streams draining northwards and close to the northern boundary of the license where gold values ranged bwteen 60 and 110 ppb gold. Although one sample did reflect a value of 2.45ppm gold at Target 5 (Map 17), it is considered to have been a QA-QC Standard that had been mistakenly included in the sample results.


Map 17. Stream sediment sampling results and soil sampling targets on Amani PL 7002/2011


Alluvial mining by artisanal miners is active in the SW corner of the license. The streams containing gold drain off two N-S trending ridges of amphibolitic gneiss that cover a combined strike length of 1.7 kilometers (Targets 2 and 4). Soil sampling, along an E-W grid on 200 meters x 25 meters sample intervals, has been completed. Results were poor with most of the samples assaying below detection limit of <0.01ppb gold). One sample, located ontop of a small ridge returned 110 ppb gold (Map 17).

Follow-up infill sampling will test the extent of this single anomaly on the hill as well as test the western, northern and eastern sides of the ridge from which the streams drain in order to trace where the gold, being mined lower down in the course of the stream, is coming from. A soil sampling grid in which approximately 200 samples are planned to be collected, will be completed early in 2012.

Although evidence of minor artisanal activity is noted elsewhere on the license, particularly as test pits and shafts within the drainage systems, no mining is currently being done other than in the SW corner of the license. A number of small pits have been excavated on the massive amphibolite ridge in the northern part of the license (Target 1) but were found to be barren of gold. The southern slope of the amphibolite ridge and contact between the amphibolite and the quartz-feldspar gneiss to the south has been soil sampled on a 200 meter x 50 meter grid across a strike length of 2.5 kilometers (Target 1). Due to discrepancies in the initial results of some of the samples, the grid has been re-sampled and extended along the amphibolite/quartz-feldspar gneiss contact towards the NW corner of the license (Map 18) where stream sediment sampling returned an anomalous gold value.


Map 18. Soil sampling results, Amani PL 7002/2011


Results reflect low gold and arsenic values with 97% and 100% respectively falling below detection limit (Table 19). A number of single point low value gold anomalies occur on the souther flank of the E-W trending amphibolite ridge. No continuity of these anaomalies occur between traverse lines. Contrary to the initial results, the area is considered barren of hosting an economical gold resource.

Table 19. Soil sample results from repeated soil sampling program across Target 1

Range (Au ppb/As
ppm)
Au Samples
As samples
<10 193 199
20-30 1 -
20-30 2 -
30-40 2 -
40-50 - -
50-100 1 -
>100 - -
Total 199 199

Although stream sediment sampling has shown that minor gold is present on the Amani PL, follow-up soil sampling programs have yet to delineate any significant gold-in-soil anoamlies to date. In order to complete the follow-up investigation and evaluation of this license, soil sample programs have been planned across:


  • the south-western corner of the license to investigate the source of the gold that is currently being mined by artisanal miners downstream

  • the western side of Target 1 in the north-west corner of the license

  • select north-south traverses on the western side of the license

North Mara Gold projects

The North Mara Gold Project, comprising of 9 Prospecting licenses and covering 566 square kilometers, have been divided into 3 blocks, namely the Tarime, Nyabigena and the Kubiasi Kiserya project areas which includes the Kiagata Project.

Kiagata Project (PL 4225/2006)

The Kiagata project, located within the North Mara Greestone belt, is situated in the Musoma District and is about 30 kilometers from Musoma Town, the main commercial hub in the area. The project is located immediately south of the Mara river and west of the Serengeti National Park.

A reconnaissance survey involving mapping, termite sampling, and selected soil and rock sampling were carried out during the quarter.

No historical nor artisanal gold workings are present on the license.

The area is underlain by granitic rocks that form large granitic hills that cover most of the license. The central part of the license is overlain by alluvial gravels and black cotton clays (“mbuga’) . Laterite is commonly present at the base of the granitic hills. No greenstone rocks are present on the license other than minor diorite float noted in the southern part of the license (Map 19). A number of thin east-west barren quartz veins are noted within the granite.

Map 19. Geology map of Kiagata PL 4225/2006


A select number of N-S soil sampling traverses on a 400 meter x 50 meter grid was undertaken across potential targets in the southern part of the license where red soils, quartz and diorite fragements were noted. A total of 13 soil samples were submitted for Aqua Regia analysis of gold at SGS Laboratory, Mwanza.

Termite sampling was undertaken across non-“mbuga” areas in which 9 samples were submitted for 500 gm Bleg analysis. Five rock samples of quartz veins were analysed by Fire assay. Results are summarized in Table 20.

Table 20. Results of sampling undertaken on the Kiagata PL 4225/2007

Total samples Soil (Au ppb) Termite (Au ppm) Rock (Au ppm)
9  3  
9   <0.10  
5     0.03

The license is underlain by granitic rocks. Sampling of possible tagets have indicated that no gold is present.

No further work is warranted and the license is recommended to be relinquished.

Kubiasi Kiserya (PL4833/2007)

The Kiserya project is located on northeastern Tanzania approximately 18 kilometers southeast from African Barrick’s North Mara Gold Mine, within the N Mara gold Belt. The license lies adjacent to the Mara River and to the north of the Serengeti Game Reserve. The northern and western parst of the license are underlain by greenstone rocks that tend to crop out as series of large hills that dot the surrounding plains. The remainder of the license is underlain by granite. Little to no colluvium of black clay “mbuga” is present.

The southeast corner of the license lies within the Serengeti National park but since mining activities are banned, this area has subsequently been relinquished. A single PML is currently under application for the last 3 years in the central to western part of the license but as yet has not been granted to the Tanzanian national.

An old colonial shaft occurs in the northern part of the PL. Within the centre of the license, recent artisanal mining has explored an outcropping, vertical dipping, auriferous quartz vein which returned a grade of 8.17 g/t gold over 0.5 meter and 4.58g/t gold across 1 meter in the hanging wall rocks. The quartz vein, exhibiting a “pinch and swell” structure, appears to swing from a strike of 055o in the north and continues in an E-W direction across a strike length of +200 meters. Both sites are hosted by sheared granitic rocks. Additional quartz vein with associated disseminated sulphide mineralisation have been noted in the eastern and southern parts of the license.

Soil sampling with regional mapping has been completed along a 200 meter x 50 meter N-S grid during the later part of 2010 but only samples on 400 meter line spacing have been analysed. Select infilling soil samples on 200 meter x 50 meter line spacing was later carried out. A total 1349 soil samples were collected of which 750 samples were selected and analysed by SGS Laboratory, Mwanza (Table 21). At least 4 regional, low level soil anomalies, having overall strike lengths of between 3 to 4 kilometers and trending ENE were originally outlined but infill sampling refined these targets to 6 smaller anomalies (Map 20). Basically 5 of the anomalies are hosted in granite within the central part of the license. The 6th anomaly occurs within the mafic rocks close to the granite contact on the western side of the license. All soil anomalies, have limited strike of upto 1.2 kilometers and appear to trend north-northeast to east-west.

Table 21. Summary of soil geochemistry results

Range (Au ppb/As ppm) Au Samples As samples
<10 509 626
20-30 124 -
20-30 69 -
30-40 32 -
40-50 10 -



50-100 4 -
>100 2 -
Total 750 626

Follow-up trenching was undertaken over soil-in-gold anomalies (Table 22). Nine trenches,, averaging 15 meters in length and totalling 150 meters, were orientated normal to the soil anomaly trend (Map 20). Thin quartz veins not exceeding 25 centimeters in width were encountered in some of the trenches. Two-meter channel samples were undertaken at the base of the trench and the quartz veins were individually sampled. Samples were submitted to SGS Laboratory Mwanza for 50 gm Fire assay. Results from the trench sampling returned no gold values in any of the trenches. A total of 31 rock samples have been collected and analysed for gold (Table 23).

Map 20. Soil anomaly map of Kubiasi Kiserya PL4833/2007

Table 22. Trench program targeting specific soil anomalies

          Soil Anomaly  

TR_ID

UTM_E60

UTM_N60

AZIMUTH

EOH

Anomaly

SANO
Au
(ppb)

Comments

KSTR001

682614

9826262

320

30

4

A05417

50
Qtz Vn -10cm,
Qtz vn - 5 cm
KSTR002 682201 9825546 310 15 4 A05767 1 Qtz Vn - 5cm
KSTR003 682617 9826264 310 15        
KSTR004 681406 9826796 310 15   A05069 10 Qtv Vn - 5 cm
KSTR005 682206 9827246 310 15 2 A05300 160 Qtz Vn - 15cm
KSTR006 682004 9827796 310 15 1 A05246 170 -
KSTR007 682596 9828000 310 15 1 A05452 40 -



KSTR008



678405



9827042



310



15



6



NMK_S0141



60
Qtz Vn - 25
cm Qtz Vn -
10 cm Qtz Vn
- 5 cm
KSTR009 683008 9826746 310 15 4 A05532 50 Qtz Vn - 6cm



Table 23. Results of in situ rock samples collected across PL 4225/2007

SANO East(Arc 60) North (Arc 60) Au ppm Descriptions
A05751 680404 9827726 0.05 Quartz vein
A05752 680397 9825324 0.09 Quartz vein
A05753 680800 9825554 0.02 Quartz vein
A05754 680983 9825220 0.03 Quartz vein
A05755 681168 9825000 0.05 Quartz vein, boxwork structures, grab sample.
A05756 681597 9825598 0.01 Quartz vein, grab sample.
A05757 681596 9825800 0.005 Quartz vein, grab sample.
A05758 681609 9826666 0.02 Quartz vein, grab sample.
A05759 681813 9827218 0.005 Quartz vein as grab collected from a burren artisanal Pit.
A05760 681814 9827162 0.03 Exposed quartz vein, 290 strike,
A05761 682006 9827140 0.005 Quartz vein, artisanal pit, 300/62 strike/dip
A05762 682021 9827138 0.005 Quartz vein, 300/62 strike/dip
A05763 682060 9827130 0.005 Quartz vein,shaft-artisanal mining
A05764 682097 9826846 0.005 Poorexposed quartz vein,boxwork structures.
A05765 682000 9825384 0.005 Quartz vein.
A05766 682201 9827038 0.005 Quartz vein, .
A05767 683803 9828243 0.04 Quartz vein, 020 strike, Dessiminated sulphide.
A05768 683745 9827974 0.005 Quartz vein, 320 strike
A05769 683776 9827946 0.05 Quartz vein, 270 strike
A05770 683831 9827176 2.0 Quartz vein, minor disseminated sulphide.
A05771 683970 9828364 1.99 Quartz vein, 040 strike
A05772 684331 9828374 0.05 Quartz vein, 040 strike, with disseminated sulphide
A05773 684507 9828482 4.98 Quartz vein,040 strike, with disseminated sulphide
NMK-R01 678800 9826678 0.005 Quartz vein with hematite alterations.
NMK-R02 678858 9826450 5.17 Sheared quartz vein, from artisanal pit.
283653 681968 9827142 8.17 Quartz vein.
283654 681968 9827142 0.3 Footwall to Quartz Vein
283655 681968 9827142 4.58 Hanging wall to Quartz Vein
283656 681976 9827142 0.04 Ferruginous alteration in artisanal pit
283657 681991 9827140 0.02 Quartz Vein


Results of the follow-up exploration on the intial soil sampling anomalies were generally poor, with none of the trenches returning any anomalous gold values.

Planned Exploration

Planned exploration is to be focused on investigating:

i.

Anomaly 1, located along the granite/metavolcanic contact that has been cut by a prominent NW-SE shear zone. Active artisanal workings occur along the shear zone some 500 meters NW of the license.

   
ii.

The E-W striking quartz veins in Anomalies 2 and 3 which returned anomalous gold values

   
iii.

The N-S trending Anomaly 4.

   
iv.

The quartz vein that returned 5.15 g/t gold on the northern slope of Kiterere Hill in the Eastern part of the Prospect.

   
v.

The old colonial shaft at the base of Getangana Hill

Mapping, trenching and possible Schlumberger VES profiling are planned to completed this phase of exploration.

Acquisition of Primary Mining Licenses in Singida, Tanzania

On May 15, 2009, a subsidiary of the Company, Kilimanjaro Mining Company Inc., entered into a Mineral Financing Agreement with a director of the Company authorizing him, on behalf of the Company, to acquire Primary Mining Licenses (“PMLs”) in the Singida area of Tanzania. On October 27, 2009, an amended Mineral Financing Agreement was signed between the director (a Tanzanian national) and the Company. The agreement was entered into as a result of certain requirements under the Tanzania Mining Act as it relates to the ability to hold title to Primary Mining Licenses (PMLs). The Mining Act allows only a Tanzanian national or a Tanzanian corporation that is 100% owned by Tanzanian nationals to hold title to PMLs. As a result, the Company entered into the Mineral Financing Agreement along with a Statutory Declaration and Declaration of Trust with one of its directors (a Tanzanian National) to facilitate the optioning, exploration and purchase of the PML’s at the Singida gold project. Upon application, approval and the issuing of a Special Mining License that is comprised of two or more of the PMLs in the Singida project area, the Company will become the registered owner on title.

At the option of the Company, any PMLs may be relinquished at any time during the agreement and the title transferred back to the original owner. Also, at the option of the Company, a 2% Net Smelter Production royalty or 2% of the Net Sale Value may be substituted in place of the final payment for each PML and paid on a pro rata basis determined by the total final number of PMLs involved in a special mining license.

Under the terms of the mineral properties sales and purchase agreements the Company has completed initial option payments in the amount of $2,058,322. As of September 30, 2011, the Company has acquired 100% of 23 PMLs. The Company relinquished 17 PMLs and has the option to acquire 20 additional and different PMLs in the Singida area. Pursuant to the original agreement and the subsequent addendums, the Company agreed to pay approximately $360,000 on January 23, 2013 and $2,340,000 on February 24, 2013 or at the option of the Company, a 2% Net Smelter Production royalty or 2% of the Net Sale Value may be substituted in place of the final payment for each PML and paid on a pro rata basis determined by the total final number of PMLs involved in a special mining license.

Acquisition of Prospecting Licenses in Tanzania

On April 20, 2011, the Company entered into a Prospecting License Purchase Agreement with Pili Sadiki, to acquire a 100% interest in a certain prospecting license located in the Kiabakari Musoma District of Tanzania.

On April 20, 2011, the Company entered into a Prospecting License Purchase Agreement with Rashid Omar, to acquire a 100% interest in a certain prospecting license located in the Handeni Tanga District of Tanzania.

On May 30, 2011, the Company entered into a Prospecting License Purchase Agreement with Manga Mining Company to acquire a 100% interest in a certain prospecting license located in the Handeni Tanga District of Tanzania. On September 20, 2011, the Company terminated this agreement.


On July 1, 2011, the Company entered into a Prospecting License Purchase Agreement with I. M. Kwematuku Export Trade Ltd. to acquire up to 100% interest in a certain prospecting license located in the Handeni Tanga District of Tanzania.

On July 19, 2011, Guardian Investment Ltd, a related party, on behalf of the Company, entered into a mineral properties option agreement to acquire four Primary Mining Licenses (PMLs) within the license area of the Uyowa project.

General

The following is a discussion and analysis of our plan of operation and results of operations for the three and nine month period ended December 31, 2011, and the factors that could affect our future financial condition. This discussion and analysis should be read in conjunction with our consolidated unaudited financial statements and the notes thereto included elsewhere in this quarterly report. Our consolidated financial statements are prepared in accordance with United States generally accepted accounting principles. All references to dollar amounts in this section are in United States dollars unless expressly stated otherwise.

Plan of Operation

As of December 31, 2011, we had working capital of approximately $381,000. We plan to spend approximately $300,000 for our property acquisitions and holding costs and $3,300,000 for exploration activities for the next twelve months, with work being conducted on several projects including soil sampling, trenching and drilling. We will need to raise additional funds to finance the exploration activities on our projects. There is no assurance that such financing would be available at this time.

Our estimated expenses over the next twelve months are as follows:

Cash Requirements during the Next Twelve Months

Expense   ($)
Property acquisition and holding costs   300,000
Exploration expenses   3,300,000
Professional fee   600,000
General and administration fee   800,000
Total   5,000,000

There is no historical financial information about us upon which to base an evaluation of our performance. We are an exploration stage corporation and have not generated any revenues from operations. We cannot guarantee we will be successful in our business operations. Our business is subject to risks inherent in the establishment of a new business enterprise, including limited capital resources, possible delays in the exploration of our properties, possible cost overruns due to price and cost increases for services and economic conditions. Because the Company does not currently derive any production revenue from operations, its ability to conduct exploration and development on properties is largely based upon its ability to raise capital by equity funding.

Our exploration objective is to find an economic mineral body containing gold. Our success depends upon finding mineralized material. This includes a determination by our contracted consultants and professional staff whether the property contains resources and/or reserves. Mineralized material is a mineralized body, which has been delineated by appropriately spaced drilling or underground sampling to support sufficient tonnage and average percentage grade of metals to justify removal. If we don’t find mineralized material or we cannot remove mineralized material, either because we do not have the money to do so or because it is not economically feasible to do so, we will cease operations or seek other properties.


RESULTS OF OPERATIONS

Three and Nine Month Summary

    Three Months Ended     Nine Months Ended  
    December 31,     December 31,  
    2011     2010     2011     2010  
Revenue $ -   $  -   $ -   $  -  
Expenses   813,452     2,593,029     2,230,491     4,143,833  
Other income (expenses)   (36 )   (51,959 )   661,587     (51,340 )
Net Income (Loss) $ (813,488 ) $ (2,644,988 ) $ (1,568,904 ) $ (4,195,173 )

Revenue

We had no operating revenues for the three and nine month period ended December 31, 2011 and 2010. We anticipate that we will not generate any revenues until we generate additional financing to support our planned operations.

Operating Costs and Expenses

The major components of our expenses for the three months and nine months ended December 31, 2011 and 2010 are outlined in the table below:

    Three Months Ended     Nine Months Ended  
    December 31,     December 31,  
    2011     2010     2011     2010  
                         
   Amortization and depreciation   9,991     6,030     26,042     17,617  
   Exploration costs   324,110     599,097     668,106     1,041,498  
   General and administrative   57,679     57,790     244,275     183,842  
   Impairment of mineral property
         acquisition costs
  _
  187,426
  371,612
  468,491
   Management and director fees   9,000     28,500     23,000     88,500  
   Professional fees   33,148     116,678     198,535     616,783  
   Salaries   141,822     25,004     434,052     77,095  
   Stock-based compensation   213,825     1,593,989     213,825     1,593,989  
   Travel and accommodation   23,877     18,515     51,044     56,018  
Total Expenses   813,452     2,593,029     2,230,491     4,143,833  

General and Administrative Expenses

The Company reported a loss of $2,230,491for the nine months ended December 31, 2011 compared with a loss of $4,143,833 for same period in fiscal 2010. The decreased loss in the current period is mainly attributed to decreased exploration costs and stock-based compensation.

The $111 decrease in our general and administrative expenses for the three month period ended December 31, 2011 as compared to the same period in fiscal 2010 and the $60,433 increase in our general and administrative expenses for the nine month period ended December 31, 2011 as compared to the same period in fiscal 2010 was primarily due to increase in licenses holding costs, computer related expenses, office rent and insurance expenses.

Liquidity and Capital Resources

Working Capital

    December 31, 2011     March 31, 2011  
Current Assets $  461,580   $  3,071,597  
Current Liabilities   80,354     961,420  
Working Capital $  381,226   $  2,110,117  


Cash Flows

    Nine Months Ended  
    December 31, 2011  
Cash used in Operating Activities $  (1,304,595 )
Cash used in by Investing Activities   (587,917 )
Cash provided by Financing Activities   -  
Net Increase (Decrease) in Cash $  (1,892,512 )

We had a cash balance of approximately $390,000 and working capital of $381,000 as of December 31, 2011 compared to cash of $2,282,901 and working capital of $2,110,117 as of March 31, 2011. The decrease of cash balance and working capital primarily due to cash spent on property acquisition, exploration and development. We anticipate that we will incur approximately $1,400,000 for operating expenses, including listing, professional, legal and accounting expenses associated with our reporting requirements under the Exchange Act during the next twelve months. Accordingly, we will need to obtain additional financing in order to complete our full business plan.

Going Concern

The unaudited financial statements accompanying our quarterly report on Form 10-Q for the quarter ended December 31, 2011 have been prepared on a going concern basis, which implies that our company will continue to realize its assets and discharge its liabilities and commitments in the normal course of business. Our company has not generated revenues since inception and has never paid any dividends and is unlikely to pay dividends or generate earnings in the immediate future. The continuation of our company as a going concern is dependent upon the continued financial support from our shareholders, the ability of our company to obtain necessary equity financing to achieve our operating objectives, and the attainment of profitable operations. As of December 31, 2011, we had cash of $390,000 and we estimate that we will require approximately $1,400,000 for general and administration costs and professional fees, and $3,600,000 for property acquisition holding and exploration costs associated with our plan of operation over the next twelve months. We do not have sufficient funds for general and administration activities and planned mineral property acquisition and exploration activities and therefore we will be required to raise additional funds.

The advancement of our business is dependent upon us raising additional financial support. The issuance of additional equity securities by us could result in a significant dilution in the equity interests of our current stockholders. Obtaining commercial loans, assuming those loans would be available, will increase our liabilities and future cash commitments.

Future Financings

We had an approximate cash balance of $390,000 and working capital of $381,000 as of December 31, 2011 compared to a cash balance of $2,282,902 and working capital of $2,110,177 as of March 31, 2011 and we estimate that we will require approximately $5,000,000 for costs associated with our plan of operation over the next twelve months. Accordingly, we do not have sufficient funds for planned operations and we will be required to raise additional funds for operations. We intend to raise additional funds from another equity offering or loans. At the present time, we are attempting to raise additional money, but there is no assurance that we will be successful. If we need additional funds and are unable to raise them, we will have to suspend or cease operations until we succeed in raising additional funds.

Outstanding shares and options

As of February 14, 2012, we have 97,458,733 shares of common stock outstanding, 4,600,000 stock options outstanding and 21,404,901 warrants outstanding.

Off-Balance Sheet Arrangements

We have no 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 are material to stockholders.


Risks And Uncertainties

Much of the information included in this quarterly report includes or is based upon estimates, projections or other “forward looking statements”. Such forward looking statements include any projections and estimates made by us and our management in connection with our business operations. While these forward-looking statements, and any assumptions upon which they are based, are made in good faith and reflect our current judgment regarding the direction of our business, actual results will almost always vary, sometimes materially, from any estimates, predictions, projections, assumptions or other future performance suggested herein.

Such estimates, projections or other “forward looking statements” involve various risks and uncertainties as outlined below. We caution the reader that important factors in some cases have affected and, in the future, could materially affect actual results and cause actual results to differ materially from the results expressed in any such estimates, projections or other “forward looking statements”.

Risks Associated with Mining

All of our properties are in the exploration stage. There is no assurance that we can establish the existence of any mineral resource on any of our properties in commercially exploitable quantities. Until we can do so, we cannot earn any revenues from operations and if we do not do so we will lose all of the funds that we expend on exploration. If we do not discover any mineral resource in a commercially exploitable quantity, our business could fail.

Despite exploration work on our mineral properties, we have not established that any of them contain any mineral reserve, nor can there be any assurance that we will be able to do so. If we do not, our business could fail.

A mineral reserve is defined by the Securities and Exchange Commission in its Industry Guide 7 (which can be viewed over the Internet at http://www.sec.gov/divisions/corpfin/forms/industry.htm#secguide7) as that part of a mineral deposit which could be economically and legally extracted or produced at the time of the reserve determination. The probability of an individual prospect ever having a “reserve” that meets the requirements of the Securities and Exchange Commission’s Industry Guide 7 is extremely remote; in all probability our mineral resource property does not contain any ‘reserve’ and any funds that we spend on exploration will probably be lost.

Even if we do eventually discover a mineral reserve on one or more of our properties, there can be no assurance that we will be able to develop our properties into producing mines and extract those resources. Both mineral exploration and development involve a high degree of risk and few properties which are explored are ultimately developed into producing mines.

The commercial viability of an established mineral deposit will depend on a number of factors including, by way of example, the size, grade and other attributes of the mineral deposit, the proximity of the resource to infrastructure such as a smelter, roads and a point for shipping, government regulation and market prices. Most of these factors will be beyond our control, and any of them could increase costs and make extraction of any identified mineral resource unprofitable.

Mineral operations are subject to applicable law and government regulation. Even if we discover a mineral resource in a commercially exploitable quantity, these laws and regulations could restrict or prohibit the exploitation of that mineral resource. If we cannot exploit any mineral resource that we might discover on our properties, our business may fail.

Both mineral exploration and extraction require permits from various foreign, federal, state, provincial and local governmental authorities and are governed by laws and regulations, including those with respect to prospecting, mine development, mineral production, transport, export, taxation, labour standards, occupational health, waste disposal, toxic substances, land use, environmental protection, mine safety and other matters. There can be no assurance that we will be able to obtain or maintain any of the permits required for the continued exploration of our mineral properties or for the construction and operation of a mine on our properties at economically viable costs. If we cannot accomplish these objectives, our business could fail.

We believe that we are in compliance with all material laws and regulations that currently apply to our activities but there can be no assurance that we can continue to remain in compliance. Current laws and regulations could be amended and we might not be able to comply with them, as amended. Further, there can be no assurance that we will be able to obtain or maintain all permits necessary for our future operations, or that we will be able to obtain them on reasonable terms. To the extent such approvals are required and are not obtained, we may be delayed or prohibited from proceeding with planned exploration or development of our mineral properties.


Our business activities are conducted in Tanzania.

Our mineral exploration activities in Tanzania may be affected in varying degrees by political stability and government regulations relating to the mining industry and foreign investment in that country. The government of Tanzania may institute regulatory policies that adversely affect the exploration and development (if any) of the Company’s properties. Any changes in regulations or shifts in political conditions in this country are beyond the control of the Company and may adversely affect its business. Investors should assess the political and regulatory risks related to the Company’s foreign country investments. Our operations may be affected in varying degrees by government regulations with respect to restrictions on production, price controls, export controls, foreign exchange controls, income taxes, expropriation of property, environmental legislation and mine safety.

We may not have clear title to our properties.

Acquisition of title to mineral properties is a very detailed and time-consuming process, and the Company’s title to its properties may be affected by prior unregistered agreements or transfers, or undetected defects. Several of the Company’s prospecting licenses are currently subject to renewal by the Ministry of Energy and Minerals of Tanzania. In result, there is a risk that we may not have clear title to all our mineral property interests, or they may be subject to challenge or impugned in the future. We have exploration licenses. We do not have a license to mine any minerals or reserves whatsoever at this time on any part of our properties. Once exploration has advanced to a point where mining on one or more of our properties is feasible, we plan to apply for a mining license or licenses.

If we establish the existence of a mineral resource on any of our properties in a commercially exploitable quantity, we will require additional capital in order to develop the property into a producing mine. If we cannot raise this additional capital, we will not be able to exploit the resource, and our business could fail.

If we do discover mineral resources in commercially exploitable quantities on any of our properties, we will be required to expend substantial sums of money to establish the extent of the resource, develop processes to extract it and develop extraction and processing facilities and infrastructure. Although we may derive substantial benefits from the discovery of a major deposit, there can be no assurance that such a resource will be large enough to justify commercial operations, nor can there be any assurance that we will be able to raise the funds required for development on a timely basis. If we cannot raise the necessary capital or complete the necessary facilities and infrastructure, our business may fail.

Mineral exploration and development is subject to extraordinary operating risks. We do not currently insure against these risks. In the event of a cave-in or similar occurrence, our liability may exceed our resources, which would have an adverse impact on our company.

Mineral exploration, development and production involve many risks, which even a combination of experience, knowledge and careful evaluation may not be able to overcome. Our operations will be subject to all the hazards and risks inherent in the exploration for mineral resources and, if we discover a mineral resource in commercially exploitable quantity, our operations could be subject to all of the hazards and risks inherent in the development and production of resources, including liability for pollution, cave-ins or similar hazards against which we cannot insure or against which we may elect not to insure. Any such event could result in work stoppages and damage to property, including damage to the environment. We do not currently maintain any insurance coverage against these operating hazards. The payment of any liabilities that arise from any such occurrence would have a material adverse impact on our company.

Mineral prices are subject to dramatic and unpredictable fluctuations.

We expect to derive revenues, if any, either from the sale of our mineral resource properties or from the extraction and sale of precious and base metals such as gold, silver and copper. The price of those commodities has fluctuated widely in recent years, and is affected by numerous factors beyond our control, including international, economic and political trends, expectations of inflation, currency exchange fluctuations, interest rates, global or regional consumptive patterns, speculative activities and increased production due to new extraction developments and improved extraction and production methods. The effect of these factors on the price of base and precious metals, and therefore the economic viability of any of our exploration properties and projects, cannot accurately be predicted.


The mining industry is highly competitive and there is no assurance that we will continue to be successful in acquiring mineral claims. If we cannot continue to acquire properties to explore for mineral resources, we may be required to reduce or cease operations.

The mineral exploration, development, and production industry is largely un-integrated. We compete with other exploration companies looking for mineral resource properties. While we compete with other exploration companies in the effort to locate and acquire mineral resource properties, we will not compete with them for the removal or sales of mineral products from our properties if we should eventually discover the presence of them in quantities sufficient to make production economically feasible. Readily available markets exist worldwide for the sale of mineral products. Therefore, we will likely be able to sell any mineral products that we identify and produce.

In identifying and acquiring mineral resource properties, we compete with many companies possessing greater financial resources and technical facilities. This competition could adversely affect our ability to acquire suitable prospects for exploration in the future. Accordingly, there can be no assurance that we will acquire any interest in additional mineral resource properties that might yield reserves or result in commercial mining operations.

If our costs of exploration are greater than anticipated, then we may not be able to complete the exploration program for our Tanzanian properties without additional financing, of which there is no assurance that we would be able to obtain.

We are proceeding with the initial stages of exploration on our Tanzanian properties. We are carrying out an exploration program that has been recommended by a consulting geologist. This exploration program outlines a budget for completion of the recommended exploration program. However, there is no assurance that our actual costs will not exceed the budgeted costs. Factors that could cause actual costs to exceed budgeted costs include increased prices due to competition for personnel and supplies during the exploration season, unanticipated problems in completing the exploration program and delays experienced in completing the exploration program. Increases in exploration costs could result in our not being able to carry out our exploration program without additional financing. There is no assurance that we would be able to obtain additional financing in this event.

Because of the speculative nature of exploration of mining properties, there is substantial risk that no commercially exploitable minerals will be found and our business will fail.

We are in the initial stages of exploration of our mineral property, and thus have no way to evaluate the likelihood that we will be successful in establishing commercially exploitable reserves of gold, silver or other valuable minerals on our Tanzanian properties.

The search for valuable minerals as a business is extremely risky. We may not find commercially exploitable reserves of gold, silver or other valuable minerals in our mineral property. Exploration for minerals is a speculative venture necessarily involving substantial risk. The expenditures to be made by us on our exploration program may not result in the discovery of commercial quantities of ore. The likelihood of success must be considered in light of the problems, expenses, difficulties, complications and delays encountered in connection with the exploration of the mineral properties that we plan to undertake. Problems such as unusual or unexpected formations and other conditions are involved in mineral exploration and often result in unsuccessful exploration efforts. In such a case, we would be unable to complete our business plan.

Because our executive officers have limited experience in mineral exploration and do not have formal training specific to the technicalities of mineral exploration, there is a higher risk that our business will fail.

Our executive officers have limited experience in mineral exploration and do not have formal training as geologists or in the technical aspects of management of a mineral resource exploration company. As a result of this inexperience, there is a higher risk of our being unable to complete our business plan for the exploration of our mineral property. With no direct training or experience in these areas, our management may not be fully aware of many of the specific requirements related to working within this industry. Our decisions and choices may not take into account standard engineering or managerial approaches mineral resource exploration companies commonly use. Consequently, the lack of training and experience of our management in this industry could result in management making decisions that could result in a reduced likelihood of our being able to locate commercially exploitable reserves on our mineral property with the result that we would not be able to achieve revenues or raise further financing to continue exploration activities. In addition, we will have to rely on the technical services of others with expertise in geological exploration in order for us to carry out our planned exploration program. If we are unable to contract for the services of such individuals, it will make it difficult and maybe impossible to pursue our business plan. There is thus a higher risk that our operations, earnings and ultimate financial success could suffer irreparable harm and our business will likely fail.


Risks Relating to Our Common Stock

If we issue additional shares in the future, it will result in the dilution of our existing shareholders.

Our articles of incorporation authorize the issuance of up to 250,000,000 shares of common stock with a par value of $0.00001 per share. Our board of directors may choose to issue some or all of such shares to acquire one or more businesses or to provide additional financing in the future. The issuance of any such shares will reduce the book value and market price of the outstanding shares of our common stock. If we issue any such additional shares, such issuance will reduce the proportionate ownership and voting power of all current shareholders. Further, such issuance may result in a change of control of our corporation.

Our common stock is illiquid and shareholders may be unable to sell their shares.

There is currently a limited market for our common stock and we can provide no assurance to investors that a market will develop. If a market for our common stock does not develop, our shareholders may not be able to re-sell the shares of our common stock that they have purchased and they may lose all of their investment. Public announcements regarding our company, changes in government regulations, conditions in our market segment or changes in earnings estimates by analysts may cause the price of our common shares to fluctuate substantially. In addition, stock prices for junior mineral exploration companies fluctuate widely for reasons that may be unrelated to their operating results. These fluctuations may adversely affect the trading price of our common shares.

Penny stock rules will limit the ability of our stockholders to sell their stock.

The Securities and Exchange Commission has adopted regulations which generally define “penny stock” to be any equity security that has a market price (as defined) less than $5.00 per share or an exercise price of less than $5.00 per share, subject to certain exceptions. Our securities are covered by the penny stock rules, which impose additional sales practice requirements on broker-dealers who sell to persons other than established customers and “accredited investors”. The term “accredited investor” refers generally to institutions with assets in excess of $5,000,000 or individuals with a net worth in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 jointly with their spouse. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document in a form prepared by the Securities and Exchange Commission which provides information about penny stocks and the nature and level of risks in the penny stock market. The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction and monthly account statements showing the market value of each penny stock held in the customer’s account. The bid and offer quotations, and the broker-dealer and salesperson compensation information, must be given to the customer orally or in writing prior to effecting the transaction and must be given to the customer in writing before or with the customer’s confirmation. In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from these rules, the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written agreement to the transaction. These disclosure requirements may have the effect of reducing the level of trading activity in the secondary market for the stock that is subject to these penny stock rules. Consequently, these penny stock rules may affect the ability of broker-dealers to trade our securities. We believe that the penny stock rules discourage investor interest in and limit the marketability of our common stock.

The Financial Industry Regulatory Authority, or FINRA, has adopted sales practice requirements which may also limit a shareholder’s ability to buy and sell our stock.

In addition to the “penny stock” rules described above, FINRA has adopted rules that require that in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable for that customer. Prior to recommending speculative low priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer’s financial status, tax status, investment objectives and other information. Under interpretations of these rules, FINRA believes that there is a high probability that speculative low priced securities will not be suitable for at least some customers. FINRA requirements make it more difficult for broker-dealers to recommend that their customers buy our common stock, which may limit your ability to buy and sell our stock and have an adverse effect on the market for its shares.


Because of the early stage of development and the nature of our business, our securities are considered highly speculative.

Our securities must be considered highly speculative, generally because of the nature of our business and the early stage of our development. We are engaged in the business of identifying, acquiring, exploring and developing commercial reserves of primarily gold and potentially uranium. Our properties are in the exploration stage only and are without known reserves of gold and/or uranium. Accordingly, we have not generated any revenues nor have we realized a profit from our operations to date and there is little likelihood that we will generate any revenues or realize any profits in the short term. Any profitability in the future from our business will be dependent upon locating and developing economic reserves of gold and/or uranium, which itself is subject to numerous risk factors as set forth herein. Since we have not generated any revenues, we will have to raise additional monies through the sale of our equity securities or debt in order to continue our business operations.

We do not intend to pay dividends on any investment in the shares of stock of our company.

We have never paid any cash dividends and currently do not intend to pay any dividends for the foreseeable future. To the extent that we require additional funding currently not provided for in our financing plan, our funding sources may prohibit the payment of a dividend. Because we do not intend to declare dividends, any gain on an investment in our company will need to come through an increase in the stock’s price. This may never happen and investors may lose all of their investment in our company.

Risks Related to Our Company

Our by-laws contain provisions indemnifying our officers and directors.

Our by-laws provide the indemnification of our directors and officers to the fullest extent legally permissible under the Nevada corporate law against all expenses, liability and loss reasonably incurred or suffered by them in connection with any action, suit or proceeding. Furthermore, our by-laws provide that our board of directors may cause our company to purchase and maintain insurance for our directors and officers, and we have implemented director and officer insurance coverage.

Because most of our directors and officers are residents of other countries other than the United States, investors may find it difficult to enforce, within the United States, any judgments obtained against our directors and officers.

Most of our directors and officers are nationals and/or residents of countries other than the United States, and all or a substantial portion of such persons’ assets are located outside the United States. As a result, it may be difficult for investors to enforce within the United States any judgments obtained against our officers or directors, including judgments predicated upon the civil liability provisions of the securities laws of the United States or any state thereof.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

Not Applicable.

Item 4. Controls and Procedures.

As required by Rule 13a-15 of the Securities Exchange Act of 1934, our principal executive officer and principal financial officer evaluated our company’s disclosure controls and procedures (as defined in Rules 13a-15(e) of the Securities Exchange Act of 1934) as of the end of the period covered by this report. Based on this evaluation, our principal executive officer and principal financial officer concluded that as of the end of the period covered by this report, these disclosure controls and procedures were not effective. Disclosure controls and procedures are controls and other procedures that are designed to ensure that the information required to be disclosed by our company in reports it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities Exchange Commission and to ensure that such information is accumulated and communicated to our company’s management, including our principal executive officer and principal financial officer, to allow timely decisions regarding required disclosure. The conclusion that our disclosure controls and procedures were not effective was due to the presence of the following material weaknesses in internal control over financial reporting which are indicative of many small companies with small staff: (i) inadequate segregation of duties and effective risk assessment; and (ii) insufficient written policies and procedures for accounting and financial reporting with respect to the requirements and application of both United States generally accepted accounting principles and Securities and Exchange Commission guidelines. Management anticipates that such disclosure controls and procedures will not be effective until the material weaknesses are remediated.


We plan to take steps to enhance and improve the design of our internal controls over financial reporting. During the period covered by this quarterly report on Form 10-Q, we have not been able to remediate the material weaknesses identified above. To remediate such weaknesses, we plan to implement the following changes during our fiscal year ending March 31, 2012, subject to obtaining additional financing: (i) appoint additional qualified personnel to address inadequate segregation of duties and ineffective risk management; and (ii) adopt sufficient written policies and procedures for accounting and financial reporting. The remediation efforts set out above are largely dependent upon our securing additional financing to cover the costs of implementing the changes required. If we are unsuccessful in securing such funds, remediation efforts may be adversely effected in a material manner.

It should be noted that while our management believes our disclosure controls and procedures provide a reasonable level of assurance, they do not expect that our disclosure controls and procedures or internal controls will prevent all error and all fraud. A control system, no matter how well conceived or operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within our company have been detected. These inherent limitations include the realities that judgments in decision making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. The design of any system of internal control is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

There were no changes in our internal control over financial reporting during the three month period ended December 31, 2011 that have materially affected or are reasonably likely to materially affect, our internal control over financial reporting.


PART II - OTHER INFORMATION

ITEM 1A. RISK FACTORS.

Not Applicable.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

On April 20, 2011, the Company signed license purchase agreements to acquire one prospecting license comprising the Handeni Project. The total consideration was $113,250, of which $77,250 was paid on April 29, 2011 and $36,000 is due on receipt of license. On September 14 and September 20, 2011 the Company paid a finder’s fee of $30,000 in cash and issued 400,000 common shares with a fair value of $108,000. We issued these shares to one non-U.S. person (as that term is defined in Regulation S of the Securities Act of 1933) in an offshore transaction in which we relied on the registration exemption provided for in Regulation S and/or Section 4(2) of the Securities Act of 1933.

On April 20, 2011, the Company signed license purchase agreements to acquire one prospecting license comprising the Buhemba Project. The total consideration was $112,150, of which $89,650 was paid on April 29, 2011 and $22,500 is due on receipt of license. On September 14 and September 20, 2011 the Company paid a finder’s fee of $30,000 in cash and issued 400,000 common shares with a fair value of $108,000. We issued these shares to one non-U.S. person (as that term is defined in Regulation S of the Securities Act of 1933) in an offshore transaction in which we relied on the registration exemption provided for in Regulation S and/or Section 4(2) of the Securities Act of 1933.

On May 30, 2011, the Company signed prospecting license purchase agreements comprising the Handeni Project to acquire one prospecting license. The total consideration includes:

1)

paying $10,000 within 5 days after execution date. The payment was made on June 6, 2011;

   
2)

On September 14 and 20, 2011, the Company paid $3,000 in cash and issued 30,000 common shares with a fair value of $8,100. We issued these shares to one non-U.S. person (as that term is defined in Regulation S of the Securities Act of 1933) in an offshore transaction in which we relied on the registration exemption provided for in Regulation S and/or Section 4(2) of the Securities Act of 1933.

On September 20, 2011, the Company terminated this agreement.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not Applicable

ITEM 5. OTHER INFORMATION.

None.


ITEM 6. EXHIBITS

Exhibit  
Number Description
   
3.1

Articles of Incorporation (incorporated by reference from our Registration Statement on Form SB-2, filed on June 6, 2007)

   
3.2

Certificate of Amendment dated December 7, 2010 (incorporated by reference from our Current Report on Form 8-K dated December 10, 2010)

   
3.3

Amended and Restated Bylaws (incorporated by reference from our Current Report on Form 8-K filed on June 7, 2011)

   
4.1

Specimen Stock Certificate (incorporated by reference from our Registration Statement on Form SB-2 filed on June 6, 2007)

   
4.2

Form of Warrant Certificate for Offering Completed September 7, 2010 (incorporated by reference from our Quarterly Report on Form 10-Q filed on November 23, 2010)

 
10.1

Option Agreement with Geo Can Resources Company Limited (incorporated by reference from our Annual Report on Form 10-K filed on July 14, 2009)

 
10.2

Binding Letter Agreement with Kilimanjaro Mining Company Inc. (incorporated by reference from our Annual Report on Form 10-K filed on July 14, 2009)

 
10.3

Consulting Services Agreement with Stocks That Move (incorporated by reference from our Quarterly Report on Form 10-Q filed on November 23, 2009)

   
10.4 Consulting Agreement with Robert Lupo (incorporated by reference from our Quarterly Report on Form 10-Q filed on February 22, 2010)
   
10.5 Addendum to the Consulting Agreement with Robert Lupo (incorporated by reference from our Quarterly Report on Form 10-Q filed on February 22, 2010)
   
10.6

Finder’s Fee Agreement with Robert A. Young and the RAYA Group (incorporated by reference from our Annual Report on Form 10-K filed on July 14, 2019)

   
10.7 Termination of the Consulting Agreement with Robert Lupo (incorporated by reference from our Annual Report on Form 10-K filed on July 14, 2010)
   
10.8

Consulting Agreement with Clive Howard Matthew King (incorporated by reference from our Annual Report on Form 10-K filed on July 14, 2010)

 
10.9

Consulting Agreement dated October 7, 2010 between the Company and Misac Noubar Nabighian (incorporated by reference from our Current Report on Form 8-K filed on October 13, 2010)

 
10.10

2010 Stock Option Plan (incorporated by reference from our Current Report on Form 8-K filed on October 13, 2010)

 
10.11

Stock Exchange Agreement with Kilimanjaro Mining Company, Inc. and their selling shareholders (incorporated by reference from our Quarterly Report on Form 10-Q filed on November 23, 2009)

 
10.12

Form of Subscription Agreement for Offering Completed September 7, 2010(incorporated by reference from our Quarterly Report on Form 10-Q filed on November 23, 2010)

 
10.13

Amendment No. 1 to Consulting Agreement between the Company and Clive King dated effective November 11, 2010 (incorporated by reference from our Quarterly Report on Form 10-Q filed on November 23, 2010)

   
10.14

Form of Mineral Property Sales Agreement dated May 15, 2009, July 29, 2009, August 28, 2009 and November 19, 2009 between a director of the Company and the landowners listed below (collectively the “Landowners”) (incorporated by reference from our Quarterly Report on Form 10-Q filed on November 23, 2010):


  No Owners Name
  S01 Pius Joackim Game in Parenership with Mustafa Kaombwe and Msua Mkumbo
  S03 Mohamed Suleimani and Partners Plus Chombo, Alfred Joakim and Heri S. Mhula
  S04 Maswi Marwa In Partnership with Robert Malando, Andrew Julius Marando and Mathew Melania
  S05 John Bina Wambura in Partnership with Fabiano Lango
  S06 Elizabeth Shango
  S07 Athuman Chiboni in Partnership with Maswi Marwa and Robert Malando



Exhibit  
Number Description

  S08 Malando Maywili in Partnership with Charles Mchembe
  S09 Robert Malando
  S10 Raymond Athumani Munyawi
  S11 Jeremia K. Lulu in Partnership with Agnes Musa, Juma Shashu, Neema Safari, Neema Tungaraza, Safari Neema Tungaraza, Safari Meema and Simon Gidazada
  S12 Heri S. Mhula and partners Samweli Sumbuka, Plus Gam and Shambulingole
  S13 Limbu Magambo Nyoda and Partners Saba Joseph, Bakari Kahinda
  S14 Shambuli Sumbuka in Partnership with Limbu Gambo
  S15 Salama Mselemu
  S16 John Bina Wambura in Partnership with Bosco Sevelin Chaila; Plus Game; Saimon Jonga
  S17 John Bina Wambura in Partnership with Jumanne Mtemi; Anton Gidion; Bosco Sevelin Chaila; Plus Game; Saimon Jonga
  S18 Limbu Magambo in Partnership with Pous GamI and Shambuli Sumbuka
  S19 Lukas Mmary in Partnership with Henry Pajero, John Bina, Massanja Game, Mwajuma Joseph, Mwita Magita and Plus Game
  S20 Maswi Marwa In Partnership with Shagida malando; Marwa Marwa; Benidict Mitti and Fred Mgongo
  S21 Mustafa IDD Kaombwe
  S22 Mustafa IDD Kaombwe in Partnership with Mahega Malugoyi; Julias Kamana; Ramadhani Lyanga and Abas Mustafa
  S23 Ramadhani Mohamed Lyanga In partnership With Mustafa Kaombwe and Bethod Njega
  S24 Ales David Kajoro in partnership with Henry Ignas; Daud Peter and Julias Charles Rugiga
  S25 Joel Mazemle in Partnership with Christina Mazemle, Plus Chombo and Limbu Magambo Nyoda
  S26 Idd Ismail in Partnership with Bakari Abdi, Elizabeth U. Yohana, Emanuel Marco, Hamisi Ramadhan, Husein Hasan, Mnaya Hosea, and Sanane Msigalali

10.15

Form of Addendum No. 1 to Mineral Property Sales Agreement dated September 18, 2009 between a director of the Company and the Landowners (incorporated by reference from our Quarterly Report on Form 10-Q filed on November 23, 2010)

   
10.16

Form of Addendum No. 2 to Mineral Property Sales Agreement dated January 18, 2010 between a director of the Company and the Landowners (incorporated by reference from our Quarterly Report on Form 10-Q filed on November 23, 2010)

   
10.17

Form of Addendum No. 3 to Mineral Property Sales Agreement dated July 27, 2010 between a director of the Company and the Landowners (incorporated by reference from our Quarterly Report on Form 10- Q filed on November 23, 2010)

   
10.18

Mineral Financing Agreement between the Company and Ahmed Magoma dated October 19, 2009* (incorporated by reference from our Quarterly Report on Form 10-Q filed on November 23, 2010)

   
10.19

Property Purchase Agreement between Geo Can Resources Company Limited and Kilimanjaro Mining Company, Inc dated May 5, 2009(incorporated by reference from our Quarterly Report on Form 10-Q filed on November 23, 2010)

   
10.20

Amendment to Mineral Financing Agreement between the Company and Ahmed Magoma dated October 27, 2009 (incorporated by reference from our Quarterly Report on Form 10-Q filed on November 23, 2010)

   
10.21

Declaration of Trust of Geo Can Resources Company Limited dated July 23, 2009 (incorporated by reference from our Quarterly Report on Form 10-Q filed on November 23, 2010)


10.22 Form of Subscription Agreement for non US Subscribers (incorporated by reference from our Current Report on Form 8-K filed on March 11, 2011)
   
10.23 Form of Subscription Agreement for US Subscribers (incorporated by reference from our Current Report on Form 8-K filed on March 11, 2011)
   
10.24

Consulting Agreement dated April 26, 2011 between David Kalenuik and the Company (incorporated by reference from our Current Report on Form 8-K filed on May 2, 2011)

   
10.25

Consulting Agreement dated April 26, 2011 between Roger Newell and the Company (incorporated by reference from our Current Report on Form 8-K filed on May 2, 2011)

   
10.26

Employment Agreement dated April 26, 2011 between Heidi Kalenuik and the Company (incorporated by reference from our Current Report on Form 8-K filed on May 2, 2011)

   
10.27 Employment Agreement dated April 26, 2011 between Ming Zhu and the Company (incorporated by reference from our Current Report on Form 8-K filed on May 2, 2011)
   
10.28 Geita Option Agreement dated May 6, 2011 between Otterburn Ventures Inc. and the Company (incorporated by reference from our Current Report on Form 8-K filed on May 12, 2011)
   
10.29 Kalemela Option Agreement dated May 6, 2011 between Otterburn Ventures Inc. and the Company (incorporated by reference from our Current Report on Form 8-K filed on May 12, 2011)
   
10.30 North Mara Option Agreement dated May 6, 2011 between Otterburn Ventures Inc. and the Company (incorporated by reference from our Current Report on Form 8-K filed on May 12, 2011)
   
10.31 Singida Option Agreement dated May 6, 2011 among Otterburn Ventures Inc., the Company and Ahmed Abubakar Magoma (incorporated by reference from our Current Report on Form 8-K filed on May 12, 2011)



Exhibit  
Number Description
   
14.1 Code of Ethics (incorporated by reference from our Annual Report on Form 10-K filed on June 26, 2008)
 
31.1* Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
   
31.2* Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
   
32.1* Certification of Chief Executive Officer pursuant Section 906 Certifications under Sarbanes-Oxley Act of 2002
 
32.2* Certification of Chief Financial Officer pursuant Section 906 Certifications under Sarbanes-Oxley Act of 2002
 
99.2 Audit Committee Charter (incorporated by reference from our Annual Report on Form 10-K filed on June 26, 2008)
 
99.3 Disclosure Committee Charter (incorporated by reference from our Annual Report on Form 10-K filed on June 26, 2008)
 
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.


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.

LAKE VICTORIA MINING COMPANY, INC.

By /s/ David Kalenuik  
  David Kalenuik  
  President, and Chief Executive Officer  
  (Principal Executive Officer)  
     
Date: February 14, 2011  
     
     
     
By /s/ Ming Zhu  
  Ming Zhu  
  Chief Financial Officer  
  (Principal Accounting Officer and Principal  
  Financial Officer)  
     
Date: February 14, 2011