Loans and Borrowings
In March and July 2007, the Company received
loan proceeds of $240,000 and $500,000 respectively from an unrelated third party. These loans were unsecured bearing interest
at 8% per annum, with no fixed repayment date, but the understanding with the lender is that the loans will be repaid from the
proceeds of future equity financings and/or the repayment of amounts lent to Minanca. On December 20, 2010, principal of $46,892
and interest of $15,751 was assigned to this third party (Note 4d). In December 2010, $267,072 of this loan as well as $200,310
of accrued interest on this loan was settled by the issue of 9,347,640 shares. During the period ending May 31, 2012 this loan
was settled in full for $560,000, resulting in a gain on extinguishment of $10,426, which is included within interest income and
other for the three and nine months ended May 31, 2012.
In January 2011, the Company received
loan proceeds of $50,000, from an unrelated third party. This loan is unsecured, has no stated interest rate. This amount was settled
for issuance of 2,500,000 shares of commons stock in February 2012 (Note 3).