Use of Estimates
The preparation of financial
statements in conformity with accounting principles generally accepted in the United States of America requires management to make
certain estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements,
and reported amounts of revenue and expenses during the reporting period. Actual results could differ materially from those estimates.
Significant estimates made by management are, among others, reliability of long-lived assets, deferred taxes and stock option valuation.
Cash and equivalents
Cash and equivalents include
investments with initial maturities of three months or less.
Fair Value of Financial Instruments
The Financial Accounting Standards Board issued Statement of Financial Accounting Standards (SFAS) No. 107, Disclosures
About Fair Value of Financial Instruments. SFAS No. 107 requires disclosure of fair value information about financial
instruments when it is practicable to estimate that value. The carrying amounts of the Companys financial instruments
as of July 31, 2012 approximate their respective fair values, because of the short-term nature of these instruments. Such instruments
normally consist of cash, accounts payable and prepaid expenses.
Effect of Recent Accounting Pronouncements
The Company reviews new accounting
standards as issued. No new standards had any material effect on these unaudited financial statements. The accounting pronouncements
issued subsequent to the date of these unaudited financial statements that were considered significant by management were evaluated
for the potential effect on these unaudited financial statements. Management does not believe any of the subsequent pronouncements
will have a material effect on these unaudited financial statements as presented and does not anticipate the need for any future
restatement of these unaudited financial statements because of the retro-active application of any accounting pronouncements issued
subsequent to June 30, 2012 through the date these unaudited financial statements were issued.
The Companys financial
statements are prepared using accounting principles generally accepted in the United States of America applicable to a going concern,
which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not
yet established an ongoing source of revenues sufficient to cover its operating costs and to allow it to continue as a going concern.
The Company experienced a loss of $227,730 for the three months ended July 31, 2012 and $1,363,891 since inception, July 8, 2008.
The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating
losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease development
The ability of the Company to
continue as a going concern is dependent upon its ability to successfully accomplish its plans to generate revenue from mining
claims. The accompanying financial statements do not include any adjustments relating to the recoverability and classification
of recorded asset amounts or the amount and classifications or liabilities or other adjustments that might be necessary should
the Company be unable to continue as a going concern.
Exploration Stage Company
The Company is considered an
exploration-stage company, with limited operating revenues during the periods presented, as defined by Statement of Financial Accounting
Standards (SFAS) No. 7. SFAS No. 7 requires companies to report their operations, shareholders deficit and cash flows
since inception through the date that revenues are generated from managements intended operations, among other things. Management
has defined inception as July 8, 2008. Since inception, the Company has incurred an operating loss of $1,363,891. The Companys
working capital has been generated through the sales of common stock and limited revenue from crude oil production. Management
has provided financial data since July 8, 2008 in the financial statements, as a means to provide readers of the Companys
financial information to make informed investment decisions.