Attached files

file filename
EXCEL - IDEA: XBRL DOCUMENT - INFRASTRUCTURE MATERIALS CORP.Financial_Report.xls
XML - IDEA: XBRL DOCUMENT - INFRASTRUCTURE MATERIALS CORP.R9.htm
XML - IDEA: XBRL DOCUMENT - INFRASTRUCTURE MATERIALS CORP.R2.htm
XML - IDEA: XBRL DOCUMENT - INFRASTRUCTURE MATERIALS CORP.R3.htm
XML - IDEA: XBRL DOCUMENT - INFRASTRUCTURE MATERIALS CORP.R8.htm
XML - IDEA: XBRL DOCUMENT - INFRASTRUCTURE MATERIALS CORP.R1.htm
XML - IDEA: XBRL DOCUMENT - INFRASTRUCTURE MATERIALS CORP.R7.htm
XML - IDEA: XBRL DOCUMENT - INFRASTRUCTURE MATERIALS CORP.R6.htm
XML - IDEA: XBRL DOCUMENT - INFRASTRUCTURE MATERIALS CORP.R5.htm
XML - IDEA: XBRL DOCUMENT - INFRASTRUCTURE MATERIALS CORP.R4.htm
XML - IDEA: XBRL DOCUMENT - INFRASTRUCTURE MATERIALS CORP.R27.htm
XML - IDEA: XBRL DOCUMENT - INFRASTRUCTURE MATERIALS CORP.R22.htm
XML - IDEA: XBRL DOCUMENT - INFRASTRUCTURE MATERIALS CORP.R16.htm
XML - IDEA: XBRL DOCUMENT - INFRASTRUCTURE MATERIALS CORP.R15.htm
XML - IDEA: XBRL DOCUMENT - INFRASTRUCTURE MATERIALS CORP.R18.htm
XML - IDEA: XBRL DOCUMENT - INFRASTRUCTURE MATERIALS CORP.R19.htm
XML - IDEA: XBRL DOCUMENT - INFRASTRUCTURE MATERIALS CORP.R10.htm
XML - IDEA: XBRL DOCUMENT - INFRASTRUCTURE MATERIALS CORP.R11.htm
XML - IDEA: XBRL DOCUMENT - INFRASTRUCTURE MATERIALS CORP.R26.htm
XML - IDEA: XBRL DOCUMENT - INFRASTRUCTURE MATERIALS CORP.R23.htm
XML - IDEA: XBRL DOCUMENT - INFRASTRUCTURE MATERIALS CORP.R12.htm
XML - IDEA: XBRL DOCUMENT - INFRASTRUCTURE MATERIALS CORP.R13.htm
XML - IDEA: XBRL DOCUMENT - INFRASTRUCTURE MATERIALS CORP.R25.htm
XML - IDEA: XBRL DOCUMENT - INFRASTRUCTURE MATERIALS CORP.R20.htm
XML - IDEA: XBRL DOCUMENT - INFRASTRUCTURE MATERIALS CORP.R14.htm
XML - IDEA: XBRL DOCUMENT - INFRASTRUCTURE MATERIALS CORP.R21.htm
XML - IDEA: XBRL DOCUMENT - INFRASTRUCTURE MATERIALS CORP.R24.htm
XML - IDEA: XBRL DOCUMENT - INFRASTRUCTURE MATERIALS CORP.R17.htm
EX-31.2 - EXHIBIT 31.2 - INFRASTRUCTURE MATERIALS CORP.exhibit31-2.htm
EX-31.1 - EXHIBIT 31.1 - INFRASTRUCTURE MATERIALS CORP.exhibit31-1.htm
EX-21.1 - EXHIBIT 21.1 - INFRASTRUCTURE MATERIALS CORP.exhibit21-1.htm
EX-23.1 - EXHIBIT 23.1 - INFRASTRUCTURE MATERIALS CORP.exhibit23-1.htm
EX-32.1 - EXHIBIT 32.1 - INFRASTRUCTURE MATERIALS CORP.exhibit32-1.htm

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

(Mark one)

[X] Annual report under Section 13 or 15(d) of the Securities Exchange Act of 1934

For the Fiscal Year June 30, 2012, or

[   ] Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

000-52641
Commission File Number

INFRASTRUCTURE MATERIALS CORP.
(Exact name of registrant as specified in its charter)

Delaware 98-0492752
(State or other jurisdiction of incorporation or (I.R.S. Employer Identification Number)
organization)  

1135 Terminal Way, Suite 207B
Reno, NV 89502 USA
(Address of Principal Executive Offices) (Zip Code)

775-322-4448
(Registrant’s telephone number, including area code)

With a copy to:
Jonathan H. Gardner
Kavinoky Cook LLP
726 Exchange St., Suite 800
Buffalo, NY 14210

Securities registered under Section 12(b) of the Exchange Act: None

Securities registered under Section 12(g) of the Exchange Act:

Common Stock, par value $0.0001 per share

Indicate by check mark if the registrant is a well-known seasoned issuer as defined by Rule 405 of the Securities Act

Yes [   ]          No [X]

Indicate by check mark if the registrant is not required to file reports pursuant to Rule 13 or Section 15(d) of the Act

Yes [   ]          No [X]

Indicate by check mark whether the issuer (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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 [   ]

1


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 Rule 405 of Regulation S-T (s 220.405 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 [   ]

Check if disclosure of delinquent filers in response to Item 405 of Regulation S-K is not contained in this form, and no disclosure will be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [   ]

Indicate by check mark whether the registrant is a large accelerated filer, a non-accelerated filer or a smaller reporter.

  Large accelerated filer [   ] Accelerated filer [   ]
  Non-accelerated filer [   ] Smaller reporting company [X]

Indicate by check mark whether registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

[   ] Yes          [X] No

The issuer had no revenue during the year ended June 30, 2012.

The aggregate market value of the Common Stock held by non-affiliates of the issuer, as of December 31, 2011, was approximately $4,025,627 based upon a share valuation of $0.085 per share. This share valuation is based upon the closing price of the Company’s shares as of December 28, 2011 (the date of the last sale of the Company’s shares closest to the end of the Company’s second fiscal quarter). For purposes of this disclosure, shares of Common Stock held by persons who the issuer believes beneficially own more than 5% of the outstanding shares of Common Stock and shares held by officers and directors of the issuer have been excluded because such persons may be deemed to be affiliates of the issuer.

As of August 31, 2012, 98,935,486 shares of the issuer’s Common Stock were outstanding.

Transitional Small Business Disclosure

Yes [   ]          No [X]

2


TABLE OF CONTENTS

 

  Part I 

Page
Item 1. Business 4
Item 1A. Risk Factors 5
Item 2. Properties 8
Item 3. Legal Proceedings 34
Item 4. Mine Safety Disclosure 34
 Part II 
Item 5. Market For Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 35
Item 6. Selected Financial Data 38
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 39
Item 7A. Quantitative and Qualitative Disclosures About Market Risk 49
Item 8. Financial Statements and Supplementary Data 49
Item 9. Change in and Disagreements With Accountants on Accounting and Financial Disclosure 49
Item 9A. Controls and Procedures 49
Item 9B. Other Information 51
 Part III 
Item 10. Directors, Executive Officers and Corporate Governance 52
Item 11. Executive Compensation 56
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 59
Item 13. Certain Relationships and Related Transactions 61
Item 14. Principal Accountant Fees and Services 61
 PART IV 
Item 15. Exhibits, Financial Statement Schedules 62

3


PART I

This Annual Report on Form 10-K contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which include, without limitation, statements about our explorations, development, efforts to raise capital, expected financial performance and other aspects of our business identified in this Annual Report, as well as other reports that we file from time to time with the Securities and Exchange Commission. Any statements about our business, financial results, financial condition and operations contained in this Annual Report that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the foregoing, the words “believes,” “anticipates,” “expects,” “intends,” “projects,” or similar expressions are intended to identify forward-looking statements. Our actual results could differ materially from those expressed or implied by these forward-looking statements as a result of various factors, including the risk factors described in the section entitled, RISK FACTORS and elsewhere in this report. We undertake no obligation to update publicly any forward-looking statements for any reason, except as required by law, even as new information becomes available or other events occur in the future.

Item 1. Business.

Our name is Infrastructure Materials Corp. and we sometimes refer to ourselves in this report as “Infrastructure Materials” or “Infrastructure”, the “Company” or as “we,” “our,” or “us.” We are engaged in the exploration and development, if warranted, of cement grade limestone properties located in the states of Nevada and Arizona and the Canadian Province of Manitoba, and of silver/base metal properties located in Nevada. As of the date of this report, we hold 1,237 unpatented lode mineral claims and six mill site claims on land owned or controlled by the United States Department of Interior’s Bureau of Land Management (“BLM”). The Company also holds mineral rights or surface rights for 4,940 net acres and holds interests in 18 patented claims. Our claims cover 25 projects in Nevada. We have six exploration permits in effect with the State of Arizona covering one project located near the municipality of Seligman, Arizona. We also own a milling facility located on six BLM mill site claims in Nevada. The Company also holds 35 quarry leases in south-central Manitoba, Canada. Our efforts going forward through our current fiscal year ending June 30, 2013, include further study and accumulation of information about our Blue Nose Project located in Lincoln County, Nevada. We will also continue the evaluation of our silver/base metal projects. While exploratory drilling programs are being developed, we will also consider joint ventures with third parties to further explore and develop, if warranted, those projects.

Infrastructure has three wholly owned subsidiaries. They are (a) Infrastructure Materials Corp US, a Nevada corporation (“IMC US”) that holds title to our limestone related claims, permits and leases in the United States, (b) Silver Reserve Corp., a Delaware corporation (“Silver Reserve” or “SRC”) that holds title to our precious metal claims and leases, and (c) Canadian Infrastructure Corp, an Alberta, Canada corporation (“CIC”). In November 2008, the Company re-focused its attention and resources on the acquisition and exploration of limestone mineral claims. Prior to that date, the Company was principally focused on the precious metal properties now held by Silver Reserve. The following diagram illustrates our corporate structure.

4


Our head office is at 1135 Terminal Way, Suite 207B, Reno, Nevada 89502 and our administrative office is also at this address. Our telephone number is 775-322-4448. We have three employees, primarily using consultants and contract personnel to perform various professional and technical services, including but not limited to management functions, drilling, construction, site surveillance, environmental assessment, and field and on-site production operating services.

Item 1A. Risk Factors

The following are certain risk factors that could affect our business, financial condition, operating results and cash flows. These risk factors should be considered in connection with evaluating the forward-looking statements because they could cause actual results to differ materially from those expressed in any forward-looking statement. The risk factors highlighted below are not the only ones we face. If any of these events actually occur, our business, financial condition, operating results or cash flows could be negatively affected.

1.

THE COMPANY HAS NO SOURCE OF OPERATING REVENUE AND EXPECTS TO INCUR SIGNIFICANT EXPENSES BEFORE ESTABLISHING AN OPERATING COMPANY, IF IT IS ABLE TO ESTABLISH AN OPERATING COMPANY AT ALL.

     

Currently, the Company has no source of revenue, limited working capital and no commitments to obtain additional financing. The Company will require additional working capital to carry out its exploration programs and to continue its business. The Company has no operating history upon which an evaluation of its future success or failure can be made. The ability to achieve and maintain profitability and positive cash flow is dependent upon:

     
  •  
  • further exploration of our properties and the results of that exploration.

         
  •  
  • raising the capital necessary to conduct this exploration and preserve the Company’s Properties.

         
  •  
  • raising capital to develop our properties, establish a mining operation, and operate this mine in a profitable manner if any of these activities are warranted by the results of our exploration programs and a feasibility study.

         

    Because the Company has no operating revenue, it expects to incur operating losses in future periods as it continues to spend funds to explore its properties. Failure to raise the necessary capital to continue exploration could cause the Company to go out of business.

    5



    2.

    WE WILL NEED TO RAISE ADDITIONAL FINANCING TO COMPLETE FURTHER EXPLORATION

       

    We will require significant additional financing in order to continue our exploration activities and our assessment of the commercial viability of our properties. There can be no assurance that we will be successful in our efforts to raise these require funds, or on terms satisfactory to us. The continued exploration of current and future mineral properties and the development of our business will depend upon our ability to establish the commercial viability of our properties and to ultimately develop cash flow from operations and reach profitable operations. We currently are in an exploration stage and we have no revenue from operations and we are experiencing significant cash outflow from operating activities. If we are unable to obtain additional financing, we will not be able to continue our exploration activities and our assessment of the commercial viability of our precious metal and mineral properties.

       
    3. WE HAVE RECEIVED A “GOING CONCERN” COMMENT FROM OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM, WHICH MAY NEGATIVELY IMPACT OUR BUSINESS.
       
      Due to the fact that we are an exploration stage company and have no established source of revenues, the report from Schwartz Levitsky Feldman llp, our independent registered public accounting firm, regarding our consolidated financial statements for the fiscal year ended June 30, 2012 includes an explanatory paragraph stating that the financial statements were prepared assuming we will continue as a going concern,. The existence of the “going concern” comment in our auditor’s report may make it more difficult for us to obtain additional financing. In the event that we are unable to raise additional capital, as to which there can be no assurance, we may not be able to continue our operations.
       
    4.

    WE HAVE NO RESERVES AND WE MAY FIND THAT OUR PROPERTIES ARE NOT COMMERCIALLY VIABLE

       

    Our properties do not contain reserves in accordance with the definitions adopted by the Securities and Exchange Commission, and there is no assurance that any exploration programs that we undertake will establish reserves. All of our mineral properties are in the exploration stage as opposed to the development stage and have no known body of economic mineralization. The known mineralization at these projects has not yet been determined, and may never be determined to be economic. We plan to conduct further exploration activities on our properties, which future exploration may include the completion of feasibility studies necessary to evaluate whether a commercial mineable mineral exists on any of our properties. There is a substantial risk that these exploration activities will not result in discoveries of commercially recoverable quantities of minerals. Any determination that our properties contain commercially recoverable quantities of minerals may not be reached until such time that final comprehensive feasibility studies have been concluded that establish that a potential mine is likely to be economic. There is a substantial risk that any preliminary or final feasibility studies carried out by us will not result in a positive determination that our mineral properties can be commercially developed.

       
    5.

    WE HAVE A HISTORY OF OPERATING LOSSES AND THERE CAN BE NO ASSURANCES WE WILL BE PROFITABLE IN THE FUTURE.

       

    We have a history of operating losses, expect to continue to incur losses, and may never be profitable. Further, we have been dependent on sales of our equity securities and debt financing to meet our cash requirements. We have incurred losses totalling $20,820,817 from inception to June 30, 2012, and incurred losses of $1,362,040 during the fiscal year ended June 30, 2012. Further, we do not expect positive cash flow from operations in the near term. There is no assurance that actual cash requirements will not exceed our estimates. In particular, additional capital may be required in the event that: (i) the costs to acquire additional mineral exploration claims are more than we currently anticipate; or (ii) exploration and or future potential mining costs for additional claims increase beyond our expectations.

       
    6.

    THE RISKS ASSOCIATED WITH EXPLORATION COULD CAUSE PERSONAL INJURY OR DEATH, ENVIRONMENTAL DAMAGE AND POSSIBLE LEGAL LIABILITY.

       

    We are not currently engaged in mining operations because we are in the exploration phase. However, our exploration operations could expose the Company to liability for personal injury or death, property damage or environmental damage. Although we carry property and liability insurance, cost effective insurance contains exclusions and limitations on coverage and may be unavailable in some circumstances.

    6



    7.

    BECAUSE OF THE UNIQUE DIFFICULTIES AND UNCERTAINTIES INHERENT IN MINERAL EXPLORATION VENTURES AND CURRENT DETERIORATION IN EQUITY MARKETS, WE FACE A HIGH RISK OF BUSINESS FAILURE.

       

    Investors should be aware of the difficulties normally encountered by new mineral exploration companies and the high rate of failure of such enterprises. Our prospects are further complicated by a pronounced deterioration in equity markets and constriction in equity capital available to finance and maintain our exploration activities. Our 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 and the difficult economy and market volatility that we are experiencing. Moreover, most exploration projects do not result in the discovery of commercial mineable deposits.

       
    8.

    OUR BUSINESS IS AFFECTED BY CHANGES IN COMMODITY PRICES.

       

    Our ability to raise capital and explore our properties and the future profitability of those operations is directly related to the market price of certain minerals such as silver and limestone as well as the price and availability of cement. The Company is negatively affected by the current decline in commodity prices.

       
    9.

    THE COMPANY COULD ENCOUNTER REGULATORY AND PERMITTING DELAYS.

       

    The Company could face delays in obtaining permits to operate on the property covered by the claims. Such delays could jeopardize financing, if any is available, which could result in having to delay or abandon work on some or all of the properties.

       
    10.

    THERE ARE PENNY STOCK SECURITIES LAW CONSIDERATIONS THAT COULD LIMIT YOUR ABILITY TO SELL YOUR SHARES.

       

    Our common stock is considered a "penny stock" and the sale of our stock by you will be subject to the "penny stock rules" of the Securities and Exchange Commission. The penny stock rules require broker-dealers to take steps before making any penny stock trades in customer accounts. As a result, the market for our shares could be illiquid and there could be delays in the trading of our stock which would negatively affect your ability to sell your shares and could negatively affect the trading price of your shares.

       
    11.

    CURRENT LEVELS OF MARKET VOLATILITY COULD HAVE ADVERSE IMPACTS

       

    The capital and credit markets have been experiencing volatility and disruption. If the current levels of market disruption and volatility continue or worsen, there can be no assurance that the Company will not experience adverse effects, which may be material. These effects may include, but are not limited to, difficulties in raising additional capital or debt and a smaller pool of investors and funding sources. There is thus no assurance the Company will have access to the equity capital markets to obtain financing when necessary or desirable.

       
    12.

    WE DO NOT INTEND TO PAY DIVIDENDS IN THE FORESEEABLE FUTURE.

       

    We have never declared or paid a dividend on our common stock. We intend to retain earnings, if any, for use in the operation and expansion of our business and, therefore, do not anticipate paying any dividends in the foreseeable future.

    7


    Item 2. Properties

    Description of Property held by Infrastructure Materials Corp US (“IMC US”), a wholly owned subsidiary of Infrastructure Materials Corp.

    The following claim groups and leased mineral rights are described below: The Blue Nose Claim Group, Morgan Hill Claim Group, the Rock Hill Claim Group, the Buffalo Mountain Claim Group, the MM Claim Group, the Royale Claim Group, the Wood Hills Claim Group, the Pequop Claim Group, the Ragged Top Claim Group, the Lime Mountain Claim Group, Jumbled Mountain Claim Group, the Burnt Springs Claim Group and the Blye Canyon Project. The Morgan Hill Claim Group (other than the leased properties identified below), the Rock Hill Claim Group, and the Buffalo Mountain Claim Group were acquired as of November 7, 2008 when the Company purchased its now wholly owned subsidiary, IMC US.

    Property Locations and Descriptions

    The following is a map highlighting the counties in the States of Nevada and Arizona where the properties held by IMC US are located.

    8


    Blue Nose Claim Group

    The Blue Nose Claim Group consists of 255 unpatented, lode mineral claims located in Lincoln County, Nevada, west of Tule Desert, along the south edge of the Clover Mountains. The claim group is 8 miles east of the Union Pacific rail line in the Meadow Valley Wash. Access is via the graded Carp and Bunker Peak roads. The claim group covers approximately 5,268 acres of land managed by the BLM and was acquired as a result of IMC US locating and staking the claims.

    On July 12, 2010, the BLM approved the Company’s Plan of Operations for the Blue Nose Claim Group. On July 14, 2010, the Company posted a reclamation bond in the amount of $240,805 with the BLM in connection with the Blue Nose Claim Group. The reclamation bond backs the Company’s obligations under the Plan of Operations to restore the site and reclaim disturbance (if any) caused by the Company’s activities on the Blue Nose Claim Group. Under the Plan of Operations, the Company drilled 28 reverse circulation holes to depths ranging between 150 and 900 feet for a total of approximately 17,000 feet. When combined with three earlier drill programs, a total of 63 reverse circulation holes approximately 30,000 feet have been completed at the Blue Nose Claim Group.

    The Company engaged Mine Development Associates of Reno, Nevada (“MDA”) to assess the data from these drill programs. In a report dated January 5, 2011, MDA stated that two basic limestone units were defined by the drilling. The Lower White limestone unit appeared to contain few impurities and contains relatively high-grade calcium oxide (CaO). The Lower White unit is overlain by another limestone unit that is generally lower grade and contains more impurities. MDA’s report concluded that while further study is required to better define the extent and quality of the units, the Blue Nose Claim Group is estimated to contain significant levels of fairly high-grade limestone. During the fiscal year ending June 30, 2013, the Company intends to further study and accumulate information about the Blue Nose Claim Group.

    The 255 Blue Nose lode mineral claims are identified in the BLM records by Nevada Mining Claim numbers: NMC 1002031 through 1002186, 1002188 through 1002206, 1002208 through 1002226, 1002228 through 1002246, 1002248 through 1002266, 1002268 through 1002286 and 1014085 through 1014088.

    IMC US is the registered holder of this claim group. There are no underlying agreements or royalty interests of third parties that pertain to the above claims. IMC US will remain as the record holder of the claims as long as it continues to make all payments required by law to maintain the claims. These payments include an annual fee of $140 per claim to the BLM. In addition, a claim holder is required to pay annual County filing fees in most counties within Nevada.

    THERE ARE NO KNOWN “RESERVES” IN THIS CLAIM GROUP. OUR OPERATIONS WITH RESPECT TO THIS CLAIM GROUP ARE ENTIRELY EXPLORATORY.

    9


    Morgan Hill Claim Group

    The Morgan Hill Claim Group consists of 130 unpatented, lode mineral claims located in Elko County, Nevada, approximately 20 miles west of the town of Wells, Nevada. The claims are situated about five miles north of Interstate 80 and the Union-Pacific rail line. The property is accessed via the I80 River Ranch Exit. The Morgan Hill claims cover approximately 2,686 acres of land managed by the BLM. The Morgan Hill claims cover a northeast trending package of sediments which include a block of favorable massive limestone that has a 2.5 mile strike length. This limestone exceeds 250 feet in thickness. The claim area contains very significant amounts of fine grained limestone within the Devonian Devil’s Gate and Nevada Formations. The unit thickness appears to range up to 500 feet and has varying amounts of interbedded magnesium oxide. There is adjacent sandstone for a silica supply required for cement. Morgan Hill has topography conducive to open pit mining. Preliminary tonnage estimates are positive with little to no initial strip ratio. Area topography allows access to drill areas with a track mounted drill rig. The property lies within 5 miles of the railhead. It is believed to be situated to competitively reach markets in Salt Lake City, Reno, Southern Idaho and Northern California. We have completed a 24-hole drill program on the project identifying three separate cement grade limestone zones of indeterminate thickness. Further drilling will be required to verify the thickness and continuity of the cement and high calcium zones.

    The 130 Morgan Hill lode mineral claims are identified by number as Nevada Mining Claims (“NMC”) in the BLM records as follows:

    NMC 989047 through 989130,
    NMC 997410 through 997438, and
    NMC 1006464 through 1006480

    IMC US is the registered holder of this claim group. There are no underlying agreements or royalty interests of third parties that pertain to the Morgan Hill claims. IMC US will remain as the record holder of the claims as long as it continues to make all payments required by law to maintain the claims. These payments include an annual fee to the BLM of $140 per claim. In addition, a claim holder is required to pay annual County filing fees in most counties within Nevada.

    Included in the Morgan Hill Claim Group are three groups of mineral rights known as: (a) the Perdriau Mineral Rights, (b) the Hammond Mineral and Surface Rights and (c) the Earl Edgar Mineral Trust Mineral Rights.

    The Perdriau Mineral Rights

    On November 30, 2009 IMC US entered into a Mineral Rights Agreement with Perdriau Investment Corp. (“Perdriau”) to purchase 50% of the mineral rights, including all easements, rights of way and appurtenant rights of any type that run with the mineral rights located in the section of Elko County, Nevada identified below (the “Perdriau Property”). The purchase price was $10 per net acre. IMC US purchased 340 net acres for a total purchase price of $3,400. Perdriau will be entitled to receive a royalty of $0.25 per ton for material mined and removed from the Perdriau Property. Material mined and stored on the Perdriau Property or adjacent property for reclamation purposes will not be subject to any royalty. Material removed from the Perdriau Property for the purposes of testing or bulk sampling, provided it does not exceed 50,000 tons, will also not be subject to any royalty. The royalty will be calculated and paid within 45 days after the end of each calendar quarter.

    The following description of the Perdriau Property is based upon reference points used in the Public Land Survey System (the “PLSS”) that is maintained by the BLM. The Perdriau Property is located on The National Map at T37N, R58E Elko County, Nevada in the following sections:

    10



    Section 9 SW ¼ 80 acres
    Section 15 W1/2 W1/2 80 acres
    Section 19 SE ¼ 80 acres
    Section 21 N1/2 NE1/4 20 acres
    Section 21 SW ¼ 80 acres
         
           Total Net acres 340 acres

    Hammond Surface Rights Lease and Mineral Rights Agreement

    As of January 15, 2010, the Company entered into a Property Lease Agreement with Eugene M. Hammond (the “Hammond Lease”) for surface rights on 80 acres in Elko County, Nevada described below (the “Hammond Surface Rights”). The term of the Hammond Lease is five years and the annual rent is $500. The lessee is responsible for the payment of all real estate taxes on the Hammond Surface Rights. During the term of the Hammond Lease, the lessee has the exclusive right to conduct exploration and development work on the Hammond Surface Rights. The results of all drilling and exploration are of the property of the lessee. The lessee is responsible for any environmental damage caused by the lessee and any reclamation costs required as a result of drilling and testing. The lessee has an option to purchase the property covered by the Hammond Lease for $15,000, less the amount paid in rent during the term of the Hammond Lease. The Hammond Surface Rights are located at the following PLSS coordinates: T37N, R58E, Section 17, S ½ SE ¼, Elko County, Nevada.

    Also as of January 15, 2010, IMC US entered into a Mineral Rights Agreement with Eugene M. Hammond (the “Hammond Mineral Rights Agreement”) pursuant to which the Company purchased a 25% interest in any and all minerals extracted from the 160 acres covered by the Hammond Mineral Rights Agreement, as described below (the “Hammond Mineral Rights Property”). The purchase price was $400. In addition, the seller is entitled to receive a royalty of $0.125 per ton on material mined and removed from the Hammond Mineral Rights Property. The Hammond Mineral Rights Agreement does not cover petroleum. The Hammond Mineral Rights Property is located at the following PLSS coordinates: T37N, R58E, Section 17, SE ¼, Elko County, Nevada.

    Earl Edgar Mineral Trust Mineral Rights

    On December 8, 2008 IMC US entered into a Mineral Rights Lease Agreement (the “Edgar Lease Agreement”) with the Earl Edgar Mineral Trust (the “Edgar”) to lease certain mineral rights in Elko County, Nevada described below (the “Edgar Property”). The term of the Edgar Lease Agreement is ten years and will automatically renew on the same terms and conditions for additional ten-year periods, provided the lessee is conducting exploration, development or mining either on the surface or underground at the property. The rent is to be paid each year on January 1st. $1.00 per net acre was paid upon execution of the Edgar Lease Agreement. On January 1 of each year commencing in 2010 and extending for so long as the Edgar Lease Agreement is in effect, the lessee is obligated to make the following payments:

      2010 $1.00 per net acre
      2011 $2.00 per net acre
      2012 $2.00 per net acre
      2013 $3.00 per net acre
      2014 $3.00 per net acre
      2015 $4.00 per net acre
      2016 $4.00 per net acre
      2017     $5.00 per net acre in each year for the duration of the Edgar Lease Agreement

    The Edgar Lease Agreement covers 100% of the mineral rights on 1,120 acres of the Edgar Property (“Property A”) and 50% of the mineral rights on 6,720 acres of the Edgar Property (“Property B”). Edgar is entitled to receive a royalty of $0.50 per ton for material mined and removed from Property A and $0.25 per ton for material mined and removed from Property B during the term of the Edgar Lease Agreement and any renewal thereof.

    11


    On April 9, 2009 the Company and Edgar entered into an Amendment to the Edgar Lease Agreement (the “Amendment”), effective as of December 8, 2008. The Amendment provides for Standard Steam LLC to carry out exploration for geothermal energy sources on the Edgar Property after obtaining the written consent of the Company. The Amendment also provides for other cooperation with Standard Steam LLC regarding mineral rights on Property B of the Edgar Property.

    Property A of the Edgar Property is located at the following PLSS coordinates: T37N, R58E Elko County, NV in the following sections:

    Section 3 W ¼ 320 acres
    Section 9 SE ¼ 160 acres
    Section 15 E ½ W ½ 160 acres
    Section 21 NW ¼  
      S ½ NE ¼ 240 acres
    Section 23 S ½ NW ¼  
      SW ¼ 240 acres
           Total Net acres   1120 acres

    Property B of the Edgar Property is located at the following PLSS coordinates in Elko County, NV in the following townships, ranges and sections:

    T37N, R58E    
    Section 3 E ½ 320 acres
    Section 9 SW ¼ 160 acres
    Section 15 W ½ W ½  
      E ½ 480 acres
    Section 17 all 640 acres
    Section 19 SE ¼ 160 acres
    Section 21 S ½  
      N ½ NE ¼ 400 acres
    Section 23 N ½ NW ¼  
      E ½ 400 acres
    Section 27 All 640 acres
    Section 29 All 640 acres
    Section 31 All 640 acres
    Section 33 All 640 acres
    Section 35 All 640 acres
         
         
    T 36 N, R 58 E    
    Section 1 N ½ 640 acres
         
    T 37 N, R 59 E    
    Section 31 All 640 acres
           Total Net Acres   3360 acres

    THERE ARE NO KNOWN “RESERVES” IN THIS CLAIM GROUP. OUR OPERATIONS WITH RESPECT TO THIS CLAIM GROUP ARE ENTIRELY EXPLORATORY.

    12


    Rock Hill Claim Group

    The Rock Hill Claim Group consists of 7 unpatented, lode mineral claims located in Pershing County, Nevada, approximately 12 miles southeast of Mill City, Nevada. Access is along unpaved roads about 25 miles southwest of Winnemucca, Nevada. The Rock Hill claims cover approximately 145 acres. The property geology indicates two basic units most likely in the rocks of the Natchez Pass Formation. Each of the two limestone units is up to 300-400 feet thick with siltstone/sandstone interbeds of variable thickness. The property is approximately 12-14 miles from the current railhead in the Dunn Glenn area. Due to the topography, access to this project would be difficult.

    The 7 Rock Hill lode mineral claims are identified by Nevada Mining Claim number in the BLM records as follows:

    NMC 1003539, 1003541, 1003543, 1003545, 1003575, 1003577 and 1003579

    Subsequent to the period covered by this report, the Company elected to drop all seven of the claims in this claim group.

    THERE ARE NO KNOWN “RESERVES” IN THIS CLAIM GROUP. OUR OPERATIONS WITH RESPECT TO THIS CLAIM GROUP ARE ENTIRELY EXPLORATORY.

    Buffalo Mountain Claim Group

    The Buffalo Mountain Claim Group consists of 5 unpatented, lode mineral claims located in Pershing County, Nevada, approximately 20 miles northeast of the town of Lovelock, Nevada. The Buffalo Mountain claims cover approximately 103 acres. Access is along unpaved roads after leaving the interstate 4 miles north of Lovelock. The geology indicates limestone within the Natchez Pass Formation. Due to the topography, access to this area would be difficult.

    The 5 Buffalo Mountain lode mineral claims are identified in the BLM records by Nevada Mining Claim numbers NMC 1003510, 1003512, 1003514, 1003516 and 1003518.

    Subsequent to the period covered by this report, the Company elected to drop all five of the claims in this claim group.

    THERE ARE NO KNOWN “RESERVES” IN THIS CLAIM GROUP. OUR OPERATIONS WITH RESPECT TO THIS CLAIM GROUP ARE ENTIRELY EXPLORATORY.

    13


    MM Claim Group

    The MM Claim Group consists of 31 unpatented, lode mineral claims located in Clark County, Nevada, approximately 10 miles south of Las Vegas, Nevada. The claim group covers approximately 640 acres. This claim group was acquired as a result of IMC US locating and staking the claims. Work has been conducted to define the potential of the claim group. Samples have been taken with 10% running an acceptable cement grade which may define a specific rock unit. Surface mapping is completed and on file. Access is by paved and unpaved roads south from Las Vegas.

    The 31 MM lode mineral claims are identified in the BLM records by Nevada Mining Claim numbers: NMC 1002567, 1002575, 1002585, 1002593, 1002604, 1002596, 1002598, 1002600, 1002603, 1002608 1002610, 1002612, 1002613, 1002629, 1002631, 1002633, 1002635, 1002636, 1002637, 1002639, 1002641, 1002643, 1002644, 1002645, 1002647, 1002649 through 1002654.

    IMC US is the registered holder of this claim group. There are no underlying agreements or royalty interests of third parties that pertain to the above claims. IMC US will remain as the record holder of the claims as long as it continues to make all payments required by law to maintain the claims. These payments include an annual fee of $140 per claim to the BLM. In addition, a claim holder is required to pay annual County filing fees in most counties within Nevada.

    THERE ARE NO KNOWN “RESERVES” IN THIS CLAIM GROUP. OUR OPERATIONS WITH RESPECT TO THIS CLAIM GROUP ARE ENTIRELY EXPLORATORY.

    Royale Claim Group

    The Royale Claim Group consists of 4 unpatented, lode mineral claims located in Clark County, Nevada, approximately 15 miles south of Las Vegas, Nevada. The claim group covers approximately 83 acres. This claim group was acquired as a result of IMC US locating and staking the claims. Reconnaissance exploration indicates good quality carbonates on the surface by visual inspection of hand samples and geochemistry. Large areas on this group are accessible by track mounted drilling equipment. Mapping and sampling is completed and on file. Access is by a paved road located 18 miles south from Las Vegas and by an unpaved road located 6 miles to the northwest.

    The 4 Royale lode mineral claims are identified in the BLM records by Nevada Mining Claim numbers: NMC 1002680, 1002681, 1002689, and 1002690.

    Subsequent to the period covered by this report, the Company elected to drop all four of the claims in this claim group.

    THERE ARE NO KNOWN “RESERVES” IN THIS CLAIM GROUP. OUR OPERATIONS WITH RESPECT TO THIS CLAIM GROUP ARE ENTIRELY EXPLORATORY.

    14


    Wood Hills Claim Group

    The Wood Hills Claim Group consists of 58 unpatented lode mineral claims located in Eastern Elko County, Nevada near Wells, Nevada. This claim group was acquired as a result of IMC US locating and staking the claims. The claims are about 5 miles southeast of the town. The claim group covers approximately 1,198 acres. Access is along unpaved roads to the project. Rail lines and Interstate Highway 80 run through Wells. Limestone beds of the Devils Gate Formation and the Ely Formation are exposed in gently dipping beds near the top and the southern extent of the Wood Hills claims. Over 50 surface samples have been taken that show good cement grade limestone.

    The 58 Wood Hills lode mineral claims are identified in the BLM records by Nevada Mining Claim numbers: NMC 1020023 through 1020026, 1020037, 1020039, 1020049, 1020052, 1020062 through 1020079, 1020089 through 1020106, 1020116, 1020118, 1020120, 1020122, 1020124, 1020126, 1020128, 1020130, 1020132, 1020133, 1020136, 1020138, 1020140, 1020142

    IMC US is the registered holder of this claim group. There are no underlying agreements or royalty interests of third parties that pertain to the above claims. IMC US will remain as the record holder of the claims as long as it continues to make all payments required by law to maintain the claims. These payments include an annual fee of $140 per claim to the BLM. In addition, a claim holder is required to pay annual County filing fees in most counties within Nevada.

    THERE ARE NO KNOWN “RESERVES” IN THIS CLAIM GROUP. OUR OPERATIONS WITH RESPECT TO THIS CLAIM GROUP ARE ENTIRELY EXPLORATORY.

    Pequop Claim Group

    The Pequop Claim Group consists of 19 unpatented, lode mineral claims. This claim group was acquired as a result of IMC US locating and staking the claims. The Pequop claims are located approximately 35 miles southeast of Wells, Nevada in Elko County. They are reached by traveling south on Highway 93 about 12 miles and then 20 miles to the east and south along a gravel road to the central portion of the Pequop Range. The claim group covers approximately 393 acres. Railroad tracks are within a half mile of the southern portion of the claims. East dipping and northeast striking beds of the Ely Formation are exposed here. They stretch for over 2 miles to the north from the railroad tunnel in the Southern Pequops. A number of the samples show good cement grade limestone with some chert (fine grained silica rich sediments) beds and silicic limestone beds. These silicic rocks could be used for a silica source in a limestone operation to make cement.

    The 19 Pequop lode mineral claims are identified in the BLM records by Nevada Mining Claim numbers: NMC 1020152, 1020156, 1020160, 1020164, 1020168, 1020170, 1020176, 1020178, 1020182, 1020186, 1020190, 1020192, 1020198, 1020202, 1020206, 1020210, 1020215, 1020218, and 1020222.

    Subsequent to the period covered by this report, the Company elected to drop all 19 of the claims in this claim group.

    THERE ARE NO KNOWN “RESERVES” IN THIS CLAIM GROUP. OUR OPERATIONS WITH RESPECT TO THIS CLAIM GROUP ARE ENTIRELY EXPLORATORY.

    15


    Ragged Top Claim Group

    The Ragged Top Claim Group consists of 23 unpatented, lode mineral claims located in both Pershing and Churchill Counties. This claim group was acquired as a result of IMC US locating and staking the claims. The claim group covers approximately 475 acres and is located 23 miles southwest of Lovelock, Nevada and 8 miles northwest of Interstate Highway 80, along an unpaved road from the Union Pacific Rail corridor. Access is via the unpaved road. These claims cover 14 exposures of limestone seen in the gently rolling hillsides. The claims have been mapped and a number of surface samples have been taken.

    The 23 Ragged Top lode mineral claims are identified in the BLM records by Nevada Mining Claim numbers: NMC 1014011, 1014013, 1014015, 1014017, 1014029, 1014031, 1014035, 1014037, 1014041, 1014045, 1014053, 1014055, 1014061, 1014065, 1014072-1014075, 1014077 and 1014080 through 1014083.

    Subsequent to the period covered by this report, the Company elected to drop all 23 of the claims in this claim group.

    THERE ARE NO KNOWN “RESERVES” IN THIS CLAIM GROUP. OUR OPERATIONS WITH RESPECT TO THIS CLAIM GROUP ARE ENTIRELY EXPLORATORY.

    Lime Mountain Claim Group

    The Lime Mountain Claim Group consists of 69 unpatented, lode mineral claims located in eastern Lincoln County, Nevada, about 35 miles southeast of Caliente, Nevada and about 90 miles northeast of Las Vegas, Nevada. This claim group was acquired as a result of IMC US locating and staking the claims. Access is south from Caliente along state highway 317 to Elgin and then another 15 miles south on the dirt road to Lyman Crossing where the road goes east for 15 miles to Lime Mountain. The claim group covers approximately 1,426 acres. A railroad line runs north-south along Meadow Valley Wash through Lyman Crossing and Elgin. The limestone crops out in a north-south line that is 2 miles long and is approximately 1 mile wide. The project has been mapped and over 40 surface samples have been taken. Many of the samples show cement grade limestone.

    The 69 Lime Mountain lode mineral claims are identified in the BLM records by Nevada Mining Claim numbers: NMC 1014092, 1014094, 1014096, 1014102, 1014104 through 1014110, 1014112, 1014114, 1014124 through 1014130, 1014133 through 1014136, 1014139 through 1014153, 1014155, 1014167 through 1014170, 1014174, 1014176 through 1014179, 1014189, 1014191, 1014193, 1014195, 1014197, 1014200, 1014202, 1014204, 1014206, 1014207, 1014209, 1014211, 1014469, 1014214, 1014216, 1014218, 1014220, 1014222, 1014223, 1014225.

    IMC US is the registered holder of this claim group. There are no underlying agreements or royalty interests of third parties that pertain to the above claims. IMC US will remain as the record holder of the claims as long as it continues to make all payments required by law to maintain the claims. These payments include an annual fee of $140 per claim to the BLM. In addition, a claim holder is required to pay annual County filing fees in most counties within Nevada.

    16


    THERE ARE NO KNOWN “RESERVES” IN THIS CLAIM GROUP. OUR OPERATIONS WITH RESPECT TO THIS CLAIM GROUP ARE ENTIRELY EXPLORATORY.

    Jumbled Mountain Claim Group

    The Jumbled Mountain Claim Group consists of 44 unpatented, lode mineral claims that are located in eastern Lincoln County, Nevada, about 90 miles northeast of Las Vegas, Nevada. This claim group was acquired as a result of IMC US locating and staking the claims. Access is from Mesquite, Nevada along 20 miles of highway and 35 miles of unpaved roads. The claims are located over three isolated outcroppings of limestone covering approximately 909 acres. These areas have been mapped and sampled. There were 283 surface rock chip samples taken.

    The 44 Jumbled Mountain lode mineral claims are identified in the BLM records by Nevada Mining Claim numbers: NMC 1014237, 1014239, 1014241, 1014244, 1014246, 1014248, 1014253, 1014255, 1014257, 1014260, 1014262, 1014264, 1014269, 1014271, 1014273, 1014287, 1014291, 1014293, 1014295, 1014299, 1014303, 1014305, 1014314, 1014316, 1014324, 1014326, 1014332, 1014334, 1014336, 1014338, 1014345, 1014347, 1014349, 1014251, 1014353, 1014360, 1014362, 1014393, 1014395, 1014401, 1014407, 1014421, 1014423, and 1014424

    Subsequent to the period covered by this report, the Company elected to drop all 44 four of the claims in this claim group.

    THERE ARE NO KNOWN “RESERVES” IN THIS CLAIM GROUP. OUR OPERATIONS WITH RESPECT TO THIS CLAIM GROUP ARE ENTIRELY EXPLORATORY.

    Burnt Springs Claim Group

    The Burnt Springs Claim Group consists of 13 unpatented, lode mineral claims located in the Burnt Springs Range 6 to 10 miles west and northwest of the Union Pacific railway at Caliente, Nevada. This claim group was acquired as a result of IMC US locating and staking the claims. Access is along a paved highway for 7 miles then 6 miles over unpaved roads. The claims are in three separate blocks in the central part of Lincoln County, Nevada and cover approximately 269 acres. The Burnt Springs claims are located on thick bedded limestone sequences of the lower Highland Peak Formation which are thinly covered by other rocks. A total of 76 rock chips samples have been taken from the Highland Peak Formation in the area of the claims.

    The 13 Burnt Springs lode mineral claims are identified in the BLM records by Nevada Mining Claim numbers: NMC 1017570, 1017573, 1017575, 1017579, 1017584, 1017589, 1017594, 1017596, 1017598, 1017605, 1017606, 1017609, and 1017611.

    Subsequent to the period covered by this report, the Company elected to drop all 13 of the claims in this claim group.

    17


    THERE ARE NO KNOWN “RESERVES” IN THIS CLAIM GROUP. OUR OPERATIONS WITH RESPECT TO THIS CLAIM GROUP ARE ENTIRELY EXPLORATORY.

    Blye Canyon Project

    The Blye Canyon Project consists of six State of Arizona mineral exploration permits numbered 08-114298 through 08-114301, 08-114532 and 08-114533.

    The Blye Canyon Project area is about 23 miles west of Seligman in northwest Arizona. Access is west from Seligman, 25 miles on Highway 66 and then south of Highway 66 about 8 miles on unpaved roads to the border of Yavapai and Mohave Counties. IMC US holds mineral exploration permits issued by the State of Arizona on 5.5 sections of land totaling approximately 3,507 acres. The basal unit in the rocks in this area is a 300 feet-thick high magnesium carbonate sediment with minor chert (high silica sediment) and limestone beds. Overlying this is a clean gray white limestone that may be 100 to 150 feet thick. The gently north to northeast dipping rocks have little relief in the low rolling hills. The project area has been mapped and over a hundred samples have been taken. Many cement grade values were found in the samples.

    The interests of IMC US in Arizona consist of mineral exploration permits that have a duration of one year from the date of issuance. The permits can be renewed for up to four additional one-year terms for a total of five years and provide the holder of the permit with an exclusive right to explore for minerals within the state land covered by the permit and to apply for mineral leases to such land. The holder of a permit may remove from the land only the amount of material required for sampling and testing and is responsible for any damage or destruction caused by the holder’s exploration activities. The holder of a permit is entitled to ingress and egress to the covered site along routes approved by the Arizona State Land Department. IMC US has posted a bond required by the State of Arizona to back any reclamation required as a result of work performed. The permit is renewable if the holder has expended not less than $10.00 per acre during each of the first two year-long periods and $20.00 per acre during each of the next three year-long periods. Each permit fee is $500 per year plus $2.00 per acre for the first two years and $1.00 per acre per year for the following three years. Upon termination of a mineral exploration permit, the State of Arizona is entitled to information collected by the permit holder. In the event that a permit holder discovers a valuable mineral deposit, the permit holder may apply to the Arizona State Land Department for a mineral lease having a term of 20 years and renewable for an additional 20 years. A permit holder shall be the preferred recipient of the mineral lease, provided that all applicable requirements are met. A mineral lease entitles the lessee to develop and establish a mine on the leased premises, provided that a mine plan and all necessary approvals are obtained.

    THERE ARE NO KNOWN “RESERVES” IN THIS PERMIT GROUP. OUR OPERATIONS WITH RESPECT TO THIS PERMIT GROUP ARE ENTIRELY EXPLORATORY.

    18


    Description of Property held by Canadian Infrastructure Corp. (“CIC”), a wholly owned subsidiary of Infrastructure Materials Corp.

    Property Location and Description

    In December of 2009, the Company expanded its area of exploration to include areas with a potential for cement stone located in south-central Manitoba, Canada. The Company acquired Canadian Infrastructure Corp. (“CIC”), as a wholly owned subsidiary pursuant to a Share Exchange Agreement between the Company, CIC and Todd D. Montgomery dated as of December 15, 2009. See Item 5, Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities herein. CIC held 95 quarry leases granted by the Province of Manitoba on three properties known as the Dauphin property, the Winnipegosis property and the Spence property. These leases covered 6,090 hectares or 15,049 acres. Exploration had been done in the past on all three properties. Based on reviews in January 2011 and May 2011 of all of CIC’s quarry leases, the Company decided to forfeit certain quarry leases held by CIC that it determined were not in the Company’s best interests to retain.

    The following is a map highlighting the properties held by CIC in Manitoba, Canada.

    SMD Mining Ltd., which merged with Eldorado Mining to become Cameco, carried out drilling and sampling on the Dauphin property in 1988 – 89. In 1991, Cameco carried out compilation geology, sampling and drilling on the Winnipegosis property. In 1992 Continental Lime Ltd. carried out outcrop sampling and drilling on the Spence property. The Dauphin property covers an area of high calcium shale known as the White Speckled Shale unit of Cretaceous age. This unit is from 2 to 8 meters in thickness. The Winnipegosis and Spence properties cover an area of high calcium limestone, part of the Dawson Bay Formation of Devonian age. CIC drilled the Dauphin property in 2009. The drilling was done to verify the original Cameco drilling and also to extend the zone.

    19


    Dauphin Group - The Dauphin Property, the Winnipegosis Property and the Spence Property

    The Dauphin Property currently consists of 28 quarry mineral leases covering approximately 1,925 hectares (4,757 acres). The 28 quarry mineral leases are identified by Quarry Lease number in the Manitoba Innovation, Energy and Mines, Mines Branch records as follows: QL-1958 through 1981, 2055, 2058, 2060 and 2061.

    The Winnipegosis Property currently consists of 1 quarry mineral lease covering approximately 64 hectares (158 acres) and identified by Quarry Lease number QL-1990 in the Manitoba Innovation, Energy and Mines, Mines Branch.

    The Spence Property currently consists of 6 quarry mineral leases covering approximately 392 hectares (968 acres) and identified by Quarry Lease number in the Manitoba Innovation, Energy and Mines, Mines Branch records as follows: QL-2013, 2026, 2037, and 2043 through 2045.

    CIC is the registered lessee of this claim group. There are no underlying agreements or royalty interests of third parties that pertain to these claims. CIC will remain as the record holder of the claims as long as it continues to make all payments required by law to maintain the claims. Currently, a claim holder is required to pay annual rent of CDN$24 per hectare or fraction thereof per lease.

    THERE ARE NO KNOWN “RESERVES” IN THIS LEASED GROUP. OUR OPERATIONS WITH RESPECT TO THIS LEASED GROUP ARE ENTIRELY EXPLORATORY.

    20


    Description of Property held by Silver Reserve Corp. (“SRC”), a wholly owned subsidiary of Infrastructure Materials Corp.

    Property Location and Description

    The following is a map highlighting the counties in the State of Nevada where the properties held by SRC are located.

    The following claim groups are described below: Silver Queen Claim Group, NL Extension Claim Group, Klondyke Claim Group, Dyer Claim Group, Sylvania Claim Group, Montezuma Claim Group, Blue Dick Claim Group, Weepah Hills Claim Group, Kope Scheelite Claim Group, Santa Fe Claim Group, Quailey Claim Group and Quailey Patented Claims, Pansy Lee Claim Group, Gold Point Claim Group and Red Rock Mill. These claims were originally acquired by the Company and assigned to SRC.

    21


    Mojave Property Purchase Agreement

    On August 1, 2006, the Company entered into a property purchase agreement (the “Mojave Property Purchase Agreement”) with the Mojave Silver Company, Inc. to acquire a 100% interest in claims located in Esmeralda County and Mineral County, Nevada (as further described below) and known as the Silver Queen Claim Group, Nivloc Claim Group (now identified as NL Extension Claim Group), Klondyke Claim Group, Dyer Claim Group, Sylvania Claim Group, Montezuma Claim Group, Blue Dick Claim Group, Weepah Hills Claim Groups, Kope Scheelite Group, Santa Fe Claim Group, Quailey Claim Group and Quailey Patented Claims (collectively the “Mojave Claims”). The Mojave Claims were conveyed in exchange for 3,540,600 shares of the Company’s common stock, then valued at $885,150. All of the Mojave Claims were subsequently assigned to our wholly owned subsidiary, SRC.

    Silver Queen Claim Group

    The Silver Queen Claim Group consists of 178 unpatented, lode mineral claims located in Esmeralda County, Nevada, approximately nine miles west of Silver Peak, Nevada on Highway 47. The claim area covers approximately 3,636 acres. The property is accessed by dirt roadways. Eighty-three claims were acquired pursuant to the Mojave Property Purchase Agreement. SRC subsequently staked an additional 93 claims and also purchased two claims in 2008.

    The claims are located in the Red Mountain District. The Silver Queen Claim Group covers a northwest trending group of silver deposits that include the Silver Queen and Mohawk mines. In 1920 a producing mine was constructed and production continued through the late 1950's at the Mohawk location.

    In June 2008 four drill holes were completed to depths of 400 to 500 feet vertically in the Silver Queen area on surface anomalies noted during grid sampling. In July 2008 five holes were drilled to intercept unmined mineralized zones noted by a previous operator within the Mohawk workings.

    SRC entered into an option agreement (the “MGold Agreement”) dated August 19, 2011 with MGold Resources Inc. (“MGold”), pursuant to which MGold would have an option to earn a 50% interest in the Silver Queen Claim Group. Under the terms of the MGold Option Agreement, none of MGold’s 50% interest in the Silver Queen Claim Group would vest until MGold completed exploration expenditures totaling CDN$4,000,000 and made total cash payments to SRC of CDN$2,000,000. MGold’s exploration expenditures were to be made over a period of 30 months, and the cash payments were to be paid over a period of 33 months. On March 15, 2012, MGold issued notice to SRC that MGold was terminating the MGold Agreement effective April 14, 2012. MGold elected to terminate the MGold Agreement and to discontinue cash payments and exploration expenditures ahead of a March 16, 2012 work commitment and cash payment anniversary date. As a result of the termination of the MGold Agreement, the Company retains its 100% interest in the Silver Queen Claim Group.

    In October 2011, MGold commenced drilling to test mineralization below the historical Mohawk mine workings. Five reverse circulation (“RC”) holes were drilled for a total of 3,490 feet of vertical drilling. Two RC holes were drilled to intercept the Silver Queen vein system and three RC holes were drilled to target surface silver anomalies in late 2011 and early 2012 for a total of 3,549 vertical feet.

    SRC is the registered holder of this claim group. There are no underlying agreements or royalty interests of third parties that pertain to these claims. SRC will remain as the record holder of the claims as long as it continues to make all payments required by law to maintain the claims. These payments include an annual fee of $140 per claim to the BLM. In addition, a claim holder is required to pay annual County filing fees in most counties within Nevada.

    The 178 Silver Queen lode mineral claims are identified in the BLM records by Nevada Mining Claim numbers: NMC 737071, 737072, 870453 through 870535, 966963 through 966966, 966969 through 966979, 969847 through 969850, 969852, 969853, 966982 through 967017, 986543, 106856, 1068563, 1058732 through 1058744, 1058748 through1058755 and 1058759 through1058770.

    22


    THERE ARE NO KNOWN “RESERVES” IN THIS CLAIM GROUP. OUR OPERATIONS WITH RESPECT TO THIS CLAIM GROUP ARE ENTIRELY EXPLORATORY.

    NL Extension Claim Group

    The NL Extension Claim Group (the “NL Project”) consists of 18 unpatented, lode mineral claims located in Esmeralda County, Nevada, approximately 6.5 miles southwest of Silver Peak, Nevada on Highway 47. The claim group covers approximately 372 acres. In previous reports filed by the Company, this claim group was sometimes referred to as the “Nivloc Claim Group.” Fifteen claims were acquired pursuant to the Mojave Property Purchase Agreement. SRC subsequently staked an additional three claims.

    The NL Project is located approximately 6.5 miles southwest of Silver Peak, Nevada and is accessible along a dirt road 7 miles west of Silver Peak. Elevations on the property range from 5900 feet to 6400 feet. The NL Project lies on the eastern flank of Red Mountain and, with the Sixteen-to-One deposit, forms a mineralized zone which trends northwesterly. The veins trend northeasterly across the zone. The Nivloc Mine operated from 1937 to 1943. The Nivloc Mine is adjacent but not within the claim group held by the Company. The Nivloc mine encountered non-mineralized carbonates at around 900 feet and we assume that the reserves here are exhausted.

    A 5-hole exploratory reverse circulation drill program was completed by SRC in January 2008. Hole NL5 intersected 30 feet with an average grade of 2.5 ounce silver and 0.033 ounce gold per ton. The hole also intersected a second 15-foot zone with five feet grading 21 ounces silver and an average grade of 8.5 ounce silver per ton but no gold. These intersections appear to be extension of the Nivloc veins 2800 feet east of the old mine workings. Hole NL3 also appeared to intercept the vein but was abandoned due to up-hole collapse. Two additional core holes were drilled to target the veins intersection in NL5 from different angles to verify if the original intercepts went through the vein.

    SRC is the registered holder of this claim group. On February 25, 2011, SRC entered into an option and joint venture agreement (the “Option Agreement”) with International Millennium Mining Inc. (“IMMI”), a wholly owned subsidiary of International Millennium Mining Corp. (“IMMC”), to sell an 85% interest in the NL Project for total consideration of $350,000 and 1,925,000 shares of IMMC’s common stock (the “Consideration”). Under the terms of the Option Agreement, the Consideration is payable over a five-year period that ends on September 15, 2015, with IMMI’s interest in the NL Project vesting at the end of such period. If the NL Project is determined to be economically feasible, based upon criteria contained in the Option Agreement, SRC will be required to fund its portion of an operating budget proposed by IMMI in order to retain its 15% interest in the NL Project and to acquire a 15% interest in IMMI’s Nivloc Mine Project (the NL Project and the Nivloc Mine Project, collectively, the “IMMI Project”). In the event that SRC decides not to fund its portion of the budget, its 15% interest would be forfeited, but SRC would be entitled to a 2% net smelter return royalty if and when the IMMI Project enters the production phase. Upon funding of the operating budget and SRC’s acquisition of a 15% interest in the IMMI Project, SRC and IMMI would enter into a joint venture agreement.

    In late 2011, IMMI conducted a drill program that consisted of 34 core holes for a sum of 31,423 feet, all directed at infilling an un-mined portion of the historical Nivloc Mine workings. All 34 holes were drilled from four pads located on SRC’s claim NL6. Thirty of the drill holes intercepted the target zone. Drill results indicate the existence of two vein structures, the Main Nivloc vein and an almost vertical splay vein.

    23


    Subject to the terms of the Option Agreement, SRC will remain as the record holder of the claims as long as all payments required by law to maintain the claims are made. These payments include an annual fee of $140 per claim to the BLM. In addition, a claim holder is required to pay annual County filing fees in most counties within Nevada.

    The 18 NL Project lode mineral claims are identified in the BLM records by Nevada Mining Claim numbers: NMC 867511 through 867525 and 964719 through 964721.

    THERE ARE NO KNOWN “RESERVES” IN THIS CLAIM GROUP. OUR OPERATIONS WITH RESPECT TO THIS CLAIM GROUP ARE ENTIRELY EXPLORATORY.

    Klondyke Claim Group

    The Klondyke Claim Group consists of 134 unpatented, lode mineral claims located in Esmeralda County, Nevada. The Klondyke Claim Group is accessible by road from Tonopah, Nevada. The property lies at elevations ranging from 5,400 feet to 5,908 feet. The claim group covers approximately 2,768 acres and is accessed by Nevada Route 93 and dirt road access. Sixty-three claims were acquired pursuant to the Mojave Property Purchase Agreement. SRC subsequently staked an additional seventy-one claims.

    The Klondyke district, which was discovered in 1899, lies about 10 miles south of Tonopah, Nevada. Most of the deposits occur in veins within limestone carrying both silver and gold. The claim area hosts numerous prospects and mine shafts. The property geology was mapped at a scale of 1:12000 in 2007 and 5 separate sample grids were laid out and sampled to cover what appeared to be anomalous zones outlined during the mapping program.

    Mapping and grid sampling to date indicate strong NE/SW bearing anomalous zones to the south of the old mine working where the structure runs NW/SE. Surface sampling in this zone carried grades as high as 42.3 oz silver and 0.1 oz gold per ton.

    Grid sampling has identified a large gold-only anomalous zone in the southern portion of the property. A trenching program is recommended to expand this anomaly.

    Five RC holes were drilled in the spring of 2012 for a total of 1,640 feet. Four of the holes targeted an anomalous vein system in the northwest portion of the property and one hole was drilled on a gold surface anomaly in the southeast portion of the property.

    SRC entered into an option agreement (the “MGold Agreement”) dated August 19, 2011 with MGold Resources Inc. (“MGold”), pursuant to which MGold would have an option to earn a 50% interest in the Klondyke Claim Group. Under the terms of the MGold Option Agreement, none of MGold’s 50% interest in the Klondyke Claim Group would vest until MGold completed exploration expenditures totaling CDN$1,350,000 and made total cash payments to SRC of CDN$265,000. MGold’s exploration expenditures were to be made over a period of 30 months, and the cash payments were to be paid over a period of 33 months. On March 15, 2012, MGold issued notice to SRC that MGold was terminating the MGold Agreement effective April 14, 2012. MGold elected to terminate the MGold Agreement and to discontinue cash payments and exploration expenditures ahead of a March 16, 2012 work commitment and cash payment anniversary date. As a result of the termination of the MGold Agreement, the Company retains its 100% interest in the Klondyke Claim Group.

    The 134 Klondyke lode mineral claims are identified in the BLM records by Nevada Mining Claim numbers: 867448, 867450, 867452, 867454, 867456, 867458, 867461, 867463, 867465, 867467 through 867469, 867471, 867472, 867474, 867476, 867478, 867480, 867482, 867484, 867487, 867490, 867492, 867494, 867496, 867498, 867500, 867502, 936129, 936131, 964631, 964633, 964635, 964637, 964638, 964641, 964642, 964644, 964646, 964648, 964650, 964652, 964654, 964656, 964665, 964667, 964682, 964699, 1039914 through 1039983 and 1058716 - 1058731.

    24


    SRC is the registered holder of these unpatented, lode mineral claims. There are no underlying agreements or royalty interests of third parties that pertain to these claims. SRC will remain as the record holder of the claims as long as it continues to make all payments required by law to maintain the claims. These payments include an annual fee of $140 per claim to the BLM. In addition, a claim holder is required to pay annual County filing fees in most counties within Nevada.

    In addition, SRC leases four patented claims. Two patented claims covering approximately 41 acres are leased from Ovidia Harting (“Harting”) pursuant to a Lease Agreement dated May 30, 2008. The Lease Agreement has a renewable term of 10 years and permits SRC to explore the area covered by the patented claims. The Lease Agreement provides for annual payments of $1,000 per claim to Harting. The Lease Agreement also provides that SRC pay the real estate taxes imposed by Esmeralda County. These two patented claims are subject to a 3% net smelter return royalty to be calculated and paid to Harting within 45 days after the end of each calendar quarter. These claims are known as the President and Annex claims, survey No. 4141 in Section 30, T1N, R43E of Esmeralda County. The Company may terminate this Lease Agreement at any time by giving 60 days notice in writing to Harting.

    Two patented claims covering approximately 37 acres (the “Claims”) are leased from Charles and Barbara Saunders (together, “Saunders”) pursuant to a Lease Agreement dated April 1, 2012 (the “Saunders Agreement”). The Claims are known as the Key Stone and Diploma claims, survey No. 4653 in Section 30, T1N, R43E of Esmeralda County. Unless terminated earlier by SRC, the term of the Saunders Agreement is for ten years and will automatically renew on the same terms and conditions for additional five-year periods. The Saunders Agreement requires SRC to pay Saunders advance minimum royalty payments of $2,000 annually. In the event that the Claims become producing claims, SRC will pay the Saunders a 3% royalty based upon gross revenue less deductions permitted by the Saunders Agreement. Gross revenue includes the aggregate of revenue received by SRC from arm’s length purchasers of all mineral products produced from the Claims, the fair market value of all products sold by SRC to persons not dealing with SRC at arm’s length and SRC’s share of the proceeds of insurance on products. From such revenue, SRC would be permitted to deduct sales charges levied by any sales agent on the sale of products, all insurance costs in respect of mineral products, and all costs, expenses and charges of any nature whatsoever that are either paid or incurred by SRC in connection with the refinement and beneficiation of products after leaving the Claims. SRC may terminate the Saunders Agreement at any time by giving 60 days advance written notice to Saunders.

    In the past the Federal government permitted private parties to obtain title to a claim known as a “patented claim” if certain conditions were met. A patented mining claim arises where the Federal Government passes its title to the claimant, making it private land. A mineral patent gives the owner exclusive title to the mineral interests and title to the surface and other resources. Patents for claims are no longer issued. Unpatented lode mineral claims are created by physically inserting a stake in the ground at each corner of the claim and filing the location of the claim as so demarcated with a government BLM recording office. The rights associated with an unpatented claim are restricted to the extraction and development of mineral deposits. No land ownership is conveyed with an unpatented claim.

    THERE ARE NO KNOWN “RESERVES” IN THIS CLAIM GROUP. OUR OPERATIONS WITH RESPECT TO THIS CLAIM GROUP ARE ENTIRELY EXPLORATORY.

    Dyer Claim Group

    The Dyer Claim Group consists of 8 unpatented, lode mineral claims located in Esmeralda County, Nevada, approximately 5 miles east of the town of Dyer, Nevada on Highway 3A. The Dyer group of claims is accessible from the town of Dyer and cover approximately 165 acres. The Dyer district consists of several prospects and a few small mines that were operated by unknown operators. Phelps Dodge Corp briefly held claims in the area in the 1990’s. Mineralization consists of copper-gold in quartz veins within limestone rocks. All eight claims were acquired pursuant to the Mojave Property Purchase Agreement.

    25


    SRC is the registered holder of this claim group. There are no underlying agreements or royalty interests of third parties that pertain to these claims. SRC will remain as the record holder of the claims as long as it continues to make all payments required by law to maintain the claims. These payments include an annual fee of $140 per claim to the BLM. In addition, a claim holder is required to pay annual County filing fees in most counties within Nevada.

    The 8 Dyer lode mineral claims are identified in the BLM records by Nevada Mining Claim numbers: NMC 871091 through 871094 and 871099 through 871102.

    THERE ARE NO KNOWN “RESERVES” IN THIS CLAIM GROUP. OUR OPERATIONS WITH RESPECT TO THIS CLAIM GROUP ARE ENTIRELY EXPLORATORY.

    Sylvania Claim Group

    The Sylvania Claim Group consists of 2 unpatented, lode mineral claims located in Esmeralda County, Nevada. The Sylvania claims are accessible from the town of Lida, Nevada. This claim group covers approximately 41 acres. Both claims were acquired pursuant to the Mojave Property Purchase Agreement.

    The Sylvania District consists of a number of prospects, the Sylvania Mine and three small open pit mines. Production has occurred in the past. The deposits occur in a mile-wide northwest-trending belt or zone. Based upon publicly available records, the deposits are mainly silver-lead but some gold and tungsten also occurs. Most of the silver-lead deposits are veins in limestone. SRC held a larger group of claims at this location but decided that further work was not warranted and allowed all but two claims covering the old workings to lapse.

    SRC is the registered holder of this claim group. There are no underlying agreements or royalty interests of third parties that pertain to these claims. SRC will remain as the record holder of the claims as long as it continues to make all payments required by law to maintain the claims. These payments include an annual fee of $140 per claim to the BLM. In addition, a claim holder is required to pay annual County filing fees in most counties within Nevada.

    The 2 Sylvania lode mineral claims are identified in the BLM records by Nevada Mining Claim numbers: NMC 871136 and 871137

    THERE ARE NO KNOWN “RESERVES” IN THIS CLAIM GROUP. OUR OPERATIONS WITH RESPECT TO THIS CLAIM GROUP ARE ENTIRELY EXPLORATORY.

    26


    Montezuma Claim Group

    The Montezuma Claim Group consists of 5 unpatented, lode mineral claims located in Esmeralda County, Nevada approximately 12 miles southwest of the town of Goldfield, Nevada on Highway 95. Access to the property is along Highway 95, 6 miles south of Goldfield and then approximately 14 miles west along a dirt road. The property lies at elevations ranging from 6400 feet to 6895 feet. This claim group covers approximately 103 acres. All five claims were acquired pursuant to the Mojave Property Purchase Agreement.

    The Montezuma District consists of a number of prospects, some shafts and tunnels and one small mine. Based upon publicly available records, the district is predominantly a silver-lead district although small amounts of copper, gold and bismuth were found in some of the producers. The deposits consist of quartz veins in limestone and shale. Mapping done in the spring of 2008 indicates the property lies on the southern edge of a caldera, warranting further exploration work. A caldera is a cauldron-like volcanic feature formed by the collapse of land following a volcanic eruption.

    SRC is the registered holder of this claim group. There are no underlying agreements or royalty interests of third parties that pertain to these claims. SRC will remain as the record holder of the claims as long as it continues to make all payments required by law to maintain the claims. These payments include an annual fee of $140 per claim to the BLM. In addition, a claim holder is required to pay annual County filing fees in most counties within Nevada.

    The 5 Montezuma lode mineral claims are identified in the BLM records by Nevada Mining Claim numbers: NMC 871181, 870083, 871185, 871191, and 871193.

    THERE ARE NO KNOWN “RESERVES” IN THIS CLAIM GROUP. OUR OPERATIONS WITH RESPECT TO THIS CLAIM GROUP ARE ENTIRELY EXPLORATORY.

    Blue Dick Claim Group

    The 19 Blue Dick claims are located in the SE part of the Palmetto Mining District and cover approximately 393 acres. All 19 claims were acquired pursuant to the Mojave Property Purchase Agreement. Production occurred prior to 1960 and the deposits contained silver, gold and lead and occur in veins, according to available public records. Most of these veins trend west or northwest. The claim area contains numerous prospects, tunnels, shafts and two small open pit mines. The Blue Dick mine has two shafts and two tunnels but no data is available.

    Geologic mapping and sampling indicates complex low angle faulting traced from the historic underground mine workings along strike for a length of at least 3000 feet. Rock chip sampling underground carried grades of gold 1.3 opt and silver 69 opt.

    SRC is the registered holder of this claim group. There are no underlying agreements or royalty interests of third parties that pertain to these claims. SRC will remain as the record holder of the claims as long as it continues to make all payments required by law to maintain the claims. These payments include an annual fee of $140 per claim to the BLM. In addition, a claim holder is required to pay annual County filing fees in most counties within Nevada.

    The 19 Blue Dick lode mineral claims are identified in the BLM records by Nevada Mining Claim numbers: NMC 868274 through 868278 and 868284 through 868297.

    THERE ARE NO KNOWN “RESERVES” IN THIS CLAIM GROUP. OUR OPERATIONS WITH RESPECT TO THIS CLAIM GROUP ARE ENTIRELY EXPLORATORY.

    27


    Weepah Hills Claim Group

    The one Weepah Hills claim is located in Esmeralda County, Nevada, approximately 15.5 miles southwest of Tonopah, Nevada on Highways 95/6. Access to this claim is via a dirt road leading off Highways 95/6. After the initial examination of this claim group, the Company decided further work was not warranted and all but one unpatented, lode mineral claim covering the old workings were allowed to lapse. This claim covers approximately 21 acres and was acquired pursuant to the Mojave Property Purchase Agreement. There are mine workings and a large head frame on the claim, which was operated in the early 1960’s, according to public records.

    SRC is the registered holder of this claim group. There are no underlying agreements or royalty interests of third parties that pertain to this claim. SRC will remain as the record holder of the claim as long as it continues to make all payments required by law to maintain the claim. These payments include an annual fee of $140 per claim to the BLM. In addition, a claim holder is required to pay annual County filing fees in most counties within Nevada.

    The single Weepah Hills lode mineral claim is identified in the BLM records by Nevada Mining Claim number: NMC 868319.

    THERE ARE NO KNOWN “RESERVES” IN THIS CLAIM GROUP. OUR OPERATIONS WITH RESPECT TO THIS CLAIM GROUP ARE ENTIRELY EXPLORATORY.

    Kope Scheelite Claim Group

    The Kope Scheelite Claim Group consists of 101 unpatented, lode mineral claims located in Mineral County, Nevada, approximately 12 miles east of Mina, Nevada. Access is by dirt road. The elevations on the claim area range from 6800 feet to 7000 feet. The Kope Scheelite claims are located on the southernmost part of the Gabbs Valley Range. The workings on the property consist of numerous shafts and prospects. This claim group covers approximately 2,087 acres. Twenty-five claims were acquired pursuant to the Mojave Property Purchase Agreement. SRC subsequently staked an additional seventy-six claims.

    Geologic mapping completed in 2007 indicates strong NW/SE bearing mineralized trends running across the property. Recent mapping indicated new strong gold, silver and copper mineralization along NW/SE bearing structures.

    The 101 Kope Scheelite lode mineral claims are identified in the BLM records by Nevada Mining Claim numbers: NMC 871216 through 871223, 871229 through 871240, 871244, 964722 through 964724, 964732, 964733, 1038681 through 1038684, 1070161 through 1070193 and 1071455 through 1071492.

    SRC is the registered holder of these unpatented, lode mineral claims. There are no underlying agreements or royalty interests of third parties that pertain to these claims. SRC will remain as the record holder of the claims as long as it continues to make all payments required by law to maintain the claims. These payments include an annual fee of $140 per claim to the BLM. In addition, a claim holder is required to pay annual County filing fees in most counties within Nevada.

    28


    In addition, SRC entered into an Exploration License with Option to Purchase (the “Buhrman Agreement”) with Ralph L. Buhrman and Jacqueline Buhrman (together, the “Owner”) for three patented mining claims, covering approximately 59 acres (the “Property”) situated in Mineral County, Nevada. The Property is identified as the claims named Geo F. (also known as George F.), Commodore and Thrush, survey No. 2593 in Sections 2 and 11, T7N, R36E of Mineral County, recorded as Patent File #47382, APN 009-170-04. Under the terms of the Buhrman Agreement, SRC was granted the exclusive right and option to enter and examine the Property (the “Exploration License”) in consideration of a $30,000 payment to the Owner (the License Payment”). During the term of the Exploration License, SRC has the exclusive right to undertake geological, geophysical, and geochemical examinations of the Property; to sample the Property by means of pits, trenches, and drilling; and to take bulk samples from the Property for the purpose of conducting metallurgical and leaching tests. However, SRC may not commence development or mining activities on the Property unless it exercises the Purchase Option as defined below. SRC will be responsible for reclamation of its pits, trenches, drill sites, and other such disturbances arising out of its activities on the Property. The Exploration License has an initial one-year term beginning on May 1, 2012 (the “Effective Date”) and ending on April 30, 2013. SRC has the right to extend the Exploration License for one additional period of one year provided SRC makes an additional License Payment of $30,000 in advance for such extension. SRC was also granted exclusive right and option to purchase the Owner’s ownership interest in the Property (the “Purchase Option”) for the sum of $90,000 less all License Payments previously made. SRC may exercise the Purchase Option at any time during the term of the Exploration License by giving written notice to the Owner. If SRC exercises the Purchase Option, SRC will also pay the Owner a two percent (2%) royalty based upon gross revenues less deductions as defined by the Buhrman Agreement, and SRC will also have the exclusive right and option to purchase such royalty at any time for the sum of $1,000,000 less any payments previously made by SRC to the Owner pursuant to such royalty. SRC may terminate the Buhrman Agreement at any time by giving 30 days’ notice in writing to the Owner.

    In the past the Federal government permitted private parties to obtain title to a claim known as a “patented claim” if certain conditions were met. A patented mining claim arises where the Federal Government passes its title to the claimant, making it private land. A mineral patent gives the owner exclusive title to the mineral interests and title to the surface and other resources. Patents for claims are no longer issued. Unpatented lode mineral claims are created by physically inserting a stake in the ground at each corner of the claim and filing the location of the claim as so demarcated with a government BLM recording office. The rights associated with an unpatented claim are restricted to the extraction and development of mineral deposits. No land ownership is conveyed with an unpatented claim.

    THERE ARE NO KNOWN “RESERVES” IN THIS CLAIM GROUP. OUR OPERATIONS WITH RESPECT TO THIS CLAIM GROUP ARE ENTIRELY EXPLORATORY.

    Santa Fe Claim Group

    The Santa Fe Claim Group consists of 23 unpatented, lode mineral claims located in Mineral County, Nevada, approximately five miles north of Luning, Nevada. This claim group covers approximately 475 acres. All 23 claims were acquired pursuant to the Mojave Property Purchase Agreement. The Santa Fe claims are accessible from the town of Luning, Nevada.

    The Santa Fe district is located in the Gabbs Valley Range northeast of Luning. The Santa Fe property was first located in 1879 and has produced silver and lead, according to public records. Workings consist of a 300 ft incline and several hundred feet of tunnels on different levels. Significant silver and gold values have been obtained from sampling on the vein systems warranting further exploration. The property was mapped in late 2007 and a follow up grid sampling program will be developed to define drill targets at a future date.

    SRC is the registered holder of this claim group. There are no underlying agreements or royalty interests of third parties that pertain to these claims. SRC will remain as the record holder of the claims as long as it continues to make all payments required by law to maintain the claims. These payments include an annual fee of $140 per claim to the BLM. In addition, a claim holder is required to pay annual County filing fees in most counties within Nevada.

    29


    The 23 Santa Fe lode mineral claims are identified in the BLM records by Nevada Mining Claim numbers: NMC 868205 through 868210, 868214 through 868218, 868224 through 868228 and 1047210 through 1047216.

    THERE ARE NO KNOWN “RESERVES” IN THIS CLAIM GROUP. OUR OPERATIONS WITH RESPECT TO THIS CLAIM GROUP ARE ENTIRELY EXPLORATORY.

    Quailey Claim Group

    The Quailey Claim Group consists of 52 unpatented, lode mineral claims, 10 owned patented claims and one leased patented claim, all located in Mineral County, Nevada. This claim group covers approximately 1,281 acres. Four of the unpatented claims and the 10 owned patented claims were acquired pursuant to the Mojave Property Purchase Agreement. SRC subsequently staked an additional forty-eight claims.

    The Quailey claims are located approximately 16 miles south, southeast from the town of Hawthorne, Nevada on the northwest side of Excelsior Mountains and are accessible from Hawthorne via Nevada Route 359 and dirt roadways to the claim area. A number of dirt roads provide access to the main workings of the former mine. Most of the information for the Quailey Mine Project was obtained from a 1975 report by J. McLaren Forbes. The early work on the property was done in 1882 when copper ores with silver and gold values were mined and smelted on the property. Later, between 1907 and 1914, Excelsior Enterprises Inc. was active on the property. Just prior to this activity, a number of the claims were surveyed and patented. During the period 1975-76 the mine was rehabilitated. This work was done by Ladd Enterprises Inc, of Reno, Nevada.

    Historical records indicate that an unknown amount of copper, gold and silver ores were mined from 4,000 feet of developed mine workings.

    The 52 Quailey lode mineral claims are identified in the BLM records by Nevada Mining Claim numbers: NMC 916095, 916096, 916099, 916103, 935444 through 935446 and 1070194 through 1070238.

    The 10 owned patented claims are identified as follows:

    Parcel 1: the claim named Nevada known as Mineral County Parcel APN 008-200-11; PLSS T5N R31E MDM Sections 2 and 3 as Patent File #141100.

    Parcel 2, which includes eight claims named Butte, Central, Calumet, Red Bank, Bonanza, Great Eastern, Roosevelt and Bisbee known as Mineral County Parcels APN 009-200-10 and APN 009-200-12; PLSS T5N R31E MDM Sections 1, 2, 3, 10 & 11 with Patent File #141941.

    Parcel 3, which includes the Northeasterly 750 feet of the San Juan claim designated by Survey No. 3303, PLSS T5N R31E MDM Section 2, recorded as Patent File #141941 and known as Mineral County Parcel APN 009-200-05.

    SRC is the registered holder of these unpatented, lode mineral claims and the owned patented claims. There are no underlying agreements or royalty interests of third parties that pertain to these claims. SRC will remain as the record holder of the unpatented, lode mineral claims as long as it continues to make all payments required by law to maintain the claims. These payments include an annual fee of $140 per claim to the BLM. In addition, a claim holder is required to pay annual County filing fees in most counties within Nevada. Also, the patented claims are subject to County real estate taxes.

    30


    In addition, SRC entered into a mineral lease agreement effective February 29, 2012 (the “Gumaskas Agreement”) with Joseph W. Gumaskas (“Gumaskas”) to lease one patented claim covering approximately 10 acres (the “Claim”) in Mineral County, Nevada. The Claim is known as San Juan SW 750 feet, Survey No. 3303, PLSS T5N R31E MDM Section 2, recorded as Patent File #463521, Mineral County Parcel APN 009-200-02. Unless terminated earlier by SRC, the term of the Gumaskas Agreement is ten years and will automatically renew on the same terms and conditions for additional five-year periods. The Gumaskas Agreement requires SRC to pay Gumaskas advance minimum royalty payments of $500 annually. In the event that the Claim becomes a producing claim, SRC will pay Gumaskas a 3% royalty based upon gross revenue less deductions permitted by the Gumaskas Agreement. Gross revenue includes the aggregate of revenue received by SRC from arm’s length purchasers of all mineral products produced from the Claim, the fair market value of all products sold by SRC to persons not dealing with SRC at arm’s length and SRC’s share of the proceeds of insurance on products. From such revenue, SRC would be permitted to deduct sales charges levied by any sales agent on the sale of products, all insurance costs in respect of mineral products, and all costs, expenses and charges of any nature whatsoever that are either paid or incurred by SRC in connection with the refinement and beneficiation of products after leaving the Claim. SRC may terminate the Gumaskas Agreement at any time by giving 60 days’ notice in writing to Gumaskas.

    In the past the Federal government permitted private parties to obtain title to a claim known as a “patented claim” if certain conditions were met. A patented mining claim arises where the Federal Government passes its title to the claimant, making it private land. A mineral patent gives the owner exclusive title to the mineral interests and title to the surface and other resources. Patents for claims are no longer issued. Unpatented lode mineral claims are created by physically inserting a stake in the ground at each corner of the claim and filing the location of the claim as so demarcated with a government BLM recording office. The rights associated with an unpatented claim are restricted to the extraction and development of mineral deposits. No land ownership is conveyed with an unpatented claim.

    THERE ARE NO KNOWN “RESERVES” IN THIS CLAIM GROUP. OUR OPERATIONS WITH RESPECT TO THIS CLAIM GROUP ARE ENTIRELY EXPLORATORY.

    Pansy Lee Claim Group

    On August 1, 2006, the Company acquired the Pansy Lee Claims Group from Anglo Gold Mining Inc. in exchange for 1,850,000 shares of the Company’s common stock pursuant to an Asset Purchase Agreement dated August 1, 2006 (the “Pansy Lee Purchase Agreement”). Pursuant to the Pansy Lee Purchase Agreement, a 2% net smelter royalty pertains to 8 of the 30 claims in this group, identified as follows: NMC 879333 through 879335 and NMC 859406 through 895410. In the event that any one or more of the 8 claims becomes a producing claim, our revenue is subject to a 2% net smelter return royalty where net smelter returns are based upon gross revenue. Gross revenue would be calculated after commercial production commences and includes the aggregate of the following amounts: revenue received by the Company from arm’s length purchasers of all mineral products produced from the property, the fair market value of all products sold by the Company to persons not dealing with the Company at arm’s length and the Company’s share of the proceeds of insurance on products. From such revenue, the Company would be permitted to deduct: sales charges levied by any sales agent on the sale of products; transportation costs for products; all costs, expenses and charges of any nature whatsoever which are either paid or incurred by the Company in connection with the refinement and beneficiation of products after leaving the property and all insurance costs and taxes.

    The Pansy Lee Claim Group currently consists of 30 unpatented, lode mineral claims located in Humboldt County, Nevada, approximately eight miles northwest of Winnemucca, Nevada. The claim group covers approximately 620 acres. The Pansy Lee claims are accessible by road from Winnemucca, Nevada. A graded dirt road runs northwesterly for a distance of 12 miles to the property which lies at elevations ranging from 4600 feet to 5200 feet.

    31


    A substantial amount of underground work has been done on the Pansy Lee Claims, as much as 910 feet below surface with over 6000 feet of horizontal tunneling on several levels. A mine was operated at the Pansy Lee claim site from 1937 to 1942. Further production occurred in 1964 and 1974. Work was undertaken again in 1981 and 1982 by Santa Fe Mining Company.

    The Nevada Bureau of Mines Bulletin 59 (1964) reported the following production figures for this claim group:

    Date Action Tons Au Ag
    1936-37 Shipped 205 - -
    1939-40 Shipped 1,677 - -
    1939-42 Milled 39,598 0.134 11.5
    1941 Shipped 407 0.385 32.5
    Total   41,887    

    In March and April of 2008, SRC drilled three core holes and completed to depths of 800 feet on angle below the existing workings. It appears the 'Swede' vein was encountered in all three holes. Work to date indicates the mineralized zone should extend to depth and along strike on the 2 main veins in the mine. We believe further drilling of these extensions is warranted.

    As described above, SRC holds this claim group subject to the 2% net smelter return royalty rights of Anglo Gold Mining Inc. SRC will remain as the record holder of the claims as long as it continues to make all payments required by law to maintain the claims. These payments include an annual fee of $140 per claim to the BLM. In addition, a claim holder is required to pay annual County filing fees in most counties within Nevada.

    The 30 Pansy Lee lode mineral claims are identified in the BLM records by Nevada Mining Claim numbers: NMC 859406 through 859432 and 879333 through 879335.

    THERE ARE NO KNOWN “RESERVES” IN THIS CLAIM GROUP. OUR OPERATIONS WITH RESPECT TO THIS CLAIM GROUP ARE ENTIRELY EXPLORATORY.

    Gold Point Claim Group

    On February 15, 2008, the Company entered into an agreement with Roger Hall, then an officer and director of the Company, to acquire 14 unpatented, lode mineral claims referred to as the Gold Point Claim Group in consideration of the sum of $5,000 dollars payable in cash and 175,000 common shares of the Company.

    The Gold Point Claim Group now consists of 8 unpatented lode mineral claims covering approximately 165 acres located in Nye County in the Gold Point District, about 10 miles north east of Current, Nevada off Nevada Route 6. Access is via Route 6 and along a dirt road for approximately two miles.

    Mineralization from 0.5 to 10 ppm gold was noted in shaley rocks adjacent to substantial jasperoids on the property. The “jasperoids” found in Nevada are hard, dense purple-black rocks where silica solutions have replaced limestone.

    32


    SRC is the registered holder of this claim group. There are no underlying agreements or royalty interests of third parties that pertain to these claims. SRC will remain as the record holder of the claims as long as it continues to make all payments required by law to maintain the claims. These payments include an annual fee of $140 per claim to the BLM. In addition, a claim holder is required to pay annual County filing fees in most counties within Nevada.

    The 8 Gold Point lode mineral claims are identified in the BLM records by Nevada Mining Claim numbers: NMC 975797 through 975802, 975804 and 975806.

    THERE ARE NO KNOWN “RESERVES” IN THIS CLAIM GROUP. OUR OPERATIONS WITH RESPECT TO THIS CLAIM GROUP ARE ENTIRELY EXPLORATORY.

    Red Rock Mill

    On August 1, 2006, the Company entered into an agreement with International Energy Resources, Inc. (“IERI”) to purchase a mill building and related milling equipment located on 28 mill site claims near the town of Mina in Mineral County, Nevada. The mill building is a corrugated steel structure. The assets were conveyed in exchange for 6,975,000 Shares of the Company valued at $1,743,750 pursuant to a property purchase agreement with IERI.

    On August 1, 2006 the Company purchased the refinery equipment from Nevada Refinery Inc. in exchange for 88,500 shares of common stock of the Company, valued at $22,125. This equipment can be used to refine “dore” bars or smelt concentrate produced from the milling process. “Doré” bars are bars of precious metal, in this case silver and gold, poured from molten material recovered in the final processing of the mill.

    The milling facility is a custom mill installation located on Highway 95 near the town of Mina, Nevada, approximately 185 miles south east of Reno, Nevada. Access is via a dirt road east of Highway 95. The mill has operated under various configurations to meet specific requirements of prior operators. Ore from various sources has been custom milled and processed for the production of concentrate or doré bars.

    The mill is nominally designed to process 200 tons of ore per day. Depending on the ore hardness, the crushing circuit will be able to process up to about 250 tons of ore per day. The flotation and leach sections are also capable of running at the 200 tons per day rate. However, other areas of the processing section do not appear to have sufficient capacity to sustain the mill’s nominal design rate and some additions may be required.

    On September 14, 2007, the Company engaged Lumos & Associates, Inc. (“Lumos”) to complete the regulatory permitting process for the milling facility. The permitting process is being carried out in twelve stages and the completion date has not been determined. In December 2010 this contract was assigned by Lumos to Tetra Tech, Inc. by mutual agreement of the Company, Lumos, and Tetra Tech, Inc.

    In August 2009, 22 of the 28 originally acquired mill site claims were abandoned. The Red Rock Mill claims now consist of 6 unpatented, mill site claims covering approximately 30 acres.

    SRC is the registered holder of this claim group. There are no underlying agreements or royalty interests of third parties that pertain to these claims. SRC will remain as the record holder of the claims as long as it continues to make all payments required by law to maintain the claims. These payments include an annual fee of $140 per claim to the BLM. In addition, a claim holder is required to pay annual County filing fees in most counties within Nevada.

    33


    The 6 Red Rock Mill site claims are identified in the BLM records by Nevada Mining Claim numbers: NMC 417400 through 417403, 417406 and 417407.

    THERE ARE NO KNOWN “RESERVES” IN THIS CLAIM GROUP. OUR OPERATIONS WITH RESPECT TO THIS CLAIM GROUP ARE ENTIRELY EXPLORATORY.

    Regulations Governing Mining Exploration in Nevada and Arizona

    All mining exploration in Nevada and Arizona is subject to regulations that cover exploration work where the surface is disturbed, including air and water quality; waste management; protection of the environment, wildlife, archeological and historical sites; road building; plus other matters.

    Mining exploration in Nevada is subject to regulation by the Nevada Division of Environmental Protection’s Bureau of Mining Regulation and Reclamation (BMRR), and in some circumstances the local county where the claims are located.

    Mining exploration on Arizona state land is subject to regulation by the Arizona State Lands Department. An exploration permit is needed to drill or trench and a plan of operations must be submitted and approved. A reclamation bond is posted when the exploration permit is issued and additional fees can be added when the plan of operations is approved, if plants and trees are to be removed or damaged.

    All mining exploration on federal lands in Nevada and Arizona is carried out subject to regulations established by the BLM or the United States Department of Agriculture’s United States Forest Service, depending upon which agency manages the land where the exploration work is performed. Permits for exploration work on federal lands are issued and supervised by the respective agency. Notices of Intent and Plans of Operations must be submitted and approved. Before any drilling or trenching can occur on any claim group on public lands, the Company is required to post with the respective agency a bond that backs the Company’s obligations to restore the site and correct environmental damage, if any, caused by the Company’s activities.

    Item 3. Legal Proceedings.

    There is no legal proceeding pending or, to the best of our knowledge, threatened against the Company.

    Item 4. Mine Safety Disclosures

    Not applicable.

    34


    PART II

    Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

    As of June 30, 2012, there were 98,935,486 shares of common stock of the Company (a “Common Share” or “Common Shares”) outstanding, held by 628 shareholders of record.

    Securities issued during the Year Ended June 30, 2010

    The Company entered into an agreement to acquire, as a wholly owned subsidiary, Canadian Infrastructure Corp., a Canadian corporation, pursuant to a Share Exchange Agreement (the “CIC Agreement”) between the Company, CIC and Todd D. Montgomery, the Company’s Chief Executive Officer and a member of its Board of Directors, dated as of December 15, 2009. Under the terms of the CIC Agreement, the Company acquired all of the issued and outstanding stock of CIC in exchange for 1,021,777 Common Shares. The Company accounted for the acquisition of CIC as a business combination that is accounted for under the acquisition method as discussed in FASB ASC Topic 805. The CIC Agreement closed on February 9, 2010.

    On June 25, 2010, the Company completed a private placement of 6,973,180 Common Shares at a price of $0.23 per share for total consideration of $1,603,831. The private placement was exempt from registration under the Securities Act of 1933, as amended (the “Securities Act”), pursuant to an exemption afforded by Regulation S promulgated thereunder (“Regulation S”). Each investor that participated in the private placement was not a “U.S. Person” as that term is defined under Regulation S.

    Securities issued during the Year Ended June 30, 2011

    On September 30, 2010, the Company issued 50,000 Common Shares pursuant to the exercise of options granted in accordance with the 2006 Stock Option Plan. Also see Stock Option Plan, below.

    On February 8, 2011, the Company completed a private placement (the “Private Placement”) of 2,083,333 Common Shares at a price of $0.24 per share for total consideration of $500,000. The Private Placement was exempt from registration under the Securities Act pursuant to an exemption afforded by Regulation S. The sole investor participating in the private placement was a non-U.S. corporation that is owned and controlled by Todd D. Montgomery, the Company’s Chief Executive Officer and a member of its Board of Directors. The investor and Mr. Montgomery are not “U.S. Person(s)” as that term is defined in Regulation S.

    On June 2, 2011, the Company completed a private placement of 2,608,696 shares of its Series A Preferred Stock (the “Series A Shares”) at a price of $0.115 per share (the “Purchase Price”) for total consideration of $300,000, pursuant to a subscription agreement (the “Subscription Agreement”) between the Company and a sole purchaser (the “Purchaser”). The Purchase Price was based on the weighted average trading price of the Company’s Common Shares on the OTC Bulletin Board for the fifteen trading days prior to June 1, 2011, the date of the Subscription Agreement. The Purchaser was a non-U.S. corporation that is controlled by Todd D. Montgomery, the Company’s Chief Executive Officer and a member of its Board of Directors. The issuance of the Series A Shares was exempt from registration under the Securities Act pursuant to an exemption afforded by Regulation S. The Purchaser and Mr. Montgomery are not “U.S. Person(s)” as that term is defined in Regulation S.

    35


    The Series A Shares had the following rights and limitations:

      1.

    Each Series A Share was convertible into one Common Share at the request of the holder thereof provided that there were sufficient authorized Common Shares available for conversion without breaching the Company’s covenants to reserve a sufficient number of Common Shares to permit the exercise of all outstanding stock options, warrants and convertible securities;

       
      2.

    Each Series A Share carried one vote on all matters coming before the Company’s shareholders for a vote;

       
      3.

    In all other respects, the Series A Shares were equal to the Common Shares of the Company; and

       
      4.

    On June 2, 2012, the Company could convert the Series A Shares into Common Shares provided that there was an adequate number of Common Shares authorized and available to be issued upon such conversion or, if there were not adequate Common Shares available for conversion, the Purchaser could tender all or less than all of the Series A Shares to the Company and the Company would purchase such Series A Shares for the original Purchase Price.

    As also discussed below, on September 29, 2011, all of the Company’s issued Series A Preferred stock were converted to 2,608,696 Common Shares.

    Securities issued during the Year Ended June 30, 2012

    The Company held an annual meeting of shareholders on July 29, 2011. At the meeting, among other actions, the shareholders of the Company approved and adopted an amendment increasing the number of authorized Common Shares to 500,000,000. On August 1, 2011 the Company filed with the Secretary of State of the State of Delaware a certificate of amendment (the “Amendment”) to the Company’s certificate of incorporation containing the change in the number of authorized Common Shares approved by shareholders on July 29, 2011. The Amendment increased the number of authorized Common Shares, par value $0.0001, from 100,000,000 to 500,000,000.

    On September 29, 2011, 2,608,696 outstanding shares of the Company’s Series A Preferred Stock were converted to 2,608,696 Common Shares, which results in an increase of $261 and $299,739 to common stock and additional paid-in capital, respectively.

    On December 16, 2011, the Company completed the sale of 26,000,000 Common Shares to the public in Canada at a price of $0.096 (CDN$0.10) per share to raise gross proceeds of $2,507,180 (CDN$2,600,000). The shares were sold pursuant to a long form prospectus filed in the Canadian provinces of Alberta, Saskatchewan, British Columbia and Ontario. PI Financial Corp. (“PI Financial”) acted as lead agent and received a corporate finance fee of $14,464 (CDN$15,000), was reimbursed $127,529 (CDN$132,250) for its expenses, was paid cash commissions of $20,236 (CDN$20,985) and received non-transferable Agent's Warrants valued at $14,644 entitling PI Financial to acquire 209,850 Common Shares at a price of $0.096 (CDN$0.10) per share exercisable for 24 months. The fair value of the Agent’s Warrants was determined using the Black-Scholes option pricing model with the following assumptions: risk-free rate of 1.63%, expected dividend yield of 0%, annualized volatility of 142.45% and expected life of two years. In connection with the offering, in addition to payments made to PI Financial, the Company incurred legal and other direct expenses, which resulted in net proceeds from the offering of $2,215,399.

    The foregoing sale of securities was made entirely outside the United States pursuant to an exemption afforded by Regulation S promulgated under the Securities Act.

    Our common stock is traded on the Over the Counter Bulletin Board (the “OTCBB”) sponsored by the National Association of Securities Dealers, Inc. under the symbol “IFAM”. The OTCBB does not have any quantitative or qualitative standards such as those required for companies listed on the Nasdaq Small Cap Market or National Market System. Following the sale of our securities in Canada as discussed above, the Company's Common Shares were listed for trading on the TSX Venture Exchange (“TSX-V”) under the symbol “IFM.” The high and low sales prices of our common stock during the fiscal years ended June 30, 2012 and June 30, 2011 are as follows:

    36


     

        OTCBB:   TSX-V:
    Quarter ended   High   Low   High   Low
    September 30, 2011   $0.110   $0.060   N/A   N/A
    December 31, 2011   $0.375   $0.070   N/A   N/A
    March 31, 2012   $0.110   $0.020   $0.120   $0.040
    June 30, 2012   $0.150   $0.020   $0.055   $0.020
                     
    September 30, 2010   $0.310   $0.120   N/A   N/A
    December 31, 2010   $0.300   $0.150   N/A   N/A
    March 31, 2011   $0.260   $0.180   N/A   N/A
    June 30, 2011   $0.220   $0.060   N/A   N/A

    Stock Option Plan

    In April 2006, the Board of Directors approved the Company’s 2006 Stock Option Plan, the purpose of which was to enhance the Company's stockholder value and financial performance by attracting, retaining and motivating the Company's officers, directors, key employees and consultants and to encourage stock ownership by such individuals by providing them with a means to acquire a proprietary interest in the Company's success through stock ownership.

    Under the 2006 Stock Option Plan, officers, directors, employees and consultants who provide services to the Company could be granted options to acquire shares of the Company’s common stock at the fair market value of the stock on the date of grant. Options could have a term of up to 10 years. The total number of shares reserved for issuance under the 2006 Stock Option Plan was 5,000,000. At a meeting of shareholders held on July 29, 2011, the shareholders of the Company approved a new stock option plan as described below. No further options will be issued under the 2006 Stock Option Plan.

    The Company held an annual meeting of shareholders on July 29, 2011. At the meeting, among other actions, the shareholders of the Company approved the amendment and restatement of the 2006 Stock Option Plan resulting in the Company’s Amended Stock Option Plan (the “Amended Plan”). The Amended Plan replaces the Company’s 2006 Stock Option Plan and no further options will be issued under the 2006 Stock Option Plan. The terms of the Amended Plan include, among others, that (a) officers, directors, employees and consultants who provide services to the Company may be granted options to acquire shares of the Company’s Common Shares at the fair market value of the stock on the date of grant, (b) options may have a term of up to 10 years, (c) the Company may issue options in a number up to a maximum of 10% of the outstanding Common Shares, and (d) outstanding stock options previously granted pursuant to the 2006 Stock Option Plan will remain in effect and be exercisable in accordance with, and be deemed to be issued under, the terms of the Amended Plan. It is expected that options issued pursuant to the Amended Plan will not be “qualified” options under the provisions of section 422 of the Internal Revenue Code of 1986, as amended from time to time.

    The following tables summarize the options outstanding as of June 30, 2012 and 2011, and the option activity for the years then ended:

    37



                Remaining     Remaining              
                contractual     contractual              
          Option Price     life (in years)     life (in years)     Number of options:  
    Expiry Date     Per Share     2012     2011     2012     2011  
    Aug 30, 2011   $ 0.25     -     0.18     -     250,000  
    April 9, 2012   $ 0.30     -     0.80     -     50,000  
    April 16, 2012   $ 0.30     -     0.82     -     50,000  
    May 31, 2012   $ 0.35     -     1.79     -     50,000  
    May 31, 2012   $ 0.15     -     2.50     -     50,000  
    Aug 16, 2012   $ 0.31     0.13     2.65     100,000     100,000  
    Aug 16, 2012   $ 0.25     0.13     3.61     250,000     250,000  
    Dec 10, 2013   $ 0.15     1.47     2.50     25,000     25,000  
    Feb 2, 2014   $ 0.31     1.62     2.65     50,000     50,000  
    Oct 22, 2014   $ 0.33     2.34     3.38     25,000     25,000  
    Apr 25, 2015   $ 0.23     2.86     3.89     50,000     50,000  
    Apr 30, 2013   $ 0.10     0.83     -     350,000     -  
    Apr 24, 2022   $ 0.10     9.82     -     8,375,000     -  
    Options outstanding at end of year                 9,225,000     950,000  
    Weighted average exercise price at end of year         $ 0.11   $ 0.26  
    Weighted average remaining contractual life (in years)           8.99     2.07  


        Number of options:  
        2012     2011  
    Outstanding, beginning of year   950,000     4,850,000  
    Granted   8,725,000     400,000  
    Expired   (450,000 )   (550,000 )
    Exercised   -     (50,000 )
    Forfeited   -     -  
    Cancelled   -     (3,700,000 )
    Outstanding, end of year   9,225,000     950,000  
    Exercisable, end of year   1,983,334     950,000  

    Item 6. Selected Financial Data

    Not applicable

    38


    Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

    This section should be read in conjunction with the accompanying financial statements and notes included in this report.

    MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

    Discussion of Operations & Financial Condition
    Twelve months ended June 30, 2012

    The Company has no source of revenue and we continue to operate at a loss. We expect our operating losses to continue for so long as we remain in an exploration stage and perhaps thereafter. As of June 30, 2012, we had accumulated losses of $20,820,817 (June 30, 2011 - $19,458,777). Our ability to emerge from the exploration stage and conduct mining operations is dependent, in large part, upon our raising additional equity financing.

    As described in greater detail below, the Company’s major financial endeavor over the years has been its effort to raise additional capital to pursue its exploration activities.

    In November of 2008, the Company refocused its business to concentrate on the exploration and, if warranted, development of cement grade limestone properties located in the State of Nevada. The Company’s limestone assets are held by its wholly owned subsidiary, IMC US which was acquired pursuant to a Share Exchange Agreement as of November 7, 2008. IMC US held five limestone properties at the time of purchase, covering a total of 402 mineral claims. These claim groups were; the Morgan Hill Group, LM Group, Rock Hill Group, Buffalo Mountain Group and the Aspen Group. The LM Group and the Aspen Group were dropped in August 2009 and August 2010, respectively.

    In December 2008, the Company amended its Certificate of Incorporation to change its name from “Silver Reserve Corp.” to “Infrastructure Materials Corp.” Also in December 2008, the Company incorporated a second wholly owned subsidiary under its former name “Silver Reserve Corp.,” and assigned all of its silver/base metal projects to this subsidiary.

    In December 2009, the Company further expanded its limestone exploration activities by acquiring CIC, which owns limestone quarry leases located in Manitoba, Canada. The Company purchased CIC, its now wholly owned subsidiary, pursuant to a Share Exchange Agreement (the “CIC Agreement”) between the Company, CIC and Todd D. Montgomery. Mr. Montgomery was the sole shareholder of CIC. Because Mr. Montgomery is also the Company’s Chief Executive Officer and a member of its Board of Directors, the CIC Agreement was approved by the disinterested members of the Company’s Board of Directors after obtaining an independent appraisal and market study for the properties. The CIC Agreement closed on February 9, 2010. As of the date of this report, CIC controls 35 quarry leases issued by the Province of Manitoba, Canada, covering 2,381 hectares (5,883 acres).

    The Company continues to look for opportunities to develop other mineral deposits of commodities in high demand or anticipated high demand. We believe that the federal governments in the United States and Canada will embark on major infrastructure expenditures in the next 10 years creating a demand for cement that exceeds the current sources of supply in certain areas of the United States and Canada. Cement is made from limestone and we believe our acquisitions in this area have significant potential.

    We have continued to raise capital and are moving forward with exploration on our Projects. The Company intends to continue to study and accumulate information about cement grade limestone properties in strategic locations with a view to filling an anticipated increased demand for cement in the United States and Canada, with a focus on the States of Nevada, California, Utah, Idaho and Arizona as well as the Canadian Provinces of Saskatchewan and Manitoba. Based on our evaluation of our 16 Limestone Projects, we have determined that the Blue Nose and Morgan Hill Projects currently provide the best opportunity for development of resources that could go to production. Our efforts will be concentrated on our Blue Nose Property which shows the highest potential for development of a substantial cement grade limestone resource.

    39


    The Company is also continuing its evaluation of the silver/base metal projects held by SRC. The Company has determined that the Silver Queen, Klondyke and Kope Scheelite Projects currently provide the best opportunity for development of resources that could go to production. While exploratory drilling programs are being developed, including a 5,000-foot drill program at our Kope Scheelite Project expected to commence in September 2012, the Company is also considering joint ventures with third parties to further explore and develop, if warranted, those properties.

    The consolidated financial statements include the accounts of the Company and its subsidiaries, IMC US, SRC and CIC. All material inter-company accounts and transactions have been eliminated.

    SELECTED ANNUAL INFORMATION            
                 
        June 30, 2012     June 30, 2011  
                 
    Revenues   Nil     Nil  
    Net (Loss)   ($1,362,040 )   ($2,523,079 )
    (Loss) per share-basic and diluted   ($0.02 )   ($0.04 )
    Total Assets $ 3,177,914   $ 2,240,487  
    Total Liabilities $ 382,474   $ 271,984  
    Cash dividends declared per share   Nil     Nil  

    Our total assets for the year ended June 30, 2012, include cash and cash equivalents of $1,533,139, short-term investments of $33,716, marketable securities of $45,181, prepaid expenses and other receivables of $14,479, restricted cash of $82,500, reclamation deposits of $240,805, plant and equipment of $713,569, net of depreciation, and mineral property interests of $514,525. Our total assets for the year ended June 30, 2011 include cash and cash equivalents of $317,912, short-term investments of $83,604, marketable securities of $68,429, prepaid expenses and other receivables of $103,807, restricted cash of $82,500, reclamation deposits of $240,805, plant and equipment of $828,905, net of depreciation, and mineral property interests of $514,525. Total assets increased from $2,240,487 on June 30, 2011 to $3,177,914 on June 30, 2012. This increase is the result of the proceeds from the December 2011 sale of the Company’s Common Shares, offset in part by expenses incurred in the normal course of business offset.

    Net Loss

    The Company’s expenses are reflected in the Statements of Operation under the category of Operating Expenses. To meet the criteria of United States generally accepted accounting principles (“GAAP”), all mineral property acquisition and exploration costs are expensed as incurred. Mineral property acquisition costs are initially capitalized in accordance with ASC 805-20-55-37, previously referenced as the FASB Emerging Issues Task Force ("EITF") Issue 04-2. The Company assesses the carrying costs for impairment under ASC 930 at each fiscal quarter end. The Company has determined that, except for the amount capitalized as Mineral Property Interests for $514,525 pursuant to the acquisition of CIC, all property payments are impaired and accordingly the Company has written off the acquisition costs to project expenses. When it has been determined that a mineral property can be economically developed as a result of establishing proven and probable reserves, the costs incurred to develop such property are capitalized. For the purpose of preparing financial information, all costs associated with a property that has the potential to add to the Company's proven and probable reserves are expensed until a final feasibility study demonstrating the existence of proven and probable reserve is completed. Except for the Mineral Property Interests discussed above, no costs have been capitalized in the periods covered by these financial statements. Once capitalized, such costs will be amortized using the units-of-production method over the estimated life of the probable reserve.

    40


    The significant components of expense that have contributed to the total operating expense are discussed as follows:

    (a) General and Administration Expense

    General and administration expense represents professional, consulting, office and general and other miscellaneous costs incurred during the periods covered by this report. General and administration expense for the year ended June 30, 2012 were $785,416, as compared with $899,059 for the year ended June 30, 2011. General and administration expense represents approximately 51% of the total operating expense for the year ended June 30, 2012, and 36% of the total Operating Expense for the year ended June 30, 2011. General and administration expense decreased by $113,643 in the current year, compared to the prior year. Most of the reduction in this category of expense is due to a foreign exchange gain of approximately $34,000, a decrease in investor relations costs of approximately $89,000, and a decrease in stock based compensation costs of approximately $40,000 offset in part by the costs of market and valuation studies for the Company’s Blue Nose limestone property and increased expenses relating to the Company’s Common Shares being traded in both the United States and Canada.

    (b) Project Expense

    Project expense includes costs of acquiring and maintaining claims, permitting processes, consultants, drilling, assaying and geologists. Included in operating expenses for the year ended June 30, 2012 is project expenses for $625,445 as compared with $1,479,229 for the year ended June 30, 2011. Project expense decreased as much of the Company’s efforts were focused on raising additional capital to finance future exploration. Project expense represents approximately 41% of the total operating expense for the year ended June 30, 2012, and approximately 59% of the total operating expense for the year ended June 30, 2011. Approximately 57% of project expenses for the year ended June 30, 2012, related to acquisition, exploration and maintenance of the Company’s silver/base metal claims.

    Liquidity and Capital Resources            
                 
    The following table summarizes the company’s cash flows and cash in hand:        
                 
        Year ended     Year ended  
        June 30, 2012     June 30, 2011  
    Cash and cash equivalents $  1,533,139   $  317,912  
    Working capital $  1,462,333   $  417,652  
    Cash (used) in operating activities $  (1,250,045 ) $  (2,370,399 )
    Cash provided by investing activities $  249,873   $  282,563  
    Cash provided by financing activities $  2,215,399   $  807,500  

    As of June 30, 2012, the Company had working capital of $1,462,333 as compared to $417,652 as of June 30, 2011. Working capital increased as a result of an increase in capital financing activities and a decrease in cash used for operating activities during the year ended June 30, 2012, as compared to the previous year.

    Off-Balance Sheet Arrangement

    The Company had no off-balance sheet arrangements as of June 30, 2012 and June 30, 2011.

    41


    Contractual Obligations and Commercial Commitments

    On August 1, 2006, the Company acquired the Pansy Lee Claims Group from Anglo Gold Mining Inc. in exchange for 1,850,000 Common Shares pursuant to an Asset Purchase Agreement dated August 1, 2006 (the “Pansy Lee Purchase Agreement”). Pursuant to the Pansy Lee Purchase Agreement, a 2% net smelter royalty pertains to 8 of the 30 claims in this group. In the event that any one or more of the 8 claims becomes a producing claim, our revenue is subject to a 2% net smelter return royalty where net smelter returns are based upon gross revenue. Gross revenue would be calculated after commercial production commences and includes the aggregate of the following amounts: revenue received by the Company from arm’s length purchasers of all mineral products produced from the property, the fair market value of all products sold by the Company to persons not dealing with the Company at arm’s length and the Company’s share of the proceeds of insurance on products. From such revenue, the Company would be permitted to deduct: sales charges levied by any sales agent on the sale of products; transportation costs for products; all costs, expenses and charges of any nature whatsoever that are either paid or incurred by the Company in connection with the refinement and beneficiation of products after leaving the property and all insurance costs and taxes.

    The Company obtained 25 mineral claims (the “Option Claims”), located in Elko County, Nevada pursuant to an option agreement (the “Option Agreement”) dated as of May 1, 2008 (the “Date of Closing”) with Nevada Eagle Resources, LLC and Steve Sutherland (together, the “Optionees”). The provisions of the Option Agreement included, among others, payments of specified annual amounts ranging from $10,000 to $80,000 by the Company to the Optionees over a period of ten years. Effective June 1, 2010, the Company and the Optionees agreed to terminate the Company’s interests in the Option Claims pursuant to (1) payment by the Company of $8,750 to each of the Optionees, (2) performance by the Company of such reclamation and remediation as required to discharge the surface management bond posted by the Company pursuant to a Notice of Intent filed with the BLM prior to undertaking exploration activity on the Option Claims, and (3) conveyance by the Company to Nevada Eagle Resources, LLC of the 124 mineral claims staked by the Company after the Date of Closing that are within the Area of Interest described in the Option Agreement. As of June 30, 2012, the undertakings described in (1) and (3) above have been completed and the reclamation and remediation described in (2) above are in progress. The 25 Option Claims together with 124 mineral claims staked by the Company have been referred to by the Company as the “Medicine Claim Group.”

    Effective as of June 23, 2008, the Company appointed Mason Douglas as the President of the Company. Mr. Douglas is also a director of the Company. In connection with the appointment, the Company entered into a consulting services agreement with a Canadian corporation that is controlled by Mr. Douglas (the “Consulting Agreement”). The Consulting Agreement has a term of one year and is then automatically renewable. Either party may terminate the Consulting Agreement upon 90 days notice to the other party. According to the terms of the Consulting Agreement as amended effective March 1, 2012, the Company will pay a fee of $10,417 per month and reimburse related business expenses. The Consulting Agreement permits Mr. Douglas to fulfill his duties for the Company from his office in Canada. Mr. Douglas does not receive a salary from the Company.

    On December 8, 2008 IMC US entered into a Mineral Rights Lease Agreement (the “Edgar Lease Agreement”) with the Earl Edgar Mineral Trust (“Edgar”) to lease certain mineral rights in Elko County, Nevada described below (the “Edgar Property”). The term of the Edgar Lease Agreement is ten years and will automatically renew on the same terms and conditions for additional ten-year periods, provided IMC US is conducting exploration, development or mining either on the surface or underground at the property. The rent is to be paid each year on January 1st. $1.00 per net acre was paid upon execution of the Edgar Lease Agreement. On January 1 of each year commencing in 2010 and extending for so long as the Edgar Lease Agreement is in effect, IMC US is obligated to make the following payments:

    42



      2010 $1.00 per net acre
      2011 $2.00 per net acre
      2012 $2.00 per net acre
      2013 $3.00 per net acre
      2014 $3.00 per net acre
      2015 $4.00 per net acre
      2016 $4.00 per net acre
      2017 $5.00 per net acre in each year for the duration of the Edgar Lease Agreement.

    The Edgar Lease Agreement covers 100% of the mineral rights on 1,120 acres of the Edgar Property (“Property A”) and 50% of the mineral rights on 6,720 acres of the Edgar Property (“Property B”). Edgar is entitled to receive a royalty of $0.50 per ton for material mined and removed from Property A and $0.25 per ton for material mined and removed from Property B during the term of the Edgar Lease Agreement and any renewal thereof.

    On April 9, 2009, the Company and Edgar entered into an Amendment to the Edgar Lease Agreement (the “Amendment”), effective as of December 8, 2008. The Amendment provides for Standard Steam LLC to carry out exploration for geothermal energy sources on the Edgar Property after obtaining the written consent of the Company. The Amendment also provides for other cooperation with Standard Steam LLC regarding mineral rights on Property B of the Edgar Property.

    On November 30, 2009, IMC US entered into a Mineral Rights Agreement with Perdriau Investment Corp. (“Perdriau”) to purchase 50% of the mineral rights, including all easements, rights of way and appurtenant rights of any type that run with the mineral rights in certain sections of Elko County, Nevada (the “Perdriau Property”). The purchase price was $10 per net acre. IMC US purchased 340 net acres for a total purchase price of $3,400. Perdriau will be entitled to receive a royalty of $0.25 per ton for material mined and removed from the Perdriau Property. Material mined and stored on the Perdriau Property or adjacent property for reclamation purposes will not be subject to any royalty. Material removed from the Perdriau Property for the purposes of testing or bulk sampling, provided it does not exceed 50,000 tons, will also not be subject to any royalty. The royalty will be calculated and paid within 45 days after the end of each calendar quarter.

    As of January 15, 2010, the Company entered into a Property Lease Agreement with Eugene M. Hammond (the “Hammond Lease”) for surface rights on 80 acres in Elko County, Nevada (the “Hammond Surface Rights”). The term of the Hammond Lease is five years and the annual rent is $500. The Company is responsible for the payment of all real estate taxes on the Hammond Surface Rights. During the term of the Hammond Lease, the Company has the exclusive right to conduct exploration and development work on the Hammond Surface Rights. The results of all drilling and exploration are the property of the Company. The Company is responsible for any environmental damage caused by the Company and any reclamation costs required as a result of drilling and testing. The Company has an option to purchase the property covered by the Hammond Lease for $15,000, less the amount paid in rent during the term of the Hammond Lease.

    Also as of January 15, 2010, IMC US entered into a Mineral Rights Agreement with Eugene M. Hammond (the “Hammond Mineral Rights Agreement”) pursuant to which the Company purchased a 25% interest in any and all minerals extracted from 160 acres (the “Hammond Mineral Rights Property”) covered by the Hammond Mineral Rights Agreement. The purchase price was $400. In addition, the seller is entitled to receive a royalty of $0.125 per ton on material mined and removed from the Hammond Mineral Rights Property. The Hammond Mineral Rights Agreement does not cover petroleum.

    43


    Effective July 1, 2010, the Company entered into an employment agreement with an individual to provide business and administrative services. The employment agreement has a term of one year and is automatically renewable thereafter. Either party may terminate the employment agreement upon 60 days notice. According to the terms of the employment agreement as amended effective March 1, 2012, the Company will pay the individual no less than $8,333 per month and reimburse related business expenses.

    Effective July 1, 2010, the Company entered into an employment agreement with an individual to provide receptionist and administrative services at its Reno, Nevada corporate headquarters. The employment agreement has a term of one year and is automatically renewable thereafter. Either party may terminate the employment agreement upon 30 days notice. Pursuant to this employment agreement, the Company will pay no less than $51,000 per year for such services.

    On February 25, 2011, SRC entered into an option and joint venture agreement (the “IMMI Option Agreement”) with International Millennium Mining Inc. (“IMMI”), a wholly owned subsidiary of International Millennium Mining Corp. (“IMMC”), to sell an 85% interest in SRC’s NL Extension Project Claim Group (the “NL Project”) for total consideration of $350,000 and 1,925,000 shares of IMMC’s common stock (the “Consideration”). The NL Project consists of 18 mineral claims located in Esmeralda County, Nevada, approximately 6 miles southwest of Silver Peak, Nevada on Highway 47. Under the terms of the IMMI Option Agreement, the Consideration is payable over a five-year period that ends on September 15, 2015, with IMMI’s interest in the NL Project vesting at the end of such period. In the event of early termination, IMMI is not entitled to the return of Consideration previously paid to SRC. If the NL Project is determined to be economically feasible, based upon criteria contained in the IMMI Option Agreement, SRC will be required to fund its portion of an operating budget proposed by IMMI in order to retain its 15% interest in the NL Project and to acquire a 15% interest in IMMI’s Nivloc Mine Project (the NL Project and the Nivloc Mine Project, collectively, the “IMMI Project”). In the event that SRC decides not to fund its portion of the budget, its 15% interest would be forfeited, but SRC would be entitled to a 2% net smelter return royalty if and when the IMMI Project enters the production phase. Upon funding of the operating budget and SRC’s acquisition of a 15% interest in the IMMI Project, SRC and IMMI would enter into a joint venture agreement.

    On September 1, 2011, SRC engaged Tetra Tech, Inc. to complete the exploration permitting activities for its Silver Queen property near Silver Peak, Nevada. The Company is to authorize each phase of work before the work proceeds. The estimated total consideration to be paid under the agreement is $68,900. As of June 30, 2012, the Company had recorded total expenses of $15,789 for this contract.

    Effective February 29, 2012, SRC entered into a mineral lease agreement (the “Gumaskas Agreement”) with Joseph W Gumaskas (“Gumaskas”) to lease a patented claim covering approximately 10 acres (the “Claim”) in Mineral County, Nevada. Unless terminated earlier by SRC, the term of the Gumaskas Agreement is ten years and will automatically renew on the same terms and conditions for additional five-year periods. The Gumaskas Agreement requires SRC to pay Gumaskas advance minimum royalty payments of $500 annually. In the event that the Claim becomes a producing claim, SRC will pay Gumaskas a 3% royalty based upon gross revenue less deductions permitted by the Gumaskas Agreement. Gross revenue includes the aggregate of revenue received by SRC from arm’s length purchasers of all mineral products produced from the Claim, the fair market value of all products sold by SRC to persons not dealing with SRC at arm’s length and SRC’s share of the proceeds of insurance on products. From such revenue, SRC would be permitted to deduct sales charges levied by any sales agent on the sale of products, all insurance costs in respect of mineral products, and all costs, expenses and charges of any nature whatsoever that are either paid or incurred by SRC in connection with the refinement and beneficiation of products after leaving the Claim. SRC may terminate the Gumaskas Agreement at any time by giving 60 days advance written notice to Gumaskas.

    Effective April 1, 2012, the Company entered into a consulting agreement (the “Teatyn Agreement”) with Teatyn Enterprises, Inc. (“Teatyn”) for Teatyn to provide the Company with certain investor relation services to the Company for a period of one year. The Teatyn Agreement can be terminated at any time upon 30-days prior written notice by either the Company or Teatyn or upon the occurrence of certain events as defined in the Teatyn Agreement. Under the terms of the Teatyn Agreement, Teatyn will receive a monthly fee of CDN$5,000 and options (the “Options”) to purchase up to 350,000 Common Shares at an exercise price of CDN$0.10 per share. The Options will vest at a rate of one twelfth (1/12) per month during the term of the Teatyn Agreement, such vesting subject to the terms of the Company’s Stock Option Plan and the policies of the TSX Venture Exchange. Unexercised Options, if any, will terminate thirty (30) days following the expiry or termination of the Teatyn Agreement.

    44


    Effective April 1, 2012, SRC entered into a mineral lease agreement (the “Saunders Agreement”) with Charles and Barbara Saunders (the “Lessors”) to lease patented claims covering approximately 37 acres (the “Claims”) in Esmeralda County, Nevada. Unless terminated earlier by SRC, the term of the Saunders Agreement is ten years and will automatically renew on the same terms and conditions for additional five-year periods. The Saunders Agreement requires SRC to pay the Lessors advance minimum royalty payments of $2,000 annually. In the event that the Claims become producing claims, SRC will pay the Lessors a 3% royalty based upon gross revenue less deductions permitted by the Saunders Agreement. Gross revenue includes the aggregate of revenue received by SRC from arm’s length purchasers of all mineral products produced from the Claims, the fair market value of all products sold by SRC to persons not dealing with SRC at arm’s length and SRC’s share of the proceeds of insurance on products. From such revenue, SRC would be permitted to deduct sales charges levied by any sales agent on the sale of products, all insurance costs in respect of mineral products, and all costs, expenses and charges of any nature whatsoever that are either paid or incurred by SRC in connection with the refinement and beneficiation of products after leaving the Claims. SRC may terminate the Saunders Agreement at any time by giving 60 days advance written notice to the Lessors.

    On May 15, 2012, SRC entered into an Exploration License with Option to Purchase (the “Buhrman Agreement”) with Ralph L. Buhrman and Jacqueline Buhrman (together, the “Owner”) for three patented claims, covering approximately 59 acres (the “Property”) situated in Mineral County, Nevada. Under the terms of the Buhrman Agreement, SRC was granted the exclusive right and option to enter and examine the Property (the “Exploration License”) in consideration of a $30,000 payment to the Owner (the License Payment”). During the term of the Exploration License, SRC has the exclusive right to undertake geological, geophysical, and geochemical examinations of the Property; to sample the Property by means of pits, trenches, and drilling; and to take bulk samples from the Property for the purpose of conducting metallurgical and leaching tests. However, SRC may not commence development or mining activities on the Property unless it exercises the Purchase Option as defined below. SRC will be responsible for reclamation of its pits, trenches, drill sites, and other such disturbances arising out of its activities on the Property. The Exploration License has an initial one-year term beginning on May 1, 2012 (the “Effective Date”) and ending on April 30, 2013. SRC has the right to extend the Exploration License for one additional period of one year provided SRC makes an additional License Payment of $30,000 in advance for such extension. SRC was also granted exclusive right and option to purchase the Owner’s ownership interest in the Property (the “Purchase Option”) for the sum of $90,000 less all License Payments previously made. SRC may exercise the Purchase Option at any time during the term of the Exploration License by giving written notice to the Owner. If SRC exercises the Purchase Option, SRC will also pay the Owner a two percent (2%) royalty based upon gross revenues less deductions as defined by the Buhrman Agreement, and SRC will also have the exclusive right and option to purchase such royalty at any time for the sum of $1,000,000 less any payments previously made by SRC to the Owner pursuant to such royalty. SRC may terminate the Buhrman Agreement at any time by giving 30 days’ notice in writing to the Owner.

    The Company has entered into operating leases for its office space and certain office furniture and equipment. Rent payments associated with those leases for the years ended June 30, 2012, and June 30, 2011, were $28,356 and $31,549, respectively. As of June 30, 2012, the Company’s estimated future minimum cash payments under non-cancelable operating leases for the years ending June 30, 2013, June 30, 2014, and June 30, 2015, are $23,138, $9,500, and $0, respectively.

    45


    Maintaining Claims in Good Standing

    The Company is required to pay to the BLM on or before September 1st of each year, a fee in the amount of $140 per mineral claim held by the Company. The total amount paid in August 2012, was $155,400 for 1,110 claims held by the Company at that date. The BLM fee for the 18 NL Project claims held by the Company were paid by IMMI pursuant to the IMMI Option Agreement described above.

    The Company is also required to pay on or before November 1st of each year, annual fees to counties in Nevada in which the claims are held. In September 2011, the Company paid $11,190 to nine counties in Nevada for annual claims-related fees.

    The Company also holds certain patented claims and leases other patented claims in Nevada. A patented claim is fee simple title to the property. Patented claims are subject to taxes assessed by the local community based on assessment rates set annually.

    The Company holds certain exploration permits in the state of Arizona, which have a duration of one year from the date of issuance. The permits may be renewed for up to four additional one-year terms for a total of five years and provide the holder of the permit with an exclusive right to explore for minerals within the state land covered by the permit and to apply for mineral leases to such land. The holder of a permit may remove from the land only the amount of material required for sampling and testing and is responsible for any damage or destruction caused by the holder’s exploration activities. The holder of a permit is entitled to ingress and egress to the covered site along routes approved by the Arizona State Land Department. IMC US has posted a bond required by the state of Arizona to back any reclamation required as a result of work performed. The permit is renewable if the holder has expended not less than $10.00 per acre during each of the first two year-long periods and $20.00 per acre during each of the next three year-long periods. Each permit fee is $500 per year plus $2.00 per acre for the first two years and $1.00 per acre per year for the following three years. Upon termination of a mineral exploration permit, the state of Arizona is entitled to information collected by the permit holder. In the event that a permit holder discovers a valuable mineral deposit, the permit holder may apply to the Arizona State Land Department for a mineral lease having a term of 20 years and renewable for an additional 20 years. A permit holder shall be the preferred recipient of the mineral lease, provided that all applicable requirements are met. A mineral lease entitles the lessee to develop and establish a mine on the leased premises, provided that a mine plan and all necessary approvals are obtained.

    Each of the Company’s quarry leases located in Manitoba, Canada is renewable annually upon payment of rent to the province of Manitoba in the amount of CDN$24 per hectare or fraction thereof. During the fiscal year ended June 30, 2012, the Company paid CDN$57,504 in rent for these leases.

    CASH REQUIREMENTS

    At June 30, 2012, the Company had cash and cash equivalents of $1,533,139, short-term investments of $33,716, marketable securities of $45,181 and prepaid expenses and other receivables of $14,479 for a Current Assets total of $1,626,515

    During the twelve month period ending June 30, 2013, the Company expects to incur approximately $200,000 of expenses in connection with its Blue Nose limestone project and plans to incur additional expenses related to other limestone projects. The Company also expects to incur approximately $300,000 of project expenses in connection with its Kope Scheelite precious metals project. Our ability to incur Project expenses is subject to permitting programs with the Bureau of Land Management and results of drilling as it progresses. The Company has no firm commitment for additional financing and may not be able to incur all of the Project and General and administration expenses planned in the next fiscal year unless further capital is raised.

    46


    SUBSEQUENT EVENTS

    Based on a review of all of the Company’s mineral claims, On August 31, 2012 the Company elected to drop certain limestone mineral claims held by IMC US that it has determined are not in the Company’s best interests to retain.

    • All 7 mineral claims of the Rock Hill Claim Group were dropped.
    • All 5 mineral claims of the Buffalo Mountain Claim Group were dropped.
    • All 4 mineral claims of the Royale Claim Group were dropped.
    • All 19 mineral claims of the Pequop Claim Group were dropped.
    • All 23 mineral claims of the Ragged Top Claim Group were dropped.
    • All 44 mineral claims of the Jumbled Mountain Claim Group were dropped.
    • All 13 mineral claims of the Burnt Springs Claim Group were dropped.

    On July 26, 2012, the Company engaged Harris Exploration Drilling and Associates Inc. to conduct professional drilling services and related activities at SRC’s Kope Scheelite project at an estimated cost of $175,000.

    On August 16, 2012, 350,000 options that were granted pursuant to the Company’s 2006 Stock Option Plan expired.

    On September 6, 2012, the Company received $50,000 cash and 300,000 shares of IMMC’s common stock pursuant to the option agreement between SRC and IMMI, IMMC’s wholly owned subsidiary.

    Recent Accounting Pronouncements

    In December 2011, the FASB issued ASU 2011-11 (ASU 2011-11), Disclosures about Offsetting Assets and Liabilities, which requires certain additional disclosure requirements about financial instruments and derivatives instruments that are subject to netting arrangements. The new disclosures are required for annual reporting periods beginning on or after January 1, 2013, and interim periods within those periods. The adoption of this update will not have an impact on the financial statements of the Company.

    In June 2011, the FASB issued ASU 2011-05, Presentation of Comprehensive Income (ASU 2011-05), which eliminates the option to present components of other comprehensive income (OCI) as part of the statement of changes in stockholders’ equity. The amendments in this standard require that all non-owner changes in stockholders’ equity be presented either in a single continuous statement of comprehensive income or in two separate but consecutive statements. The standard does not change the current option for presenting components of OCI gross or net of the effect of income taxes, provided that such tax effects are presented in the statement in which OCI is presented or disclosed in the notes to the financial statements. Additionally, the standard does not affect the calculation or reporting of earnings per share. Subsequently, in December 2011, the FASB issued ASU 2011-12, Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income (ASU 2011-12), which indefinitely defers the requirement in ASU 2011-05 to present on the face of the financial statements reclassification adjustments for items that are reclassified from OCI to net income in the statement(s) where the components of net income and the components of OCI are presented. The amendments in these standards do not change the items that must be reported in OCI, when an item of OCI must be reclassified to net income, or change the option for an entity to present components of OCI gross or net of the effect of income taxes. The amendments in ASU 2011-05 and ASU 2011-12 are effective for fiscal years, and interim periods within those years, beginning after December 15, 2011 and are to be applied retrospectively. The Company is currently evaluating the impact of the pending adoption of ASU 2011-05 and ASU 2011-12 on its financial statements.

    47


    In May 2011, the FASB issued ASU 2011-04, Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs (ASU 2011-04). ASU 2011-04 amended ASC 820, Fair Value Measurements and Disclosures, to converge the fair value measurement guidance in U.S. GAAP and International Financial Reporting Standards (IFRSs). ASU 2011-04 changes the wording used to describe many requirements in U.S. GAAP for measuring fair value and for disclosing information about fair value measurements. Disclosure requirements have been expanded to include additional information about transfers between level 1 and level 2 of the fair value hierarchy and level 3 measurements regarding the sensitivity of fair value to changes in unobservable inputs and any interrelationships between those inputs Additionally, ASU 2011-04 clarifies the FASB’s intent about the application of existing fair value measurements including: (a) the application of the highest and best use valuation premise concepts; (b) measuring the fair value of an instrument classified in a reporting entity's stockholders' equity; and (c) quantitative information required for fair value measurements categorized within level 3. The amendments are to be applied prospectively and are effective for annual periods beginning after December 15, 2011. The Company is currently evaluating the effect that the provisions of ASU 2011-04 will have on the disclosures within the financial statements of the Company.

    In July 2012, the FASB issued ASU 2012-02, "Intangibles—Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment," (ASU 2012-02). ASU 2012-02 amends the guidance in ASC 350-302 on testing indefinite-lived intangible assets, other than goodwill, for impairment by allowing an entity to perform a qualitative impairment assessment before proceeding to the two-step impairment test. If the entity determines, on the basis of qualitative factors, that the fair value of the indefinite-lived intangible asset is not more likely than not (i.e., a likelihood of more than 50 percent) impaired, the entity would not need to calculate the fair value of the asset. In addition, the ASU does not amend the requirement to test these assets for impairment between annual tests if there is a change in events or circumstances; however, it does revise the examples of events and circumstances that an entity should consider in interim periods. ASU 2012-02 is effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012, with early adoption being permitted. The Company is currently evaluating the effect that the provisions of ASU 2011-02 will have on the consolidated financial statements of the Company.

    Critical Accounting Policies

    The preparation of financial statements in accordance with accounting principles generally accepted in the United States requires us to make estimates and assumptions that affect reported amounts of assets and liabilities at the date of the financial statements, the reported amount of revenues and expenses during the reporting period and related disclosure of contingent assets and liabilities. These estimates are based on our best knowledge of current events and actions the Company may undertake in the future. On an ongoing basis, we evaluate our estimates and judgments. To the extent actual results differ from those estimates, our future results of operations may be affected.

    48


    Besides this critical accounting policy on use of estimates, we believe the following critical accounting policy affects the preparation of our financial statements.

    Acquisition, Exploration and Evaluation Expenditures

    The Company is an exploration stage company and has not yet realized any revenue from its operations. It is primarily engaged in the acquisition and exploration of mineral properties. Mineral property acquisition costs are initially capitalized in accordance with ASC 805-20-55-37, previously referenced as the Financial Accounting Standards Board (“FASB”) Emerging Issues Task Force ("EITF") Issue 04-2. The Company assesses the carrying costs for impairment under ASC 360 and evaluates its carrying value under ASC 930 at each fiscal quarter end. When it has been determined that a mineral property can be economically developed as a result of establishing proven and probable reserves, the costs incurred to develop such property will be capitalized. The Company has capitalized $514,525 as Mineral Property Interests, and written off all other property payments to project expenses as impaired costs. Once capitalized, such costs will be amortized using the units-of-production method over the estimated life of the probable reserve. To date, mineral property exploration costs have been expensed as incurred. To date the Company has not established any proven or probable reserves on its mineral properties.

    Item 7A. Quantitative and Qualitative Disclosures About Market Risk

    Not applicable

    Item 8. Financial Statements and Supplementary Data

    See the Company’s financial statements and the report of Schwartz Levitsky Feldman, LLP following the signature page of this report, which are included as a part of this report.

    Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure

    None

    Item 9A. Controls and Procedures

    MANAGEMENT'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

    Based on an evaluation, conducted by our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as required by Exchange Act Rule 13a-15(e), they concluded that our disclosure controls and procedures were effective as of June 30, 2012, to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act are:

      1.

    recorded, processed, summarized and reported within the time periods specified by the SEC's rules and forms, and

         
      2.

    accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

    Management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is defined in Rule 13a-15(f) or 15d-15(f) promulgated under the Securities Exchange Act of 1934 as a process designed by, or under the supervision of, the company's principal executive and principal financial officers and effected by the company's board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States and includes those policies and procedures that:

    49


    * Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the company;

    * Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and

    * Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company's assets that could have a material effect on the financial statements.

    In making its assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control-Integrated Framework.

    Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Because of the inherent limitations of internal control, there is a risk that material misstatements may not be prevented or detected on a timely basis by internal control over financial reporting. However, these inherent limitations are known features of the financial reporting process. Therefore, it is possible to design into the process safeguards to reduce this risk.

    Management believes that potential weaknesses in the Company’s internal controls may arise as a result of a lack of segregation of duties and the existence of related party transactions. Management has added compensating controls to address the lack of segregation of duties and plans to add further controls in the future. In connection with related party transactions, management and the Board have required independent valuations prior to engaging in related party transactions that are not in the ordinary course of business. However, only one member of the Board, Randal Ludwar, may be considered independent. Mr. Ludwar was the Company’s Chief Financial Officer until October 22, 2009. Since that time, he has remained on the Board, but receives no remuneration from the Company and has no family affiliation with other members of the Board. Management has no evidence of any breakdown in its internal controls and continues to explore methods of reducing and minimizing the risk of a material misstatement in the Company’s financial statements.

    Based on its assessment, management has concluded that the Company's disclosure controls and procedures and internal control over financial reporting is effective based on the above criteria.

    Changes in Internal Controls

    During the quarter ended June 30, 2012, there have been no changes to the Company’s internal controls over financial reporting that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

    Audit Committee

    The Audit Committee is comprised of three directors, Randal Ludwar, Brent Walter and Joseph Montgomery, and meets regularly with the Company’s Chief Financial Officer. Mr. Ludwar was the Company’s Chief Financial Officer until October 22, 2009. Mr. Ludwar does not receive any compensation form the Company and has no family affiliation with the other members of the Board or with members of management. As of the end of the period covered by this report, the Company believes Mr. Ludwar can be considered an independent director. The Audit Committee has reviewed the financial statements of the Company included with this report on Form 10-K for the year ended June 30, 2012.

    50


    Item 9B. Other Information

    None.

    51


    Part III

    Item 10. Directors, Executive Officers and Corporate Governance

    The following individuals comprise the Company’s Board of Directors and executive officers as of June 30, 2012. Each director will serve until the next meeting of shareholders or until replaced.

    Todd D. Montgomery CEO and Director
    Mason Douglas President and Director
    Randal Ludwar Director
    Joseph Montgomery Director and Chairman of the Board
    Brent Walter Director
    Rakesh Malhotra Chief Financial Officer
    Anne Macko Corporate Secretary

    Todd D. Montgomery – Chief Executive Officer, Director

    Mr. Montgomery was the founder and former President of Anglo Potash Ltd. (TSX-V), a Canadian mining company, formerly Anglo Minerals Ltd. This company was purchased by BHP in 2008. In 1999, Mr. Montgomery founded and served as President and Chief Operating Officer of SynEnco Energy Inc., an oil sands development corporation. Prior to 1999, he identified and secured oil sands properties for Oil Sands Quest, an AMEX listed company. Mr. Montgomery has provided independent mining consulting services for a number of private and public corporations. Mr. Montgomery is also currently serving as CEO and a Director of Anglo Canadian Oil Corp. (TSX-V); President, CEO and Director of Canadian Platinum Corp. (TSX-V); and as CEO, President and Director of Pacific Iron Ore Corporation (TSX-V). He has previously served as CEO and a Director of Anglo Aluminum Corp. (TSX-V); CEO, President and Director of Klondike Capital Corp. (TSX-V); Director, President, CEO and CFO of McGregor Capital Corp. (TSX-V); and as Chairman of PanWestern Energy Ltd. (TSX-V). Mr. Montgomery is 46 years old. Todd D. Montgomery is the nephew of Joseph Montgomery, who also serves as Chairman of the Company’s Board of Directors.

    Mason Douglas - President, Director

    Mr. Douglas is currently President and a Director of Infrastructure Materials Corp. Mr. Douglas received an MBA from the University of Saskatchewan in 2000. He received his Bachelor of Law (LL.B) from the University of Calgary in 2007. Mr. Douglas is presently an inactive member of the Law Society of Alberta. Between 2001 and 2004 Mr. Douglas was Vice President of Operations of Western Petrochemicals Corp. a privately owned oil development company. Between 2001 and 2006 he also was an independent consultant providing business plans, economic modeling and project management for a variety of mining projects. Mr. Douglas is currently serving as a Director of Anglo Canadian Oil Corp. (TSX-V) and Canadian Platinum Corp. (TSX-V) and previously served as Chief Operating Officer and a Director of Anglo Aluminum Corp. (TSX-V). Mr. Douglas is 37 years old.

    Randal Ludwar - Director

    Mr. Ludwar received a B.Sc. (1977) in Business Administration from Yale University. Mr. Ludwar has been a private consultant to the Montgomery Group of Companies for the past seventeen years. He currently serves as a Director of Canadian Platinum Corp. (TSX-V) and previously served as a Director of McGregor Capital Corp. (TSX-V), Anglo Potash Ltd. (TSX-V) and Klondike Capital Corp. (TSX-V). Mr. Ludwar is 58 years old.

    52


    Joseph Montgomery - Chairman of the Board of Directors

    Dr. Montgomery is a geological engineer. He holds a B.Sc. (1959) in Geology, a M.Sc. (1960) in Geology and a Ph.D. (1967) in Geology. Dr. Montgomery has been practicing since 1959 and maintains his professional status as a member of the Association of Professional Engineers and Earth Sciences of British Columbia. He is also a member of the advisory board of the Canadian Institute of Gemology and is currently serving as a Director of Cosigo Resources Ltd. (TSX-V). Dr. Montgomery has previously served as a Director of Abitibi Mining Corp. (TSX-V), Amador Gold Corp. (TSX-V), Klondike Silver Corp. (TSX-V), Golden Chalice Resources Inc. (TSX-V), Kalahari Resources Inc. (TSX-V), Klondike Gold Corp. (TSX-V), Anglo Potash Ltd. (TSX-V). Sedex Mining Corp. (TSX-V), Chalice Diamond Corp. (TSX), Zincorp Resources Corp. (TSX), Pacific Iron Ore Corp. (TSX-V) and Almaden Minerals Ltd. (TSX). Dr. Montgomery is 85 years old. Joseph Montgomery is the uncle of Todd D. Montgomery, who also serves as a member of the Company’s Board of Directors and as the Company’s Chief Executive Officer.

    Brent Walter - Director

    Mr. Walter received a LL.B degree from the University of Saskatchewan in 1990. He is a lawyer with the firm, ProVenture Law LLP in Calgary, Alberta, and practices primarily in the areas of securities and corporate/commercial law. Mr. Walter currently serves as a director and officer of a number of public and private corporations, including Anglo Canadian Oil Corp. (TSX-V), Red Rock Energy Inc. (TSX-V), Canadian Platinum Corp. (TSX-V) and Pacific Iron Ore Corp. (TSX-V). During the five years preceding the period covered by this report, Mr. Walter was Managing Director of Anglo Potash Ltd. (TSX-V), and a Director of AgriTec Systems, Inc. (TSX-V), Klondike Capital Corp. (TSX-V), Mystique Energy Inc. (TSX-V), PanWestern Energy Ltd. (TSX-V), Fair Sky Resources (TSX-V), and Maskal Energy Ltd. (TSX-V). He is a member of the Law Societies of Alberta and Saskatchewan (inactive), as well as the Canadian Bar Association. Mr. Walter is 46 years old.

    Rakesh Malhotra - Chief Financial Officer

    Mr. Malhotra is a United States certified public accountant and a Canadian chartered accountant with more than 20 years of experience in accounting and finance, including consolidations, treasury management and financial statement audits. Mr. Malhotra graduated with a Bachelor of Commerce (Honours) from the University of Delhi (India), worked for the accounting firm, A.F. Ferguson & Co. (KPMG correspondent), and obtained his CA designation in India. His subsequent experience includes five years with the International Bahwan Group of Companies and working for a mid-sized chartered accounting firm in Toronto performing audits of public companies. Mr. Malhotra has worked for over four years as Vice President of Finance for a private group of service companies in Toronto, Ontario, and is currently serving as CFO for Pacific Copper Corp. (OTCBB), Security Devices International Inc. (OTCBB), Infrastructure Materials Corp. (OTCBB / TSX-V) and Yukon Gold Corp. (OTCBB / TSX). He previously served as CFO for Uranium Hunter Corp. (OTCBB). Mr. Malhotra is 55 years old.

    Anne Macko – Corporate Secretary

    Ms. Macko has over 25 years of experience in administration and holds a Bachelor of Arts degree from Western Illinois University. From October of 2007 to February of 2010 she was affiliated with Lance Capital Ltd., a Canadian management consulting firm that provided the Company with management consulting, administrative and accounting services. Ms. Macko previously held positions with George T. Hall Company, AppleOne, Inc. and Yamas Controls Company. In February of 2010, Ms. Macko was retained by the Company as a consultant and became an employee in July of 2010. Ms. Macko is 59 years old.

    53


    Reorganization of Officers and Directors

    Not applicable.

    Family Relationships

    There are no family relationships between or among the directors or executive officers except for the following: Joseph Montgomery, Chairman of the Company’s Board of Directors, is the uncle of Todd D. Montgomery, also a director and the Company’s Chief Executive Officer.

    Involvement in Certain Legal Proceedings

    During the past ten years none of the following events have occurred with respect to any of our directors or executive officers or any of the persons nominated by our board to become a director of the Company.

    1. A petition under the Federal bankruptcy laws or any state insolvency law was filed by or against, or a receiver, fiscal agent or similar officer was appointed by a court for the business or property of such person, or any partnership in which he was a general partner at or within two years before the time of such filing, or any corporation or business association of which he was an executive officer at or within two years before the time of such filing;

    2. Such person was convicted in a criminal proceeding or is a named subject of a pending criminal proceeding (excluding traffic violations and other minor offenses);

    3. Such person was the subject of any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining him from, or otherwise limiting, the following activities:

      i. Acting as a futures commission merchant, introducing broker, commodity trading advisor, commodity pool operator, floor broker, leverage transaction merchant, any other person regulated by the Commodity Futures Trading Commission, or an associated person of any of the foregoing, or as an investment adviser, underwriter, broker or dealer in securities, or as an affiliated person, director or employee of any investment company, bank, savings and loan association or insurance company, or engaging in or continuing any conduct or practice in connection with such activity;
         
      ii.

    Engaging in any type of business practice; or

         
      iii.

    Engaging in any activity in connection with the purchase or sale of any security or commodity or in connection with any violation of Federal or State securities laws or Federal commodities laws;

    4. Such person was the subject of any order, judgment or decree, not subsequently reversed, suspended or vacated, of any Federal or State authority barring, suspending or otherwise limiting for more than 60 days the right of such person to engage in any activity described in paragraph (3)(i) above, or to be associated with persons engaged in any such activity;

    5. Such person was found by a court of competent jurisdiction in a civil action or by the Commission to have violated any Federal or State securities law, and the judgment in such civil action or finding by the Commission has not been subsequently reversed, suspended, or vacated;

    6. Such person was found by a court of competent jurisdiction in a civil action or by the Commodity Futures Trading Commission to have violated any Federal commodities law, and the judgment in such civil action or finding by the Commodity Futures Trading Commission has not been subsequently reversed, suspended or vacated;

    54


    7. Such person was the subject of, or a party to, any Federal or State judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated, relating to an alleged violation of:

      i.

    Any Federal or State securities or commodities law or regulation; or

         
      ii.

    Any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease- and-desist order, or removal or prohibition order; or

         
      iii. Any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or

     8. Such person was the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Exchange Act), any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member.

    Compliance with Section 16(a) of the Exchange Act

    Section 16(a) of the Securities Exchange Act of 1934, as amended, (the “Exchange Act”), requires the Company’s directors and officers, and persons who own more than 10% of the registered class of the Company’s equity securities (“Section 16 Persons), to file with the Securities and Exchange Commission (the “SEC”), initial reports of ownership and reports of changes in ownership of Common Stock and other equity securities of the Company. Section 16 Persons are required by SEC regulation to furnish the Company with copies of all Section 16(a) reports they filed. Based on the Company’s review of the forms it has received, on reports filed by Section 16 Persons with the SEC and on the Company’s records, the Company believes that during the twelve month period ended June 30, 2012, the following reports were filed late:

    Name Form Type Number of Number of
        Forms Transactions Reported
    Randal Ludwar Form 4 1 1
    Rakesh Malhotra Form 3 1 2
    Joseph Montgomery Form 4 1 1
    Brent Walter Form 4 2 2
    Mason Douglas Form 4 1 1
    Todd Montgomery Form 4 2 2

    Code of Ethics

    The Company adopted a formal written Code of Business Conduct & Ethics for all officers, directors and senior employees, available at:

    http://www.infrastructurematerialscorp.com/Corporate_Profile/code_of_ethics.html

    55


    Item 11. Executive Compensation

    Except for services provided by entities owned by some of our Officers and Directors as more particularly set out in CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE, below, no officer or director has received any other remuneration from us, directly or indirectly, since our inception. We have a stock option plan only, as described herein. Although we have no other retirement incentive, defined benefit, actuarial, pension or profit-sharing programs for the benefit of directors, officers or other employees, it is possible that we will adopt such a plan in the future.

    (a) Compensation of Officers

    The following table shows the compensation paid to the Company’s executive officers during the fiscal years ended June 30, 2012 and 2011:

    SUMMARY COMPENSATION TABLE
                       
                Non-equity Nonqualified    
      Year     Stock Option incentive plan deferred All other  
    Name and principal Ended Salary Bonus Awards Awards   compensation   compensation   compensation   Total
    position June 30, ($) ($) ($) ($) ($) earnings ($) ($)  ($)
                       
    Todd D. Montgomery 2012  NIL  NIL NIL NIL NIL NIL NIL 0
    CEO and Director 2011  NIL  NIL NIL NIL NIL NIL NIL 0
                       
    Mason Douglas 2012  NIL  NIL NIL 9,729 NIL NIL 109,668 119,397
    President and Director 2011 NIL  NIL NIL NIL NIL NIL 102,000 102,000
                       
    Rakesh Malhotra 2012  NIL  NIL NIL 3,063 NIL NIL 15,581 18,644
    CFO 2011  NIL  NIL NIL NIL NIL NIL 13,974 13,974
                       
    Anne Macko 2012 54,667  1,500 NIL  3,603 NIL NIL NIL 59,770
    Corporate Secretary 2011 53,375  1,200 NIL 10,954 NIL NIL NIL 65,529

    (b) Long Term Incentive Plan (LTIP Awards)

    The Company does not have a long term incentive plan, pursuant to which cash or non-cash compensation intended to serve as an incentive for performance (whereby performance is measured by reference to financial performance or the price of the Company’s securities), was paid or distributed to any executive officers during the three most recent completed years.

    56


    (c) Options and Stock Appreciation Rights (SARs)

    The following table shows the stock options and stock appreciation rights, if any, granted to the Company’s executive officers as of June 30, 2012:

                                                        Equity  
                                                  Equity     Incentive    
                                                  Incentive     plan  
                                                  plan     awards:  
                                                  awards:     Market or  
                                          Market     Number       payout  
                    Equity                       value of     of     value of  
                    Incentive                 Number of     shares of       unearned       unearned    
                     plan                  shares       units       shares,     shares, or    
        Number of     Number of     awards:                 or units     of stock     units or     units or  
        Securities     Securities     Number of                 of stock     that     other     other  
        underlying     underlying     Securities       Option           that     have     rights     rights  
        unexercised     unexercised      underlying     exercise     Option     have not     not       that have     that have  
        options (#)     options (#)     unearned     price     expiration     vested      vested      not     not  
    Name   Exercisable      Unexercisable      options (#)     ($)     date     (#)     ($)     vested (#)      vested ($)   
    Mason Douglas   225,000     1,125,000     Nil     0.10     24-Apr-2022     Nil     Nil     Nil     Nil  
    Anne Macko   83,333     416,667     Nil     0.10     24-Apr-2022     Nil     Nil     Nil     Nil  

      Rakesh Malhotra

      25,000     Nil     Nil     0.15     10-Dec-2013     Nil     Nil     Nil     Nil  
    70,833 354,167 0.10 24-Apr-2022

    57


    (d) Compensation of Directors

    Directors are not paid any fees in their capacity as directors of the Company. The directors are entitled to participate in the Company’s stock option plan. For information regarding the compensation of our directors who are also officers of the Company see the “SUMMARY COMPENSATION TABLE” above.

    DIRECTOR COMPENSATION TABLE

    Name Year
    ended
    June 30,
    Fees
    earned
    or paid
    in cash
     
    Stock
    Awards ($)
    Option
    Awards ($)
    Non-equity
    incentive plan
    compensation
    ($)
    All other
    compensation
    ($)
    Total
    ($)
    Joseph
    Montgomery
    Chairman of the
    Board of
    Directors (1)
    2012 NIL NIL $4,324 NIL NIL $4,324
    Brent Walter
    Director (2)
    2012 NIL NIL $9,729 NIL NIL $9,729
    Randal Ludwar
    Director (3)
    2012 NIL NIL $4,324 NIL NIL $4,324

      (1)

    On April 25, 2012, Mr. Montgomery was granted the option to purchase 600,000 Common Shares at a price of CDN$0.10 per share. As of the fiscal year ended June 30, 2012, 100,000 options were exercisable.

         
      (2)

    On April 25, 2012, Mr. Walter was granted the option to purchase 1,350,000 Common Shares at a price of CDN$0.10 per share. As of the fiscal year ended June 30, 2012, 225,000 options were exercisable.

         
      (3)

    On April 25, 2012, Mr. Ludwar was granted the option to purchase 600,000 Common Shares at a price of CDN$0.10 per share. As of the fiscal year ended June 30, 2012, 100,000 options were exercisable.

    No stock options were exercised by executive officers or directors during the fiscal year ended June 30, 2012.

    Other Arrangements
    None.

    Indebtedness of Directors and Executive Officers

    None.

    58


    Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

    As of August 31, 2012, we have 98,935,486 Common Shares issued and outstanding. We have included in the tables below the number of Common Shares of the Company held by the officers and directors of the Company as well as the beneficial owners of more than 5% of shares of the Company’s common stock.

                          Number of Shares  
                          Subject to Options  
                          Exercisable as of  
        Number of Shares of                 August 31, 2012 or  
        Common Stock                 Which will  
        Beneficially                 become Exercisable  
    Name and Address   Owned as of     Nature of       Percentage of     within 60 days  
    of Beneficial Owner   August 31, 2012     Ownership     Class Held     of this Date  
                             
    Pinetree Capital Ltd.   8,177,174     Record     8.27% of Common shares     Nil  
    150 King St. W., Ste 2500                        
    Toronto, ON M5X 1A9                        

    59



                          Number of Shares  
                          Subject to Options  
                          Exercisable as of  
        Number of Shares of                 August 31, 2012 or  
        Common  Stock                 Which will  
        Beneficially                 become Exercisable  
    Name and Address   Owned as of     Nature of           within 60 days  
    of Beneficial Owner   August 31, 2012     Ownership     Percentage of Class Held     of this Date  
                             
    Todd D. Montgomery, CEO   39,731,330 (1)   Record     40.16% of Common shares       Nil  
    1413-43rd Street SW                        
    Calgary, AB T3C 2A3                        
                             
    Joseph Montgomery, Chairman   500,000 (2)   Record     0.51% of Common shares       200,000  
    878 W. 27th Avenue                        
    Vancouver, BC V5Z 2G7                        
                             
    Randal Ludwar, Director   500,000       Record     0.51% of Common shares       200,000  
    1215 Mayberry Crescent                        
    Moose Jaw, SK S6H 6X7                        
                             
    Brent Walter, Director   2,100,000 (3)   Record     2.12% of Common shares       533,333(5)   
    2417 - 32nd Avenue SW                        
    Calgary, AB T2T 1X4                        
                             
    Mason Douglas, President   550,000       Record     0.56% of Common shares       450,000  
    311 Saskatchewan Cr. W.                        
    Saskatoon, SK S7M 0A2                        
                             
    Anne Macko, Corporate Secretary   Nil             Nil     166,667  
    3300 Kauai Court                        
    Reno, NV 89509                        
                             
    Rakesh Malhotra, CFO   16,664 (4)     Record     0.02% of Common shares       166,667  
    4580 Beaufort Terrace                        
    Mississauga, ON L5M 3H7                        
                             
                                                           TOTAL   43,397,994           43.88%     1,716,667  

    (1)

    All of Todd D. Montgomery’s Common Shares are held by companies that are owned or controlled by Mr. Montgomery.

    (2)

    400,000 of Joseph Montgomery’s Common Shares are held by family members.

    (3)

    800,000 of Brent Walter’s Common Shares are held by a family member.

    (4)

    All of Rakesh Malhotra’s Common Shares are held by a family member.

    (5)

    83,333 of Brent Walter’s Common Shares subject to options are held by a family member.

    As a group, management and the directors own or control 43.88% of the issued and outstanding Common Shares of Infrastructure Materials Corp.

    60


    Item 13. Certain Relationships and Related Transactions, and Director Independence

    A corporation owned and operated by the Company’s President who is also a member of the Company’s Board of Directors, received $109,668 for the President’s services.

    The Company recorded expenses of $27,538 for legal services rendered and expenses incurred on behalf of the Company by a law firm, a partner of which is also a member of the Company’s Board of Directors. In addition the same law firm was paid $70,853 for legal services rendered and expenses incurred on behalf of the Company that were capitalized as costs for raising capital.

    The Company’s Chief Financial Officer received $15,581 for consulting services provided to the Company.

    The Company’s Corporate Secretary received $56,167 for administrative services provided to the Company.

    The Company recorded interest expense of $1,381 pursuant to a promissory note issued to a corporation that is owned and controlled by the Company’s Chief Executive Officer who is also a member of its Board of Directors.

    On April 25, 2012, the Company granted options to certain of its officers and directors to purchase up to an aggregate of 4,825,000 Common Shares at an exercise price of CDN$0.10 per share. On the same date, the Company also granted options to a consultant who is a family member of a director to purchase up to 250,000 Common Shares at the same exercise price. The options were granted in accordance with the Company’s Amended Plan and vest at the rate of one twelfth (1/12) each month until fully vested. The options granted have a term of ten years. The Company expensed stock based compensation costs of $34,772 for options granted to officers and directors, and $1,802 for options granted to the director’s family member.

    Director Independence

    We currently have one independent director, as the term “independent” is defined by the rules of the NYSE-MKT. (Note-our Common Shares are not currently listed on the NYSE-MKT or any other national securities exchange and this reference is used for definitional purposes only.)

    Item 14. Principal Accountant Fees and Expenses

    The Company appointed Schwartz Levitsky Feldman, LLP as independent auditors to audit the financial statements of the Company for the fiscal years ended June 30, 2011 and June 30, 2012.

    Audit Fees. The Company paid Schwartz Levitsky Feldman LLP audit and audit related fees of approximately $37,205 and $26,514 for the fiscal years ended June 30, 2011 and June 30, 2012, respectively.

    All Other Fees. During the fiscal year ended June 30, 2012, the Company paid Schwartz Levitsky Feldman LLP fees of approximately $24,048 related to the Company’s December 2011 Canadian registered public offering. During the fiscal year ended June 30, 2011, the Company did not pay its principal accountant any additional fees.

    61


    PART IV

    Item 15. Exhibits, Financial Statement Schedules

    The Company’s Financial Statements and the Report of Schwartz Levitsky Feldman, LLP for the year ended June 30, 2012 and for the year ended June 30, 2011 are filed as part of this report.

    Index to Exhibits

    3.1

    Certificate of Incorporation filed on June 3, 1999 with the Delaware Secretary of State (previously filed as part of the Company’s registration statement filed on December 22, 2006)

       
    3.2

    By Laws (previously filed as part of the Company’s registration statement filed on December 22, 2006)

       
    3.3

    Certificate of Amendment of the Certificate of Incorporation of the Company dated June 5, 1999, changing the capitalization of the Company (previously filed as part of the Company’s registration statement filed on December 22, 2006)

       
    3.4

    Certificate of Amendment of the Certificate of Incorporation of the Company dated April 11, 2006, and filed with the Delaware Secretary of State on April 11, 2006 changing the capitalization of the Company (previously filed as part of the Company’s registration statement filed on December 22, 2006)

       
    3.5

    Certificate of Ownership and Merger of the Company dated November 8, 2008 and filed with the Delaware Secretary of State on December 1, 2008 (previously filed as part of the Company’s report on Form 8-K filed on December 1, 2008)

       
    3.6

    Certificate of Amendment of the Certificate of Incorporation of the Company dated July 29, 2011 and filed with the Delaware Secretary of State on August 1, 2011 (previously filed as part of the Company’s report on Form 8-K filed on August 4, 2011)

       
    21.1

    Subsidiaries of the Registrant

       
    23.1

    Consent of Schwartz Levitsky Feldman LLP Independent Auditors dated September 26, 2012

       
    31.1

    Certification by the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

       
    31.2

    Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

       
    32.1

    Certification by the Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, Section 906 of the Sarbanes-Oxley Act of 2002

       
    F-2 Report of Schwartz Levitsky Feldman, LLP dated September 21, 2012

    In addition, the following reports are incorporated by reference.

    Current Report on Form 8-K “Item 5.03 Amendment to Articles of Incorporation”, dated July 29, 2011

    62


    Current Report on Form 8-K “Item 1.01 Entry into a Material Definitive Agreement”, dated August 24, 2011

    Current Report on Form 8-K “Item 3.02 Unregistered Sales of Securities”, dated December 16, 2011

    Current Report on Form 8-K “Item 1.02 Termination of a Material Definitive Agreement”, dated March 23, 2012

    Current Report on Form 8-K “Item 8.01 Other Events”, dated April 19, 2012

    63


    SIGNATURES

    Pursuant to the requirements of the Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report on Form 10-K to be signed on its behalf by the undersigned, thereunto duly authorized, on the 26th day of September, 2012.

    SIGNATURE TITLE DATE
         
         
    /s/Todd D. Montgomery Chief Executive Officer September 26, 2012
       Todd D. Montgomery    
         
         
    /s/Mason Douglas President September 26, 2012
       Mason Douglas    
         
         
    /s/Rakesh Malhotra Chief Financial Officer September 26, 2012
         Rakesh Malhotra    

    SIGNATURE TITLE DATE
         
         
    /s/Todd D. Montgomery Chief Executive Officer and September 26, 2012
         Todd D. Montgomery Director  
         
         
    /s/Mason Douglas President and Director September 26, 2012
         Mason Douglas    
         
         
    /s/ Randal Ludwar Director September 26, 2012
         Randal Ludwar    
         
         
    /s/ Joseph Montgomery Chairman of the Board of Directors September 26, 2012
         Joseph Montgomery    
         
         
    /s/ Brent Walter Director September 26, 2012
         Brent Walter    

    64


    INFRASTRUCTURE MATERIALS CORP.
    (AN EXPLORATION STAGE COMPANY)

    CONSOLIDATED FINANCIAL STATEMENTS

    YEARS ENDED JUNE 30, 2012 AND 2011
    (Amounts expressed in US Dollars)

    CONTENTS   
       
    Report of Independent Registered Public Accounting Firm F2
       
    Consolidated Balance Sheets as of June 30, 2012 and June 30, 2011 F3
       
    Consolidated Statements of Operations and Comprehensive Loss for the years ended June 30, 2012 and June 30, 2011 and for the period from inception (June 3, 1999) to June 30, 2012 F4
       
    Consolidated Statements of Changes in Stockholders' Equity for the years ended June 30, 2012 and June 30, 2011 and for the period from inception (June 3, 1999) to June 30, 2012 F5
       
    Consolidated Statements of Cash Flows for the years ended June 30, 2012 and June 30, 2011 and for the period from inception (June 3, 1999) to June 30, 2012 F6
       
    Notes to Consolidated Financial Statements F7




    REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

    To the Board of Directors and Stockholders of
    Infrastructure Materials Corp.
    (An Exploration Stage Company)

    We have audited the accompanying consolidated balance sheets of Infrastructure Materials Corp. (the “Company”) as at June 30, 2012 and 2011 and the related consolidated statements of operations and comprehensive loss, cash flows and stockholders’ equity for the years ended June 30, 2012 and 2011 and for the period from inception (June 3, 1999) to June 30, 2012. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

    We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

    In our opinion, based on our audits, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Infrastructure Materials Corp. as at June 30, 2012 and 2011 and the results of its operations and its cash flows for the years ended June 30, 2012 and 2011 and for the period from inception (June 3, 1999) to June 30, 2012 in conformity with accounting principles generally accepted in the United States of America.

    The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the consolidated financial statements, the Company is an exploration stage company and has no established source of revenues. These conditions raise substantial doubt about its ability to continue as a going concern. Management’s plans regarding these matters are also described in the notes to the consolidated financial statements. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

      “SCHWARTZ LEVITSKY FELDMAN LLP”
       
    Toronto, Ontario, Canada Chartered Accountants
    September 21, 2012 Licensed Public Accountants

    2300 Yonge Street
    Toronto, Ontario M4P 1E4
    Tel: 416 785 5353
    Fax: 416 785 5663

    F2


    INFRASTRUCTURE MATERIALS CORP.
    (AN EXPLORATION STAGE COMPANY)
    Consolidated Balance Sheets as at
    June 30, 2012 and 2011
    (Amounts expressed in US Dollars)

        June 30,     June 30,  
        2012     2011  
        $     $  
    ASSETS            
    Current            
       Cash and cash equivalents   1,533,139     317,912  
       Short term investments   33,716     83,604  
       Marketable securities (Note 11)   45,181     68,429  
       Prepaid expenses and other receivables   14,479     103,807  
                 
    Total Current Assets   1,626,515     573,752  
                 
    Restricted Cash (Note 5)   82,500     82,500  
    Reclamation Deposit (Note 6)   240,805     240,805  
                 
    Plant and Equipment, net (Note 7)   713,569     828,905  
    Mineral Property Interests (Note 8)   514,525     514,525  
                 
    Total Assets   3,177,914     2,240,487  
                 
    LIABILITIES            
    Current            
       Accounts payable   105,219     52,197  
       Accrued liabilities (Note 9)   58,963     103,903  
                 
    Total Current Liabilities   164,182     156,100  
                 
    Deferred Revenue (Note 11)   193,593     93,429  
    Asset Retirement Obligation (Note 12)   24,699     22,455  
                 
    Total Liabilities   382,474     271,984  
                 
    Exploration Stage Activities (Note 2)            
    Commitments and Contingencies (Note 19)            
    Related Party Transactions (Note 20)            
    Subsequent Events (Note 21)            
                 
    Redeemable Preferred Stock (Note 13)   -     300,000  
                 
    STOCKHOLDERS' EQUITY            
    Capital Stock (Note 14)            
       Preferred stock, $0.0001 par value, 50,000,000 shares authorized, none 
             issued and outstanding (2011 – 2,608,696) (Note 13)
      -     -  
       Common stock, $0.0001 par value, 500,000,000 shares authorized, 
             98,935,486 issued and outstanding (2011 – 70,326,790)
      9,894     7,033  
    Additional Paid-in Capital   23,694,775     21,120,247  
    Accumulated Other Comprehensive Loss   (88,412 )   -  
    Deficit Accumulated During the Exploration Stage   (20,820,817 )   (19,458,777 )
                 
    Total Stockholders' Equity   2,795,440     1,668,503  
                 
    Total Liabilities and Stockholders' Equity   3,177,914     2,240,487  

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

    F3


    INFRASTRUCTURE MATERIALS CORP.
    (AN EXPLORATION STAGE COMPANY)
    Consolidated Statements of Operations and Comprehensive Loss for the
    Years Ended June 30, 2012 and 2011 and the Period from Inception (June 3, 1999) to June 30, 2012
    (Amounts expressed in US Dollars)

        Cumulative     For the     For the  
        since     year ended     year ended  
        inception     June 30, 2012     June 30, 2011  
        $     $     $  
    Operating Expenses                  
                       
           General and administration   9,863,554     785,416     899,059  
           Project expenses   10,504,930     625,445     1,479,229  
           Depreciation   1,161,263     125,401     147,148  
                       
    Total Operating Expenses   21,529,747     1,536,262     2,525,436  
                       
    Loss from Operations   (21,529,747 )   (1,536,262 )   (2,525,436 )
           Other income-interest   387,069     553     2,357  
           Other income-gain on termination of option agreement (Note 16)   175,050     175,050     -  
           Other income-gain on bargain purchase (Note 8)   238,645     -     -  
           Interest Expense   (91,834 )   (1,381 )   -  
                       
    Loss before Income Taxes   (20,820,817 )   (1,362,040 )   (2,523,079 )
                       
           Provision for income taxes   -     -     -  
                       
    Net Loss   (20,820,817 )   (1,362,040 )   (2,523,079 )
                       
           Unrealized loss on marketable securities (Note 11)         (88,412 )   -  
                       
    Comprehensive Loss         (1,450,452 )   (2,523,079 )
                       
    Loss per Weighted Average Number of Shares Outstanding
    -Basic and Fully Diluted
          (0.02 )   (0.04 )
                       
    Weighted Average Number of Shares Outstanding During the Periods
    -Basic and Fully Diluted
          86,359,577     69,047,201  

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

    F4


    INFRASTRUCTURE MATERIALS CORP.
    (AN EXPLORATION STAGE COMPANY)
    Consolidated Statements of Changes in Stockholder’s Equity for the
    Years Ended June 30, 2012 and 2011 and the Period from Inception (June 3, 1999) to June 30, 2012
    (Amounts expressed in US Dollars)

                                Deficit              
                                Accumulated     Accumulated        
        Common Stock     Additional     Deferred     during the     Other     Total  
        Number           Paid-in     Stock     Exploration     Comprehensive     Stockholders'  
        of Shares     Amount       Capital     Compensation     Stage     Loss     Equity  
              $     $     $     $     $     $  
    For the period from inception (June 3, 1999) through July 1, 2004   1     -     5,895         (5,895 )       -  
     Net (loss)   -     -     910           (910 )         -  
    Balance, June 30, 2005   1     -     6,805     -     (6,805 )         -  
     Contribution to additional paid-in capital   -     -     3,024                       3,024  
     Cancelled shares   (1 )   -     (1 )                     (1 )
     Common shares issued for nil consideration   14,360,000     1,436     (1,436 )         -           -  
     Common shares issued for cash   2,050,000     205     414,795           -           415,000  
     Subscription for stock               300,000           -           300,000  
     Stock issuance cost   -     -     (24,500 )         -           (24,500 )
     Net loss   -     -     -           (87,574 )         (87,574 )
    Balance, June 30, 2006   16,410,000     1,641     698,687     -     (94,379 )         605,949  
                                               
     Common shares issued for cash   3,395,739     340     548,595           -           548,935  
     Common shares issued to agents in
       lieu of commission for placement of
       common shares and convertible debentures
      1,064,000     106     265,894         -         266,000  
     Common shares issued for acquisition
        of interests in mineral claims
      3,540,600     354     884,796         -         885,150  
     Common shares issued for acquisition
       of interests in mineral claims
      1,850,000     185     462,315         -         462,500  
     Common shares issued for acquisition
       interests in a refinery
      88,500     9     22,116         -         22,125  
     Common shares issued for purchase of
       a mill with capital equipments
      6,975,000     697     1,743,053         -         1,743,750  
     Stock issuance cost               (59,426 )                     (59,426 )
     Stock based compensation               30,026                       30,026  
     Net loss for the year ended June 30, 2007         -     -     -     (2,845,424 )         (2,845,424 )
    Balance, June 30, 2007   33,323,839     3,332     4,596,056     -     (2,939,803 )         1,659,585  
                                               
     Common stock issued to consultants   3,000,000     300     2,249,700     (1,875,000 )   -           375,000  
     Stock based compensation         -     139,272           -           139,272  
     Warrant modification expense               844,423                       844,423  
     Conversion of convertible debentures
        with accrued interest
      7,186,730     719     3,590,801     -     -         3,591,520  
     Common shares issued for acquisition
        of interests in mineral claims
      175,000     18     104,982                 105,000  
     Common stock issued to a consultant   100,000     10     57,990                       58,000  
     Amortization of deferred stock
        compensation
                  562,500             562,500  
     Net loss for the year                           (4,635,465 )         (4,635,465 )
    Balance June 30, 2008   43,785,569     4,379     11,583,224     (1,312,500 )   (7,575,268 )         2,699,835  
                                               
     Common shares issued for cash (net)   7,040,000     704     3,372,296     -     -           3,373,000  
     Common stock issued to a consultant   75,000     7     43,493     -     -           43,500  
     Common stock issued on acquisition of
       a subsidiary
      397,024     40     31,722     -     -         31,762  
     Common shares issued on warrant
       exercises
      8,900,907     890     2,224,337     -     -         2,225,227  
     Stock based compensation               814,050                       814,050  
     Warrant modification expense               346,673                       346,673  
     Amortization of deferred stock
       compensation
                  1,125,000             1,125,000  
     Net loss for the year                           (6,045,477 )         (6,045,477 )
    Balance June 30, 2009   60,198,500     6,020     18,415,795     (187,500 )   (13,620,745 )         4,613,570  
                                               
     Common shares issued for cash   6,973,180     697     1,603,134                       1,603,831  
     Common stock issued on acquisition of a
       subsidiary
      1,021,777     102     275,778                 275,880  
     Stock based compensation               216,751           -           216,751  
     Amortization of deferred stock
       compensation
                  187,500             187,500  
     Net loss for the year                           (3,314,953 )         (3,314,953 )
    Balance June 30, 2010   68,193,457     6,819     20,511,458     -     (16,935,698 )         3,582,579  
                                               
     Common shares issued for cash   2,083,333     209     499,791                       500,000  
     Stock based compensation               101,503           -           101,503  
     Common stock options exercised   50,000     5     7,495           -           7,500  
     Net loss for the year                           (2,523,079 )         (2,523,079 )
    Balance June 30, 2011   70,326,790     7,033     21,120,247     -     (19,458,777 )         1,668,503  
                                               
     Common shares issued for cash (net)   26,000,000     2,600     2,212,799                       2,215,399  
     Stock based compensation               61,990           -           61,990  
     Preferred shares converted to common shares   2,608,696     261     299,739                       300,000  
     Unrealized loss on marketable securities                           -     (88,412 )   (88,412 )
     Net loss for the year                           (1,362,040 )         (1,362,040 )
    Balance June 30, 2012   98,935,486     9,894     23,694,775     -     (20,820,817 )   (88,412 )   2,795,440  

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

    F5


    INFRASTRUCTURE MATERIALS CORP.
    (AN EXPLORATION STAGE COMPANY)
    Consolidated Statements of Cash Flows for the
    Years Ended June 30, 2012 and 2011 and the Period from Inception (June 3, 1999) to June 30, 2012
    (Amounts expressed in US Dollars)

        Cumulative     For the     For the  
        Since     year ended     year ended  
        Inception     June 30, 2012     June 30, 2011  
        $     $     $  
    Cash Flows from Operating Activities                  
       Net loss   (20,820,817 )   (1,362,040 )   (2,523,079 )
       Adjustment to reconcile net loss to cash used in operating activities:                  
           Depreciation   1,161,263     125,401     147,148  
           Amortization of debt issuance cost   247,490     -     -  
           Loss on disposal of plant and equipment   10,524     -     -  
           Gain on Bargain Purchase (Note 8)   (238,645 )   -     -  
           Gain on termination of option agreement (Note 16)   (175,050 )   (175,050 )   -  
           Stock based compensation   1,363,592     61,990     101,503  
           Warrant modification expense   1,191,096     -     -  
           Shares issued for mineral claims, as part of project expenses   1,452,650     -     -  
           Shares issued for consultant services expensed   2,351,500     -     -  
           Shares issued on acquisition of subsidiary   31,762     -     -  
           Accretion of Asset Retirement Obligation (Note 12)   24,699     2,244     22,455  
           Interest on convertible debentures   90,453     -     -  
       Cash flow from changes in certain assets and liabilities:                  
           Prepaid expenses and other receivables   (14,479 )   89,328     (63,964 )
           Accounts payable   105,219     53,022     (41,213 )
           Accrued liabilities   59,404     (44,940 )   (13,249 )
                       
       Net cash used in operating activities   (13,159,339 )   (1,250,045 )   (2,370,399 )
                       
    Cash Flows from Investing Activities                  
           Decrease (Increase) in Short-term investments   (33,716 )   49,888     503,141  
           Increase in Reclamation Deposit (Note 6)   (240,805 )   -     (240,805 )
           Increase in Restricted Cash   (82,500 )   -     -  
           Cash received for option on claims and included in Deferred revenue (Note 11)*   60,000     35,000     25,000  
           Cash received for termination of option agreement (Note 16)   175,050     175,050     -  
           Acquisition of plant and equipment for cash   (121,815 )   (10,065 )   (4,773 )
           Proceeds from sale of plant and equipment   2,500     -     -  
                       
       Net cash provided (used) in investing activities   (241,286 )   249,873     282,563  
                       
    Cash Flows from Financing Activities                  
           Issuance of common shares for cash (net)   9,109,970     2,215,399     500,000  
           Issuance of preferred shares for cash   300,000     -     300,000  
           Issuance of common shares for option exercise   7,500     -     7,500  
           Issuance of common shares for warrant exercises   2,225,227     -     -  
           Issuance of promissory note (Note 10)   100,000     100,000        
           Repayment of promissory note (Note 10)   (100,000 )   (100,000 )      
           Issuance of convertible debentures subsequently converted to cash   3,501,067     -     -  
           Stock and debenture placement commissions paid in cash   (210,000 )   -     -  
                       
       Net cash provided by financing activities   14,933,764     2,215,399     807,500  
                       
    Net Change in Cash and cash equivalents   1,533,139     1,215,227     (1,280,336 )
                       
    Cash and cash equivalents - beginning of period   -     317,912     1,598,248  
                       
    Cash and cash equivalents - end of period   1,533,139     1,533,139     317,912  
                       
    Supplemental Cash Flow Information                  
       Interest Paid (Note 10)   1,381     1,381     -  
       Income taxes paid   -     -     -  

    * Excludes receipt of marketable securities for $133,593, being a non-cash item included in Deferred Revenue

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

    F6


    INFRASTRUCTURE MATERIALS CORP.
    (AN EXPLORATION STAGE COMPANY)
    Notes to the Consolidated Financial Statements
    June 30, 2012 and 2011
    (Amounts expressed in US Dollars)

    1.           Nature of Business and Operations

    The focus of Infrastructure Materials Corp. (the “Company”) is on the exploration and development, if feasible, of limestone, silver and other metals from its claims in the States of Nevada and Arizona and the Canadian province of Manitoba.

    The Company’s limestone assets are held by its wholly owned subsidiary, Infrastructure Materials Corp US (“IMC US”), a Nevada corporation, which was acquired as of November 7, 2008. As of the date of the financial statements, IMC US controls 12 limestone Projects in Nevada, made up of 658 mineral claims covering approximately 13,594 acres on land owned or controlled by the United States Department of Interior Bureau of Land Management (“BLM”). IMC US has acquired 100% of the Mineral Rights on an additional 1,120 acres, 50% of the Mineral Rights on 7,400 acres, and 25% of the Mineral Rights on 160 acres. IMC US also holds 6 mineral exploration permits covering approximately 3,507 acres at two projects in the state of Arizona. Subsequent to the date of the financial statements, 115 mineral claims in Nevada were dropped. Please see Note 21, Subsequent Events.

    On December 18, 2008, the Company incorporated a second wholly owned subsidiary in the State of Delaware under its former name, “Silver Reserve Corp.” referred to herein as “SRC.” The Company assigned all fourteen of its silver/base metal projects in Nevada to this subsidiary. As of June 1, 2010, SRC terminated its interests in one of the projects. As of the date of the financial statements, the remaining thirteen claim groups contain 579 mineral claims covering approximately 11,921 acres and 10 patented claims and 8 leased patented claims covering approximately 345 acres. SRC also has a milling facility located in Mina, Nevada on six mill site claims covering 30 acres.

    In December 2009, the Company further expanded its limestone exploration activities by acquiring Canadian Infrastructure Corp. (“CIC”), a Canadian corporation, which controlled 95 limestone quarry leases issued by the province of Manitoba, Canada, covering 6,090 hectares (15,049 acres). The Company acquired CIC pursuant to a Share Exchange Agreement (the “CIC Agreement”) between the Company, CIC and Todd D. Montgomery dated as of December 15, 2009. Mr. Montgomery was the sole shareholder of CIC. Because Mr. Montgomery is also the Company’s Chief Executive Officer and a member of its Board of Directors, the CIC Agreement was approved by the disinterested members of the Company’s Board of Directors on November 27, 2009, after obtaining an independent appraisal and market study for the properties. Under the terms of the CIC Agreement, the Company acquired all of the issued and outstanding stock of CIC in exchange for 1,021,777 shares of common stock of the Company (a “Common Share” or “Common Shares”). The CIC Agreement closed on February 9, 2010. In January 2011 and May 2011, the Company decided to forfeit a total of 60 quarry leases covering approximately 3,709 hectares (9,166 acres). As of the date of the financial statements, CIC controls 35 quarry leases, covering approximately 2,381 hectares (5,883 acres). Also see Note 8, Mineral Property Interests.

    The Company has not yet determined that any of its claims, mineral rights, mineral exploration permits or quarry leases can be economically developed and has expensed related costs to project expense. The Company’s assessment of the claims, mineral exploration permits, mineral rights and quarry leases may change after further exploration.

    The consolidated financial statements include the accounts of the Company and its subsidiaries, IMC US, SRC, and CIC. All material inter-company accounts and transactions have been eliminated.

    F7


    INFRASTRUCTURE MATERIALS CORP.
    (AN EXPLORATION STAGE COMPANY)
    Notes to the Consolidated Financial Statements
    June 30, 2012 and 2011
    (Amounts expressed in US Dollars)

    2.           Exploration Stage Activities

    The Company's financial statements have been prepared in accordance with United States generally accepted accounting principles and are presented on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business.

    The Company is in the exploration stage and has not yet realized revenues from its planned operations. The Company has incurred a cumulative loss of $20,820,817 from inception to June 30, 2012. The Company has no source of operating revenue and expects to incur significant expenses before establishing operating revenue. Due to continuing operating losses and cash outflows from continuing operations, the Company’s continuation as a going concern is dependent upon its ability to obtain adequate financing and to reach profitable levels of operation. In the event that the Company is unable to raise additional capital, as to which there is no assurance, the Company will not be able to continue doing business. The Company’s future success is dependent upon its continued ability to raise sufficient capital, not only to finance its operating expenses, but to continue its exploration activities and its assessments of the commercial viability of its claims. There is no assurance that such capital will be available on acceptable terms, if at all, or that the Company will attain profitable levels of operation.

    The Company has funded operations through the issuance of capital stock, convertible debentures and redeemable preferred stock. In May and June of 2006, the Company closed a private placement of its Common Shares for gross proceeds of $415,000. During the year ended June 30, 2007 the Company raised $848,935 (including $300,000 received in the prior year as stock subscriptions) through a private placement of Common Shares for cash. The Company also issued Convertible Debentures in the amount of $1,020,862 during the year ended June 30, 2006 and issued Convertible Debentures in the amount of $2,480,205 during the year ended June 30, 2007. During the fiscal year ended June 30, 2009, the Company completed private placements of Common Shares for proceeds of $3,373,000 net of cash expenses and issued Common Shares as a result of warrant exercises for proceeds of $2,225,227. In June 2010 and February 2011 the Company completed private placements of Common Shares for gross proceeds of $1,603,831 and $500,000, respectively. In June 2011 the Company completed a private placement of redeemable preferred stock for gross proceeds of $300,000. In December 2011 the Company completed a public offering in Canada of Common Shares for gross proceeds of $2,507,180 (CDN$2,600,000). Management's plan is to continue raising additional funds through future equity or debt financing until it achieves profitable operations from production of minerals or metals on its properties, if feasible.

    F8


    INFRASTRUCTURE MATERIALS CORP.
    (AN EXPLORATION STAGE COMPANY)
    Notes to the Consolidated Financial Statements
    June 30, 2012 and 2011
    (Amounts expressed in US Dollars)

    3.           Summary of Significant Accounting Policies

    The accounting policies of the Company are in accordance with accounting principles generally accepted in the United States of America and their basis of application is consistent with that of the previous year. Outlined below are the significant accounting policies:

    Basis of Presentation

    a)           Cash and Cash Equivalents

    Cash consists of cash and cash equivalents, which are short-term, highly liquid investments with original terms to maturity of 90 days or less.

    b)           Short-Term Investments and Marketable Securities

    Short-term investments represent bank deposits with maturities greater than three months and less than one year. These deposits are classified as held-for-trading and, due to the short-term maturity of these instruments, are reflected at carrying value, which is equivalent to their fair value.

    The Company’s marketable securities are classified as “available for sale.” The Company includes these investments in current assets at fair value. Realized gains and losses are included in income when the securities are sold.

    c)           Acquisition, Exploration and Evaluation Expenditures

    The Company is an exploration stage company and has not yet realized any revenue from its operations. It is primarily engaged in the acquisition and exploration of mineral properties. Mineral property acquisition costs are initially capitalized in accordance with ASC 805-20-55-37, previously referenced as the Financial Accounting Standards Board (“FASB”) Emerging Issues Task Force ("EITF") Issue 04-2. The Company assesses the carrying costs for impairment under ASC 360 and evaluates its carrying value under ASC 930 at each fiscal quarter end. When it has been determined that a mineral property can be economically developed as a result of establishing proven and probable reserves, the costs incurred to develop such property will be capitalized. The Company has capitalized $514,525 as Mineral Property Interests (See Note 8, Mineral Property Interests), and written off all other property payments to project expenses as impaired costs. Once capitalized, such costs will be amortized using the units-of-production method over the estimated life of the probable reserve.

    To date, mineral property exploration costs have been expensed as incurred. To date the Company has not established any proven or probable reserves on its mineral properties.

    F9 


    INFRASTRUCTURE MATERIALS CORP.
    (AN EXPLORATION STAGE COMPANY)
    Notes to the Consolidated Financial Statements
    June 30, 2012 and 2011
    (Amounts expressed in US Dollars)

    3.           Summary of Significant Accounting Policies - Cont’d

    d)           Plant and Equipment

    Plant and equipment are recorded at cost less accumulated depreciation. Depreciation is provided commencing in the month following acquisition using the following annual rate and method:

    Computer equipment 30% declining balance method
    Office furniture and fixtures 20% declining balance method
    Plant and Machinery 15% declining balance method
    Tools 25% declining balance method
    Vehicles 20% declining balance method
    Consumables 50% declining balance method
    Moulds 30% declining balance method
    Mobile Equipment 20% declining balance method
    Factory Buildings 5% declining balance method

    e)           Financial Instruments

    The fair market value of the Company’s financial instruments comprising cash and cash equivalents, short term investments, marketable securities and restricted cash were estimated to approximate their carrying values due to the short-term maturity of these financial instruments. The Company maintains cash balances at financial institutions. The Company has not experienced any material losses in such accounts.

    FASB defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The standard describes a fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value, which are the following:

    • Level 1 – Quoted prices in active markets for identical assets or liabilities

    • Level 2 – Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

    • Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

    Commodity Price Risk:

    The ability of the Company to develop its properties and the future profitability of the Company is directly related to the market price of certain minerals.

    F10


    INFRASTRUCTURE MATERIALS CORP.
    (AN EXPLORATION STAGE COMPANY)
    Notes to the Consolidated Financial Statements
    June 30, 2012 and 2011
    (Amounts expressed in US Dollars)

    3.           Summary of Significant Accounting Policies - Cont’d

    Foreign Exchange Risk:

    The Company conducts some of its operating activities in Canadian dollars. The Company is therefore subject to gains or losses due to fluctuations in Canadian currency relative to the US dollar.

    f)           Impairment of Long-lived Assets

    Long-lived assets to be held and used are analyzed for impairment whenever events or changes in circumstances indicate that the related carrying amounts may not be recoverable. The Company evaluates at each balance sheet date whether events and circumstances have occurred that indicate possible impairment. If there are indications of impairment, the Company uses future undiscounted cash flows of the related asset or asset grouping over the remaining life in measuring whether the assets are recoverable. In the event such cash flows are not expected to be sufficient to recover the recorded asset values, the assets are written down to their estimated fair value. Long-lived assets to be disposed of are reported at the lower of carrying amount or fair value of asset less cost to sell.

    g)           Asset Retirement Obligation

    The Company follows ASC 410-20 (Pre-Codification SFAS No. 143) "Accounting for Asset Retirement Obligations", that addresses financial accounting and reporting for reclamation obligations. ASC 410-20 requires recognition of the present value of obligations associated with the obligation for site reclamation and similar activities relating to its mining interests. Over time, accretion of the liability is recognized as an operating expense. See Note 12.

    h)           Revenue Recognition

    Revenue is recognized when the limestone, silver or other metals are extracted, processed, and sold. The Company will record revenues from the sale of limestone, silver or other metals when delivery to the customer has occurred, collectability is reasonably assured and title has transferred.

    i)           Income Taxes

    Deferred tax assets and liabilities are recorded for differences between the financial statement and tax basis of the assets and liabilities that will result in taxable or deductible amounts in the future based on enacted tax laws and rates. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. Income tax expense is recorded for the amount of income tax payable or refundable for the period increased or decreased by the change in deferred tax assets and liabilities during the period.

    F11


    INFRASTRUCTURE MATERIALS CORP.
    (AN EXPLORATION STAGE COMPANY)
    Notes to the Consolidated Financial Statements
    June 30, 2012 and 2011
    (Amounts expressed in US Dollars)

    3.           Summary of Significant Accounting Policies - Cont’d

    j)           Earnings (Loss) Per Share

    Basic earnings (loss) per share are computed by dividing net income (loss) by the weighted average number of common shares outstanding for the year. Diluted earnings (loss) per share is computed by dividing net income (loss) by the weighted average number of common shares outstanding plus common stock equivalents (if dilutive) related to convertible preferred stock, stock options and warrants for each year. There were no common equivalent shares outstanding at June 30, 2012 and 2011 that have been included in the diluted loss per share calculation as the effects would have been anti-dilutive.

    k)           Stock Based Compensation

    All awards granted to employees and non-employees after June 30, 2005 are valued at fair value by using the Black-Scholes option pricing model and recognized on a straight line basis over the service periods of each award. The Company accounts for equity instruments issued in exchange for the receipt of goods or services from other than employees using the estimated fair market value of the consideration received or the estimated fair value of the equity instruments issued, whichever is more reliably measurable. The value of equity instruments issued for consideration other than employee services is determined on the earlier of a performance commitment or completion of performance by the provider of goods or services.

    l)           Concentration of Credit Risk

    The Company does not have significant off-balance sheet risk or credit risk concentration.

    m)           Use of Estimates

    Preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the financial statements and related notes to financial statements. These estimates are based on management's best knowledge of current events and actions the Company may undertake in the future. Actual results may ultimately differ from such estimates. Significant estimates include the carrying value of mineral property interests, estimated useful lives of plant and equipment, accruals for liabilities, calculations of stock based compensation, the determination of asset retirement obligations and the provision for income taxes.

    n)           Comprehensive Income or Loss

    The Company reports comprehensive income or loss in its consolidated financial statements. In addition to items included in net income or loss, comprehensive income or loss includes items currently charged or credited directly to stockholders’ equity, such as foreign currency translation adjustments and unrealized gains or losses on available for sale marketable securities.

    F12


    INFRASTRUCTURE MATERIALS CORP.
    (AN EXPLORATION STAGE COMPANY)
    Notes to the Consolidated Financial Statements
    June 30, 2012 and 2011
    (Amounts expressed in US Dollars)

    3.           Summary of Significant Accounting Policies - Cont’d

    o)           Redeemable Preferred Stock

    Redeemable preferred stock (and, if ever, any other redeemable financial instrument the Company may enter into) is initially evaluated for possible classification as liabilities in instances where redemption is certain to occur. Redeemable preferred stock classified as liabilities is recorded and carried at fair value. Redeemable preferred stock that does not, in its entirety, require liability classification is evaluated for embedded features that may require bifurcation and separate classification as derivative liabilities. In all instances, the classification of the redeemable preferred stock host contract that does not require liability classification is evaluated for equity or mezzanine classification based upon the nature of the redemption features. Generally, any feature that could require cash redemption for matters not within the Company’s control, irrespective of probability of the event occurring, requires classification outside of stockholders’ equity. Redeemable preferred stock that is recorded in the mezzanine section is accreted to its redemption value through charges to stockholders’ equity when redemption is probable using the effective interest method. See Note 13 for further disclosures about the Company’s redeemable preferred stock.

    p)           Recent Accounting Pronouncements

    In December 2011, the FASB issued ASU 2011-11 (ASU 2011-11), Disclosures about Offsetting Assets and Liabilities, which requires certain additional disclosure requirements about financial instruments and derivatives instruments that are subject to netting arrangements. The new disclosures are required for annual reporting periods beginning on or after January 1, 2013, and interim periods within those periods. The adoption of this update will not have an impact on the financial statements of the Company.

    In June 2011, the FASB issued ASU 2011-05, Presentation of Comprehensive Income (ASU 2011-05), which eliminates the option to present components of other comprehensive income (OCI) as part of the statement of changes in stockholders’ equity. The amendments in this standard require that all non-owner changes in stockholders’ equity be presented either in a single continuous statement of comprehensive income or in two separate but consecutive statements. The standard does not change the current option for presenting components of OCI gross or net of the effect of income taxes, provided that such tax effects are presented in the statement in which OCI is presented or disclosed in the notes to the financial statements. Additionally, the standard does not affect the calculation or reporting of earnings per share. Subsequently, in December 2011, the FASB issued ASU 2011-12, Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income (ASU 2011-12), which indefinitely defers the requirement in ASU 2011-05 to present on the face of the financial statements reclassification adjustments for items that are reclassified from OCI to net income in the statement(s) where the components of net income and the components of OCI are presented. The amendments in these standards do not change the items that must be reported in OCI, when an item of OCI must be reclassified to net income, or change the option for an entity to present components of OCI gross or net of the effect of income taxes. The amendments in ASU 2011-05 and ASU 2011-12 are effective for fiscal years, and interim periods within those years, beginning after December 15, 2011 and are to be applied retrospectively. The Company is currently evaluating the impact of the pending adoption of ASU 2011-05 and ASU 2011-12 on its financial statements.

    F13


    INFRASTRUCTURE MATERIALS CORP.
    (AN EXPLORATION STAGE COMPANY)
    Notes to the Consolidated Financial Statements
    June 30, 2012 and 2011
    (Amounts expressed in US Dollars)

    3.           Summary of Significant Accounting Policies - Cont’d

    p)           Recent Accounting Pronouncements –Cont’d

    In May 2011, the FASB issued ASU 2011-04, Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs (ASU 2011-04). ASU 2011-04 amended ASC 820,

    Fair Value Measurements and Disclosures, to converge the fair value measurement guidance in U.S. GAAP and International Financial Reporting Standards (IFRSs). ASU 2011-04 changes the wording used to describe many requirements in U.S. GAAP for measuring fair value and for disclosing information about fair value measurements. Disclosure requirements have been expanded to include additional information about transfers between level 1 and level 2 of the fair value hierarchy and level 3 measurements regarding the sensitivity of fair value to changes in unobservable inputs and any interrelationships between those inputs Additionally, ASU 2011-04 clarifies the FASB’s intent about the application of existing fair value measurements including: (a) the application of the highest and best use valuation premise concepts; (b) measuring the fair value of an instrument classified in a reporting entity's stockholders' equity; and (c) quantitative information required for fair value measurements categorized within level 3. The amendments are to be applied prospectively and are effective for annual periods beginning after December 15, 2011. The Company is currently evaluating the effect that the provisions of ASU 2011-04 will have on the disclosures within the financial statements of the Company.

    In July 2012, the FASB issued ASU 2012-02, "Intangibles—Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment," (ASU 2012-02). ASU 2012-02 amends the guidance in ASC 350-302 on testing indefinite-lived intangible assets, other than goodwill, for impairment by allowing an entity to perform a qualitative impairment assessment before proceeding to the two-step impairment test. If the entity determines, on the basis of qualitative factors, that the fair value of the indefinite-lived intangible asset is not more likely than not (i.e., a likelihood of more than 50 percent) impaired, the entity would not need to calculate the fair value of the asset. In addition, the ASU does not amend the requirement to test these assets for impairment between annual tests if there is a change in events or circumstances; however, it does revise the examples of events and circumstances that an entity should consider in interim periods. ASU 2012-02 is effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012, with early adoption being permitted. The Company is currently evaluating the effect that the provisions of ASU 2011-02 will have on the consolidated financial statements of the Company.

    F14


    INFRASTRUCTURE MATERIALS CORP.
    (AN EXPLORATION STAGE COMPANY)
    Notes to the Consolidated Financial Statements
    June 30, 2012 and 2011
    (Amounts expressed in US Dollars)

    4.           Fair Value of Financial Instruments

    The fair values of financial assets measured in the balance sheet as of June 30, 2012 are as follows:

              Quoted prices              
              in active     Significant        
              markets for     observable     Unobservable  
        Carrying     identical assets     inputs     inputs  
    Balance sheet   Amount     (Level 1)     (Level 2)     (Level 3)  
    classification and nature   $     $     $     $  
                             
    Assets                        
    Cash and cash equivalents   1,533,139     1,533,139              
    Short term investments   33,716     33,716              
    Marketable securities   45,181     45,181              
    Restricted Cash   82,500     82,500              

    The fair values of financial assets measured in the balance sheet as of June 30, 2011 are as follows:

              Quoted prices              
              in active     Significant        
              markets for     observable     Unobservable  
        Carrying     identical assets     inputs     inputs  
    Balance sheet   Amount     (Level 1)     (Level 2)     (Level 3)  
    classification and nature   $     $     $     $  
                             
    Assets                        
    Cash and cash equivalents   317,912     317,912              
    Short term investments   83,604     83,604              
    Marketable securities   68,429     68,429              
    Restricted Cash   82,500     82,500              

    5.           Restricted Cash

    Amounts reflected as Restricted Cash represent either cash held as collateral or certificates of deposits pledged toward reclamation liabilities assessed by the BLM. Periodically, the BLM may require the Company to pledge additional cash as collateral or the Company may be allowed to remove restrictions on this cash by completing its reclamation obligations, as the case may be.

    6.           Reclamation Deposit

    The Company posted a reclamation bond of $240,805 pursuant to the Plan of Operations for its Blue Nose limestone project, as required by the BLM to secure remediation costs if the project is abandoned or closed. The Company must complete certain reclamation work for these funds to be released, but may leave the bond in place for future exploration programs, even if such reclamation work is completed.

    F15


    INFRASTRUCTURE MATERIALS CORP.
    (AN EXPLORATION STAGE COMPANY)
    Notes to the Consolidated Financial Statements
    June 30, 2012 and 2011
    (Amounts expressed in US Dollars)

    7.           Plant and Equipment, Net

          June 30, 2012     June 30, 2011  
                Accumulated           Accumulated  
          Cost     Depreciation     Cost     Depreciation  
          $     $     $     $  
                               
      Office, furniture and fixtures   3,623     2,358     3,623     2,041  
      Computer equipment   24,513     9,308     14,448     5,615  
      Plant and Machinery   1,514,511     926,387     1,514,511     822,601  
      Tools   11,498     6,474     11,498     4,799  
      Vehicles   76,928     50,082     76,928     43,371  
      Consumables   64,197     63,027     64,197     61,857  
      Moulds   900     787     900     738  
      Mobile Equipment   73,927     53,609     73,927     48,530  
      Factory Buildings   74,849     19,345     74,849     16,424  
          1,844,946     1,131,377     1,834,881     1,005,976  
                               
      Net carrying amount   713,569           828,905        
      Depreciation charges   125,401           147,148        

    8.           Mineral Property Interests

    The Company entered into an agreement to acquire, as a wholly owned subsidiary, Canadian Infrastructure Corp., a Canadian corporation, pursuant to a Share Exchange Agreement (the “CIC Agreement”) dated as of December 15, 2009, between the Company, CIC and Todd D. Montgomery. Under the terms of the CIC Agreement, the Company acquired all of the issued and outstanding stock of CIC in exchange for 1,021,777 Common Shares of the Company. The CIC Agreement closed on February 9, 2010.

    The Company accounted for the acquisition of CIC as a business combination under the acquisition method as discussed in FASB ASC Topic 805. ASC 805 requires acquisition-date fair value measurement of identifiable assets, liabilities assumed and non-controlling interests in the acquiree. The only assets acquired were CIC’S quarry leases having a fair value of $514,525 (CDN $550,000) that were recorded as an asset, “Mineral Property Interests,” on the date of acquisition. The Company obtained an independent appraisal and market study to determine the fair value of the quarry leases acquired. The stock of the Company traded at $0.27 per share on February 9, 2010, and the Company recorded a $275,880 increase in shareholders’ equity reflecting the issuance of 1,021,777 Common Shares of the Company in exchange for all issued and outstanding shares of CIC. There were no liabilities recorded in the financial records of CIC as of the date of acquisition. Further, the Company acquired all the issued and outstanding shares of CIC, resulting in the absence of non-controlling interests in the acquiree yielding a bargain purchase price of $238,645 that has been recorded as Other Income in the Company’s Consolidated Statements of Operations and Comprehensive Loss. Costs incurred in connection with the acquisition were expensed.

    F16


    INFRASTRUCTURE MATERIALS CORP.
    (AN EXPLORATION STAGE COMPANY)
    Notes to the Consolidated Financial Statements
    June 30, 2012 and 2011
    (Amounts expressed in US Dollars)

    8.           Mineral Property Interests - Cont’d

    Amounts recognized as assets as of the acquisition date:

    Mineral Property Interests, being quarry leases in the province of Manitoba, Canada at fair value (CDN $ 550,000) $ 514,525  
           
    Total consideration transferred included the following:      
           
    Fair value as of the acquisition date of 1,021,777 common shares of the Company issued in exchange for all issued and outstanding shares of CIC $ 275,880  
           
    Gain on bargain purchase, being the excess of the fair value of net assets acquired over the purchase price, and recognized as Other Income in the Statements of Operations and Comprehensive Loss $ 238,645  

    An update of the independent appraisal indicated the fair value of the quarry leases was unchanged as of the date of the financial statements.

    9.           Accrued Liabilities

    Accrued liabilities are comprised of the following:

        2012     2011  
        $     $  
    Professional fees for year-end reporting and and audit 31,500 30,000
    Reclamation Bonding   27,463     19,818  
    Unbilled fees for legal services   -     53,914  
    Other   -     171  
    Total   58,963     103,903  

    10.         Note Payable

    As of August 24, 2011, the Company borrowed $100,000 from Mont Strategies Inc., a corporation that is owned and controlled by Todd D. Montgomery, the Company’s Chief Executive Officer and a member of its Board of Directors. The loan was made pursuant to a demand promissory note that bore interest at a rate of four percent (4%) per annum and had a maturity date of August 24, 2013, the second anniversary of such promissory note. On December 27, 2011, the Company retired the promissory note by paying Mont Strategies Inc. the principal amount of the note along with accrued interest. For the year ended June 30, 2012, the Company recorded interest expense of $1,381 for the promissory note.

    F17


    INFRASTRUCTURE MATERIALS CORP.
    (AN EXPLORATION STAGE COMPANY)
    Notes to the Consolidated Financial Statements
    June 30, 2012 and 2011
    (Amounts expressed in US Dollars)

    11.         Deferred Revenue and Marketable Securities

    On February 25, 2011, SRC entered into an option and joint venture agreement (the “Option Agreement”) with International Millennium Mining Inc. (“IMMI”), a wholly owned subsidiary of International Millennium Mining Corp. (“IMMC”), to sell an 85% interest in SRC’s NL Extension Project Claim Group (the “NL Project”) for total consideration of $350,000 cash and 1,925,000 shares of IMMC’s common stock (the “Consideration”). The NL Project consists of 18 mineral claims located in Esmeralda County, Nevada, approximately 6 miles southwest of Silver Peak, Nevada on Highway 47. Under the terms of the Option Agreement, the Consideration is payable over a five-year period that ends on September 15, 2015, with IMMI’s interest in the NL Project vesting at the end of such period. As of the date of the financial statements, the Company had received Consideration of $193,593, consisting of 575,000 shares of IMMC with a fair market value of $133,593 that is recorded as Marketable Securities in the Company’s Consolidated Balance Sheets and $60,000 in cash. Because IMMI’s interest in the NL Project vests at the end of the five-year period, this Consideration is accounted for in the Consolidated Balance Sheets as Deferred Revenue, a non-current liability. The unrealized loss of $88,412 arising from the reduction in the market value of the Company’s shares of IMMC’s common stock as of June 30, 2012, is accounted for in the Stockholders’ Equity section of the Consolidated Balance Sheets as Accumulated Other Comprehensive Loss.

    12.         Asset Retirement Obligation

    The Company is required to recognize a liability for its legal obligation to perform reclamation and disturbance monitoring activities once any of its projects are abandoned or closed. Although these activities are conditional upon future events, the Company is required to make a reasonable estimate of the fair value of the liability. Based on the existing level of ground disturbance and monitoring requirements, the discounted asset retirement obligations ("ARO's") were estimated to be $24,699 as of June 30, 2012, assuming payments made over a three-year period. Determination of the undiscounted ARO and the timing of these obligations were based on internal estimates using information currently available and existing regulations.

    At the end of each reporting period, ARO’s are equal to the present value of all estimated future costs required to remediate any ground disturbances that exist as of the end of the period, using discount rates applicable at the time of initial recognition of each component of the liability. A liability for an asset retirement obligation may be incurred over more than one reporting period if the events that create the obligation occur over more than one reporting period. Any incremental liability incurred in a subsequent reporting period shall be considered to be an additional layer of the original liability. Each layer shall be initially measured at fair value. Included in this liability are the costs of reclamation and monitoring and maintenance costs. Discount rates typically range between 10% and 12%. The Company’s entire ARO as of June 30, 2012 and June 30, 2011 relates to the Blue Nose project.

    Balance as of June 30, 2011 $  22,455  
    Increase in Asset Retirement Obligation   -  
    Accretion for the year ended      
    June 30, 2012   2,244  
           
    Balance as of June 30, 2012 $  24,699  

    F18


    INFRASTRUCTURE MATERIALS CORP.
    (AN EXPLORATION STAGE COMPANY)
    Notes to the Consolidated Financial Statements
    June 30, 2012 and 2011
    (Amounts expressed in US Dollars)

    13.         Redeemable Preferred Stock

    Redeemable preferred stock represents preferred stock that is either redeemable for cash on a specific date or contingently redeemable for cash for events that are not within the control of management. Preferred stock where redemption for cash is certain to occur is classified in liabilities. The Company currently has no preferred stock classified in liabilities. The Company’s Series A Convertible Preferred Stock was redeemable preferred stock and was required to be classified outside of stockholders’ equity (in the mezzanine section). Redeemable preferred stock as of June 30, 2011 equaled $300,000.

    Terms, Features and Conditions of the Company’s Series A Redeemable Preferred Stock:

      Date of Number of Par Stated   Date of
    Series Designation    Shares Value Value Conversion Conversion
    A 6/1/2011      2,608,696 $   0.0001 $   0.115 $   0.115 9/29/2011

    The Company’s Series A Convertible Preferred Stock had voting rights equal to the if-converted number of common shares.

    Series A Convertible Preferred Stock

    On June 1, 2011, the Company entered into a subscription agreement pursuant to which 2,608,696 shares of the Company’s newly designated Series A Convertible Preferred Stock (the “Series A Preferred Stock”), par value $0.0001, were purchased at a price of $0.115 per share (the “Purchase Price”) for an aggregate purchase price of $300,000. The Series A Preferred Stock provided for dividends only if and when declared by the Board. Each holder of Series A Preferred Stock had the right to vote equal to the number of conversion shares issuable upon conversion of the Preferred Stock in all matters as to which shareholders were required or permitted to vote.

    The Purchase Price was based on the weighted average trading price of the Company’s Common Shares on the OTC Bulletin Board for the fifteen trading days prior to June 1, 2011, the date of the Subscription Agreement. The sole purchaser (the “Purchaser”) participating in the subscription agreement was a non-U.S. corporation that is controlled by Todd D. Montgomery, the Company’s Chief Executive Officer and a member of its Board of Directors. The issuance of the Series A Preferred Stock was exempt from registration under the Securities Act of 1933, as amended (the “Securities Act”) pursuant to an exemption afforded by Regulation S promulgated thereunder (“Regulation S”). The Purchaser and Mr. Montgomery are not “U.S. Person(s)” as that term is defined in Regulation S.

    The Company evaluated the Series A Preferred Stock for classification. The Series A Preferred Stock were redeemable at any time on or after the first anniversary of the closing absent the Company’s ability to net share settle. This term and feature does not rise to the level of “unconditionally” redeemable for purposes of liability classification. The Company then evaluated the conversion feature embedded in the Series A Preferred Stock, and certain other features (i.e. the contingent redemption elements) for classification and measurement. Generally, embedded terms and features that both (i) meet the definition of derivatives and (ii) are clearly and closely related to the host contract in terms of risks, do not require bifurcation and separate measurement. In order to develop these conclusions, the Company first evaluated the hybrid contract to determine if the hybrid contract, with all features included, was more akin to an equity instrument or a debt instrument. Significant indicators of equity were that the instrument does not have a term or a maturity date; it

    F19


    INFRASTRUCTURE MATERIALS CORP.
    (AN EXPLORATION STAGE COMPANY)
    Notes to the Consolidated Financial Statements
    June 30, 2012 and 2011
    (Amounts expressed in US Dollars)

    13.         Redeemable Preferred Stock – Cont’d

    is a perpetual financial instrument, the non-existence of a cumulative dividend feature and the existence of voting rights based upon the if-converted number of common shares. The sole indicator of debt was the Holder’s ability to redeem the preferred stock upon the occurrence of a specific event. The weight of these indicators led the Company to the conclusion that the hybrid contract was more akin to an equity instrument. Accordingly, the conversion option does not require bifurcation because its risks and the risks of the hybrid are clearly and closely related.

    Further consideration of the classification of the Series A Preferred Stock as either equity or mezzanine was required. Generally, redeemable instruments, where redemption is either stated or outside the control of management, require classification outside of stockholders’ equity. Because the instrument is redeemable at any time on or after the first anniversary of the closing absent the Company’s ability to net share settle, the instrument is required to be classified outside of stockholders’ equity in the mezzanine.

    On September 29, 2011, all of the Company’s Series A Preferred stock were converted to Common Shares.

    14.         Issuance of Common Shares and Warrants

    Year ended June 30, 2012

    The Company held an annual meeting of shareholders on July 29, 2011. At the meeting, among other actions, the shareholders of the Company approved and adopted an amendment increasing the number of authorized Common Shares to 500,000,000. On August 1, 2011 the Company filed with the Secretary of State of the State of Delaware a certificate of amendment (the “Amendment”) to the Company’s certificate of incorporation containing the change in the number of authorized Common Shares approved by shareholders on July 29, 2011. The Amendment increased the number of authorized Common Shares, par value $0.0001, from 100,000,000 to 500,000,000.

    On September 29, 2011, 2,608,696 outstanding shares of the Company’s Series A Preferred Stock were converted to 2,608,696 Common Shares, which results in an increase of $261 and $299,739 to common stock and additional paid-in capital, respectively. Also see Note 13, Redeemable Preferred Stock.

    On December 16, 2011, the Company completed the sale of 26,000,000 Common Shares to the public in Canada at a price of $0.096 (CDN$0.10) per share to raise gross proceeds of $2,507,180 (CDN$2,600,000). The shares were sold pursuant to a long form prospectus filed in the Canadian provinces of Alberta, Saskatchewan, British Columbia and Ontario. PI Financial Corp. (“PI Financial”) acted as lead agent and received a corporate finance fee of $14,464 (CDN$15,000), was reimbursed $127,529 (CDN$132,250) for its expenses, was paid cash commissions of $20,236 (CDN$20,985) and received non-transferable Agent's Warrants valued at $14,644 entitling PI Financial to acquire 209,850 Common Shares at a price of $0.096 (CDN$0.10) per share exercisable for 24 months. The fair value of the Agent’s Warrants was determined using the Black-Scholes option pricing model with the following assumptions: risk-free rate of 1.63%, expected dividend yield of 0%, annualized volatility of 142.45% and expected life of two years. In connection with the offering, in addition to payments made to PI Financial, the Company incurred legal and other direct expenses, which resulted in net proceeds from the offering of $2,215,399.

    The foregoing sale of securities was made entirely outside the United States pursuant to an exemption afforded by Regulation S promulgated under the Securities Act. Following the sale of our securities in Canada, the Company's Common Shares were listed for trading on the TSX Venture Exchange under the symbols “IFM” and “IFM.S.” The Company's Common Shares continue to be traded in the United States on the OTC Bulletin Board under the symbol “IFAM.”

    F20


    INFRASTRUCTURE MATERIALS CORP.
    (AN EXPLORATION STAGE COMPANY)
    Notes to the Consolidated Financial Statements
    June 30, 2012 and 2011
    (Amounts expressed in US Dollars)

    14.         Issuance of Common Shares and Warrants – Cont’d

    Year ended June 30, 2011

    On September 30, 2010, the Company issued 50,000 shares of its common stock (“Common Shares” or a “Common Share”) pursuant to the exercise of options granted in accordance with its employee stock option plan (the “2006 Stock Option Plan”). Also see Note 15, Stock Based Compensation.

    On February 8, 2011, the Company completed a private placement (the “Private Placement”) of 2,083,333 Common Shares at a price of $0.24 per share for total consideration of $500,000. The Private Placement was exempt from registration under the Securities Act of 1933, as amended (the “Securities Act”) pursuant to an exemption afforded by Regulation S promulgated thereunder (“Regulation S”). The sole investor (the “Investor”) participating in the private placement was a non-U.S. corporation that is owned and controlled by Todd D. Montgomery, the Company’s Chief Executive Officer and a member of its Board of Directors. The Investor and Mr. Montgomery are not “U.S. Person(s)” as that term is defined in Regulation S.

    15.         Stock Based Compensation

    In April 2006, the Board of Directors approved the Company’s 2006 Stock Option Plan, the purpose of which was to enhance the Company's stockholder value and financial performance by attracting, retaining and motivating the Company's officers, directors, key employees and consultants and to encourage stock ownership by such individuals by providing them with a means to acquire a proprietary interest in the Company's success through stock ownership.

    Under the 2006 Stock Option Plan, officers, directors, employees and consultants who provide services to the Company could be granted options to acquire shares of the Company’s common stock at the fair market value of the stock on the date of grant. Options could have a term of up to 10 years. The total number of shares reserved for issuance under the 2006 Stock Option Plan was 5,000,000. At a meeting of shareholders held on July 29, 2011, the shareholders of the Company approved a new stock option plan as described below. No further options will be issued under the 2006 Stock Option Plan.

    The Company held an annual meeting of shareholders on July 29, 2011. At the meeting, among other actions, the shareholders of the Company approved the amendment and restatement of the 2006 Stock Option Plan resulting in the Company’s Amended Stock Option Plan (the “Amended Plan”). The Amended Plan replaces the Company’s 2006 Stock Option Plan and no further options will be issued under the 2006 Stock Option Plan. The terms of the Amended Plan include, among others, that (a) officers, directors, employees and consultants who provide services to the Company may be granted options to acquire shares of the Company’s Common Shares at the fair market value of the stock on the date of grant, (b) options may have a term of up to 10 years, (c) the Company may issue options in a number up to a maximum of 10% of the outstanding Common Shares, and (d) outstanding stock options previously granted pursuant to the 2006 Stock Option Plan will remain in effect and be exercisable in accordance with, and be deemed to be issued under, the terms of the Amended Plan. It is expected that options issued pursuant to the Amended Plan will not be “qualified” options under the provisions of section 422 of the Internal Revenue Code of 1986 as amended from time to time.

    F21


    INFRASTRUCTURE MATERIALS CORP.
    (AN EXPLORATION STAGE COMPANY)
    Notes to the Consolidated Financial Statements
    June 30, 2012 and 2011
    (Amounts expressed in US Dollars)

    15.         Stock Based Compensation – Cont’d

    Year ended June 30, 2012

    On August 31, 2011, 250,000 options that were not granted pursuant to the Company’s 2006 Stock Option Plan or the Amended Plan expired.

    Effective April 1, 2012, the Company granted options to a consultant to purchase up to 350,000 common shares at an exercise price of CDN$0.10 per share. The term of the option grant is tied to the term of the consulting agreement pursuant to which the options were granted so as to expire on the date that is 30 days after the termination of the consulting agreement. The consulting agreement has an initial one-year term, but can be terminated at any time upon 30-days prior written notice by the Company or the consultant or upon the occurrence of certain events defined in the consulting agreement. The options vest at the rate of 1/12 each month until fully vested. These options were granted pursuant to the Company’s Amended Plan.

    On April 9, 2012, 50,000 options issued in accordance with the Company’s 2006 Stock Option Plan expired.

    On April 16, 2012, 50,000 options issued in accordance with the Company’s 2006 Stock Option Plan expired.

    On April 25, 2012, the Company granted options to certain of its officers, directors, employees and consultants to purchase up to an aggregate of 8,375,000 Common Shares at an exercise price of CDN$0.10 per share. The options were granted in accordance with the Company’s Amended Plan and vest at the rate of one twelfth (1/12) each month until fully vested. The options granted have a term of ten years.

    On May 31, 2012, 100,000 options issued in accordance with the Company’s 2006 Stock Option Plan expired.

    Year ended June 30, 2011

    On September 30, 2010, 50,000 options issued in accordance with the Company’s 2006 Stock Option Plan were exercised and 200,000 options expired.

    On October 15, 2010, 300,000 options issued in accordance with the Company’s 2006 Stock Option Plan expired.

    On November 18, 2010, the Company granted options to an employee to purchase up to 250,000 common shares at an exercise price of $0.16 per share. These options were granted in accordance with the terms of the Company’s 2006 Stock Option Plan and vested at a rate of 1/12 each month until fully vested. The options were granted with a term of 5 years.

    On November 24, 2010, the Company granted options to an employee to purchase up to 150,000 common shares at an exercise price of $0.16 per share. These options were granted in accordance with the terms of the Company’s 2006 Stock Option Plan and vested at a rate of 1/12 each month until fully vested. The options were granted with a term of 5 years.

    In June 2011, 3,700,000 options were terminated by mutual agreement of the Company and the option holders. In each case, the option price exceeded the price at which the Company’s shares were traded.

    On June 30, 2011, 50,000 options issued in accordance with the Company’s 2006 Stock Option Plan expired.

    F22


    INFRASTRUCTURE MATERIALS CORP.
    (AN EXPLORATION STAGE COMPANY)
    Notes to the Consolidated Financial Statements
    June 30, 2012 and 2011
    (Amounts expressed in US Dollars)

    15.         Stock Based Compensation - Cont’d

    For the year ended June 30, 2012, the Company recognized in the financial statements, stock-based compensation costs as per the following details. The fair value of each option used for the purpose of estimating the stock compensation is based on the grant date using the Black-Scholes option pricing model with the following weighted average assumptions:

    The expected term calculation is based upon the expected term the option is to be held, which is the full term of the option. The risk-free interest rate is based upon the U.S. Treasury yield in effect at the time of grant for an instrument with a maturity that is commensurate with the expected term of the stock options. The dividend yield of zero is based on the fact that the Company has never paid cash dividends on our common stock and has no present intention to pay cash dividends. The expected forfeiture rate of 0% is based on the vesting of stock options in a short period of time.

                                                        Stock-based     Unexpended  
                                                        compensation     Stock-based  
                                                        cost expensed     compensation  
                                                        during the year     cost deferred  
        Risk free     Volatility     Expected     Forfeiture     Expected     Exercise     Total number of     Grant date     ended June 30,     over the vesting  
    Date of grant   rate     factor     Dividends     rate     life     price     options granted     fair value     2012     period  
                                                                 
    Apr-1-12   1.10%     180.37%     0%     0%     1 year   $  0.10     350,000   $  0.02   $  1,633   $  4,897  
    Apr-25-12   3.63%     155.72%     0%     0%     10 years   $  0.10     8,375,000   $  0.04   $  60,357   $  268,450  
                                                                 
    Total                                                 $  61,990   $  273,347  

    As of June 30, 2012, there was $273,347 of unrecognized expenses related to non-vested stock-based compensation arrangements granted. The stock-based compensation expense for the years ended June 30, 2012 and June 30, 2011, was $61,990 and $101,503, respectively.

    F23


    INFRASTRUCTURE MATERIALS CORP.
    (AN EXPLORATION STAGE COMPANY)
    Notes to the Consolidated Financial Statements
    June 30, 2012 and 2011
    (Amounts expressed in US Dollars)

    15.         Stock Based Compensation - Cont’d

    The following tables summarize the options outstanding as of June 30, 2012 and 2011, and the option activity for the years then ended:

            Remaining   Remaining        
            contractual   contractual        
        Option Price   life (in years)   life (in years)   Number of options:    
    Expiry Date   Per Share   2012   2011    2012   2011
    Aug 30, 2011   $0.25   -   0.18   -   250,000
    April 9, 2012   $0.30   -   0.80   -   50,000
    April 16, 2012   $0.30   -   0.82   -   50,000
    May 31, 2012   $0.35   -   1.79   -   50,000
    May 31, 2012   $0.15   -   2.50   -   50,000
    Aug 16, 2012   $0.31   0.13   2.65   100,000   100,000
    Aug 16, 2012   $0.25   0.13   3.61   250,000   250,000
    Dec 10, 2013   $0.15   1.47   2.50   25,000   25,000
    Feb 2, 2014   $0.31   1.62   2.65   50,000   50,000
    Oct 22, 2014   $0.33   2.34   3.38   25,000   25,000
    Apr 25, 2015   $0.23   2.86   3.89   50,000   50,000
    Apr 30, 2013   $0.10   0.83   -   350,000   -
    Apr 24, 2022   $0.10   9.82   -   8,375,000   -
    Options outstanding at end of year   9,225,000   950,000
    Weighted average exercise price at end of year    $0.11   $0.26
    Weighted average remaining contractual life (in years)      8.99   2.07

        Number of options:  
        2012     2011  
    Outstanding, beginning of year   950,000     4,850,000  
    Granted   8,725,000     400,000  
    Expired   (450,000 )   (550,000 )
    Exercised   -     (50,000 )
    Forfeited   -     -  
    Cancelled   -     (3,700,000 )
    Outstanding, end of year   9,225,000     950,000  
    Exercisable, end of year   1,983,334     950,000  

    F24


    INFRASTRUCTURE MATERIALS CORP.
    (AN EXPLORATION STAGE COMPANY)
    Notes to the Consolidated Financial Statements
    June 30, 2012 and 2011
    (Amounts expressed in US Dollars)

    16.         Termination of Option Agreement

    On August 24, 2011, the Company’s wholly owned subsidiary, Silver Reserve Corp. (“SRC”), entered into an option agreement dated as of August 19, 2011 (the “MGold Option Agreement”) with MGold Resources Inc. (“MGold”), pursuant to which MGold had an option (the “Option) to earn a 50% interest in each of SRC’s Silver Queen Claim Group (the “Silver Queen Property”) and Klondyke Claim Group (the “Klondyke Property”) after expenditure of certain Option Costs and the full payment of the Cash Consideration, as defined below. Under the terms of the MGold Option Agreement, MGold was required to incur exploration expenditures totaling CDN$4,000,000 with regards to the Silver Queen Property and CDN$1,350,000 with regards to the Klondyke Property (together, the “Option Costs”). MGold also would make total cash payments to SRC of CDN$2,000,000 for the Silver Queen Property and CDN$265,000 for the Klondyke Property (together, the “Cash Consideration”). The Option Costs were to be made over a period of 30 months, and the Cash Consideration was to be paid over a period of 33 months. Upon full expenditure of the Option Costs and payment of the total Cash Consideration, the Option could be exercised and MGold would hold a 50% equity interest in each of the Silver Queen Property and Klondyke Property. Following exercise of the Option, SRC and MGold would enter into a joint venture with regards to the operation of the properties. During the period prior to the exercise of the Option, MGold had the right to terminate the MGold Option Agreement with 30 days’ notice to SRC or to discontinue its Option with respect to either property and retain its Option with respect to the other property. On September 26, 2011, the Company received $145,875 (CDN$150,000) and $29,175 (CDN$30,000) from MGold representing the first Cash Consideration payments for the Silver Queen Property and the Klondyke Property, respectively, for total Cash Consideration of $175,050. Because MGold’s interests in the Silver Queen and Klondyke Properties were to vest at the end of the 33-month period, this Cash Consideration was accounted for in the Consolidated Balance Sheets as Deferred Revenue, a non-current liability.

    On March 15, 2012, MGold issued notice to SRC that MGold was terminating the MGold Option Agreement effective April 14, 2012. Upon the termination of the MGold Option Agreement, the Company recognized $175,050 as a Gain from termination of option agreement, which was the amount included in Deferred Revenue for the periods ended December 31, 2011, and March 31, 2012.

    17.         Geographic Location of Assets

    All assets in the financial statements are located in the State of Nevada, United States of America except for Cash and Cash equivalents of $102,541 and Mineral Property Interests of $514,525, which are located in Canada.

    F25


    INFRASTRUCTURE MATERIALS CORP.
    (AN EXPLORATION STAGE COMPANY)
    Notes to the Consolidated Financial Statements
    June 30, 2012 and 2011
    (Amounts expressed in US Dollars)

    18.         Income Taxes

    The Company's current and deferred income taxes are as follows:

          2012     2011  
                   
      Loss before income taxes $  (1,362,040 ) $  (2,523,079 )
                   
      Expected income tax recovery at the statutory rate of 29.5% $  (401,802 ) $  (744,308 )
      Increase in income taxes resulting from:            
      Permanent differences   18,287     29,943  
      Valuation allowance   383,515     714,365  
                   
      Provision for income taxes $  -   $  -  

    The Company has deferred income tax assets as follows:

          2012     2011  
                   
      Net operating loss carry forward $  17,103,576   $  15,750,751  
                   
      Deferred Income tax on loss carry forward $  5,045,555   $  4,646,471  
      Temporary differences (due to timing difference between tax value and book value)   3,941     90,536  
      Valuation allowance for deferred income tax assets   (5,049,496 )   (4,737,007 )
                   
      Deferred income taxes $  -   $  -  

    As of June 30, 2012, the Company has non-capital losses of approximately $17,103,576 available to offset future taxable incomes which expire as follows:

    2026 $  64,024  
    2027 $  2,324,117  
    2028 $  3,474,713  
    2029 $  4,536,752  
    2030 $  2,868,022  
    2031 $  2,483,123  
    2032 $  1,352,825  
      $  17,103,576  

    F26


    INFRASTRUCTURE MATERIALS CORP.
    (AN EXPLORATION STAGE COMPANY)
    Notes to the Consolidated Financial Statements
    June 30, 2012 and 2011
    (Amounts expressed in US Dollars)

    19.         Commitments and Contingencies

    On August 1, 2006, the Company acquired the Pansy Lee Claims Group from Anglo Gold Mining Inc. in exchange for 1,850,000 Common Shares pursuant to an Asset Purchase Agreement dated August 1, 2006 (the “Pansy Lee Purchase Agreement”). Pursuant to the Pansy Lee Purchase Agreement, a 2% net smelter royalty pertains to 8 of the 30 claims in this group. In the event that any one or more of the 8 claims becomes a producing claim, our revenue is subject to a 2% net smelter return royalty where net smelter returns are based upon gross revenue. Gross revenue would be calculated after commercial production commences and includes the aggregate of the following amounts: revenue received by the Company from arm’s length purchasers of all mineral products produced from the property, the fair market value of all products sold by the Company to persons not dealing with the Company at arm’s length and the Company’s share of the proceeds of insurance on products. From such revenue, the Company would be permitted to deduct: sales charges levied by any sales agent on the sale of products; transportation costs for products; all costs, expenses and charges of any nature whatsoever that are either paid or incurred by the Company in connection with the refinement and beneficiation of products after leaving the property and all insurance costs and taxes.

    The Company obtained 25 mineral claims (the “Option Claims”), located in Elko County, Nevada pursuant to an option agreement (the “Option Agreement”) dated as of May 1, 2008 (the “Date of Closing”) with Nevada Eagle Resources, LLC and Steve Sutherland (together, the “Optionees”). The provisions of the Option Agreement included, among others, payments of specified annual amounts ranging from $10,000 to $80,000 by the Company to the Optionees over a period of ten years. Effective June 1, 2010, the Company and the Optionees agreed to terminate the Company’s interests in the Option Claims pursuant to (1) payment by the Company of $8,750 to each of the Optionees, (2) performance by the Company of such reclamation and remediation as required to discharge the surface management bond posted by the Company pursuant to a Notice of Intent filed with the BLM prior to undertaking exploration activity on the Option Claims, and (3) conveyance by the Company to Nevada Eagle Resources, LLC of the 124 mineral claims staked by the Company after the Date of Closing that are within the Area of Interest described in the Option Agreement. As of June 30, 2012, the undertakings described in (1) and (3) above have been completed and the reclamation and remediation described in (2) above are in progress. The 25 Option Claims together with 124 mineral claims staked by the Company have been referred to by the Company as the “Medicine Claim Group.”

    Effective as of June 23, 2008, the Company appointed Mason Douglas as the President of the Company. Mr. Douglas is also a director of the Company. In connection with the appointment, the Company entered into a consulting services agreement with a Canadian corporation that is controlled by Mr. Douglas (the “Consulting Agreement”). The Consulting Agreement has a term of one year and is then automatically renewable. Either party may terminate the Consulting Agreement upon 90 days notice to the other party. According to the terms of the Consulting Agreement as amended effective March 1, 2012, the Company will pay a fee of $10,417 per month and reimburse related business expenses. The Consulting Agreement permits Mr. Douglas to fulfill his duties for the Company from his office in Canada. Mr. Douglas does not receive a salary from the Company.

    On December 8, 2008 IMC US entered into a Mineral Rights Lease Agreement (the “Edgar Lease Agreement”) with the Earl Edgar Mineral Trust (“Edgar”) to lease certain mineral rights in Elko County, Nevada described below (the “Edgar Property”). The term of the Edgar Lease Agreement is ten years and will automatically renew on the same terms and conditions for additional ten-year periods, provided IMC US is conducting exploration, development or mining either on the surface or underground at the property. The rent is to be paid each year on January 1st. $1.00 per net acre was paid upon execution of the Edgar Lease

    F27


    INFRASTRUCTURE MATERIALS CORP.
    (AN EXPLORATION STAGE COMPANY)
    Notes to the Consolidated Financial Statements
    June 30, 2012 and 2011
    (Amounts expressed in US Dollars)

    19.         Commitments and Contingencies - Cont’d

    Agreement. On January 1 of each year commencing in 2010 and extending for so long as the Edgar Lease Agreement is in effect, IMC US is obligated to make the following payments:

    2010 $1.00 per net acre
    2011 $2.00 per net acre
    2012 $2.00 per net acre
    2013 $3.00 per net acre
    2014 $3.00 per net acre
    2015 $4.00 per net acre
    2016 $4.00 per net acre
    2017 $5.00 per net acre in each year for the duration of the Edgar Lease Agreement.

    The Edgar Lease Agreement covers 100% of the mineral rights on 1,120 acres of the Edgar Property (“Property A”) and 50% of the mineral rights on 6,720 acres of the Edgar Property (“Property B”). Edgar is entitled to receive a royalty of $0.50 per ton for material mined and removed from Property A and $0.25 per ton for material mined and removed from Property B during the term of the Edgar Lease Agreement and any renewal thereof.

    On April 9, 2009, the Company and Edgar entered into an Amendment to the Edgar Lease Agreement (the “Amendment”), effective as of December 8, 2008. The Amendment provides for Standard Steam LLC to carry out exploration for geothermal energy sources on the Edgar Property after obtaining the written consent of the Company. The Amendment also provides for other cooperation with Standard Steam LLC regarding mineral rights on Property B of the Edgar Property.

    On November 30, 2009, IMC US entered into a Mineral Rights Agreement with Perdriau Investment Corp. (“Perdriau”) to purchase 50% of the mineral rights, including all easements, rights of way and appurtenant rights of any type that run with the mineral rights in certain sections of Elko County, Nevada (the “Perdriau Property”). The purchase price was $10 per net acre. IMC US purchased 340 net acres for a total purchase price of $3,400. Perdriau will be entitled to receive a royalty of $0.25 per ton for material mined and removed from the Perdriau Property. Material mined and stored on the Perdriau Property or adjacent property for reclamation purposes will not be subject to any royalty. Material removed from the Perdriau Property for the purposes of testing or bulk sampling, provided it does not exceed 50,000 tons, will also not be subject to any royalty. The royalty will be calculated and paid within 45 days after the end of each calendar quarter.

    As of January 15, 2010, the Company entered into a Property Lease Agreement with Eugene M. Hammond (the “Hammond Lease”) for surface rights on 80 acres in Elko County, Nevada (the “Hammond Surface Rights”). The term of the Hammond Lease is five years and the annual rent is $500. The Company is responsible for the payment of all real estate taxes on the Hammond Surface Rights. During the term of the Hammond Lease, the Company has the exclusive right to conduct exploration and development work on the Hammond Surface Rights. The results of all drilling and exploration are the property of the Company. The Company is responsible for any environmental damage caused by the Company and any reclamation costs required as a result of drilling and testing. The Company has an option to purchase the property covered by the Hammond Lease for $15,000, less the amount paid in rent during the term of the Hammond Lease.

    F28


    INFRASTRUCTURE MATERIALS CORP.
    (AN EXPLORATION STAGE COMPANY)
    Notes to the Consolidated Financial Statements
    June 30, 2012 and 2011
    (Amounts expressed in US Dollars)

    19.         Commitments and Contingencies - Cont’d

    Also as of January 15, 2010, IMC US entered into a Mineral Rights Agreement with Eugene M. Hammond (the “Hammond Mineral Rights Agreement”) pursuant to which the Company purchased a 25% interest in any and all minerals extracted from 160 acres (the “Hammond Mineral Rights Property”) covered by the Hammond Mineral Rights Agreement. The purchase price was $400. In addition, the seller is entitled to receive a royalty of $0.125 per ton on material mined and removed from the Hammond Mineral Rights Property. The Hammond Mineral Rights Agreement does not cover petroleum.

    Effective July 1, 2010, the Company entered into an employment agreement with an individual to provide business and administrative services. The employment agreement has a term of one year and is automatically renewable thereafter. Either party may terminate the employment agreement upon 60 days notice. According to the terms of the employment agreement as amended effective March 1, 2012, the Company will pay the individual no less than $8,333 per month and reimburse related business expenses.

    Effective July 1, 2010, the Company entered into an employment agreement with an individual to provide receptionist and administrative services at its Reno, Nevada corporate headquarters. The employment agreement has a term of one year and is automatically renewable thereafter. Either party may terminate the employment agreement upon 30 days notice. Pursuant to this employment agreement, the Company will pay no less than $51,000 per year for such services.

    On February 25, 2011, SRC entered into an option and joint venture agreement (the “IMMI Option Agreement”) with International Millennium Mining Inc. (“IMMI”), a wholly owned subsidiary of International Millennium Mining Corp. (“IMMC”), to sell an 85% interest in SRC’s NL Extension Project Claim Group (the “NL Project”) for total consideration of $350,000 and 1,925,000 shares of IMMC’s common stock (the “Consideration”). The NL Project consists of 18 mineral claims located in Esmeralda County, Nevada, approximately 6 miles southwest of Silver Peak, Nevada on Highway 47. Under the terms of the IMMI Option Agreement, the Consideration is payable over a five-year period that ends on September 15, 2015, with IMMI’s interest in the NL Project vesting at the end of such period. In the event of early termination, IMMI is not entitled to the return of Consideration previously paid to SRC. If the NL Project is determined to be economically feasible, based upon criteria contained in the IMMI Option Agreement, SRC will be required to fund its portion of an operating budget proposed by IMMI in order to retain its 15% interest in the NL Project and to acquire a 15% interest in IMMI’s Nivloc Mine Project (the NL Project and the Nivloc Mine Project, collectively, the “IMMI Project”). In the event that SRC decides not to fund its portion of the budget, its 15% interest would be forfeited, but SRC would be entitled to a 2% net smelter return royalty if and when the IMMI Project enters the production phase. Upon funding of the operating budget and SRC’s acquisition of a 15% interest in the IMMI Project, SRC and IMMI would enter into a joint venture agreement.

    On September 1, 2011, SRC engaged Tetra Tech, Inc. to complete the exploration permitting activities for its Silver Queen property near Silver Peak, Nevada. The Company is to authorize each phase of work before the work proceeds. The estimated total consideration to be paid under the agreement is $68,900. As of June 30, 2012, the Company had recorded total expenses of $15,789 for this contract.

    F29


    INFRASTRUCTURE MATERIALS CORP.
    (AN EXPLORATION STAGE COMPANY)
    Notes to the Consolidated Financial Statements
    June 30, 2012 and 2011
    (Amounts expressed in US Dollars)

    19.         Commitments and Contingencies - Cont’d

    Effective February 29, 2012, SRC entered into a mineral lease agreement (the “Gumaskas Agreement”) with Joseph W Gumaskas (“Gumaskas”) to lease a patented claim covering approximately 10 acres (the “Claim”) in Mineral County, Nevada. Unless terminated earlier by SRC, the term of the Gumaskas Agreement is ten years and will automatically renew on the same terms and conditions for additional five-year periods. The Gumaskas Agreement requires SRC to pay Gumaskas advance minimum royalty payments of $500 annually. In the event that the Claim becomes a producing claim, SRC will pay Gumaskas a 3% royalty based upon gross revenue less deductions permitted by the Gumaskas Agreement. Gross revenue includes the aggregate of revenue received by SRC from arm’s length purchasers of all mineral products produced from the Claim, the fair market value of all products sold by SRC to persons not dealing with SRC at arm’s length and SRC’s share of the proceeds of insurance on products. From such revenue, SRC would be permitted to deduct sales charges levied by any sales agent on the sale of products, all insurance costs in respect of mineral products, and all costs, expenses and charges of any nature whatsoever that are either paid or incurred by SRC in connection with the refinement and beneficiation of products after leaving the Claim. SRC may terminate the Gumaskas Agreement at any time by giving 60 days advance written notice to Gumaskas.

    Effective April 1, 2012, the Company entered into a consulting agreement (the “Teatyn Agreement”) with Teatyn Enterprises, Inc. (“Teatyn”) for Teatyn to provide the Company with certain investor relation services to the Company for a period of one year. The Teatyn Agreement can be terminated at any time upon 30-days prior written notice by either the Company or Teatyn or upon the occurrence of certain events as defined in the Teatyn Agreement. Under the terms of the Teatyn Agreement, Teatyn will receive a monthly fee of CDN$5,000 and options (the “Options”) to purchase up to 350,000 Common Shares at an exercise price of CDN$0.10 per share. The Options will vest at a rate of one twelfth (1/12) per month during the term of the Teatyn Agreement, such vesting subject to the terms of the Company’s Stock Option Plan and the policies of the TSX Venture Exchange. Unexercised Options, if any, will terminate thirty (30) days following the expiry or termination of the Teatyn Agreement.

    Effective April 1, 2012, SRC entered into a mineral lease agreement (the “Saunders Agreement”) with Charles and Barbara Saunders (the “Lessors”) to lease patented claims covering approximately 37 acres (the “Claims”) in Esmeralda County, Nevada. Unless terminated earlier by SRC, the term of the Saunders Agreement is ten years and will automatically renew on the same terms and conditions for additional five-year periods. The Saunders Agreement requires SRC to pay the Lessors advance minimum royalty payments of $2,000 annually. In the event that the Claims become producing claims, SRC will pay the Lessors a 3% royalty based upon gross revenue less deductions permitted by the Saunders Agreement. Gross revenue includes the aggregate of revenue received by SRC from arm’s length purchasers of all mineral products produced from the Claims, the fair market value of all products sold by SRC to persons not dealing with SRC at arm’s length and SRC’s share of the proceeds of insurance on products. From such revenue, SRC would be permitted to deduct sales charges levied by any sales agent on the sale of products, all insurance costs in respect of mineral products, and all costs, expenses and charges of any nature whatsoever that are either paid or incurred by SRC in connection with the refinement and beneficiation of products after leaving the Claims. SRC may terminate the Saunders Agreement at any time by giving 60 days advance written notice to the Lessors.

    On May 15, 2012, SRC entered into an Exploration License with Option to Purchase (the “Buhrman Agreement”) with Ralph L. Buhrman and Jacqueline Buhrman (together, the “Owner”) for three patented claims, covering approximately 59 acres (the “Property”) situated in Mineral County, Nevada.

    F30


    INFRASTRUCTURE MATERIALS CORP.
    (AN EXPLORATION STAGE COMPANY)
    Notes to the Consolidated Financial Statements
    June 30, 2012 and 2011
    (Amounts expressed in US Dollars)

    19.         Commitments and Contingencies - Cont’d

    Under the terms of the Buhrman Agreement, SRC was granted the exclusive right and option to enter and examine the Property (the “Exploration License”) in consideration of a $30,000 payment to the Owner (the License Payment”). During the term of the Exploration License, SRC has the exclusive right to undertake geological, geophysical, and geochemical examinations of the Property; to sample the Property by means of pits, trenches, and drilling; and to take bulk samples from the Property for the purpose of conducting metallurgical and leaching tests. However, SRC may not commence development or mining activities on the Property unless it exercises the Purchase Option as defined below. SRC will be responsible for reclamation of its pits, trenches, drill sites, and other such disturbances arising out of its activities on the Property. The Exploration License has an initial one-year term beginning on May 1, 2012 (the “Effective Date”) and ending on April 30, 2013. SRC has the right to extend the Exploration License for one additional period of one year provided SRC makes an additional License Payment of $30,000 in advance for such extension. SRC was also granted exclusive right and option to purchase the Owner’s ownership interest in the Property (the “Purchase Option”) for the sum of $90,000 less all License Payments previously made. SRC may exercise the Purchase Option at any time during the term of the Exploration License by giving written notice to the Owner. If SRC exercises the Purchase Option, SRC will also pay the Owner a two percent (2%) royalty based upon gross revenues less deductions as defined by the Buhrman Agreement, and SRC will also have the exclusive right and option to purchase such royalty at any time for the sum of $1,000,000 less any payments previously made by SRC to the Owner pursuant to such royalty. SRC may terminate the Buhrman Agreement at any time by giving 30 days’ notice in writing to the Owner.

    The Company has entered into operating leases for its office space and certain office furniture and equipment. Rent payments associated with those leases for the years ended June 30, 2012, and June 30, 2011, were $28,356 and $31,549, respectively. As of June 30, 2012, the Company’s estimated future minimum cash payments under non-cancelable operating leases for the years ending June 30, 2013, June 30, 2014, and June 30, 2015, are $23,138, $9,500, and $0, respectively.

    Maintaining Claims in Good Standing

    The Company is required to pay to the BLM on or before September 1st of each year, a fee in the amount of $140 per mineral claim held by the Company. The total amount paid in August 2012, was $155,400 for 1,110 claims held by the Company at that date. The BLM fee for the 18 NL Project claims held by the Company were paid by IMMI pursuant to the IMMI Option Agreement described above.

    The Company is also required to pay on or before November 1st of each year, annual fees to counties in Nevada in which the claims are held. In September 2011, the Company paid $11,190 to nine counties in Nevada for annual claims-related fees.

    The Company also holds certain patented claims and leases other patented claims in Nevada. A patented claim is fee simple title to the property. Patented claims are subject to taxes assessed by the local community based on assessment rates set annually.

    F31


    INFRASTRUCTURE MATERIALS CORP.
    (AN EXPLORATION STAGE COMPANY)
    Notes to the Consolidated Financial Statements
    June 30, 2012 and 2011
    (Amounts expressed in US Dollars)

    19.         Commitments and Contingencies - Cont’d

    The Company holds certain exploration permits in the state of Arizona, which have a duration of one year from the date of issuance. The permits may be renewed for up to four additional one-year terms for a total of five years and provide the holder of the permit with an exclusive right to explore for minerals within the state land covered by the permit and to apply for mineral leases to such land. The holder of a permit may remove from the land only the amount of material required for sampling and testing and is responsible for any damage or destruction caused by the holder’s exploration activities. The holder of a permit is entitled to ingress and egress to the covered site along routes approved by the Arizona State Land Department. IMC US has posted a bond required by the state of Arizona to back any reclamation required as a result of work performed. The permit is renewable if the holder has expended not less than $10.00 per acre during each of the first two year-long periods and $20.00 per acre during each of the next three year-long periods. Each permit fee is $500 per year plus $2.00 per acre for the first two years and $1.00 per acre per year for the following three years. Upon termination of a mineral exploration permit, the state of Arizona is entitled to information collected by the permit holder. In the event that a permit holder discovers a valuable mineral deposit, the permit holder may apply to the Arizona State Land Department for a mineral lease having a term of 20 years and renewable for an additional 20 years. A permit holder shall be the preferred recipient of the mineral lease, provided that all applicable requirements are met. A mineral lease entitles the lessee to develop and establish a mine on the leased premises, provided that a mine plan and all necessary approvals are obtained.

    Each of the Company’s quarry leases located in Manitoba, Canada is renewable annually upon payment of rent to the province of Manitoba in the amount of CDN$24 per hectare or fraction thereof. During the fiscal year ended June 30, 2012, the Company paid CDN$57,504 in rent for these leases.

    20.         Related Party Transactions

    There are no amounts owed to or from related parties as of June 30, 2012, and June 30, 2011.

    The following transactions were undertaken in the normal course of operations and are measured at the exchange amount, which is the amount of consideration established and agreed to by the Company and the related parties.

    Year ended June 30, 2012

    A corporation owned and operated by the Company’s President who is also a member of the Company’s Board of Directors, received $109,668 for the President’s services.

    The Company recorded expenses of $27,538 for legal services rendered and expenses incurred on behalf of the Company by a law firm, a partner of which is also a member of the Company’s Board of Directors. In addition the same law firm was paid $70,853 for legal services rendered and expenses incurred on behalf of the Company that were capitalized as costs for raising capital.

    The Company’s Chief Financial Officer received $15,581 for consulting services provided to the Company.

    The Company’s Corporate Secretary received $56,167 for administrative services provided to the Company.

    The Company recorded interest expense of $1,381 pursuant to a promissory note issued to a corporation that is owned and controlled by the Company’s Chief Executive Officer who is also a member of its Board of Directors. Also see Note 10, Note Payable.

    F32


    INFRASTRUCTURE MATERIALS CORP.
    (AN EXPLORATION STAGE COMPANY)
    Notes to the Consolidated Financial Statements
    June 30, 2012 and 2011
    (Amounts expressed in US Dollars)

    20.         Related Party Transactions – Cont’d

    On April 25, 2012, the Company granted options to certain of its officers and directors to purchase up to an aggregate of 4,825,000 Common Shares at an exercise price of CDN$0.10 per share. On the same date, the Company also granted options to a consultant who is a family member of a director to purchase up to 250,000 Common Shares at the same exercise price. The options were granted in accordance with the Company’s Amended Plan and vest at the rate of one twelfth (1/12) each month until fully vested. The options granted have a term of ten years. The Company expensed stock based compensation costs of $34,772 for options granted to officers and directors, and $1,802 for options granted to the director’s family member.

    Year ended June 30, 2011

    A corporation owned and operated by the Company’s President who is also a member of the Company’s Board of Directors, received $102,000 for the President’s services.

    The Company recorded expenses of $57,704 for legal services rendered and expenses incurred on behalf of the Company by a law firm, a partner of which is also a member of the Company’s Board of Directors.

    The Company’s Chief Financial Officer received $13,974 for consulting services provided to the Company.

    The Company’s Corporate Secretary received $54,575 for administrative services provided to the Company

    On February 8, 2011, the Company completed a private placement of 2,083,333 Common Shares at a price of $0.24 per share for total consideration of $500,000 with an entity that is owned and controlled by the Company’s Chief Executive Officer, who is also a member of the Company’s Board of Directors.

    On June 1, 2011, the Company completed a private placement of 2,608,696 shares of Series A Preferred Stock at a price of $0.115 per share for total consideration of $300,000 with an entity owned and controlled by the Company’s Chief Executive Officer, who is also a member of the Company’s Board of Directors. See Note 13, Redeemable Preferred Stock.

    In June 2011, 2,450,000 options that were held by directors and officers of the Company were terminated by mutual agreement of the Company and the option holders. In each case, the option price exceeded the price at which the Company’s shares were traded.

    F33


    INFRASTRUCTURE MATERIALS CORP.
    (AN EXPLORATION STAGE COMPANY)
    Notes to the Consolidated Financial Statements
    June 30, 2012 and 2011
    (Amounts expressed in US Dollars)

    21.         Subsequent Events

    Based on a review of all of the Company’s mineral claims, On August 31, 2012 the Company elected to drop certain limestone mineral claims held by IMC US that it has determined are not in the Company’s best interests to retain.

    • All 7 mineral claims of the Rock Hill Claim Group were dropped.
    • All 5 mineral claims of the Buffalo Mountain Claim Group were dropped.
    • All 4 mineral claims of the Royale Claim Group were dropped.
    • All 19 mineral claims of the Pequop Claim Group were dropped.
    • All 23 mineral claims of the Ragged Top Claim Group were dropped.
    • All 44 mineral claims of the Jumbled Mountain Claim Group were dropped.
    • All 13 mineral claims of the Burnt Springs Claim Group were dropped.

    On July 26, 2012, the Company engaged Harris Exploration Drilling and Associates Inc. to conduct professional drilling services and related activities at SRC’s Kope Scheelite project at an estimated cost of $175,000.

    On August 16, 2012, 350,000 options that were granted pursuant to the Company’s 2006 Stock Option Plan expired.

    On September 6, 2012, the Company received $50,000 cash and 300,000 shares of IMMC’s common stock pursuant to the option agreement between SRC and IMMI, IMMC’s wholly owned subsidiary, as further described in Note 19, Commitments and Contingencies.

    F34