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EXCEL - IDEA: XBRL DOCUMENT - CIGMA METALS CORPFinancial_Report.xls


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q

(Mark One)

x
QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2011

o
TRANSITION REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____________  to_____________ 
 
Commission file number 0-27355

CIGMA METALS CORPORATION
(Exact name of registrant as specified in its charter)

Florida
 
98-0203244
(State or other jurisdiction of incorporation or organization)
 
(IRS Employer Identification No.)

c.Velazquez 150, Madrid, Spain
 
E-28002
(Address of principal executive offices)
 
(Zip Code)
 
(+34) 60 900 1424
(Registrant’s telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
YES o NO x
 
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
YES o NO x
 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer o
Accelerated filer o
Non-accelerated filer o(do not check if a smaller reporting company)
Smaller reporting company x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
YES o NO x
 
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS

Indicate by check mark, whether the registrant filed all documents and reports required to be filed by Section 12, 13 or 15 (d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by court.
YES o NO o
 
APPLICABLE ONLY TO CORPORATE ISSUERS

Indicate the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date: 59,500,000 shares of Common Stock were outstanding as of October 31, 2012.
 


 
 

 
 
CIGMA METALS CORPORATION

This quarterly report contains statements that plan for or anticipate the future and are not historical facts. In this report these forward looking statements are generally identified by words such as “anticipate,” “plan,” “believe,” “expect,” “estimate,” and the like. Because forward looking statements involve future risks and uncertainties, these are factors that could cause actual results to differ materially from the estimated results. These risks and uncertainties are detailed in Part 1 – Financial Information - Item 1. “Financial Statements” and Item 2. “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”


PART 1 – FINANCIAL INFORMATION
Page
     
Item 1.
Financial Statements
 
     
 
3
     
 
4
     
 
5
     
 
9
     
 
10
     
Item 2.
17
Item 3.
33
Item 4T.
33
 
   
PART II – OTHER INFORMATION
 
 
   
Item 1.
34
Item 1A.
34
Item 2.
34
Item 3.
34
Item 4.
34
Item 5.
34
Item 6.
34
     
38
 
 
Item 1.
Financial Statements
 
CIGMA METALS CORPORATION
(An exploration stage enterprise)

September 30, 2011 and December 31, 2010
(Expressed in U.S. Dollars)

   
September 30
   
December 31
 
 
 
(Unaudited) 2011
   
2010
 
   
 
       
ASSETS
           
Current
           
Cash
  $ 186,688     $ 223,334  
Notes receivable
    -       169,901  
Available-for-sale securities
    46,445       117,935  
Cost method investments
    177,266       -  
Prepaid expenses and other assets
    6,692       3,600  
Total current assets
    417,091       514,770  
                 
Mineral properties
    500,000       500,000  
Total assets
  $ 917,091     $ 1,014,770  
                 
LIABILITIES AND STOCKHOLDERS' EQUITY
               
Current liabilities
               
Accounts payable and accrued expenses
  $ 519     $ 15,953  
Accounts payable - related party
    134,789       134,789  
Total current liabilities
    135,308       150,742  
                 
Stockholders' Equity
               
Common stock Authorized 100,000,000 common shares, par value $0.0001 Issued and outstanding: 54,500,000 (2010 - 54,500,000) common shares
    5,450       5,450  
Additional paid in capital
    11,092,994       11,092,994  
Accumulated deficit during the development stage
    (10,241,738 )     (10,219,833 )
Accumulated other comprehensive income (loss)
    (74,923 )     (14,583 )
Stockholders' equity
    781,783       864,028  
                 
Total liabilities and stockholders' equity
  $ 917,091     $ 1,014,770  
 
The accompanying notes are an integral part of these consolidated financial statements.
 
 
CIGMA METALS CORPORATION
 
Cumulative
                         
(An exploration stage enterprise)
 
January 13
   
Three months
   
Three months
   
Nine months
   
Nine months
 
 
1989 (inception)
   
Ended
   
Ended
   
Ended
   
Ended
 
(Expressed in U.S. Dollars)
 
September 30
   
September 30
   
September 30
   
September 30
   
September 30
 
(Unaudited)
 
2011
   
2011
   
2010
   
2011
   
2010
 
Expenses
                             
Administrative and general
  $ 940,367     $ 7,982     $ 17,783     $ 38,927     $ 9,516  
Exploration costs
                                       
- HaldeyGold Project - partnership
    796,261       -       -       -       -  
- HaldeyGold Project - other
    185,126       -       -       -       -  
- Tugojakovsk Project
    453,821       -       -       -       -  
- Kazakhstan
    5,077,672       -       -       -       100,000  
- Mexico
    4,000       1,500       -       4,000       -  
Impairment of mineral properties
    1,009,597       -       -       -       -  
Interest, bank charges and foreign currency exchange (gains) losses
    119,866       9,969       4,205       7,074       5,291  
Professional fees
    809,567       -       27,350       2,560       79,298  
Property investigation costs
    119,717       -       -       -       -  
Management and consulting fees
    2,091,014       9,110       23,620       48,445       92,373  
Loss before other items
    11,607,008       28,561       72,958       101,006       286,478  
                                         
Other income (loss)
                                       
Writedown of available-for-sale securities
    (148,180 )     -       -       -       -  
Writedown of investment in partnership interest
    (190,601 )     -       -       -       -  
Gain (loss) on sale of assets
    (12,342 )     -       -       -       -  
Gain (loss) on sale of available-for-sale securities
    361,704       -       -       71,737       -  
Gain (loss) on disposition of subsidiary
    958,591       -       -       -       958,591  
Interest income
    265,359       1,413       4,581       7,364       16,877  
Total other income (loss)
    1,234,531       1,413       4,581       79,101       975,468  
Net income (loss) before non-controlling interest
    (10,372,477 )     (27,148 )     (68,377 )     (21,905 )     688,990  
Non-controlling interest
    130,739       -       -       -       -  
Net income (loss) for the period
  $ (10,241,738 )   $ (27,148 )   $ (68,377 )   $ (21,905 )   $ 688,990  
                                         
Basic and diluted income (loss) per share
          $ (0.00 )   $ (0.00 )   $ (0.00 )   $ 0.01  
Weighted average number of common shares outstanding
            54,500,000       54,500,000       54,500,000       54,253,676  

The accompanying notes are an integral part of these consolidated financial statements.
 
 
CIGMA METALS CORPORATION & SUBSIDIARIES
(An exploration stage enterprise)
Comprehensive Income (Loss)
January 13, 1989 (inception) to September 30, 2011
                                       
(Expressed in U.S. Dollars)
                                               
                     
 
                         
                                 
Accumulated
   
Accumulated
   
Total
 
               
Additional
   
Advances for
   
Compre-
   
(deficit) during
   
other
   
stockholders'
 
   
Common stock
   
paid-in
   
Stock
   
hensive
   
exploration
   
comprehensive
   
equity
 
   
Shares
   
Amount
   
capital
   
Subscriptions
   
(loss)
   
stage
   
income (loss)
   
(deficiency)
 
Issuance of common stock for
                                               
- for services on August 2, 1989
    2,000,000     $ 200     $ 800     $ -     $ -     $ -     $ -     $ -  
Components of comprehensive income (loss)
                                                               
- Net (loss) for the year
    -       -       -       -       (1,000 )     (1,000 )     -       (1,000 )
Total comprehensive (loss)
                                  $ (1,000 )                        
                                                                 
Balance, December 31, 1991 to 1997
    2,000,000       200       800       -               (1,000 )     -       (1,000 )
Issuance of common stock for
                                                               
- for mineral property rights on April 2, 1998
    12,000,000       1,200       (600 )     -               -       -       600  
Components of comprehensive income (loss)
                                                               
- Net (loss) for the year
    -       -       -       -       (600 )     (600 )     -       (600 )
Total comprehensive (loss)
                                  $ (600 )                        
                                                                 
Balance, December 31, 1998
    14,000,000       1,400       200       -               (1,600 )     -       -  
Issuance of common stock for
                                                               
- cash on March 31, 1999
    14,000,000       1,400       698,600       -               -       -       700,000  
Components of comprehensive income (loss)
                                                               
- Net (loss) for the year
    -       -       -       -       (141,392 )     (141,392 )     -       (141,392 )
Total comprehensive (loss)
                                  $ (141,392 )                        
                                                                 
Balance, December 31, 1999
    28,000,000       2,800       698,800       -               (142,992 )     -       558,608  
Components of comprehensive income (loss)
                                                               
- Net (loss) for the year
    -       -       -       -       (211,182 )     (211,182 )     -       (211,182 )
- Unrealized gains (losses) on available-for-sale securities
    -       -       -       -       (77,734 )     -       (77,734 )     (77,734 )
Total comprehensive (loss)
                                  $ (288,916 )                        
 
 
Balance, December  31, 2000
    28,000,000       2,800       698,800       -               (354,174 )     (77,734 )     269,692  
Components of comprehensive income (loss)
                                                               
- Net (loss) for the year
    -       -       -       -       (25,510 )     (25,510 )     -       (25,510 )
- Unrealized gains (losses) on available-for-sale securities
    -       -       -       -       (17,803 )     -       (17,803 )     (17,803 )
Total comprehensive (loss)
                                  $ (43,313 )                        
                                                                 
Balance, December  31, 2001
    28,000,000       2,800       698,800       -               (379,684 )     (95,537 )     226,379  
Components of comprehensive income (loss)
                                                               
- Net (loss) for the year
    -       -       -       -       (20,943 )     (20,943 )     -       (20,943 )
- Unrealized gains (losses) on available-for-sale securities
    -       -       -       -       48,407       -       48,407       48,407  
Total comprehensive (loss)
                                  $ 27,464                          
                                                                 
Balance, December  31, 2002
    28,000,000       2,800       698,800       -               (400,627 )     (47,130 )     253,843  
Components of comprehensive income (loss)
                                                               
- Net (loss) for the year
    -       -       -       -       (17,631 )     (17,631 )     -       (17,631 )
- Unrealized gains (losses) on available-for-sale securities
    -       -       -       -       (3,723 )     -       (3,723 )     (3,723 )
Total comprehensive (loss)
                                  $ (21,354 )                        
                                                                 
Balance, December  31, 2003
    28,000,000       2,800       698,800                       (418,258 )     (50,853 )     232,489  
Cash advanced on stock subscriptions
    -       -       -       1,000,000               -       -       1,000,000  
Components of comprehensive income (loss)
                                                               
- Net (loss) for the year
    -       -       -       -       (657,031 )     (657,031 )     -       (657,031 )
- Unrealized gains (losses) on available-for-sale securities
    -       -       -       -       (31,020 )     -       (31,020 )     (31,020 )
Total comprehensive (loss)
                                  $ (688,051 )                        
                                                                 
Balance, December  31, 2004
    28,000,000       2,800       698,800       1,000,000               (1,075,289 )     (81,873 )     544,438  
Issuance of common stock for
                                                               
- cash on May 20, 2005
    2,000,000       200       999,800       (1,000,000 )             -       -       -  
- cash on December 13, 2005
    700,000       70       349,930       -               -       -       350,000  
Cash advanced on stock subscriptions
    -       -       -       300,000               -       -       300,000  
Components of comprehensive income (loss)
                                                               
- Net (loss) for the year
    -       -       -       -       (888,224 )     (888,224 )     -       (888,224 )
 
 
 
- Recongnition of other than temporary decline in market value of available-foe-sale securities
    -       -       -       -       81,873       -       81,873       81,873  
Total comprehensive (loss)
                                  $ (806,351 )                        
                                                                 
Balance, December 31, 2005
    30,700,000       3,070       2,048,530       300,000               (1,963,513 )     -       388,087  
Issuance of common stock for
                                                               
- cash on March 30, 2006
    800,000       80       299,920       (300,000 )             -       -       -  
- cash on May 12, 2006
    6,540,000       654       3,269,346       -               -       -       3,270,000  
- cash on May 26, 2006
    1,460,000       146       729,854       -               -       -       730,000  
Grant of options to employees and directors
    -       -       366,844       -               -       -       366,844  
Components of comprehensive income (loss)
                                                               
- Net (loss) for the year
    -       -       -       -       (1,545,617 )     (1,545,617 )     -       (1,545,617 )
- Unrealized gains (losses) on available-for-sale securities
    -       -       -       -       (15,488 )     -       (15,488 )     (15,488 )
Total comprehensive (loss)
                                  $ (1,561,105 )                        
                                                                 
Balance, December  31, 2006
    39,500,000       3,950       6,714,494       -               (3,509,130 )     (15,488 )     3,193,826  
Issuance of common stock for
                                                               
- finders fee in March/April 2007
    200,000       20       136,980       -               -       -       137,000  
- finders fee in June 2007
    200,000       20       95,980       -               -       -       96,000  
- cancel finders fee in March/April 2007
    (200,000 )     (20 )     (136,980 )     -               -       -       (137,000 )
Components of comprehensive income (loss)
                                                               
- Net (loss) for the period
    -       -       -       -       (1,909,808 )     (1,909,808 )     -       (1,909,808 )
- Cumulative translation adjustment
    -       -       -       -       8,101       -       8,101       8,101  
- Unrealized gains (losses) on available-for-sale securities
    -       -       -       -       (73,864 )     -       (73,864 )     (73,864 )
Total comprehensive (loss)
                                  $ (1,975,571 )                        
                                                                 
Balance, December 31, 2007
    39,700,000       3,970       6,810,475       -               (5,418,938 )     (81,251 )     1,314,256  
Issuance of common stock for
                                                               
- shares to be issued
    -       -       449,842       158               -       -       450,000  
- finders fee in January 2008
    300,000       30       113,970       -               -       -       114,000  
- cash in June 2008
    6,500,000       650       1,949,350       -               -       -       1,950,000  
- cash in October 2008
    1,600,000       160       399,840       -               -       -       400,000  
Components of comprehensive income (loss)
                                                               
- Net (loss) for the period
    -       -       -       -       (3,482,650 )     (3,482,650 )     -       (3,482,650 )
- Cumulative translation adjustment
    -       -       -       -       18,746       -       18,746       18,746  
 
- Unrealized gains (losses) on available-for-sale securities
    -       -       -       -       (43,593 )     -       (43,593 )     (43,593 )
Total comprehensive (loss)
                                  $ (3,507,497 )                        
                                                                 
Balance, December 31, 2008
    48,100,000       4,810       9,723,477       158               (8,901,588 )     (106,098 )     720,759  
Issuance of common stock for
                                                               
- shares to be issued
    -       -       (449,842 )     (158 )             -       -       (450,000 )
- cash in February 2009
    500,000       50       99,950                                       100,000  
- cash in March 2009
    1,000,000       100       199,900       -                               200,000  
- cash in July 2009
    3,900,000       390       1,169,610       -                               1,170,000  
- cash in
                                                            -  
Components of comprehensive income (loss)
                                                               
- Net (loss) for the period
                                    (2,235,894 )     (2,235,894 )             (2,235,894 )
- Cumulative translation adjustment
                                    (197,162 )             (197,162 )     (197,162 )
- Unrealized gains (losses) on available-for-sale securities
                                    175,994               175,994       175,994  
                                    $ (2,257,062 )                        
Balance, December 31, 2009
    53,500,000       5,350       10,743,095       -               (11,137,482 )     (127,266 )     (516,303 )
                                                                 
Issuance of common stock for
                                                               
- for mineral property rights on September 30, 2011
    1,000,000       100       349,899       -                               349,999  
Components of comprehensive income (loss)
                                                               
- Net income for the period
                                    917,649       917,649               917,649  
- Cumulative translation adjustment
                                    170,315               170,315       170,315  
- Unrealized gains (losses) on available-for-sale securities
                                    (57,632)               (57,632)       (57,632)  
Total comprehensive income
                                  $ 1,030,332                          
Balance, December 31, 2010     54,500,000     $ 5,450     $ 11,092,994     $ -             $ (10,219,833 )   $ (14,583)     $ 864,028  
                                                                 
Components of comprehensive income (loss)
                                                               
- Net loss for the period
                                    (21,905)       (21,905)               (21,905)  
- Unrealized gains (losses) on available-for-sale securities
                                    (60,340)               (60,340)       (60,340)  
Total comprehensive (loss)
                                  $ (82,245)                          
Balance, September 30, 2011     54,500,000     $ 5,450     $ 11,092,994     $               $ (10,241,738)       (74.923)       781.783  
 
The accompanying notes are an integral part of these consolidated financial statements.

 
CIGMA METALS CORPORATION
 
Cumulative
             
(An exploration stage enterprise)
 
January 13
   
Nine months
   
Nine months
 
 
1989 (inception)
   
Ended
   
Ended
 
(Expressed in U.S. Dollars)
 
to September 30
   
September 30
   
September 30
 
(Unaudited)
 
2011
   
2011
   
2010
 
Cash flows used in operating activities
                 
Net income (loss) for the period
  $ (10,241,738 )   $ (21,905 )   $ 688,990  
Adjustments to reconcile net income (loss) to net cash used in operating activities
                       
- depreciation
    51,626       -       -  
- stock compensation expense on stock option grants
    366,844       -       -  
- accrued interest on notes receivable
    (27,266 )     (7,365 )     (16,877 )
- issuance of common stock for mineral property rights
    600       -       -  
- expenses satisfied with issuance of common stock
    211,000       -       -  
- partnership exploration costs
    1,125,711       -       -  
- writedown of investment in partnership interest
    190,601       -       -  
- writedown of available for sale securities
    148,180       -       -  
- realized gain on sale of available-for-sale investments
    (361,704 )     (71,737 )     -  
- gain on disposition of subsidiary
    (958,591 )     -       (958,591 )
- impairment of mineral properties
    1,009,597       -       -  
- minority interest in income (loss) of subsidiary
    (130,739 )                
- realized loss on sale of equipment
    12,342       -       -  
Changes in working capital assets and liabilities, net of disposal of subsidiary
                 
- decrease (increase) in trade and other receivables
    (11,180 )     -       -  
- decrease (increase) in prepaid expenses and other assets
    (31,181 )     (3,092 )     2,840  
- increase (decrease) in accounts payables and accrued liabilities
    236,299       (15,434 )     (733,355 )
- increase (decrease) in accounts payables related party
    134,788       -       (68,737 )
- increase (decrease) in deposits
    -       -       (450,000 )
Net cash used in operating activities
    (8,274,811 )     (119,533 )     (1,535,730 )
                         
Cash provided by (used in) investing activities
                       
- collections on notes receivable
    200,000       -       200,000  
- purchase equipment
    (217,093 )     -       -  
- proceeds from sale of equipment
    35,717       -       -  
- proceeds from disposition of subsidiary, net of cash deposit
    1,452,949       -       1,452,949  
- investment in available-for-sale securities
    (329,977 )     -       -  
- proceeds from disposition of marketable securities
    422,132       82,887       -  
- investment in partnership interest
    (1,316,312 )     -       -  
- acquisition of mineral property costs
    (2,550,000 )     -       (150,000 )
Net cash provided by (used in) investing activities
    (2,302,584 )     82,887       1,502,949  
                         
Cash flows from financing activities
                       
- issuance of common stock
    10,170,001       -       -  
- loan proceeds
    1,160,255       -       -  
- loan payments
    (633,396 )     -       -  
Net cash provided by financing activities
    10,696,860       -       -  
                         
Effect of exchange rate changes on cash and cash equivalents
    67,223       -       -  
Increase in cash and cash equivalents
    186,688       (36,646 )     (32,781 )
Cash and cash equivalents, beginning of period
    -       223,334       52,609  
Cash and cash equivalents, end of period
  $ 186,688     $ 186,688     $ 19,828  
                         
Supplement Disclosures of Cash Information:
                       
Interest paid (net of amounts capitalized)
          $ -     $ -  
Income taxes paid
          $ -     $ -  

The accompanying notes are an integral part of these consolidated financial statements.
 
 
CIGMA METALS CORPORATION
(An Exploration Stage Company)
(Unaudited)

1.
Nature of Business and Going Concern

Cigma Metals Corporation (the “Company”) was formed on January 13, 1989, under the laws of the State of Florida as “Cigma Ventures Corporation.” On April 17, 1999 the Company changed its name to “Cigma Metals Corporation.” The Company is in the business of location, acquisition, exploration and, if warranted, development of mineral properties. The Company’s current focus is on the exploration and development of its mineral concessions in Mexico. The Company has not yet determined whether its properties contain mineral reserves that may be economically recoverable and has not generated any operating revenues to date.

These consolidated financial statements have been prepared in accordance with generally accepted accounting principles applicable to a going concern which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. The general business strategy of the Company is to acquire mineral properties either directly or through the acquisition of operating entities. The Company has incurred recurring operating losses since inception, has not generated any operating revenues to date and used cash of $119,533 from operating activities in 2011.

The Company requires additional funds to meet its obligations and maintain its operations. These conditions raise substantial doubt about the Company's ability to continue as a going concern. Management's plans in this regard are to raise equity financing through private or public equity investment in order to support existing operations and expand its business. There is no assurance that such additional funds will be available to the Company when required or on terms acceptable to the Company. These consolidated financial statements do not include any adjustments that might result from this uncertainty.

2.
Significant Accounting Policies

a)
Principles of Accounting:

The Company follows accounting standards set by the Financial Accounting Standards Board, referred to as the “FASB”. The FASB sets accounting principles generally accepted in the United States (“GAAP”) that the Company follows to ensure they consistently report their financial condition, results of operations, and cash flows. References to GAAP issued by the FASB in these footnotes are to the FASB Accounting Standards Codification, referred to as “ASC”.

These consolidated financial statements have been prepared in accordance with GAAP and include the accounts of the Company and its 100% owned subsidiaries Exploraciones Cigma S.A. de C.V. (“Exploraciones Cigma”) and Cigma Metals (BVI) Limited (“Cigma BVI”), collectively, they are referred to herein as “the Company”. In January 2010, the Company sold its 100% interest in its Kazakhstan subsidiary (“Dostyk LLP”) to Copperbelt AG. Significant inter-company accounts and transactions have been eliminated.

b)
Accounting Estimates

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates and assumptions.
 
 
c)
Cash Equivalents
 
Cash equivalents comprise certain highly liquid instruments with a maturity of three months or less when purchased. The Company did not have any cash equivalents at September 30, 2011 and December 31, 2010.

d)
Note receivable

The asset is a non-derivative financial asset resulting from the December 2009 sale of the Company’s 100% interest in its Kazakhstan subsidiary, Dostyk LLP, to Copperbelt AG and is stated at fair value. The $150,000 note bears interest at 8.0%, due on demand and is unsecured. The note along with the accrued interest, $177,442 was converted into 272,989 common shares of Copperbelt AG in August 2011 at $0.65 per share. At each reporting date the Company assesses whether there is any objective evidence that a financial asset is impaired. A financial asset is deemed to be impaired, if, and only if, there is objective evidence of impairment as a result of one or more events that has occurred after the initial recognition of the asset and that event has an impact on the estimated future cash flows of the financial asset.

e)
Marketable securities

Non-derivative financial assets that do not meet the definition of loans and receivables are classified as available-for-sale and comprise principally all of the Company’s strategic investments in entities not qualifying as subsidiaries or associates. The Company’s available-for-sale securities consist of shares of common stock of three small cap publicly traded companies at September 30, 2011 and December 31, 2010, respectively, and are stated at fair value. Any unrealized holding gains or losses in these securities are included in the determination of accumulated other comprehensive income (loss). If a loss in value in the available-for-sale securities is considered to be other than temporary, it is recognized in the determination of net income. Cost is based on the specific identification method for the individual securities to determine realized gains or losses. On sale of available-for-sale investments, the cumulative amount recognized in other comprehensive loss/income is reclassified from accumulated other comprehensive loss/income to profit or loss.

On sale of available-for-sale investments, the cumulative amount recognized in other comprehensive loss/income is reclassified from accumulated other comprehensive loss/income to profit or loss.

Investee companies where no quoted market price in an active market is available are accounted for under the cost method of accounting. Under this method, the Company’s share of the earnings or losses of such Investee companies is not included in the Consolidated Balance Sheet or Statement of Operations. However, impairment charges are recognized in the Consolidated Statement of Operations. If circumstances suggest that the value of the Investee Company has subsequently recovered, such recovery is not recorded.

Cost method investments at September 30, 2011, consist of an investment in a privately held corporation headquartered in Europe.

f)
Mineral Properties and Exploration Expenses

The Companies policy is to account for its mineral properties on a cost basis whereby all direct costs, net of pre-production revenue, relative to the acquisition of the properties are capitalized. All sales and option proceeds received are first credited against the costs of the related property, with any excess credited to earnings. Once commercial production has commenced, the net costs of the applicable property will be charged to operations using the unit-of-production method based on estimated proven and probable recoverable reserves. The net costs related to abandoned properties are charged to operations.

Exploration costs are charged to operations as incurred until such time that proven reserves are discovered. From that time forward, the Company will capitalize all costs to the extent that future cash flow from mineral reserves equals or exceeds the costs deferred. The deferred costs will be amortized over the recoverable reserves when a property reaches commercial production. As at September 31, 2011 and December 31, 2010, the Company did not have proven reserves. Exploration activities conducted jointly with others are reflected at the Company's proportionate interest in such activities.
 
The Company reviews the carrying values of its mineral properties on a regular basis by reference to the project economics including the timing of the exploration and/or development work, the work programs and the exploration results experienced by the Company and others. The review of the carrying value of any producing property will be made by reference to the estimated future operating results and net cash flows. When the carrying value of a property exceeds its estimated net recoverable amount, provision is made for the decline in value.
 
 
The recoverability of the amounts shown for mineral properties is dependent on the confirmation of economically recoverable reserves, confirmation of the Company’s interest in the underlying mineral claims, the ability of the Company to obtain the necessary financing to successfully complete their development and the attainment of future profitable operations or proceeds from disposition.

Estimated costs related to site restoration programs during the commercial development stage of the property are accrued over the life of the project.

g)
Stock-based compensation

The Company accounts for share-based payments under the fair value method of accounting whereby stock-based compensation cost is measured at the grant date based on the fair value of the common stock on the award date.

h)
Interest Expense

Interest expense was approximately $329 in 2011 (2010 - $1,266) respectively.

i)
Foreign Currency Translations and Transactions

The Company and Cigma Metals (BVI) Limited’s reporting currency is the U.S. Dollar. Exploraciones Cigma S.A. de C.V. is a foreign operation and its functional currency is the Mexico Peso. Certain contractual obligations in these consolidated financial statements are stated in the Mexican Peso. The Mexican Peso to U.S. dollar exchange rate at September 30, 2011 was U.S. $0.0738 to 1 Peso.

The Company translates foreign assets and liabilities of its subsidiaries, other than those denominated in U.S. dollars, at the rate of exchange at the balance sheet date. Income and Expenses are translated at the average rate of exchange throughout the year. Gains or losses from these translations are reported as a separate component of other comprehensive income (loss) until all or a part of the investment in the subsidiaries is sold or liquidated. The translation adjustments do not recognize the effect of income tax because the Company expects to reinvest the amounts indefinitely in operations.

Transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency foreign exchange loss in the consolidated statements of operations and were not material in 2011 or 2010 or in the cumulative period ending September 30, 2011.

j)
Concentration of Credit Risk

Financial instruments that subject the Company to concentrations of credit risk consist primarily of cash, cash equivalents and the notes receivable. The Company places its cash with high credit quality financial institutions in Canada. The Company occasionally has cash deposits in excess of federally insured limits. The Company did not have funds deposited in banks beyond the insured limits as of September 30, 2011 and December 31, 2010. The Company has not experienced any losses related to these balances, and management believes its credit risk to be minimal. The note receivable relates to the sale in 2010 of the Company’s 100% interest in its Kazakhstan subsidiary to Copperbelt AG. The Company believes the credit risk with respect to the note receivable to be minimal.

k)
Long-Lived Assets Impairment

Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable, in accordance with GAAP. An impairment loss would be recognized when the carrying amount of an asset exceeds the estimated undiscounted future cash flows expected to result from the use of the asset and its eventual disposition.