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

(Mark One)

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

For the quarterly period ended June 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
(IRS Employer Identification No.)
organization)
 
   
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 S

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 S

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 S

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
YES o NO S
 


 
1

 

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.

 
2

 

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.”

The Private Securities Litigation Reform Act of 1995, which provides a “safe harbor” for such statements, may not apply to this Report.

PART 1 – FINANCIAL INFORMATION
 
Page
         
Item 1.
 
Financial Statements
   
         
     
4
         
     
5
         
     
6
         
     
10
         
     
11
         
Item 2.
   
19
Item 3.
   
36
Item 4T.
   
37
 
       
PART II – OTHER INFORMATION
   
 
       
Item 1.
   
37
Item 1A.
   
37
Item 2.
   
37
Item 3.
   
38
Item 4.
   
38
Item 5.
   
38
Item 6.
   
38
         
 
39


Item 1. Financial Statements

CIGMA METALS CORPORATION
           
(An exploration stage enterprise)
           
             
Consolidated Balance Sheets
           
June 30, 2011 and December 31, 2010
           
(Expressed in U.S. Dollars)
           
   
June 30
   
December 31
 
   
(Unaudited) 2011
   
2010
 
             
ASSETS
           
Current
           
Cash
  $ 224,055     $ 223,334  
Notes receivable
    175,852       169,901  
Available-for-sale securities
    53,862       117,935  
Prepaid expenses and other assets
    5,316       3,600  
Total current assets
    459,085       514,770  
                 
Mineral properties
    500,000       500,000  
Total assets
  $ 959,085     $ 1,014,770  
                 
LIABILITIES AND STOCKHOLDERS' EQUITY
               
Current liabilities
               
Accounts payable and accrued expenses
  $ 7,948     $ 15,953  
Accounts payable - related party
    134,789       134,789  
Total current liabilities
    142,737       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
    (10,214,590 )     (10,219,833 )
Accumulated other comprehensive income (loss)
    (67,506 )     (14,583 )
Stockholders' equity
    816,348       864,028  
                 
Total liabilities and stockholders' equity
  $ 959,085     $ 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
   
Six months
   
Six months
 
Consolidated Statements of Operations
 
1989 (inception)
   
Ended
   
Ended
   
Ended
   
Ended
 
(Expressed in U.S. Dollars)
 
June 30
   
June 30
   
June 30
   
June 30
   
June 30
 
(Unaudited)
 
2011
   
2011
   
2010
   
2011
   
2010
 
Expenses
                             
Administrative and general
  $ 932,385     $ 10,552     $ 6,025     $ 30,945     $ (8,267 )
Exploration costs
                                       
- HaldeyGold Project - partnership
    796,261       -       -       -       -  
- HaldeyGold Project - other
    185,126       -       -       -       -  
- Tugojakovsk Project
    453,821       -       -       -       -  
- Kazakhstan
    5,077,672       -       -       -       100,000  
- Mexico
    2,500       -       -       2,500       -  
Impairment of mineral properties
    1,009,597       -       -       -       -  
Interest, bank charges and foreign currency exchange (gains) losses
    109,897       1,866       (116 )     (2,895 )     1,086  
Professional fees
    809,567       -       44,475       2,560       51,948  
Property investigation costs
    119,717       -       -       -       -  
Management and consulting fees
    2,081,904       13,943       16,627       39,335       68,753  
Loss before other items
    11,578,447       26,361       67,011       72,445       213,520  
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
    263,946       2,992       4,986       5,951       12,296  
Total other income (loss)
    1,233,118       2,992       4,986       77,688       970,887  
Net income (loss) before non-controlling interest
    (10,345,329 )     (23,369 )     (62,025 )     5,243       757,367  
Non-controlling interest
    130,739       -       -       -       -  
Net income (loss) for the period
  $ (10,214,590 )   $ (23,369 )   $ (62,025 )   $ 5,243     $ 757,367  
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       54,127,778  
                           
The accompanying notes are an integral part of these consolidated financial statements.
                         


CIGMA METALS CORPORATION & SUBSIDIARIES
                                               
(An exploration stage enterprise)
                                               
                                                 
Consolidated Statements of Stockholders' Equity (Deficiency) and
                                           
Comprehensive Income (Loss)
                                               
January 13, 1989 (inception) to June 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  
Total comprehensive (loss)
                                  $ (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 March 31, 2010
    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 income for the period
                                    5,243       5,243               5,243  
- Unrealized gains (losses) on available-for-sale securities
                                    (52,923 )             (52,923 )     (52,923 )
Total comprehensive (loss)
                                  $ (47,680 )                        
Balance, June 30, 2011
    54,500,000     $ 5,450     $ 11,092,994     $ -             $ (10,214,590 )   $ (67,506 )   $ 816,348  
                                                                 
The accompanying notes are an integral part of these consolidated financial statements.
                                                 


CIGMA METALS CORPORATION
 
Cumulative
             
(An exploration stage enterprise)
 
January 13
   
Six months
   
Six months
 
Consolidated Statements of Cash Flows
 
1989 (inception)
   
Ended
   
Ended
 
(Expressed in U.S. Dollars)
 
to June 30
   
June 30
   
June 30
 
(Unaudited)
 
2011
   
2011
   
2010
 
Cash flows used in operating activities
                 
Net income (loss) for the period
  $ (10,214,590 )   $ 5,243     $ 757,367  
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
    (25,852 )     (5,951 )     (12,296 )
- 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
    (29,805 )     (1,716 )     2,468  
- increase (decrease) in accounts payables and accrued liabilities
    243,728       (8,005 )     (692,466 )
- increase (decrease) in accounts payables related party
    134,788       -       (68,737 )
- increase (decrease) in deposits
    -       -       (450,000 )
Net cash used in operating activities
    (8,237,444 )     (82,166 )     (1,422,255 )
                         
Cash provided by (used in) investing activities
                       
- collections on notes receivable
    200,000       -       100,000  
- 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       1,402,949  
                         
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 (decrease) in cash and cash equivalents
    224,055       721       (19,306 )
Cash and cash equivalents, beginning of period
    -       223,334       52,609  
Cash and cash equivalents, end of period
  $ 224,055     $ 224,055     $ 33,303  
                         
Supplement Disclosures of Cash Information:
                       
Interest paid (net of amounts capitalized)
          $ -     $ -  
Income taxes paid