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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
Form 10-Q
(Mark One)
þ
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the quarterly period ended October 31, 2012
or
 
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  000-30230
 
 
GENERAL METALS CORPORATION
 
 
(Exact name of registrant as specified in its charter)
 
 
Delaware
 
65-0488983
(State or other jurisdiction of incorporation or organization)
 
(IRS Employer Identification No.)
 
1155 W 4TH St Ste 210, Reno, NV 89503
 
89511
(Address of principal executive offices)
 
(Zip Code)
 
 
775.583.4636
 
 
(Registrant’s telephone number, including area code)
 
 
 
 N/A
 
 
(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. þ YESNO
 
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 [X]   No [   ]
 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a small 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
(Do not check if a smaller reporting company)
o
Smaller reporting company
þ
 
 
 

 
 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.  YES þ NO
 
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
 
Check whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Exchange Act after the distribution of securities under a plan confirmed by a court.     
 
APPLICABLE ONLY TO CORPORATE ISSUERS
 
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
 
329,482,157 common shares issued and outstanding as of December 6, 2012.
 
  
PART I – FINANCIAL INFORMATION
 
 
ITEM 1. FINANCIAL STATEMENTS.
 
Our unaudited condensed consolidated financial statements are stated in United States dollars (US$) and are prepared in accordance with United States Generally Accepted Accounting Principles.
 
 
 
 

 

General Metals Corporation
 (An Exploration Stage Company)

Unaudited Condensed Consolidated Balance Sheet
 
   
October 31,
2012
   
April 30
2012
 
ASSETS
 
             
Current assets
           
Cash and cash equivalents
  $ 9,870     $ 4,954  
Prepaid expenses
    14,395       16,521  
                 
Total current assets
    24,265       21,475  
                 
Other assets
               
Land
    67,742       67,742  
Mineral property
    613,941       613,941  
Property and equipment, net
    2,978       5,595  
Other assets
    35,238       35,238  
                 
Total other assets
    719,899       722,516  
                 
Total assets
  $ 744,164     $ 743,991  
                 
LIABILITIES AND STOCKHOLDERS' EQUITY/(DEFICIT)
 
                 
Current Liabilities
               
Notes payable, current portion
  $ 4,197     $ 3,898  
Accounts payable
    475,021       409,701  
Accrued liabilities
    135,298       111,946  
Accounts payable to related parties
    66,135       199,036  
                 
Total current liabilities
    680,651       724,581  
                 
Long-term liabilities
               
Notes payable, net of current portion
    31,887       33,804  
                 
Total long-term liabilities
    31,887       33,804  
                 
Total liabilities
    712,538       758,385  
                 
Commitments and contingencies
               
                 
Stockholders' equity/(deficit)
               
Preferred stock, authorized 50,000,000 shares, par value $0.001, zero issued and outstanding
    -       -  
                 
Common stock, authorized 550,000,000 shares, par value $0.001, issued and outstanding on October 31, 2012 and April 30, 2012 is 328,399,205 and 294,195,232 respectively
    328,399       294,194  
                 
Additional paid-in capital
    11,506,385       10,976,553  
Accumulated deficit during exploration stage
    (11,803,158 )     (11,285,141 )
                 
Total stockholders' equity/(deficit)
    31,626       (14,394 )
                 
Total liabilities and stockholders' equity/(deficit)
  $ 744,164     $ 743,991  
 
The accompanying notes are an integral part of these statements
 
 
 

 
 
General Metals Corporation
 (An Exploration Stage Company)

Unaudited Condensed Consolidated Statements of Operations
 
   
Three months ended October 31,
   
Six months ended October 31,
   
March 15, 2006
(Inception)
to October 31,
 
   
2012
   
2011
   
2012
   
2011
   
2012
 
Revenue
  $ -     $ -     $ -     $ -     $ -  
                                         
Operating expenses
                                       
Depreciation and amortization
    1,280       1,337       2,618       2,675       37,888  
General and administrative
    21,960       34,763       29,686       45,906       1,502,728  
Management and consulting
    291,731       112,814       356,190       270,605       6,252,710  
Exploration and development
    40,883       56,005       55,554       72,076       3,073,003  
Professional fees
    22,724       49,315       69,328       70,872       830,683  
                                         
Total expenses
    378,578       254,234       513,376       462,134       11,697,012  
                                         
(Loss) from operations
    (378,578 )     (254,234 )     (513,376 )     (462,134 )     (11,697,012 )
                                         
Other income (expenses)
                                       
Interest expense
    (2,863 )     (2,023 )     (4,741 )     (4,138 )     (42,462 )
Other income
    100       -       100       -       17,300  
Gain on sale of mineral properties
    -       -       -       -       1,249,072  
Realized gain/(loss) on sale of investments
    -       -       -       -       (112,204 )
Other than temporary impairment of investments
    -       -       -       -       (1,224,302 )
Gain/(loss) on foreign currency exchange
    -       -       -       -       6,450  
                                         
(Loss) before income taxes
    (381,341 )     (256,257 )     (518,017 )     (466,272 )     (11,803,158 )
                                         
Provision for income taxes
    -       -       -       -       -  
                                         
Net (loss)
  $ (381,341 )   $ (256,257 )   $ (518,017 )   $ (466,272 )   $ (11,803,158 )
                                         
Loss per common share:
                                       
Basic & Diluted
  $ (0.00 )   $ (0.00 )   $ (0.00 )   $ (0.00 )        
                                         
Weighted average shares outstanding:
                                       
Basic & Diluted
    316,659,230       281,279,424       306,792,192       275,355,225          
 
The accompanying notes are an integral part of these statements
 
 
 

 
General Metals Corporation
 (An Exploration Stage Company)
 
Unaudited Condensed Consolidated Statements of Cash Flows
   
Six months ended October 31,
   
March 15, 2006
(Inception)
 
   
2012
   
2011
   
to October 31,
2012
 
Operating activities
                 
Net loss
  $ (518,017 )   $ (466,272 )   $ (11,803,158 )
Adjustments to reconcile net loss
                       
Stock issued for services
    233,853       107,697       3,162,491  
Stock issued for payment of interest on debt
    -       -       12,750  
Non-cash financing costs
    -       -       46,234  
Realized loss on sale of investments
    -       -       112,204  
Gain on sale of mineral property
    -       -       (1,249,072 )
Depreciation and amortization
    2,618       2,675       37,888  
Stock-based compensation
    105,600       20,405       1,886,771  
Other-than-temporary impairment of investments
    -       -       1,224,302  
Impairment of long-lived assets
    -       -       17,500  
Bad debt expense
    -       -       22,387  
Gain on sale of fixed asset
    -       -       (1,250 )
Change in assets and liabilities
                       
(Increase)/decrease in other current assets
    -       -       (22,387 )
(Increase)/decrease in prepaid expenses
    2,125       10,742       (13,981 )
Increase/(decrease) in accounts payable
    (67,581 )     7,872       616,056  
Increase/(decrease) in accrued liabilities
    23,352       29,537       380,007  
                         
Net cash used by operating activities
    (218,050 )     (287,344 )     (5,571,258 )
                         
Investment activities
                       
Investments:
                       
Purchases
    -       -       (1,357 )
Proceeds from sales
    -       -       154,914  
Acquisition of mineral property
    -       -       (78,091 )
Investment in General Copper
    -       -       (17,500 )
Investment in Lahontan
    -       -       (2,563 )
Deposit on water rights
    -       -       (800 )
Deposit on reclamation bond
    -       -       (34,438 )
Proceeds from sale of mineral property
    -       -       12,500  
Proceeds from sale of fixed asset
    -       -       8,000  
Purchase of land
    -       -       (67,742 )
Purchase of equipment
    -       -       (17,616 )
                         
Net cash provided/(used) by investment activities
    -       -       (44,693 )
                         
Financing activities
                       
Proceeds from loans from related parties
    -       -       121,864  
Repayments of loans from related parties
    -       -       (43,064 )
Proceeds from issuance of debt
    -       -       149,841  
Repayments of debt
    (1,618 )     (2,447 )     (10,958 )
Proceeds from the sale of stock
    224,584       299,875       5,408,138  
                         
Net cash provided by financing activities
    222,966       297,428       5,625,821  
                         
Net increase / (decrease) in cash
    4,916       10,084       9,870  
                         
Cash, beginning of period
    4,954       14,157       -  
                         
Cash, end of period
  $ 9,870     $ 24,241     $ 9,870  
                         
Supplemental Information:
                       
Interest paid
  $ 4,741     $ 4,138     $ 22,789  
Income taxes paid
  $ -     $ -     $ -  
                         
Non-cash activities:
                       
Stock issued for service as prepaid expenses
  $ -     $ 13,942     $ 11,159  
Stock issued to acquire mineral property lease
  $ -     $ -     $ 783,687  
Stock issued for payment of interest on debt
  $ -     $ -     $ 12,750  
Stock issued as reduction of accrued expenses
  $ -     $ -     $ 353,539  
Stock issued as reduction of contingent liability
  $ -     $ -     $ 50,000  
Stock issued as reduction of related party loans
  $ -     $ -     $ 26,800  
Stock issued as reduction of short-term note payable
  $ -     $ -     $ 100,000  
The accompanying notes are an integral part of these statements
 
 

 
 
General Metals Corporation
 (An Exploration Stage Company)
Notes to Consolidated Financial Statements

NOTE 1 - CONDENSED FINANCIAL STATEMENTS

The accompanying financial statements have been prepared by the Company without audit.  In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations, and cash flows at October 31, 2012, and for all periods presented herein, have been made.

In accordance with Article 8-03 of Regulation S-X certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted.  It is suggested that these condensed financial statements be read in conjunction with the financial statements and notes thereto included in the Company's April 30, 2012 audited financial statements.  The results of operations for the period ended October 31, 2012 are not necessarily indicative of the operating results for the full year.

The accompanying condensed consolidated financial statements include the accounts of General Metals Corporation and its wholly owned subsidiary, General Gold Corporation.  Collectively, they are referred herein as the Company.  All inter-company balances and transactions have been eliminated on consolidation.
 
The Company is considered a development (exploration) stage entity for financial reporting purposes by United States generally accepted accounting principles (US GAAP) since it has not generated material revenue from its principal business activities.
 
Use of estimates

The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the period. Actual results could differ from those estimates.

Recently Issued Accounting Pronouncements

No new accounting pronouncements have been issued since the filing of the Company’s Form 10-K on July 30, 2012 for the fiscal year ended April 30, 2012 that are likely to have a material impact on the Company’s financial position, results of operations, or cash flows.
 

NOTE 2 - GOING CONCERN

The Company's financial statements are prepared using generally accepted accounting principles in the United States of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not yet established an ongoing source of revenues sufficient to cover its operating costs and allow it to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations. 

In order to continue as a going concern, the Company will need, among other things, additional capital resources. Management's plan is to obtain such resources for the Company by obtaining capital from management and significant shareholders sufficient to meet its minimal operating expenses and seeking equity and/or debt financing. However, management cannot provide any assurances that the Company will be successful in accomplishing any of its plans.
The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and attain profitable operations. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
 
 
 

 

NOTE 3 – STOCKHOLDERS’ EQUITY

The following provides additional information for certain stock transactions that occurred during the six months ended October 31, 2012.  For additional details for all stock transaction please see the consolidated statement of changes in stockholders’ equity as reported in the Company’s 10-K for the period ended April 30, 2012 and filed with the Securities Exchange Commission on July 30, 2012.

During the three months ended July 31, 2012, we issued a total of 8,610,648 shares;  4,668,353 shares were issued for services valued at $96,818 to vendors; and 3,942,295 shares were issued for cash to investors in private placement at $0.015 per share for receipt of cash totaling $59,134.

During the three months ended October 31, 2012, we issued a total of 25,593,325 shares; 6,567,612 shares were issued for services valued at $137,034; 8,000,000 shares were issued to the Board of Directors and Officers as a stock grant award valued at $105,600; 11,000,000 shares were issued for cash to investors in private placement at $0.015 per share for receipt of cash totaling $165,000; 25,714 shares were issued for cash to an officer of the company in private placement at $0.0175 per share for receipt of cash totaling $450.
 
NOTE 4 – SUBSEQUENT EVENTS

Management evaluated subsequent events through the date of the filing and identified no events requiring disclosure.

NOTE 5 – RELATED PARTY
 
Forbush and Associates, of which Dan Forbush, CEO, President, and CFO, is the Principal, provides accounting support, clerical and administrative support and bookkeeping services to the Company on a billed by hour incurred basis. Forbush and Associates is owed $24,845 and $13,225 relating to hours incurred at October 31, 2012 and April 30, 2012, respectively. In the six months ended October 31, 2012, Forbush and Associates charged $15,620 for consulting services rendered in relation to preparation of the 10-K for the period ended April 30, 2012, preparation of the 10-Q for the period ended July 31, 2012, and various clerical support. In the six months ended October 31, 2011, Forbush and Associates charged $289 for reimbursable expenses included in General and administrative expenses and $15,500 for services rendered.
 
Dyer Engineering Consultants, an entity controlled by one of our Board members, provides mine permitting, engineering and leach pad design services at the Independence project. As of October 31, 2012 and April 30, 2012, Dyer Engineering Consultants is owed $41,290 and $44,281 for services rendered respectively.
 

ITEM 2.  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 
Forward-Looking Statements
 
This quarterly report contains forward-looking statements.  These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as "may", "should", "expects", "plans", "anticipates", "believes", "estimates", "predicts", "potential" or "continue" or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks in the section entitled "Risk Factors", that may cause our or our industry's actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.
 
 
 

 

Our unaudited condensed financial statements are stated in United States Dollars (US$) and are prepared in accordance with United States Generally Accepted Accounting Principles. The following discussion should be read in conjunction with our financial statements and the related notes that appear elsewhere in this quarterly report. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed below and elsewhere in this quarterly report, particularly in the section entitled "Risk Factors".
 
In this quarterly report, unless otherwise specified, all dollar amounts are expressed in United States dollars. All references to "common shares" refer to the common shares in our capital stock.

As used in this quarterly report, the terms "we", "us" and "our" mean General Metals Corporation and our wholly owned subsidiary General Gold Corporation, unless otherwise indicated.
 
OVERVIEW
 
We are an exploration stage company engaged in the acquisition, exploration and development of mineral properties currently with an emphasis on gold and silver mineralization, presently focused on our Independence Project located in Battle Mountain, Nevada.
 
We are presently conducting an aggressive program to rapidly move the Independence Project toward production, which is dependent upon obtaining further financing.   
 
In addition to the on-going development of the Independence Project, we are continually seeking to acquire other mining claims, as our funding allows.
 
The continuation of our Company is dependent upon us attaining and maintaining profitable operations and raising additional capital as needed. In this regard we have raised additional capital through equity offerings and loan transactions.  We have been successful in structuring transactions in which expenses are paid through the issuances of common shares.  In addition, we have raised additional funds and expect to continue to raise additional funds through private placement equity offerings sufficient to fund our current plan of operations.
 
 
 

 
 
The Independence Mine Property
 
  
 
We currently control a 100% undivided leasehold interest in the Independence Mine, situated in the Battle Mountain Mining District, Lander County, Nevada. The property consists of 14 whole and fractional mining claims encompassing 240 acres.  Our due diligence shows that all claims are valid and in good standing through and for the assessment year ending August 31, 2013.
 
The Independence Project is wholly owned by our company through our subsidiary company General Gold Corporation under a mining lease/option agreement with Independence Gold-Silver Mines of Seattle, Washington. Under the terms of the agreement we were required to expend a minimum of $625,000 towards exploration development and commercial production of ores, minerals or materials. This expenditure requirement was fulfilled prior to the year ended April 30, 2008, as we expended approximately $760,000 through that date.  During the year ended April, 30, 2012, we spent approximately $143,607 on exploration and development including the initiation of the permitting process and $3,017,449 inception to April 30, 2012. Through the six months ended October 31, 2012, we spent an additional $55,554 in drilling and permitting of the Independence Project.
 
 
The term of the lease is for a period of 20 years commencing October 1, 2005. There is a production royalty payable for the sale of all gold, silver or platinum based upon the average daily price of gold on the London Metal Exchange. With the current market price for gold, the royalty rate payable is 5%. There is also a production royalty of 3% payable on the sale of all substances other than gold, silver and platinum. In addition, any future production is subject to a 1% net smelter royalty obligation payable to Gold Range, LLC.  The advance minimum royalty payments are $35,000 each April 1st and October 1st through April 1, 2014.
 
We have the option to reduce the production royalty due to Independence Gold-Silver Mines, Inc. from 5% (at current price) to 1.875% for $3.0 million within 10 years of the date the lease commenced provided all obligations have been met.

Location and Access

All infrastructure necessary for the exploration, development and operation of a mine is readily available. The property is accessed via federal, state and county maintained all weather paved and gravel roads from the nearby town of Battle Mountain. A well-trained work force is available in the town of Battle Mountain, situated 30 miles north of the property along Interstate highway 80. Adequate ground water is available for diversion for future mining operations which enjoy special treatment as temporary or interim uses under Nevada water laws. Electrical power has recently been extended to within one mile of the project to service the Phoenix project, and the transcontinental natural gas line passes within 1.5 miles of the property.
 
The property has been the site of intermittent historic exploration and mining activities since the late 1920s. Past mining operations extracted 65,000 tons of high grade gold and silver ores from the property. The bulk of this activity occurred during two periods, the first from high grade ores shipped for direct smelting during the late 1940s and early 1950s, and a second from 1975 to 1983 when a significant amount of underground development took place, and a mill was erected on the property.
 
 
 

 
 
The Independence Project consists of 14 whole and fractional unpatented lode mining claims, which cover approximately 240 acres.
 
Core and reverse circulation drilling to date indicate two targets. These two targets are referred to as the Independence Deep (A Target), and the Independence Surface (B Target). Historic mining operations have generated in excess of 70,000 tons of waste dumps, mill tailings, and other waste rock products on the property. Samples of this material contain gold and silver values which suggest potential to recover gold and silver values.
 
The Independence Project covers a mineralized zone on strike with the world class, Fortitude / Phoenix Gold Skarn Deposit. The property has potential to develop a high grade underground resource in the Antler Sequence, together with a shallow, near surface resource in the overlying Pumpernickel Formation. Situated at the intersection of the Battle Mountain-Eureka Gold Trend and the Northern Nevada Rift (Twin Creeks-McCoy lineament), the Independence Project, like Fortitude and Cove/McCoy, is one of a number of Gold Skarns which occur along the Battle Mountain – Eureka and Northern Nevada Rift Zone mineral lineaments.
 
Mineralized outcrops are common on the property. Many on the southern part of the property have been prospected by shallow prospect shafts, pits and trenches. In addition, over 100 Reverse Circulation and Core holes, and extensive shallow underground mine workings in the old Independence Mine indicate wide spread, shallow, near surface mineralization which we feel represents a valid exploration target for potential future surface, bulk mining operations
 
Historic drilling and underground mine workings indicate wide spread mineralization, both in shallow, near surface, and deep targets. There are presently no identified reserves on the property. We have conducted a phased exploration program to evaluate the mineral potential of this property, with the objective of identifying and developing mineral resources and reserves reportable under SEC Industry Guide 7.

Independence Deep Target
 
A large body of mineralized material is clearly indicated by previous drilling in the Deep Target. We completed interpretation of the logs and geologic modeling in the fall of 2009 which identified mineralized material in the deep target. We retained all of the core samples, approximately 25,000 feet, and stored them on site.
 
Mineralization identified in the deep target to date is contained in the lower plate of the Golconda Thrust in rocks of the Battle Mountain and Edna Formations of the Antler Sequence.
  
Independence Shallow Target
 
Promising shallow and near surface mineralization has been identified. The Shallow Target contains an oxide target hosted entirely in the Pumpernickel Formation. To date over 130 drill holes and roughly eight (8) miles of underground workings have penetrated portions of this target, all of which have encountered highly anomalous to high grade mineralization. The principle limiting factor for surface/ shallow resources has been the lack of drilling information.  In addition, review of the work done by those which held interests in the property previously has identified  a total of 8 shallow near surface mineralized targets on the property with 4 of those being north of the Canyon Fault and 3 others where no mining has been performed and minimal geologic sampling and drilling work completed.  To date, we have spent over $2.8 million drilling, sampling and evaluating these targets. 
 
 
Independence Hill Zone

The Hill Zone, discovered in 2008, is a large, highly mineralized area north of the Canyon Fault and the Independence Shallow Target. Unlike the Independence Shallow Target, there is no historic mining in the high grade areas of the Hill zone, so all the mineral is still in place. This discovery significantly enhances the mineral potential of the 60% of the property which lies north of the Canyon Fault.  Drilling in the Hill Zone indicates three parallel zones of mineralization, each of which is comparable in width and grade to the single mineralized zone found in the Independence Shallow Target to the south.
 
 
 

 

Mineral Ownership
 
The Independence Project claims are 100% controlled by our Company.
 
Accomplishments
 
During the quarter ended October 31, 2012, our Company focused its efforts on securing new capital to attain our development goals. The Company held discussion with various parties during the period culminating in a decision to pursue funding through a transaction on the Canadian TSX exchange. The Company evaluated specific alternatives that would involve either a direct listing of the Company’s shares or a Plan of Arrangement with a publicly traded Canadian firm. The Company anticipates completing a transaction in early 2013 though the Company has not received a firm commitment as of the date of this filing.
 
Also during the quarter ended October 31, 2012, the Company entered into an agreement with Morse and Associates of St. George, Utah whereby Morse will undertake a complete reworking of the Company’s investor relations strategy.  This will include an upgraded website, creating greater visibility for the Company on the internet and building much greater awareness in the market of the Company’s shares and their inherent value. We are pleased to be working with Morse and Associates who have extensive experience with web-centric investor relations, having managed several campaigns for Microsoft and other large corporations
 

Plan of Operations- Permitting and Development Program

During the next twelve months, our Company will continue the program to move the Independence Project toward production.  We anticipate being able to secure necessary studies and permits to allow us to proceed to production.  

We anticipate initially mining the Hill Zone and are completing all necessary work to be able to finalize permits to allow us to begin there.  Additional drilling and assaying planned to further delineate the Hill Zone mineralization will allow us to maximize our cash flows early in the production cycle.
  
 
The following budget outline presents the anticipated and necessary expenditures for the next twelve month period to move the Independence Project forward to the brink of production in the coming twelve months.
 
 

Direct exploration and development costs-Shallow Area
     
RC Drilling Definition Drilling
     
Site Construction
 
$
12,800
 
Drilling 10,050 Feet RC
   
118,100
 
Sample Analyses (5 foot sample length plus standards)
   
86,500
 
Management (man days for geologist and assistant)
   
33,000
 
Supplies
   
8,200
 
Field Costs
   
8,500
 
Complete Core Drilling Program
       
Sample Analyses (5 foot sample length plus standards)
   
13,300
 
Management, logging and reporting
   
11,000
 
Splitting and sampling
   
3,400
 
QA-QC assay work
   
11,100
 
Land payments
   
120,000
 
Preliminary economic assessment (PEA)
   
25,000
 
Project permitting, State and County Permits
   
100,000
 
Engineering and design
   
40,000
 
Environmental Studies and additional permitting costs
   
50,000
 
Drill, and case water well
   
35,000
 
Report completion costs
   
25,000
 
Contingency
   
99,100
 
         
Total direct exploration and development costs
 
$
800,000
 
         
Indirect costs
       
Office rent and other operating expenses
 
$
80,000
 
Wages and salaries and payroll related expenses
   
200,000
 
Investor relations expenses
   
50,000
 
Insurance expenses
   
40,000
 
Other general and administrative expenses
   
20,000
 
Legal expenses
   
10,000
 
         
Total indirect costs
 
$
400,000
 
         
Total budget for next twelve months
 
$
1,200,000
 

 
 

 

Liquidity and Capital Requirements
 
We anticipate that to proceed with our plan of operations we will require additional funds of approximately $1.2 million over the next twelve months, exclusive of any acquisition or exploration costs. As we do not have the funds necessary to cover our projected operating expenses for the next twelve month period, we will be required to raise additional funds through the issuance of equity securities, through loans or through debt financing. There can be no assurance that we will be successful in raising the required capital or that actual cash requirements will not exceed our estimates. We intend to fulfill any additional cash requirement through the sale of our equity securities.

If we are not able to obtain the additional financing on a timely basis, if and when it is needed, we will be forced to scale down or perhaps even cease the operation of our business.
 
The continuation of our business is dependent upon obtaining further financing, a successful program of exploration and/or development, and, finally, achieving a profitable level of operations. The issuance of additional equity securities by us could result in a significant dilution in the equity interests of our current stockholders. Obtaining commercial loans, assuming those loans would be available, will increase our liabilities and future cash commitments.
 
There are no assurances that we will be able to obtain further funds required for our continued operations. As noted herein, we are pursuing various financing alternatives to meet our immediate and long-term financial requirements. There can be no assurance that additional financing will be available to us when needed or, if available, that it can be obtained on commercially reasonable terms. If we are not able to obtain the additional financing on a timely basis, we will be unable to conduct our operations as planned, and we will not be able to meet our other obligations as they become due. In such event, we will be forced to scale down or perhaps even cease our operations.

Capital Expenditures
 
Our forecast for future capital expenditures investments are dependent upon our ability to raise sufficient capital to meet our operating needs and finance permitting and production at the Independent Project.
 
General and Administrative/Management and Consulting Expenses
 
We expect to spend up to $400,000 during the twelve-month period ending October 31, 2013 on general and administrative and investor relations expenses including legal and auditing fees, rent, office equipment and other administrative related expenses.
 
 
 

 
 
Exploration and Development
 
The exploration and development program currently being executed by our company includes the beginning of the permitting process to move the Independence Project toward production. We expect to expedite this process which will require additional funds of approximately $800,000 over the next twelve months, exclusive of any acquisition or construction costs.
 
Corporate Offices
 
Our principal business offices are located at 1155 West Fourth Street, Suite 210, Reno, NV  89503.  We currently obtain our space rent free.  We believe that our current arrangements provide adequate space for our foreseeable future needs.
 
On April 28, 2009, we purchased a 480 acre parcel of private land which will be used for mineral processing, equipment storage and maintenance.  The full purchase price was $67,767 with 30% down and the balance by way of seller financing at 10% per annum for a period of 10 years with quarterly payments of $1,874 with no pre-payment penalty. Legal Description: Township 30 North, Range 43 East, M.D.M., Section 17 N/2, SW/4 comprising 480 acres.
 
Employees
 
We expect to add one employee over the next 12 month period. We do and will continue to outsource services as needed.  As at October 31, 2012, our only employee was our President, CEO, and CFO. 

Critical Accounting Estimates
 
There have been no material changes to our critical accounting estimates since the end of our 2012 fiscal year. For detailed information on our critical accounting policies and estimates, see our Annual Report on Form 10-K for the fiscal year ended April 30, 2012.
 
Results of Operations – Three Months Ended October 31, 2012 and 2011
 
The following summary of our results of operations should be read in conjunction with our financial statements for the period ended October 31, 2012 which are included herein.
 
Our operating results for the three months ended October 31, 2012 and 2011 and the changes between those periods for the respective items are summarized as follows:
 
 
   
Three Months Ended
October 31,
       
   
2012
   
2011
   
Change
 
Revenue
 
$
Nil
   
$
Nil
   
$
Nil
 
Operating expenses
 
$
378,578
   
$
254,234
   
$
(124,344
)
Net (loss)
 
$
(381,341
)
 
$
(256,257
)
 
$
(125,084
)
 
Revenues
 
We have not earned any revenues from our primary activities since our inception and we do not anticipate earning revenues in the near future.
 
Net Loss
 
The increase in net loss from the period ended October 31, 2011 to October 31, 2012 relates primarily to the stock grants issued to our officers and Board of Directors and fees paid to investor relation consultants and fundraising expenses.  We anticipate net losses in future periods as we continue to work toward our goal of near term production at the Independence Project.
 
 
 

 
 
Operating Expenses

Our operating expenses for the three months ended October 31, 2012 and 2011 are outlined in the table below:
 
   
Three Months Ended
October 31,
       
   
2012
   
2011
   
Change
 
Depreciation and amortization
 
$
1,280
   
$
1,337
   
$
57
 
General and administrative
 
$
21,960
   
$
34,763
   
$
12,803
 
Management and consulting
 
$
291,731
   
$
112,814
   
$
(178,917
)
Exploration and development
 
$
40,883
   
$
56,005
   
$
15,122
 
Professional fees
 
$
22,724
   
$
49,315
   
$
26,591
 
 
The increase in operating expenses for the three months ended October 31, 2012, compared to the same period in fiscal 2012, was mainly due to an increase in Management and consulting expenses of $178,917 from stock grants issued to our officers and Board of Directors and fees paid to consultants.  Board of Directors and other vendors continue to receive stock for services.  Decreased general and administrative expenses for the three months in fiscal 2013 was due to decrease premise rent as we consolidated offices and eliminated rent expense at a stand-alone office. Exploration and development activities decreased due to limited cash resources available to pay for continued exploration fees and as the Board of Directors focused on pursuing a transaction or direct listing on the Canadian TSX exchange and a decrease in the advance minimum royalty payment due to Independence Gold-Silver Mines, Inc from $52,500 in October 2011 to $35,000 in October of 2012.  Professional fees decreased during the three months ended October 31, 2012 as compared to same period in fiscal 2012 due to audit and accounting fees being completed and accrued in the prior quarter of fiscal 2013 as compared to the same period in fiscal 2012.

Results of Operations – Six Months Ended October 31, 2012 and 2011
 
The following summary of our results of operations should be read in conjunction with our financial statements six months ended October 31, 2012 which are included herein.
 
Our operating results for the six months ended October 31, 2012 and 2011 and the changes between those periods for the respective items are summarized as follows:
 
   
Six Months Ended
October 31,
       
   
2012
   
2011
   
Change
 
Revenue
 
$
Nil
   
$
Nil
   
$
Nil
 
Operating expenses
 
$
513,376
   
$
462,134
   
$
(51,242
)
Net (loss)
 
$
(518,017
)
 
$
(466,272
)
 
$
(51,745
)
 
 
Revenues
 
We have not earned any revenues from our primary activities since our inception and we do not anticipate earning revenues in the near future.
 
Net Loss
 
The increase in net loss from the period ended October 31, 2011 to October 31, 2012 relates primarily to the stock grants issued to our officers and Board of Directors and fees paid to investor relation consultants and fundraising expenses.  We anticipate net losses in future periods as we continue to work toward our goal of near term production at the Independence Project.
 
 
 

 
 
Operating Expenses

Our operating expenses for the six months ended October 31, 2012 and 2011 are outlined in the table below:
   
Six Months Ended
October 31,
       
   
2012
   
2011
   
Change
 
Depreciation and amortization
 
$
2,618
   
$
2,675
   
$
57
 
General and administrative
 
$
29,686
   
$
45,906
   
$
16,220
 
Management and consulting
 
$
356,190
   
$
270,605
   
$
(85,585
)
Exploration and development
 
$
55,554
   
$
72,076
   
$
16,522
 
Professional fees
 
$
69,328
   
$
70,872
   
$
1,544
)
 
The increase in operating expenses for the six months ended October 31, 2012, compared to the same period in fiscal 2011, was mainly due to an increase in management and consulting of $85,585 which related to $105,600 of stock grants issued to our officer and the Board of Directors.   Exploration costs decreased by $16,522 from the six months ended October 31, 2011 compared to the six months ended October 31, 2012 as the advanced minimum royalty payment due to Independent Gold-Silver Mines, Inc., decreased from $52,500 to $35,000 in fiscal 2013 and will remain at $35,000 through April 1, 2014.  Professional fees were relatively stable in the comparative periods.

We have focused our energy during this quarter on securing financing and energizing the permitting process with all charges being classified as development bringing the project ever closer to production.   We anticipate that the management and consulting costs will decrease in the future as we engage in a transaction or directly listing to the Canadian TSX exchange and secure financing to further the Company’s objectives at the Independent Project.
 
Liquidity and Financial Condition
 
Working Capital
   
October 31,
2012
   
April 30,
2012
   
Change
 
Current assets
 
$
24,265
   
$
21,475
   
$
2,790
 
Current liabilities
 
$
680,651
   
$
724,581
   
$
43,930
 
Working Capital
 
$
(656,386
)
 
$
(703,106
)
 
$
46,720
 
 
Cashflow
   
Six Months Ended
October 31
       
   
2012
   
2011
   
Change
 
Net cash used in operating activities
 
$
(218,050
)
 
$
(287,344
)
 
$
69,294
 
Net cash provided/(used) in investing activities
 
$
-
   
$
-
   
$
-
 
Net cash provided/(used) by financing activities
 
$
222,966
   
$
297,428
   
$
(74,462
)
Net increase/(decrease) in cash during period
 
$
4,916
   
$
10,084
   
$
(5,168
)

Our total assets at October 31, 2012 were $744,164. Our financial statements report a net loss of $518,017 for the six months ended October 31, 2012 and a net loss of $11,803,158 for the period from March 15, 2006 (date of inception) to October 31, 2012. We had a cash balance of $9,870 as of October 31, 2012.
 
We have suffered recurring losses from operations. The continuation of our company is dependent upon our company attaining and maintaining profitable operations and raising additional capital as needed. In this regard we have raised additional capital through equity offerings and loan transactions.  We have been successful in structuring deals in which expenses are paid for through the issuances of common shares.  In addition, we have raised additional funds and expect to continue to raise additional funds through private placement equity offerings sufficient to fund our current plan of operations.
 
 
 

 

We continue to explore and seek funding opportunities through either equity or loan transactions. As we receive funding, the use of available funding is evaluated by Management and the Board of Directors for its priority of use.
 
Our principal sources of funds have been from sales of our common stock.
 
Contractual Obligations
 
As a “smaller reporting company”, we are not required to provide tabular disclosure obligations.
 
Off-Balance Sheet Arrangements
 
We have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to stockholders.
 
Recently Issued Accounting Standards

No new accounting pronouncements have been issued since the filing of the Company’s Form 10-K on July 30, 2012 for the fiscal year ended April 30, 2012 that are likely to have a material impact on the Company’s financial position, results of operations, or cash flows.
 
 
ITEM 4.  CONTROLS AND PROCEDURES
 
Management’s Report on Disclosure Controls and Procedures
 
We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms, and that such information is accumulated and communicated to our management, including our president (also our principal executive officer) and our chief financial officer (also our principal financial officer and principal accounting officer) to allow for timely decisions regarding required disclosure.
 
As of October 31, 2012, the end of our quarter covered by this report, we carried out an evaluation, under the supervision and with the participation of our president (also our principal executive officer) and our chief financial officer (also our  principal financial and accounting officer), of the effectiveness of the design and operation of our disclosure controls and procedures. Based on the foregoing, our President (who is acting as our principal executive officer) and our Chief Financial Officer (who is acting as our principal financial officer and principle accounting officer) concluded that our disclosure controls and procedures were effective as of the end of the period covered by this quarterly report.
 
Changes in Internal Control over Financial Reporting
 
There have been no changes in our internal controls over financial reporting that occurred during our quarter ended October 31, 2012 that have materially or are reasonably likely to materially affect, our internal controls over financial reporting.

PART II
 
OTHER INFORMATION
 
ITEM 1.  LEGAL PROCEEDINGS
 
Our company is not a party to any pending legal proceeding and no legal proceeding is contemplated or threatened as of the date of this quarterly report.
 
 
 

 
 
ITEM 1A.  RISK FACTORS
 
 
We have had no material changes in our risk factors as disclosed in our Form 10-K for the year ended April 30, 2012 filed on July 30, 2012.
 
ITEM 2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
 
The following provides additional information for certain stock transactions that occurred during the six months ended October 31, 2012.  For additional details for all stock transaction please see the consolidated statement of changes in stockholders’ equity as reported in the Company’s 10-K for the period ended April 30, 2012 and filed with the Securities Exchange Commission on July 30, 2012.
 
During the three months ended July 31, 2012, we issued a total of 8,610,648 shares;  4,668,353 shares were issued for services valued at $96,818 to vendors and directors; and 3,942,295 shares were issued for cash to three accredited investors in private placement at $0.015 per share for receipt of cash totaling $59,134.

During the three months ended October 31, 2012, we issued a total of 25,593,325 shares; 6,567,612 shares were issued for services valued at $137,034; 8,000,000 shares were issued to the Board of Directors and Officers as a stock grant award valued at $105,600; 11,000,000 shares were issued for cash to investors in private placement at $0.015 per share for receipt of cash totaling $165,000; 25,714 shares were issued for cash to an officer of the company in private placement at $0.0175 per share for receipt of cash totaling $450.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES
 
None.
 
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
 
On December 12, 2012, the Company held an annual meeting of its stockholders in Reno, Nevada for shareholders of record as of October 22, 2012.
 
At the meeting, our stockholders approved the following:
 
Election of Directors
 
For
   
Withheld
 
Against
 
Daniel J. Forbush
    91,284,389       23,836,103  
Nil
 
Larry Max Bigler
    90,633,982       23,803,201  
Nil
 
Walter A. Marting Jr.
    90,666,884       23,803,201  
Nil
 
P.K. “Rana” Medhi
    110,761,847       3,708,238  
Nil
 
Shane K. Dyer
    90,774,628       23,695,457  
Nil
 
 
Appointment of Auditor
 
For
   
Against
   
Abstained
 
Appointment of Ingenium Accounting Associates as our independent registered public accountants for the next fiscal year
    213,728,783       2,156,501       17,609  
 
Approval of Stock Option Plan
 
For
   
Against
   
Abstained
 
Approve the adoption of our company's 2012 Stock Option Plan
    86,777,034       27,121,047       572,004  

ITEM 5.  OTHER INFORMATION
 
None.
  
 
ITEM 6.  EXHIBITS

Item
 
Description
(3)
 
Articles of Incorporation and By-laws
     
3.1
 
Certificate of Incorporation (incorporated by reference from our Registration Statement on Form 10-SB12G filed on August 24, 1999)
     
3.2
 
By-Laws (incorporated by reference from our Registration Statement on Form 10-SB12G filed on August 24, 1999)
     
3.3
 
Amendment to Certificate of Incorporation (incorporated by reference from our Annual Report on Form 10-KSB filed on August 15, 2006)
     
(10)
 
Material Contracts
     
10.1
 
Letter of Intent between General Gold Corporation and Gold Range, LLC dated November 14, 2004  (incorporated by reference from our Annual Report on Form 10-KSB filed on August 15, 2006)
 
 
 

 
 
10.2
 
Amendment to Letter of Intent between General Gold Corporation and Gold Range, LLC dated December 31, 2004 (incorporated by reference from our Annual Report on Form 10-KSB filed on August 15, 2006).=
     
10.3
 
Assignment of Lease Agreement between General Gold Corporation and Gold Range Company, LLC dated April 29, 2005  (incorporated by reference from our Annual Report on Form 10-KSB filed on August 15, 2006)
     
10.4
 
Assignment of Lease and Consent Agreement between Independence Gold-Silver Mines Inc., Gold Range Company, LLC and General Gold Corporation dated June 29, 2005  (incorporated by reference from our Annual Report on Form 10-KSB filed on August 15, 2006)
     
10.5
 
Lease Agreement between Independence Gold-Silver Mines Inc. and Gold Range Company, LLC dated July 13, 2005  (incorporated by reference from our Annual Report on Form 10-KSB filed on August 15, 2006)
     
10.6
 
Share Purchase Agreement dated July 20, 2006 among General Gold Corporation, Recov Energy Corp. and the selling shareholders of General Gold Corporation  (incorporated by reference from our Annual Report on Form 10-KSB filed on August 15, 2006)
     
10.7
 
Share Purchase Agreement dated March 15, 2007 between our company and Sanibel Investments Ltd. (incorporated by reference from our Current Report on Form 8-K filed on March 22, 2007).
     
(14)
 
Code of Ethics
     
14.1
 
Code of Ethics  (incorporated by reference from our Annual Report on Form 10-KSB filed on August 15, 2006)
     
(21)
 
Subsidiaries
     
   
General Gold Corporation, a Nevada company
  
(31)
 
Section 302 Certification
     
31.1
 
Section 302 Certification of the Sarbanes-Oxley Act of 2002 (filed herewith)
     
31.2
 
Section 302 Certification of the Sarbanes-Oxley Act of 2002 (filed herewith)
     
(32)
 
Section 906 Certification
     
32.1
 
Section 906 Certification of the Sarbanes-Oxley Act of 2002 (filed herewith)
     
32.2
 
Section 906 Certification of the Sarbanes-Oxley Act of 2002 (filed herewith)
     
101.INS**
 
XBRL Instance
     
101.SCH**
 
XBRL Taxonomy Extension Schema
     
101.CAL**
 
XBRL Taxonomy Extension Calculation
     
101.DEF**
 
XBRL Taxonomy Extension Definition
     
101.LAB**
 
XBRL Taxonomy Extension Labels
     
101.PRE**
 
XBRL Taxonomy Extension Presentation
     
** XBRL
 
Information is furnished and not filed or a part of a registration statement or prospectus for purposes of sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.

 
 

 
 
SIGNATURES
 
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
 
 
GENERAL METALS CORPORATION
 
 
(Registrant)
 
       
       
Dated: December 14, 2012
/s/ Daniel J. Forbush
 
 
Daniel J. Forbush
 
 
Chief Executive Officer/Chief Financial
Officer
 
 
(Principal Executive Officer, Principal
Financial Officer and Principal Accounting
Officer)