|2.||Summary of Significant Accounting Policies|
These financial statements and related
notes are presented in accordance with accounting principles generally accepted in the United States (US GAAP). The Companys
fiscal year-end is August 31.
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 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.
|c.||Basic and Diluted Net Income (Loss) Per Share|
Earnings (loss) per share is computed
by dividing net income (loss) available to common stockholders by the weighted average number of common shares outstanding during
the reporting period including common stock issued effective the date committed. Common stock issuable is considered outstanding
as of the original approval date for the purposes of earnings per share computations. Diluted earnings (loss) per common share
is computed by dividing net earnings (loss) by the sum of (a) the basic weighted average number of shares of common stock outstanding
during the period and (b) additional shares that would have been issued and potentially dilutive securities. During the reporting
periods the diluted earnings (loss) per share was equivalent to the basic earnings (loss) per share because all potentially dilutive
securities were anti-dilutive due to the net losses incurred. Potentially dilutive securities consist of stock options outstanding
at the end of the reporting period. Stock options outstanding as at November 30, 2012 were 8,000,0000 (November 30, 2011: Nil).
Cash includes deposits in banks, which
are unrestricted as to withdrawal or use.
|e.||Mineral Property and Exploration Costs|
The Company has been in the exploration
stage since its formation on May 28, 2004 and has not realized any revenues from its planned operations. It has been primarily
engaged in the acquisition and exploration of mining properties. Mineral property acquisition and exploration costs are expensed
as incurred. When it has been determined that a mineral property can be economically developed as a result of establishing proven
and probable reserves, the costs incurred to develop such property are capitalized. Such costs will be amortized using the units-of-production
method over the estimated life of the probable reserve. If mineral properties are subsequently abandoned or impaired, any capitalized
costs will be charged to operations.
|f.||Deferred Acquisition Costs|
The Company capitalizes deposits paid
during the acquisition of equity interests as deferred acquisition costs. Deferred acquisition costs are recorded at cost and are
included in the purchase price of the equity interest once the acquisition has been consummated.
|g.||Fair Value Measurements|
Fair value is defined as the price that
would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the
measurement date in the principal or most advantageous market. The Company uses a fair value hierarchy that has three levels of
inputs, both observable and unobservable, with use of the lowest possible level of input to determine fair value.
Level 1 - quoted prices (unadjusted)
in active markets for identical assets or liabilities;
Level 2 - observable inputs other than
Level 1, quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets and liabilities
in markets that are not active, and model-derived prices whose inputs are observable or whose significant value drivers are observable;
Level 3 - assets and liabilities whose
significant value drivers are unobservable.
As of reporting period, the Company did
not have any assets or liabilities that were measured at fair value on a recurring or non-recurring basis.
Observable inputs are based on market
data obtained from independent sources, while unobservable inputs are based on the Companys market assumptions. Unobservable
inputs require significant management judgment or estimation. In some cases, the inputs used to measure an asset or liability may
fall into different levels of the fair value hierarchy. In those instances, the fair value measurement is required to be classified
using the lowest level of input that is significant to the fair value measurement. Such determination requires significant management
Financial instruments, which include
cash, accounts payable, and loans and borrowings, were estimated to approximate their carrying values due to the immediate or short-term
maturity of these financial instruments. The fair value of amounts due to related parties are not practical to estimate, due to
the related party nature of the underlying transactions. The financial risk to the Companys operations arises from fluctuations
in foreign exchange rates and the degree of volatility of these rates. Currently, the Company does not use derivative instruments
to reduce its exposure to foreign currency risk.
The Company recognizes deferred tax assets
and liabilities for the future tax consequences attributable to differences between the financial statement carrying amounts of
existing assets and liabilities and their tax bases, as well as net operating losses.
Deferred tax assets and liabilities are
measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected
to be recovered or settled. The effect on deferred tax assets or liabilities of a change in tax rates is recognized in the period
in which the tax change occurs. A valuation allowance is provided to reduce the deferred tax assets to a level, that more likely
than not, will be realized.
Management does not believe that the
Company has any unrecognized tax positions. The Companys policy is to recognize interest and penalties accrued on any unrecognized
tax benefits as a component of income tax expense.
The Company accounts for share-based
payments under the fair value method of accounting for stock-based compensation consistent with US GAAP. Under the fair value method,
stock-based compensation cost is measured at the grant date based on the fair value of the award using the Black-Sholes option
pricing model and is recognized to expense on a straight-line basis over the requisite service period, which is generally the vesting
period. Where upon grant the options vest immediately the stock-based costs are expensed immediately.
|j.||Foreign Currency Translation and Transactions|
The Companys functional and reporting
currency is the United States dollar. Monetary assets and liabilities denominated in foreign currencies are translated into the
United States dollar using the exchange rate prevailing at the balance sheet date. Gains and losses arising on settlement of foreign
currency denominated transactions or balances are included in the determination of income.
|k.||Concentration of Credit Risk|
The Companys financial instruments
that are exposed to concentration of credit risk consist of cash. The Companys cash is in demand deposit accounts placed
with federally insured financial institutions in Canada.
|l.||Interim Financial Statements|
In the opinion of management, the accompanying
unaudited condensed financial statements contain all adjustments which include only normal recurring adjustments, necessary to
present fairly the Companys financial position, results of operations and cash flows for the periods shown. The results
of operations for such periods are not necessarily indicative of the results expected for a full year or for any future period.
The unaudited financial statements should
be read in conjunction with the Companys audited financial statements and footnotes thereto for the year ended August 31,
2012, which are included in the Companys Annual Report on Form 10-K.
|m.||Recent Accounting Pronouncements|
The Company continually assesses any
new accounting pronouncements to determine their applicability. Where it is determined that a new accounting pronouncement affects
the Companys financial reporting, the Company undertakes a study to determine the consequence of the change to its financial
statements and assures that there are proper controls in place to ascertain that the Companys financialstatements properly
reflect the change. A variety of proposed or otherwise potential accounting standards are currently under study by standard-setting
organizations and various regulatory agencies. Because of the tentative and preliminary nature of these proposed standards, the
Company has not determined whether implementation of such proposed standards would be material to the Companys financial
statements. New pronouncements assessed by the Company recently are discussed below:
In June 2011, the Financial Accounting
Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2011-05, Comprehensive Income (Topic
220) Presentation of Comprehensive Income (ASU 2011-05). ASU 2011-05 requires entities to present net income
and other comprehensive income in either a single continuous statement or in two separate, but consecutive, statements of net income
and other comprehensive income. ASU 2011-05 is effective for fiscal years and interim periods within those years, beginning after
December 15, 2011 (the interim period ending November 30, 2012 for the Company). The Company does not expect the adoption of ASU
2011-05 to have a material impact on its results of operations, financial condition, or cash flows.