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EXCEL - IDEA: XBRL DOCUMENT - MIDWEST OIL & GAS INC.Financial_Report.xls
EX-31.1 - EXHIBIT 31.1 - MIDWEST OIL & GAS INC.ex31_1apg.htm
EX-32.1 - EXHIBIT 32.1 - MIDWEST OIL & GAS INC.ex32_1apg.htm
EX-32.2 - EXHIBIT 32.2 - MIDWEST OIL & GAS INC.ex32_2apg.htm
EX-31.2 - EXHIBIT 31.2 - MIDWEST OIL & GAS INC.ex31_2apg.htm


UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


FORM 10-Q


[X]

QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED APRIL 30, 2013


Commission files number 000-54666


AMERICAS DIAMOND CORP.

(Exact name of registrant as specified in its charter)


NEVADA

(State or other jurisdiction of incorporation or organization)


2nd Floor, Berkeley Square House, Berkley Square

London, United Kingdom W1J 6BD

 (Address of principal executive offices, including zip code.)


Telephone +44 207 681 1620  Facsimile +44 207 681 1620

(Telephone number, including area code)


Resident Agents of Nevada

711 S. Carson Street #4

Carson City, NV  89701

Telephone (775)882-4641 Facsimile (775)882-6818

 (Name, address and telephone number of agent for service)


78 York Street

London W1H 1DP England

 (Former address of principal executive offices, including zip code.)


Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the last 90 days.    YES [X]  NO [   ]


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 smaller reporting company. See the definitions of "large accelerated filer, "accelerated filer," "non-accelerated filer," and "smaller reporting company" in Rule 12b-2 of the Exchange Act.


Large accelerated filer  

[   ]

Accelerated filer

[   ]

Non-accelerated filer

[   ]

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 [   ]  NO [X]

 


State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date:  31,891,630 shares as of June 19, 2013




ITEM 1.  FINANCIAL STATEMENTS


The un-audited quarterly financial statements for the period ended April 30, 2013, prepared by the Company, immediately follow.


AMERICAS DIAMOND MINING CORPORATION

(An Exploration Stage Company)

CONSOLIDATED BALANCE SHEETS

(Expressed in US dollars)

(Unaudited)


 

April 30,

January 31,

 

2013

2013

 

 

 

ASSETS

 

 

 

 

 

Current assets:

 

 

Cash and cash equivalents

$

2,176 

$

9,550 

Prepaid expenses

-0- 

2,292 

 

 

 

Total current assets

2,176 

11,842 

 

 

 

Mineral properties  (Note 2 and 3)

980,966 

980,966 

 

 

 

Plant and equipment

1,735,000 

1,735,000 

 

 

 

Other deferred costs

-0- 

-0- 

 

 

 

Total assets

2,718,142 

2,727,808 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

 

Current Liabilities

 

 

Accounts payable (Note 4)

$

520,880 

$

593,256 

Accrued liabilities

43,593 

40,457 

Equipment Note payable (Note 4 and 8)

840,000 

840,000 

Shares to be issued (Note 5)

45,000 

790,716 

Total current liabilities

1,449,474 

2,264,429 

Long term Liabilities

 

 

Long term equipment note

519,307 

545,000 

Total Liabilities

1,968,781 

2,809,429 

Commitments and contingencies (Note 8)

 

 

 

 

 

Stockholders' equity

 

 

Common stock (Note 7) ($0.001 par value)

 

 

Authorized 375,000,000 common shares with $0.001 par value

 

 

Issued and outstanding

 

 

31,891,630 common shares (January 31, 2013 – 30,000,000)

31,891 

30,000 

Additional paid-in capital

1,073,825 

30,000 

Deficit

(356,355)

(141,621)

 

 

 

Total stockholders' equity

749,361 

(81,621)

 

 

 

Total liabilities and stockholders’ equity

$

2,718,142 

$

2,727,808 

 

 

 

Nature of operations (Note 1)

 

 

 

 

 

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




ADMC Form 10-Q  April 30, 2013                                                                                                           Page 2 of 17



AMERICAS DIAMOND MINING CORPORATION

(An Exploration Stage Company)

CONSOLIDATED STATEMENTS OF OPERATIONS

(Expressed in United States dollars)

(Unaudited)


 

Three Month

Ended

April 30,

2013

Three Months

Ended

April 30,

2012

January 6, 2010

(Inception) through

April 30,

2013

 

 

 

 

 EXPENSES

 

 

 

Professional fees

55,198 

3,100 

129,765 

General and administration

6,808 

16,715 

43,124 

Depreciation

-0- 

-0- 

-0- 

 

62,006 

19,815 

172,889 

 

 

 

 

Loss before other items

(61,206)

(19,815)

9,262 

Other items

 

 

 

Interest and other income (expense)

(20,728)

-0- 

(11,465)

Mineral property evaluation

(132,000)

(-0-)

(172,000)

 

(152,728)

(-0-)

(183,465)

Loss for the period

$

(214,734)

$

(19,815)

$

(356,355)

 

 

 

 

Basic and fully diluted loss per share

$

(0.001)

$

(0.001)

$

(0.001)

 

 

 

 

Weighted average number of shares outstanding

31,891,630 

30,000,000 

 


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




ADMC Form 10-Q  April 30, 2013                                                                                                           Page 3 of 17



AMERICAS DIAMOND MINING CORPORATION

(An Exploration Stage Company)

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Expressed in US dollars)

(Unaudited)


 

 

Three Months

Ended

April 30,

2013

Three Months

Ended

April 30,

2012

January 6, 2010

(Inception)

through

April 30,

2013

 

 

 

 

 

Operating activities

 

 

 

 

Loss for the period

 

(214,734)

(22,662)

(356,355)

Items not affecting cash:

 

 

 

 

Stock based compensation

 

-0- 

-0- 

37,500 

Depreciation

 

-0- 

-0- 

(-0-)

Sub-total

 

(214,734)

(22,662)

(318,855)

Changes in non-cash working capital items

 

 

 

 

Deposits

 

-0- 

(10,000)

-0- 

Equipment debt

 

-0- 

-0- 

1,385,000 

Prepaid expense

 

2,292 

-0- 

-0- 

Accounts payable and accrued liabilities

 

(75,568)

2,440 

526,973 

Net cash provided by (used in) operating activities

 

(292,593)

(10,222)

(1,593,118)

Investment activities

 

 

 

 

Mineral properties and deferred exploration costs

 

(-0-)

(-0-)

(980,966)

Purchase of plant and equipment

 

(-0-)

(-0-)

(1,735,000)

Other deferred costs

 

-0- 

-0- 

-0- 

Cash provided by (used by) investment activities  

 

(-0-)

(-0-)

(2,715,966)

 

 

 

 

 

Financing activities

 

 

 

 

Share capital issued-net of issuance costs

 

1,045,716 

-0- 

1,105,716 

Share subscriptions

 

(745,716)

-0- 

45,000 

Repayment of equipment debt

 

(25,693)

-0- 

(25,693)

 

 

 

 

 

Cash provided by financing activities

 

274,307 

-0- 

1,125,023 

 

 

 

 

 

Increase (decrease) in cash and cash equivalents during the period

(18,286)

(10,222)

2,176 

 

 

 

 

 

Cash and cash equivalents, beginning of the period

 

20,461 

30,683 

-0- 

 

 

 

 

 

Cash and cash equivalents, end of the period

 

2,176 

20,550 

2,176 

 

 

 

 

 

Supplementary information:

 

 

 

 

Interest paid (received), net

 

$

20,727 

$

-0- 

$

20,727 

 

 

 

 

 

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





ADMC Form 10-Q  April 30, 2013                                                                                                           Page 4 of 17




AMERICAS DIAMOND MINING CORPORATION

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT

FROM JANUARY 10, 2010 (INCEPTION) THROUGH THE PERIOD ENDED APRIL 30, 2013


  

Common Stock

 

 

 

 

 

 

 

  

Shares

 

 

Dollars

 

Additional

Paid-in Capital

 

Accumulated

Deficit

 

Total

 

  

 

 

 

 

 

 

 

 

 

 

 

 Inception 1/6/2010

 

 

-0-

 

 

$

-0-

$

(-0-)

 

$

-0- 

 

$

(-0-)

 

 Stock Issued

 

 

3,000,000

 

 

 

3,000

 

12,000 

 

 

 

 

 

15,000 

 

 Net loss

 

 

 

 

 

 

 

 

 

 

 

(810)

 

 

(810)

 

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Balances 1/31/10

 

 

3,000,000

 

 

$

3,000

$

12,000 

 

$

(810)

 

$

14,190 

 

 Stock Issued

 

 

3,000,000

 

 

 

3,000

 

42,000 

 

 

 

 

 

45,000 

 

 Net loss

 

 

 

 

 

 

 

 

 

 

 

(18,507)

 

 

(18,507)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Balances 1/31/11

 

 

6,000,000

 

 

 

6,000

 

54,000 

 

 

(19,317)

 

 

40,683 

 

 Net loss

 

 

 

 

 

 

 

 

 

 

 

(22,662)

 

 

(22,662)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Balances 1/31/12

 

 

6,000,000

 

 

 

6,000

 

54,000 

 

 

(41,979)

 

 

18,021 

 

 Share split

 

 

24,000,00

 

 

 

24,000

 

(24,000)

 

 

 

 

 

 

 

 Net loss

 

 

 

 

 

 

 

 

 

 

 

(99,642)

 

 

(99,642)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Balances 1/31/13

 

 

30,000,000

 

 

$

30,000

$

30,000 

 

$

(141,621)

 

$

(81,621)

 

Stock Issued

 

 

1,891,630

 

 

 

1,891

 

1,048,828 

 

 

 

 

 

1,050,719 

 

Net Loss

 

 

 

 

 

 

 

 

 

 

 

(214,734)

 

 

(214,734)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balances 4/30/13

 

 

30,000,000

 

 

 

31,891

 

30,000 

 

 

(356,355)

 

 

(749,361)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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





ADMC Form 10-Q  April 30, 2013                                                                                                           Page 5 of 17



AMERICAS DIAMOND MINING CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in US dollars)

(Unaudited)

April 30, 2013




NOTE 1 - NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES


NATURE OF OPERATIONS


Americas Diamond Mining Corporation. is engaged in the acquisition and exploration of diamond mining projects in the Americas. The Company is focused on developing its existing mining properties in South America and acquiring and developing new mines with the expectation that the properties can enter production within 24 months. The Company operates in one reporting segment.


PRINCIPLES OF CONSOLIDATION


We generally act as a sole proprietor, but may enter joint agreements with other companies in an effort to achieve our stated operating objectives. Our Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America, and include our accounts and our wholly-owned subsidiaries’ accounts (collectively, the “Company”). All significant intercompany balances and transactions have been eliminated in consolidation.


USE OF ESTIMATES AND PREPARATION OF FINANCIAL STATEMENTS


The preparation of 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.


CASH AND CASH EQUIVALENTS


Cash equivalents comprise certain highly liquid instruments with an original maturity of three months or less when purchased. At the reporting dates, cash and cash equivalents consist of cash and funds invested in money market accounts.


INVESTMENTS


The Company measures its investments based on a fair value hierarchy disclosure framework that prioritizes and ranks the level of market price observability used in measuring assets and liabilities at fair value. Market price observability is affected by a number of factors, including the type of asset or liability and their characteristics. This hierarchy prioritizes the inputs into three broad levels as follows:


 

Level 1—Quoted prices in active markets for identical instruments.


 

Level 2—Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets.


 

Level 3—Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.






ADMC Form 10-Q  April 30, 2013                                                                                                           Page 6 of 17



The Company categorizes its investments as either trading, available for sale, or held to maturity.  The Company does not hold any securities for trading purposes or that we believe would be considered held to maturity.  The Company’s investments are comprised of available-for-sale securities and are carried at fair value with unrealized gains and losses, net of applicable income taxes, recorded within accumulated other comprehensive income.  The Company reviews its investments quarterly for declines in market value that are other than temporary in addition to re-evaluating the investment classification.


FAIR VALUE OF FINANCIAL INSTRUMENTS


The Company’s financial instruments consist of cash and cash equivalents, investments, accounts payable, notes payables, loans from shareholders and accrued expenses.  The Company considers the carrying values of its financial instruments in the financial statements to approximate their fair value due to the short term nature of such items. The fair values of the Company's debt instruments are calculated based on debt with similar maturities, credit quality and current market rates of interest. Unless otherwise noted, it is management’s opinion that the Company is not exposed to significant interest risks arising from these financial instruments.


CONCENTRATIONS


Financial instruments, which could potentially subject the Company to credit risk, consist primarily of cash, cash equivalents and investments. The Company maintains its cash in bank deposit accounts insured by the Federal Deposit Insurance Corporation. The Company’s account balances, at times, may exceed federally insured limits. The Company has not experienced material losses in such accounts, and believes it is not exposed to any significant credit risk with respect to its cash accounts.


The Company’s operations are all related to the minerals and mining industry. A reduction in mineral prices or other disturbances in the minerals market could have an adverse effect on the Company’s operations.


MINERAL PROPERTIES, MINERAL CLAIM PAYMENTS AND EXPLORATION EXPENSES


The Company capitalizes all costs related to the acquisition of minerals properties and the Company expenses all costs related to the maintenance and exploration of the unproven mineral properties to which it has secured exploration rights. If and when The Company has demonstrated that the mineralization can be profitability mined, then subsequent development costs of the property will be capitalized.


Once capitalized, such costs will be amortized using the units-of-production method over the estimated life of the probable mineralization. To date, excluding the mineral properties acquired in Kansai Mining asset acquisition, the Company has not established the commercial feasibility of its exploration prospects; therefore all costs have been expensed.


Mineralized material is found in a body that has been delineated by appropriately spaced drilling and/or underground sampling to support reported tonnage and average grade of minerals. Such a deposit does not qualify as economic mineralization until legal and economic feasibility are confirmed based upon a comprehensive evaluation of development costs, unit costs, grades, recoveries and other material factors.  Exploration potential is the estimated value of potential mineral deposits that the Company has the legal right to access. The value assigned to exploration potential was determined by interpreting the known exploration information and exploration results, including geological data and/or geological information, that were available as of the acquisition date. Carrying amounts assigned to VBME are not charged to expense until the VBME becomes associated with additional mineralization and the mineralization are produced or the VBME is determined to be impaired. Additions to mineralization for properties with VBME will carry with them the value assigned to VBME at the date acquired, less any impairment amounts.


The Company assesses the carrying costs for impairment under ASC 930 Extractive Activities – Mining (AS 930) annually. An impairment is recognized when the sum of the expected undiscounted future cash flows is less than the carrying amount of the mineral property. Impairment losses, if any, are measured as the excess of the carrying amount of the mineral property over its estimated fair value. If mineral properties are subsequently abandoned or impaired, any capitalized costs will be charged to operations.





ADMC Form 10-Q  April 30, 2013                                                                                                           Page 7 of 17



PROPERTY PLANT AND EQUIPMENT


Property, plant and equipment are recorded at cost. Depreciation is recorded on the straight-line basis over estimated useful lives that range from three to five years, but do not exceed the useful life of the individual asset. Normal maintenance and repairs are charged to operations while expenditures for major maintenance and improvements are capitalized. When assets are retired or sold, the related cost and accumulated depreciation are removed from the accounts, and any gain or loss arising from such disposition is included in the consolidated statement of activities.


IMPAIRMENT OF LONG-LIVED ASSETS


Management reviews and evaluates the net carrying value of all facilities, including idle facilities, for impairment at least annually, or upon the occurrence of other events or changes in circumstances that indicate that the related carrying amounts may not be recoverable. We estimate the net realizable value of each property based on the estimated undiscounted future cash flows that will be generated from operations at each property, the estimated salvage value of the surface plant and equipment and the value associated with property interests. All assets of an operating segment are evaluated together for purposes of estimating future cash flows.


Although management has made a reasonable estimate of factors based on current conditions and information, assumptions underlying future cash flows are subject to significant risks and uncertainties. Estimates of undiscounted future cash flows are dependent upon estimates of metals to be recovered from ore mineralization, and to some extent, identified resources beyond initial mineralization, future production and capital costs and estimated metals prices (considering current and historical prices, forward pricing curves and related factors) over the estimated remaining mine life. It is reasonably possible that changes could occur in the near term that could adversely affect our estimate of future cash flows to be generated from our operating properties. If undiscounted cash flows including an asset’s fair value are less than the carrying value of a property, an impairment loss is recognized. The Company has determined that no impairment exists pertaining to its long-lived assets.


ENVIRONMENTAL COSTS


Environmental expenditures that relate to current operations are charged to operations or capitalized as appropriate. Expenditures that relate to an existing condition caused by past operations, and which do not contribute to current or future revenue generation, are charged to operations. Liabilities are recorded when environmental assessments and/or remedial efforts are probable, and the cost can be reasonably estimated. Generally, the timing of these accruals coincides with the earlier of completion of a feasibility study or the Company’s commitments to plan of action based on the then known facts. Management has determined that recording a liability pertaining to environmental expenditures as of April 30, 2013 is not needed.


ASSET RETIREMENT OBLIGATIONS


The Company follows ASC 410-20, which addresses financial accounting and reporting for obligations associated with the retirement of tangible long-lived assets and the associated retirement costs. The standard applies to legal obligations associated with the retirement of long-lived assets that result from the acquisition, construction, development and normal use of the asset.


ASC 410-20 requires that the fair value of a liability for an asset retirement obligation be recognized in the period in which it is incurred if a reasonable estimate of fair value can be made. The fair value of the liability is added to the carrying amount of the associated asset and this additional carrying amount is depreciated over the life of the asset. The liability is accreted at the end of each period through charges to operating expense. If the obligation is settled for other than the carrying amount of the liability, the Company will recognize a gain or loss on settlement. The Company has no mining projects in production as of April 30, 2013, and the asset retirement obligations are usually created as part of the production process. Accordingly, at April 30, 2013, the Company had no asset retirement obligations.


INCOME TAX


The Company accounts for income taxes under ASC 740, Income Taxes. Deferred taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss carry forwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the




ADMC Form 10-Q  April 30, 2013                                                                                                           Page 8 of 17



differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. ASC 740 also requires that uncertain tax positions are evaluated in a two-step process, whereby (1) it is determined whether it is more likely than not that the tax positions will be sustained based on the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold, the largest amount of tax benefit that is greater than fifty percent likely of being realized upon ultimate settlement with the related tax authority would be recognized.


REVENUE RECOGNITION


We plan to recognize revenue from the sale of product when an agreement of sale exists, product delivery has occurred, title has transferred to the customer and collection is reasonably assured. The price to be received is based upon terms of a sales contract. The Company has not generated revenue activity for the periods presented in the consolidated financial statements.


STOCK BASED COMPENSATION


The Company has adopted ASC 718, Stock Compensation, which requires the Company to measure the compensation cost of stock options and other stock-based awards to employees and directors at fair value at the grant date and recognize compensation expense over the requisite service period for awards expected to vest. The Company has not issued stock options in 2012 or 2013. The Company issues stock for payment of certain professional fees and these stock issuances are expensed based on the market value of the stock on the date granted. The Company expenses these professional fees at the time of stock issuance as the stock issuance date approximates the date the services are performed.


PER SHARE DATA


Basic loss per share is computed by dividing net loss by the weighted average number of common shares outstanding for the year. Diluted loss per share is computed by dividing net loss by the weighted average number of common shares outstanding plus common stock equivalents (if dilutive) related to warrants, convertible notes and convertible preferred stock.


There were no stock options, or convertible notes or convertible preferred stock outstanding at April 30, 2013 and January 31, 2013.


RECENT ACCOUNTING PRONOUNCEMENTS


Fair Value Measurements and Disclosures ASC 820, Improving Disclosures about Fair Value Measurements: In January 2010, the Financial Accounting Standards Board (FASB) issued accounting guidance intended to improve disclosures related to fair value measurements. This guidance requires significant transfers in and out of Level 1 and Level 2 fair value measurements to be disclosed separately along with the reasons for the transfers. Additionally, in the reconciliation for the fair value measurements using significant unobservable inputs (Level 3), information about purchases, sales, issuances and settlements must be presented separately (cannot net as one number). This guidance also provides clarification for existing disclosures on (i) level of disaggregation and (ii) inputs and valuation techniques. In addition, this guidance includes conforming amendments for employers’ disclosure of postretirement benefit plan assets. This guidance was effective for interim and annual reporting periods beginning after December 15, 2009, except for the disclosures about purchases, sales, issuances and settlements in the roll forward of activity in Level 3 fair value measurements. Those disclosures are required for fiscal years beginning after December 15, 2010, and for interim periods within those fiscal years. The adoption of ASC 820 did not have a material impact on the Company’s consolidated results of operations or financial position.


NOTE 2 – ACQUISITION OF ASSETS


Asset Purchase Agreement – Kansai Mining Corporation





ADMC Form 10-Q  April 30, 2013                                                                                                           Page 9 of 17



Pursuant to an Asset Purchase Agreement by and among the Company, SUDAM and Kansai Mining Corporation, the Company acquired the assets associated with a diamond project in Venezuela in two parts: first two diamond leases (Natal I and Natal II) owned by Compania Minera Adamantine (“CMA”), a corporation formed in Venezuela and the second part consisting of plant and equipment comprising a 3-stage treatment plant, a 50-70 TPH scrubber and 10 TPH DMS plant and X-Ray final recovery section from Bateman’s in South Africa.

 

The purchase of SUDAM which includes CMA-an option to purchase 100% ownership interest of Compania Minera Adamantine (“CMA”) by issuing 250,000 shares of a public company (which was subsequently agreed to be Americas Diamond Corporation).  Under the terms of the option agreement SUDAM will have three years to complete the following: a) issue $13,000,000 worth of shares of a public company (which was subsequently agreed to be Americas Diamond Corporation).  50% of these shares will be issued when production permits are issued and the remaining 50% will be issued when commercial production is achieved. The shares will be valued at the lower of $.40 or on a 5 day VWAP (volume weighted average price) when the milestones are reached.  B) SUDAM will pay 100% of all costs related to CMA, the mining leases and the plant & equipment.  In addition Kansai will retain a 10$ net profits interest in the diamond project ½ of which can be purchased within two years for US $3,000,000.


The plant and equipment was purchased for US $1,735,000 paid for over two years with monthly principal payments of $50,000 for 12 months, then payments of $90,000 for 11 months and a final payment in the 24 month. Interest is to be paid monthly at the rate of 6%.


In addition SUDAM agreed to spend the following amounts

a.

Month one –US $45,000

b.

Month two-US $30,000

c.

Month three-US $25,000

d.

Months four thru nine-$60,000

e.

Months ten thru twelve-$50,000

f.

$230,000 for capital costs and spare equipment within the first twelve months

g.

$750,000 per year from the end of year 1for term of the option to further the objective of obtaining production


In the event of default of any provision of the SUDAM Asset Purchase agreement for the mining lease, plant & equipment all the assets revert back to Kansai Mining.  As of April 30, 2011 the Company was not in compliance of the Asset Agreement but had not received any default notice from Kansai Mining.

 

ASC 930-805, states that mineral rights consist of the legal right to explore, extract, and retain at least a portion of the benefits from mineral deposits. Mining assets include mineral rights. Acquired mineral rights are considered tangible assets under ASC 805. ASC 805 requires that mineral rights be recognized at fair value as of the acquisition date.  ASC 930-805-30-1 and 30-2 provides that in fair valuing mineral assets, an acquirer should take into account both:


  

·

The value beyond proven and probable reserves (VBME) to the extent that a market participant would include VBME in determining the fair value of the assets.

  

·

The effects of anticipated fluctuations in the future market price of minerals in a manner that is consistent with the expectations of market participants.


In order to fair value the mineral rights acquired, management utilized a compilation and review report prepared by a third-party which documented the estimated proven and probable reserves related to the Natal property. Based on these findings, management estimated the VBME and the Company determined that the fair value of the total consideration paid of $ 980,966 resulting from the Asset Purchase Agreement should be allocated to the mineral rights acquired. The Company has recorded the acquired mineral rights fair value as Mineral properties on the consolidated balance sheet as a separate component of property, plant and equipment. As the mineral rights represent a tangible asset, the assigned fair value should be amortized over the useful life of the mineral right based on the units of production method. Management has preliminarily determined that the useful life for the acquired mineral right approximates twenty years but will reevaluate this estimate at the time production commences. Management will begin the amortization of the asset once development of the site commences in accordance with the units of production method.





ADMC Form 10-Q  April 30, 2013                                                                                                           Page 10 of 17



There were no material relationships among the Company and Kansai Mining or any of their respective affiliates. It is the policy of the Company to segregate each of its mining projects into separate, wholly owned special purpose vehicles, for the purposes of risk mitigation and financing. The Asset Purchase Agreement was executed as the Company believes that it has the resources to develop the mineral rights related to the projects acquired.


NOTE 3 - MINERAL PROPERTIES AND PROPERTIES, PLANT AND EQUIPMENT


Our major components of mineral properties and properties, plants and equipment are:


  

 

April 30,

2013

 

 

January 31,

2013

 

Mine and Mill Equipment

 

$

1,735,000

 

 

$

$1,735,000

 

Mineral Properties

 

 

980,966

 

 

 

980,966

 

  

 

$

2,715,966

 

 

 

2,715,966

 

Less: accumulated depreciation, depletion and amortization

 

 

-0-

 

 

 

-0-

 

Net carrying value

 

$

2,715,966

 

 

$

2,715,966

 


With the acquisition of the Natal Diamond Project, we also acquired certain mining claims and permits in the transaction. These mineral rights as discussed in Note 2 were fair valued at $980,966 and are presented as Mineral Properties on the consolidated balance sheet. Since that time, we have not commenced any mining operations; therefore, we have not recorded any amortization expense related to any capitalized amounts. Costs of acquiring mining properties are capitalized upon acquisition. Mine development costs incurred either to develop new projects, to expand the capacity of mines, or to develop mine areas substantially in advance of current production are also capitalized once proven and probable reserves exist and the property is a commercially mineable property. Costs incurred to maintain current production or to maintain assets on a standby basis are charged to operations. Costs of abandoned projects are charged to operations upon abandonment. The Company evaluates the carrying value of capitalized mining costs and related property and equipment costs, to determine if these costs are in excess of the recoverable amount whenever events or changes in circumstances indicate that the carrying amounts may not be recoverable.


NOTE 4 - NOTES PAYABLE


As part of the purchase of SUDAM by Americas Diamond Corporation $488,216 of debt was paid by the issuance of 971,695 shares of the common stock of Americas Diamond Corporation. These shares were issued during the period ended April 30, 2013.


As part of the January 31, 2013 Asset Purchase Agreement (see note 2) the Company purchased plant and equipment.  As of April 30, 2013 the balances are:


 

April 30,

2013

Current portion of equipment debt

$

840,000

Long term portion of equipment debt

$

540,000

Total due

$

1,385,000


NOTE 5 - SHARES TO BE ISSUED


The Company is obligated to issue shares either for services, property purchase agreements or for cash.


  

 

April 30,

2013

 

 

January 31,

2013

 

Services (55,000 shares)

 

$

-0-

 

 

 

27,500

 

Mineral Properties (250,000 shares)

 

 

-0-

 

 

 

125,000

 

Purchase of SUDAM (971,695 shares)

 

 

-0-

 

 

 

488,216

 

Cash (298,595-January 31, 2013 and 150,000 as of April 30, 2013)

 

 

45,000

 

 

 

150,000

 

Total

 

$

45,000

 

 

 

790,716

 





ADMC Form 10-Q  April 30, 2013                                                                                                           Page 11 of 17



All shares were valued at 95% of the 10 day moving average of the share price


NOTE 6 - INCOME TAX


The Company had net operating loss carry forwards available to offset future taxable income approximating $141,621 as of January 31, 2013. The Company has determined that realization of a deferred tax asset that has resulted from the net operating losses is not likely and therefore a full valuation allowance has been recorded against this deferred income tax asset. There are no other material deferred tax positions recorded by the Company.


We do not have an accrual for uncertain tax positions as of April 30, 2013. If interest and penalties were to be assessed, we would charge interest to Interest Expense, and penalties to Other Operating Expense. It is not anticipated that unrecognized tax benefits would significantly increase or decrease within 12 months of the reporting date.


NOTE 7 - CAPITAL STOCK


Common Stock


As of January 31, 2013, the Company had 30,000,000 share of its $0.001 par value common stock issued and outstanding as of April 30, 2013 the Company had 31,891,630 shares issued and outstanding.


Warrants and Options


As of April 30, 2013 and January 31, 2013, the Company had no warrants or options for the purchase of shares of common stock issued and outstanding:


NOTE 8 - RELATED PARTY TRANSACTIONS


SUDAM was acquired by Americas Diamond Corporation and the president and CEO of both companies is Daniel Martinez.


NOTE 9 - FINANCIAL CONDITION AND GOING CONCERN


As of April 30, 2013, the Company had cash on hand as of $2,176 and a working capital deficit of approximately $1,447,298 and has incurred a loss from operations since inception. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The Company's continuance is dependent on raising capital and generating revenues sufficient to sustain operations. The Company believes that the necessary capital will be raised and has entered into discussions to do so with certain individuals and companies. Subsequent to the date of this financial statement an agreement was reached with Americas Diamond Corporation to acquire SUDAM effective April 30, 2013.  


The accompanying consolidated financial statements do not include any adjustments that might be necessary should the Company be unable to secure the necessary capital and continue as a going concern.


NOTE 10 - COMMITMENTS AND CONTINGENCIES


None


NOTE 11 - MINING LEASE AND OPTION TO PURCHASE


Natal Diamond Project


The Company purchased SUDAM which owns equipment and an option to purchase the mining leases associated with the Natal Diamond Project as a result of the Asset Purchase agreement with Kansai Mining as discussed in Note 2.





ADMC Form 10-Q  April 30, 2013                                                                                                           Page 12 of 17



NOTE 12 - SUBSEQUENT EVENTS


The Company has drawn down a total of $420,000 under its January 2013 financing agreement and has a remaining balance of $2,780,000 available under that agreement.  On May 1, 2013 the Company has issued the following warrants:


Warrants issued:


Number

Exercise price

Exercise date

202,715

$0.68

1-May-15

149,492

$0.68

1-May-15

201,734

$0.68

1-May-15

90,994

$0.68

1-May-15





ADMC Form 10-Q  April 30, 2013                                                                                                           Page 13 of 17



ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.


Forward Looking Statements


This report contains forward-looking statements that involve risk and uncertainties.  We use words such as “anticipate”, “believe”, “plan”, “expect”, “future”, “intend”, and similar expressions to identify such forward-looking statements.  Investors should be aware that all forward-looking statements contained within this filing are good faith estimates of management as of the date of this filing.  These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from historical results or our predictions.


The Company


On September 14, 2012 Jenny Brown resigned as our President and Chief Executive Officer. As a result, concurrent to Ms. Brown's resignation, we appointed Daniel Martinez, as President, Chief Executive Officer and as a Director of our company.


Our Board of Directors is now comprised of Daniel Martinez.


On October 8, 2012, we filed Articles of Merger with the Nevada Secretary of State to change our name from “Impact Explorations Inc.” to “Americas Diamond Corp.”, to be effected by way of a merger with its wholly-owned subsidiary Americas Diamond Corp., which was created solely for the name change.


Also on October 8, 2012, we filed a Certificate of Change with the Nevada Secretary of State to give effect to a forward split of our authorized, issued and outstanding shares of common stock on a five (5) new for one (1) old basis and, consequently, our authorized capital shall increase from 75,000,000 to 375,000,000 shares of common stock and our issued and outstanding shares of common stock shall increase from 6,000,000 to 30,000,000, all with a par value of $0.001.


Effective October 15, 2012, in accordance with approval from the Financial Industry Regulatory Authority ("FINRA"), we changed our name from Impact Explorations Inc. to Americas Gold Corp. and effected a forward split of our authorized, issued and outstanding shares of common stock on a five (5) new for one (1) old basis, such that, our authorized  capital increased from 75,000,000 to 375,000,000 shares of common stock and our issued and outstanding shares of common stock increased from 6,000,000 to 30,000,000, all with a par value of $0.001.


We acquired SUDAM effective January 31, 2013. SUDAM owned a diamond processing plant in Venezuela and had an option to acquire Compania Minera Adamantine (“CMA”) which owns the Natal I and Natal II diamond concessions in Venezuela.  As a result of this acquisition the Company ceased to be “shell company”


Results of Operations


We are an exploration stage company and have generated minimal revenues since inception (January 6, 2010) and have incurred $172,889 in expenses through April 30, 2013.


For the three months ended April 30, 2013 we incurred $214,926 in expenses.  These expenses consisted of $55,198 in professional fees , $6,808 in general and administrative expenses , $132,000 of exploration costs associated with diamond property and $20,720 of interest expense primarily associated with the purchase of equipment.  For the same three month period ended April 30, 2012 we incurred $19,815 in expenses.  These expenses consisted of $3,100 in professional fees and $16,715 in general and administrative expenses.


The following table provides selected financial data about our company for the period ended April 30, 2013.  


Balance Sheet Data:

 

April 30, 2013

Cash

 

$

2,176

Mineral properties & equipment

 

$

2,715,966

Total assets

 

$

2,718,142

Total liabilities

 

$

1,968,781

Shareholders' equity

 

$

749,361






ADMC Form 10-Q  April 30, 2013                                                                                                           Page 14 of 17



Cash provided by financing activities since inception through April 30, 2013 was $1,105,716 from the sale of shares of common stock.


Liquidity and Capital Resources


Our cash balance at April 30, 2013 was $2,176, with $1,449,473 in outstanding current liabilities.  Our plan of operation for the next twelve months is to continue our exploration efforts, either on our current claim or possibly on another mineral property if we are able to find one with better prospects than our current property.  During the quarter ended April, 2013 we incurred $132,000 in mineral exploration in Venezuela.


In January 2013 the Company signed a financing agreement for $3,200,000 and has obtained a total of $420,000 to date. An additional $2,780,000 is available under that agreement.


Plan of Operation


Our exploration target is to find exploitable minerals.  Our success depends on achieving that target.  There is the likelihood of our current mineral claim containing little or no economic mineralization or reserves of silver and other minerals. There is the possibility that our current claim does not contain any reserves and funds that we spend on exploration will be lost.  Even if we complete our current exploration program and are successful in identifying a mineral deposit we will be required to expend substantial funds to bring our claim to production.  We are unable to assure you we will be able to raise the additional funds necessary to implement any future exploration or extraction program even if mineralization is found.


Our agreement with Kansai requires us to spend $60,000 per month on CMA and an additional $230,000 in capital costs.  These costs are needed to re-start the diamond processing plant which is needed for bulk testing of the diamond concession.


Off-Balance Sheet Arrangements


We have no off-balance sheet arrangements.


ITEM 4.  CONTROLS AND PROCEDURES.


Evaluation of Disclosure Controls and Procedures


Under the supervision and with the participation of our management, including our principal executive officer and the principal financial officer, we have conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities and Exchange Act of 1934, as of the end of the period covered by this report.  Based on this evaluation, our principal executive officer and principal financial officer concluded as of the evaluation date that our disclosure controls and procedures were effective such that the material information required to be included in our Securities and Exchange Commission reports is accumulated and communicated to our management, including our principal executive and financial officer so that it may be recorded, processed, summarized and reported within the time periods specified in SEC rules and forms relating to our company, particularly during the period when this report was being prepared.


Changes in Internal Controls Over Financial Reporting


There have been no changes in our internal control over financial reporting that occurred during the last fiscal quarter ended April 30, 2013 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting




ADMC Form 10-Q  April 30, 2013                                                                                                           Page 15 of 17



PART II. OTHER INFORMATION


ITEM 5.  OTHER INFORMATION.


Effective November 27, 2012, our stock symbol changed from “IXPL” to “ADMC” to better reflect the new name of our company.  The symbol change became effective with the Over-the-Counter Bulletin Board at the opening of trading on November 27, 2012.


ITEM 6.  EXHIBITS.


The following exhibits are included with this quarterly filing.  Those marked with an asterisk and required to be filed hereunder, are incorporated by reference and can be found in their entirety in our original Registration Statement on Form S-1, filed under SEC File Number 333-165365, at the SEC website at www.sec.gov:


Exhibit No.

 

Description

3.1

 

Articles of Incorporation*

3.2

 

Bylaws*

31.1

 

Sec. 302 Certification of Principal Executive Officer

31.2

 

Sec. 302 Certification of Principal Financial Officer

32.1

 

Sec. 906 Certification of Principal Executive Officer

32.2

 

Sec. 906 Certification of Principal Financial Officer

101

 

Interactive data files pursuant to Rule 405 of Regulation S-T





ADMC Form 10-Q  April 30, 2013                                                                                                           Page 16 of 17



SIGNATURES


Pursuant to the requirements of Section 13(a) 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.


June 19, 2013

Americas Diamond Corp., Registrant


By: /s/ Daniel Martinez

______________________________

Daniel Martinez, President and Chief Executive Officer,

Chief Financial and Accounting Officer



In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.


June 19, 2013

Americas Diamond Corp., Registrant


By: /s/ Daniel Martinez

______________________________

Daniel Martinez, President and Chief Executive Officer,





ADMC Form 10-Q  April 30, 2013                                                                                                           Page 17 of 17