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XML - IDEA: XBRL DOCUMENT - Mindesta Inc.R14.htm
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10-K - FORM 10-K - Mindesta Inc.form10k.htm
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EXCEL - IDEA: XBRL DOCUMENT - Mindesta Inc.Financial_Report.xls
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EX-31.2 - EXHIBIT 31.2 - Mindesta Inc.exhibit31-2.htm
EX-31.1 - EXHIBIT 31.1 - Mindesta Inc.exhibit31-1.htm
v2.4.0.8
Summary of Significant Accounting Policies (Policies)
12 Months Ended
Dec. 31, 2013
Nature of Operations and Going Concern [Policy Text Block]

(b) Nature of Operations and Going Concern
The Company is an exploration stage company. Effective January 2, 2012, Mindesta entered into an option agreement with Nubian Gold Corporation (“Nubian”), a privately owned Ontario company, which currently holds title to three mineral exploration permits, in the Republic of Somaliland. Under the option agreement, Mindesta could earn a 50% interest in the permits by incurring total exploration expenditures of $2 million within two years and could increase its interest to 80 percent by completing a bankable feasibility study. Mindesta incurred the first $750,000 of exploration expenditures which represented a firm commitment. Mindesta also had the option to acquire all of Nubian’s remaining interest in the permits at fair market value as determined by an independent valuator agreed to by both Mindesta and Nubian at any time after incurring the first $750,000 of exploration expenditures. As at January 2, 2014, the two year anniversary of the option agreement, the Company had not incurred the required total exploration expenditures of $2 million and thereby, relinquished all rights under the option agreement. These factors raise substantial doubt as to the Company's ability to continue to operate as a going concern.

The Company is an Exploration Stage Company that incurred a net gain of $110,464 for the year ended December 31, 2013 (2012 – net loss of $1,003,188) and has an accumulated deficit of $12,925,800 since the inception of the Company. Current liabilities exceed current assets by $243,126. The Company’s ability to continue as a going concern is dependent upon its ability to raise additional capital to pay expenses and carry out any further exploration activities. The Company will require significant financing to continue its operations and fund any further activities. There is a high degree of risk and many inherent uncertainties in mining operations and exploration activities and management cannot provide assurances that it will be successful in any future endeavors.

The Company’s ability to continue as a going concern is dependent upon its ability to raise additional capital for operating and administrative costs. However, there is a high degree of risk and many inherent uncertainties in the natural resource development industry and management cannot provide assurances that it will be successful. The accompanying financial statements do not include any adjustments that might result from negative outcomes with respect to these uncertainties.

Cash and Cash Equivalents [Policy Text Block]

(c) Cash and Cash Equivalents
Cash and cash equivalents include bank balances, funds held in trust with lawyers, and short term investments that are readily convertible into cash with original maturities of three months or less.

Use of Estimates [Policy Text Block]

(d) Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and judgments that affect the reported amounts of assets and liabilities at the date of the financial statements, and revenues and expenses for the period. By their nature, these estimates and judgments are subject to management uncertainty and the effect on the financial statements of changes in such estimates in future periods could be significant. Significant estimates and judgments include those relating to the assessment of the Company’s ability to continue as a going concern, estimates to determine whether impairment of long lived assets is required, and the fair value of stock options, depreciation rates and estimated useful lives of buildings and equipment. Actual results may differ from those estimates and judgments.

Marketable Securities [Policy Text Block]

(e) Marketable Securities
The Company classifies its marketable securities as available-for-sale securities. The securities are measured at fair market value in the financial statements with unrealized gains or losses recorded in other comprehensive income. At the time securities are sold, gains or losses are included in net income.

Long-Lived Assets [Policy Text Block]

(f) Long-Lived Assets
The Company monitors the recoverability of long-lived assets based on factors such as current market value, future asset utilization, business climate and future undiscounted cash flows expected to result from the use of the related assets. The Company records an impairment loss in the period it is determined that the carrying amount of the asset may not be recoverable. The impairment loss is calculated as the amount by which the carrying value of the asset exceeds its fair value.

Comprehensive Income (Loss) [Policy Text Block]

(g) Comprehensive Income (Loss)
The Company adopted ASC 220 “Comprehensive Income”. ASC 220 establishes standards for reporting and presentation of comprehensive income (loss) and its components in a full set of financial statements. Comprehensive income (loss) is presented in the statement of operations. ASC 220 requires only additional disclosures in the financial statements and does not affect the Company’s financial position or results of operations.

Fair Value of Financial Instruments [Policy Text Block]

(h) Fair Value of Financial Instruments
FASB ASC 820, “Fair Value Measurement” defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. ASC 820 defines fair value 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. This standard is now the single source in GAAP for the definition of fair value, except for the fair value of leased property as defined in SFAS 13. ASC 820 establishes a fair value hierarchy that distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy under ASC 820 are described below:

Level 1

Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.

 

 

Level 2

Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates); and inputs that are derived principally from or corroborated by observable market data by correlation or other means.

 

 

Level 3

Inputs that are both significant to the fair value measurement and unobservable.

Income Taxes [Policy Text Block]

(i) Income Taxes Income taxes are determined using the balance sheet method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using the 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 and liabilities of a change in tax rates is recognized in the period that includes the enactment date. In addition, a valuation allowance is established to reduce any deferred tax asset for which it is determined that it is more likely than not that some portion of the deferred tax asset will not be realized.

Potential benefits of income tax losses are not recognized in the accounts until realization is more likely than not. The Company has adopted FASB ASC 740 as of its inception. Pursuant to FASB ASC 740 the Company is required to compute tax asset benefits for net operating losses carried forward. Potential benefits of net operating losses have not been recognized in these financial statements because the Company cannot be assured it is more likely than not it will utilize the net operating losses carried forward in future periods; and accordingly is offset by a valuation allowance. FIN No.48 prescribes a recognition threshold and measurement attribute for financial statement recognition and measurement of tax positions taken into in tax returns.

To the extent interest and penalties may be assessed by taxing authorities on any underpayment of income tax, such amounts would be accrued and classified as a component of general and administrative expenses in our Statements of Operations and Comprehensive Loss. The Company elected this accounting policy, which is a continuation of our historical policy, in connection with our adoption of FIN 48.

Translation of Foreign Currencies [Policy Text Block]

(j) Translation of Foreign Currencies The functional currency of the Company has been determined to be the U.S. dollar. Foreign currency transaction gains or losses are reflected in the results of operations. For the year ended December 31, 2013 and 2012, foreign currency losses of $7,700 and $6,206, respectively, were recognized.

Mineral Properties [Policy Text Block]

(k) Mineral Properties Mineral property acquisition costs are capitalized when incurred and will be amortized using the units –of – production method over the estimated life of the reserve following the commencement of production. If a mineral property is subsequently abandoned or impaired, any capitalized costs will be expensed in the period of abandonment or impairment.

Acquisition costs include cash consideration and the fair market value of shares issued on the acquisition of mineral properties.

Exploration Costs [Policy Text Block]

(l) Exploration Costs

Exploration costs, which include maintenance, development and exploration of mineral claims, are expensed as incurred. When it is determined that a mineral deposit can be economically developed as a result of establishing proven and probable reserves, the costs incurred after such determination will be capitalized and amortized over their useful lives. To date, the Company has not established the commercial feasibility of its exploration prospects; therefore, all exploration costs are being expensed.

Stock Based Compensation [Policy Text Block]

(m) Stock Based Compensation
The Company has adopted the provisions of FASB ASC 718, “ Stock Compensation ” (“ASC 718”), which establishes accounting for equity instruments exchanged for employee services. Under the provisions of ASC 718, stock-based compensation cost is measured at the grant date, based on the calculated fair value of the award, and is recognized as an expense over the employee’s requisite service period (generally the vesting period of the equity grant). New shares of the Company’s Common Stock will be issued for any options exercised or awards granted

Basic and Diluted Loss Per Share [Policy Text Block]

(n) Basic and Diluted Loss Per Share
Basic loss per share was computed by dividing the amount of the loss for the period by the weighted average number of common shares outstanding during the period. Diluted loss per share is calculated using the treasury stock method, whereby the weighted average number of shares outstanding used in the calculation assumes that the deemed proceeds received from the exercise of stock options that are “in the money” would be used to repurchase common shares of the Company at the average market price during the year. Existing stock options have not been included in the computation of diluted loss per share as they are anti-dilutive, and therefore, basic and diluted loss per share amounts are the same.

Concentrations [Policy Text Block]

(o) Concentrations The Company explored mineral concessions all of which are located in Somaliland. The Company uses primarily one supplier to supply the exploration licenses, manpower and technical expertise for mineral exploration in Somaliland (notes 6 and  7).

Recently Adopted Pronouncements [Policy Text Block]

(p) Recently Adopted Pronouncements In July 2012, the FASB issued ASU 2012-02, “Intangibles – Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment” in Accounting Standards Update No. 2012-02. This update amends ASU 2011-08, Intangibles – Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment and permits an entity first to assess qualitative factors to determine whether it is more likely than not that an indefinite-lived intangible asset is impaired as a basis for determining whether it is necessary to perform the quantitative impairment test in accordance with Subtopic 350-30, Intangibles - Goodwill and Other - General Intangibles Other than Goodwill. The amendments are effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012. Early adoption is permitted, including for annual and interim impairment tests performed as of a date before July 27, 2012, if a public entity’s financial statements for the most recent annual or interim period have not yet been issued or, for nonpublic entities, have not yet been made available for issuance. The adoption of ASU 2012-02 did not have a material impact on our financial position or results of operations.

In August 2012, the FASB issued ASU 2012-03, “Technical Amendments and Corrections to SEC Sections: Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin (SAB) No. 114, Technical Amendments Pursuant to SEC Release No. 33-9250, and Corrections Related to FASB Accounting Standards Update 2010-22 (SEC Update)” in Accounting Standards Update No. 2012-03. This update amends various SEC paragraphs pursuant to the issuance of SAB No. 114. The adoption of ASU 2012-03 did not have a material impact on our financial position or results of operations.

In October 2012, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2012-04, “Technical Corrections and Improvements” in Accounting Standards Update No. 2012-04. The amendments in this update cover a wide range of Topics in the Accounting Standards Codification. These amendments include technical corrections and improvements to the Accounting Standards Codification and conforming amendments related to fair value measurements. The amendments in this update will be effective for fiscal periods beginning after December 15, 2012. The adoption of ASU 2012-04 did not have a material impact on our financial position or results of operations.

In February 2013, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2013-02, Comprehensive Income (Topic 220): Reporting of Amounts Reclassified out of Accumulated Other Comprehensive Income. The guidance in ASU 2013-02 is intended to provide guidance in the reclassification of Accumulated Other Comprehensive Income to net income. The amendments in this ASU are effective for fiscal years beginning after December 15, 2012. Early adoption is permitted if an entity’s financial statements for the most recent annual or interim period have yet been issued. The adoption of ASU 2013-02 did not have a material impact on our financial position or results of operations.

New Accounting Pronouncements [Policy Text Block]

(q) New Accounting Pronouncements

Other recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force) and the SEC did not or are not believed to have a material impact on the Company's present or future financial statements.