Attached files
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| EX-32.1 - SARBANES-OXLEY 906 CERTIFICATION - Soltera Mining Corp. | exh32-1.htm |
| XML - IDEA: XBRL DOCUMENT - Soltera Mining Corp. | R9999.htm |
| EX-31.1 - SARBANES-OXLEY 302 CERTIFICATION - Soltera Mining Corp. | exh31-1.htm |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
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[X]
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ANNUAL REPORT PURSUANT TO SECTION 13 0R 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the fiscal year ended October 31, 2014
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[ ]
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TRANSITION REPORT PURSUANT TO SECTION 13 0R 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the transition period from ____________________ to ____________________
Commission file number 000-51841
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SOLTERA MINING CORP.
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(Exact name of registrant as specified in its charter)
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| Nevada | 00-0000000 | |
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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| 3651 Lindell Road, Suite D579, Las Vegas, Nevada | 89103 | |
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(Address of principal executive offices)
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(Zip Code)
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Registrant's telephone number, including area code: 303 800 5752
Securities registered pursuant to Section 12(b) of the Act:
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Title of each class
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Name of each exchange on which registered
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None
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N/A
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Securities registered pursuant to Section 12(g) of the Act:
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common stock - $0.001 par value
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(Title of Class)
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Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. [ ] Yes [X] No
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. [ ] Yes [X] No
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 last 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. [ ] Yes [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 (§ 229.405 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 if disclosure of delinquent filers in response to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [ ]
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer", "accelerated filer" and "smaller reporting company in Rule 12b-2 of the Exchange Act.
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Larger accelerated filer [ ]
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Accelerated filer [ ]
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Non-accelerated filer [ ]
(Do not check if a smaller reporting company)
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Smaller reporting company [X]
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Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). [ ] Yes [X] No
The aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant on April 30, 2015, the last business day of the registrant's most recently completed second fiscal quarter, based on the closing price on that date of $0.045on the Pink Sheets, was $1,464,051 (32,534,476 X $0.045).
State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date.
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Class
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Outstanding at August 12, 2015
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common stock - $0.001 par value
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98,167,597
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Documents incorporated by reference: Exhibit 3.1 (Articles of Incorporation) and Exhibit 3.2 (By-laws) both filed as exhibits to Soltera's registration statement on Form SB-2 on January 24, 2006; Exhibit 3.4 (Articles of Incorporation of Incas) filed as an exhibit to Soltera's Form 8-K (Current Report) on February 21, 2007; Exhibit 10.5 (Stock Acquisition Agreement) filed as an exhibit to Soltera's Form 8-K (Current Report) on August 2, 2007; Exhibit 10.6 (First Option Agreement) filed as an exhibit to Soltera's Form 8-K (Current Report) on August 2, 2007; Exhibit 10.7 (Second Option Agreement) filed as an exhibit to Soltera's Form 8-K (Current Report) on August 2, 2007; Exhibit 10.9 (Loan Agreement) filed as an exhibit to Soltera's Form 8-K (Current Report) on August 2, 2007; Exhibit 10.12 (Bare Trust) filed as an exhibit to Soltera's Form 10-KSB (Annual Report) on February 21, 2008; Exhibit 10.13 (Assignment Agreement) filed as an exhibit to Soltera's Form 8-K (Current Report) on March 10, 2008; Exhibit 10.14 (Option Agreement) filed as an exhibit to Soltera's Form 8-K (Current Report) on March 10, 2008; Exhibit 10.15 (Stock Acquisition Agreement) filed as an exhibit to Soltera's Form 8-K (Current Report) on March 10, 2008; Exhibit 10.18 (Irrevocable Offer) filed as an exhibit to Soltera's Form 8-K (Current Report) on May 13, 2009; Exhibit 10.22 (Financing Agreement) filed as an exhibit to Soltera's Form 8-K Report (Current Report) on June 18, 2010; Exhibit 10.23 (Financing Agreement) filed as an exhibit to Soltera's Form 8-K Report (Current Report) on March 13, 2014; Exhibit 10.24 (Renegotiation Agreement) filed as an exhibit to Soltera's Form 8-K Report (Current Report) on March 13, 2014; Exhibit 14 (Financial Code of Ethics) filed as an exhibit to Soltera's Form 10-QSB (Quarterly Report) on September 18, 2007; and Exhibit 99.1 (Disclosure Committee Charter) filed as an Exhibit to Soltera's Form 10-K (Annual Report) on August 28, 2009.
Forward Looking Statements
The information in this annual report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements involve risks and uncertainties, including statements regarding Soltera's capital needs, business strategy and expectations. Any statements contained herein that are not statements of historical facts may be deemed to be forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as "may", "will", "should", "expect", "plan", "intend", "anticipate", "believe", "estimate", "predict", "potential" or "continue", the negative of such terms or other comparable terminology. Actual events or results may differ materially. In evaluating these statements, you should consider various factors, including the risks outlined from time to time, in other reports Soltera's files with the Securities and Exchange Commission.
The information constitutes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The forward-looking statements in this Form 10-K for the fiscal year ended October 31, 2014, are subject to risks and uncertainties that could cause actual results to differ materially from the results expressed in or implied by the statements contained in this report. As a result, the identification and interpretation of data and other information and their use in developing and selecting assumptions from and among reasonable alternatives requires the exercise of judgment. To the extent that the assumed events do not occur, the outcome may vary substantially from anticipated or projected results, and accordingly, no opinion is expressed on the achievability of those forward-looking statements. No assurance can be given that any of the assumptions relating to the forward-looking statements specified in the following information are accurate.
All forward-looking statements are made as of the date of filing of this Form 10-K and Soltera disclaims any obligation to publicly update these statements, or disclose any difference between its actual results and those reflected in these statements. Soltera may, from time to time, make oral forward-looking statements. Soltera strongly advises that the above paragraphs and the risk factors described in this Annual Report and in Soltera's other documents filed with the United States Securities and Exchange Commission should be read for a description of certain factors that could cause the actual results of Soltera to materially differ from those in the oral forward-looking statements. Soltera disclaims any intention or obligation to update or revise any oral or written forward-looking statements whether as a result of new information, future events or otherwise.
PART I
Item 1. Description of Business.
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(a)
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Business Development
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Soltera Mining Corp. ("Soltera") is a Nevada corporation that was incorporated on September 21, 2005, under the name "Atlin Mineral Exploration Corp." On May 30, 2007, the company changed its name to "Soltera Mining Corp." by a majority vote of its shareholders.
Incas Mineral, S.A. is an Argentinean company that was incorporated on July 6, 2007 ("Incas"). Incas is a wholly-owned subsidiary of Soltera, with 98% of the shares registered in the name of Soltera and 2% of the shares registered in the name of Fabio Montanari, Soltera's president, who is holding the shares in trust for Soltera pursuant to the terms and conditions of a bare trust. See Exhibit 3.4 – Articles of Incorporation of Incas (translated) and Exhibit 10.12 - Bare Trust for more details.
Atzek Mineral SA de CV is a Mexican company that was incorporated on September 25, 2007 ("Atzek"). Atzek was a wholly-owned subsidiary of Soltera. See Exhibit 3.5 - Licence of Atzek, Exhibit 3.6 - Articles of Incorporation of Atzek, and Exhibit 10.15 – Stock Acquisition Agreement for more details. Due to Soltera's lack of funds, the board of directors decided on December 5, 2009 for reasons of convenience and efficiency to sell Atzek. As consideration for Aztek, the buyers assumed all responsibility for any existing debt and the future operation of Atzek effective December 23, 2009.
Soltera, together with two Albanian companies, ENER-ALB PROJECTS sh.p.k. and ELITE MINE sh.a., formed a new joint venture company named the Albanian Mines Company sh.a. (the "Albanian Joint Venture Company") to tender for the rights to mineral properties in Albania. The Albanian Joint Venture Company was formed on October 17, 2008. See Exhibit 3.8 – Act of Incorporation for more details. Following a request from the other Joint-Venture partner, board of directors decided on November 21, 2012, for reasons of convenience and efficiency, to leave the Joint-Venture. All rights will pass to the other partner; there were no payments to either party, and the other joint venture partner assumed all responsibility for any existing debt and the future operation of the Albanian Joint Venture Company.
Soltera maintains its statutory resident agent's office at 1859 Whitney Mesa Drive, Henderson, Nevada, 89014 and its business office is located at 3651 Lindell Road, Suite D579, Las Vegas, Nevada, 89103. Soltera's office telephone number is (303) 800- 5752.
Soltera is engaged in the acquisition and exploration of mineral properties. Soltera's plan of operations is to conduct mineral exploration activities on the mineral properties in order to assess whether these claims possess commercially exploitable mineral deposits. Soltera's exploration program is designed to explore for commercially viable deposits of base and precious minerals, such as base and precious metals, such as copper, zinc, molybdenum, silver and gold. See "Business of Soltera" and "Management's Discussion and Analysis or Plan of Operations" below for more information.
Soltera has an authorized capital of 200 million shares of common stock with a par value of $0.001 per share with 98,167,597 shares of common stock currently issued and outstanding.
Soltera has not been involved in any bankruptcy, receivership or similar proceedings. There has been no material reclassification, merger consolidation or purchase or sale of a significant amount of assets not in the ordinary course of Soltera's business.
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(b)
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Business of Soltera
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Soltera's principal business is the acquisition and exploration of mineral resources. Soltera has not presently determined whether the properties it is exploring or intends to acquire contain mineral reserves that are economically recoverable.
Soltera is a start-up company, which has not generated any revenues from its mineral exploration activities.
In September 2007, Soltera, through Incas, began an exploration program on the El Torno Project. Since that time, and intermittently due to lack of funds in 2008-2010, Soltera completed two geochemical stream sediment sampling campaigns, a structural geologic survey of the mineralized area, an extensive rock sampling program that produced nearly 11,000 samples for analysis and a 3D IP geophysical survey over the main part of the vein (see "Property Interests" below).
In addition, and with the goal of generating cash flow, Soltera through Incas signed a Joint-Venture agreement with the titleholder of the El Torno project to exploit eluvial (loose surface material) in part of the property. This easily worked material, had already been exploited by the title holder before April 2007 with good economic results. However, extensive pitting and sampling carried out by Soltera in October-December 2010 showed that there was an insufficient eluvium tonnage of suitable plant feed in the current exploitation licence area to justify a commercial operation.
Soltera sold its Mexican subsidiary Atzek Mineral SA de CV in December 2009 for the price of the debts it had accumulated and relinquished all claims and agreements concerning the Eureka copper-gold property in Argentina. These decisions were based purely on the lack of funding at that time. Both the two Mexican gold properties and the Eureka copper-gold property had good exploration potential in Soltera's opinion, but there were simply no funds to undertake any work or maintain property rental payments.
The board of directors also decided in November 2012 to abandon the Albanian Joint Venture. Soltera had incurred no costs, and the joint venture has been virtually dormant for the past two years and Soltera decided to concentrate on its El Torno gold property in Argentina.
Soltera will continue to identify and assess new projects for acquisition purposes, but will focus on exploring and adding value to the project interests already acquired.
Property Interests
The following is a summary of Soltera's principal property interests, segregated by the operations on Soltera's claims.
None of Soltera's assets or mineral properties are currently in production or contain a reserve.
A. El Torno Project – Argentinean Property
On July 6, 2007, Incas entered into an option agreement with Manuel Bernal Mateo. The option agreement now covers five mineral claims in Argentina covering 7,863.24 hectares (19,430 acres) (the "El Torno Project"). In October 2007, Incas conducted and completed a geological and mining inspection and audit of the El Torno Project. As a result of the inspection and audit, Incas was able to confirm the size of the other two mineral claims. In the First Option Agreement the other two mineral claims are listed but there was no area coverage assigned to them. These changes resulted in the El Torno Project being increased from 3,947 hectares to 7,863.24 hectares for the following mineral claims: Mina Manolo (600 hectares), Mina La Despreciada (3,328.53 hectares), Mina El Torno Norte (2,385.43 hectares), Mina El Torno Sur (1,519.28 hectares), and Mina La Palca (30 hectares). On December 30, 2008, the parties agreed to extend the expiration date of the El Torno Project to December 30, 2013. On February 20, 2014 the payment terms were renegotiated and amended with further extension. However, Soltera did not make all the payments required under this option agreement and the option agreement is currently in default. See below for further details regarding the status of this option agreement.
Incas has the exclusive right to explore the mineral claims with an option to acquire a 100% interest in the El Torno Project upon fulfilling the following conditions:
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a.
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During the term of the option, Incas is obliged to submit to Mr. Mateo a quarterly report with technical data and detailed expenses on the El Torno Project.
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b.
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Mr. Mateo will be entitled to 1% of the Foundry Net Return, which can be purchased by Incas for $1 million anytime after production commences on the El Torno Project.
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c.
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After commencement of production on the El Torno Project, or on December, 31 2013 (if production has not commenced yet), Incas shall pay Mr. Mateo a total of $3.5 million, less any payments made by Incas during the option period. Incas can choose one of the following payment plans:
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i.
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one lump sum payment; or
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ii.
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$500,000 every six months plus a penalty payment of $350,000.
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d.
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On July 30, 2007, Incas was to lend either Mr. Mateo or Mr. Giulianotti $180,000 to be used to purchase a backhoe to be used in the exploration of the alluvial bed. The borrower was to repay the loan with $10,000 monthly payments commencing on December 1, 2007. Mr. Mateo has signed a special power of attorney with Mr. Giulianotti. The $180,000 loan was transferred to the borrower in July 2007. However, the borrower returned the funds in August 2007 due to a 30% withholding by the Argentinean government. On September 25, 2008, Soltera delivered the $180,000 to Mr. Giulianotti to be used to purchase the backhoe to be used in the exploration of the alluvial bed. The borrower was to repay the loan with $10,000 monthly payments commencing on December 1, 2007. Such payments have not been made to date, instead $150,000 of this amount was used to offset payments due to Mr. Giulianotti as per the Option Agreement for El Torno, and $10,000 of this amount was used to offset payments Mr. Giulianotti made on Inca's behalf for annual rental fee for the existing campsite on El Torno. The following US$20,000 has been used to pay a part of the acquisition option on the Sur Eureka Project. As a result the loan has been completely recovered by Soltera. See below and Exhibit 10.9 - Loan Agreement for more details.
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e.
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On or before June 30, 2008, Incas was to pay Mr. Mateo $50,000. This payment was offset by $50,000 of the loan payments due to Incas from the borrower.
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f.
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On or before July 6, 2008, Incas was to conduct a geological and mining inspection and audit of the El Torno Project. In October 2007, Incas conducted and completed a geological and mining inspection and audit of the El Torno Project.
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g.
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On or before June 30, 2009, Incas was to pay Mr. Mateo $100,000. This payment has been offset by $100,000 of the loan payments due to Incas from Mr. Mateo.
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h.
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On or before June 30, 2010, Incas paid Mr. Mateo $200,000.
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i.
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On or before December 30, 2010, Incas was required to make an investment of $1 million in the exploration of the El Torno Project. Upon consent from Giulianotti, the investment was deferred and has been completed as of the date of this report.
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j.
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From June 30, 2011, and until the El Torno Project is put into production, Incas was required to pay Mr. Mateo $150,000 half-yearly, with the first payment due on or before June 30, 2011. All payments were made up to June 30, 2013.
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Pursuant to condition c. listed above, Soltera was required to make a $500,000 payment by December 31, 2013. But Soltera failed to make this payment subsequent to the 2013 year-end, and consequently the mineral property exploration and option agreement was in default as of December 31, 2013. The payment terms were renegotiated and on February 20, 2014 Soltera, through its wholly owned subsidiary, Incas Mineral, S.A., entered into a renegotiation agreement (the "Renegotiation Agreement") with Antonio Augustin Giulianotti whereby the parties agreed to amend the payment terms of the First Renegotiated Option Agreement. The payment terms were extended by six months such that the remaining $2,750,000 was to be paid on or before the following dates:
a. $500,000 on or before June 30, 2014;
b. $500,000 on or before December 30, 2014;
c. $500,000 on or before June 30, 2015;
d. $500,000 on or before December 30, 2015;
e. $500,000 on or before June 30, 2016; and
f. $250,000 on or before December 30, 2016.
See Exhibit 10.6 - First Renegotiated Option Agreement and Exhibit 10.24 - Renegotiating Agreement for more details.
As of the date of this annual report, Soltera has not yet made any of the three outstanding payments under the Renegotiation Agreement, except for a partial payment of $100,000 made to Mr. Giulianotti on February 20, 2014. As a result, the Renegotiation Agreement is currently in default. Soltera intends to renegotiate the payment terms with Mr. Giulianotti. However, Soltera has not yet begun the renegotiates and there is no certainty that Soltera will be successful in negotiating new terms and maintaining its interest in the El Torno Project.
Location and Access
The El Torno Project is also located in the Andean Cordillera in the extreme north-west of Argentina in the Puna Jujeña, Jujuy Province of Argentina, near the international border with Bolivia. The region is at altitudes around 4,000 metres (13,123 feet) and the nearest permanent habitation is the village of Santa Catalina about 15 kilometres (9.5 miles) to the east.
The infrastructure on the El Torno Project comprises electricity 10 kilometres (6.7 miles) away (at the village of Santa Catalina) and a road passable all year by cars and trucks. Water is abundant in a river cutting through the main vein on the El Torno Project and from a very large river at the border with Bolivia 12 kilometres (7.5 miles) away.
Climate and Geomorphology
The area is at an elevation between 3,800 and 4,300 metres (12,467 and 14,107 feet), but the latitude over the Tropic of Capricorn determines a good climate, without snow and with rain concentrated in the summer season. The winter is gentle and exploitation work is possible the entire year.
The morphology of the area is also gentle as deep slopes and steep mountains are absent. For this reason the access road to the El Torno Project does not need much maintenance.
Geology and Mineralization
On the El Torno Project, there is an old mine, exploited by Incas and Jesuits, with more than 1,000 metres (3,280 feet) of galleries. Since January 2006, the owner of the El Torno Project has been exploiting the alluvial part of the deposit that has a thickness of 2 - 3 metres (6.5 – 9.8 feet) and an alluvial conoid close to the main vein with a maximum thickness of 8 metres (26 feet). The deposit is composed of a large quartz vein, sub-vertical, running North-South, approximately 14 kilometres (8.7 miles) long, 9 to 14 metres (46 feet) wide, and made up of a stock-work system of narrow quartz veins around the principal quartz vein. This system has a length of approximately 2 kilometres (1.24 miles), running in two principal directions: 100-130°
and 0 – 20°. The El Torno Project was investigated by Puma Minerals in 1997 and by Peñoles between August and December 1999. Puma Minerals had conducted more than 2,100 metres (6,890 feet) of drilling in 16 holes. Following the Puma Minerals exploration work, Peñoles, conducted in trenches grab samples, a detailed geologic survey, and geophysical prospecting by IP methods. In a second stage, Peñoles carried out an estimation of the main structure cut by the drills of Puma in an extension of 1.3 kilometres (0.8 miles). In the only three geophysical profiles performed by Peñoles on the first 1.3 kilometres (0.8 miles) it was also observed the presence of a cloak-type structure with moderate to high chargeability, located between the 50 and 125 metres (164 and 410 feet) of depth which had not been revealed earlier by the Puma Minerals drills.
Soltera carried out geochemical two stream sediment surveys with the object of finding out whether mineralization extended along the full length of the vein or was confined to the central portion. The first, in late 2007, was strategic and covered about 100 km2, over the whole El Torno property. The country is rolling highland dissected by streams, so is well suited for this type of survey. A total of 596 samples were collected at selected locations on stream courses and the -80 mesh fractions analysed in Canada. The results showed a series of distinct, very strong anomalies extending the full 14 km length of the vein system, indicating that the gold mineralization is present along almost its whole length. Even more interesting, was the presence of very strong and broad gold anomalies up to 2 km away from the main system, which appear to be centered over large areas of vein suites and stockworks in the country rocks. One of these anomalies alone is 2 km long by 1.5 km wide. These broad but strong anomalies gave the first indication that gold mineralization is far more extensive than previously thought and, furthermore, they offer the distinct possibility that wide mineralized areas of country rock may be previously unrecognized large-scale open-pit targets.
The second survey, in mid-2008, was tactical and focused on the anomalies identified by the first survey. It consisted of just over 1,000 samples covering an area of about 15 km2. The results were excellent and confirmed the presence of a major gold anomalous zone about 5 km north-south and up to almost 2 km wide centered on the vein system but extending well beyond the vein into the country rocks on either side. There is also a separate anomalous area of about one square kilometer located about 1 km east of the main vein in the south.
A structural study, completed in April 2008, focused on the main vein system, concentrating on parts of the system exposed at the surface and in the old mine workings. The results suggest that the quartz veins are broadly parallel to the sedimentary layering, rather than steeply dipping as previously thought, and they thicken in the anticlinal axis. This is reminiscent of the Bendigo and Ballarat gold fields in Australia and suggests the possibility of stacked mineralized vein systems along the anticlinal axis at depth.
In late 2010, Soltera decided to test a 40 hectare area of loose surface material (eluvium) that had been worked in the past by the mineral title owner with a view to generating a rapid cash flow. The plan was to use an existing simple gravity plant to extract the gold. Twenty trenches were dug on the exploitation licence area and samples were taken from the sides and underlying bed rock. These were split into six size fractions in the ALS laboratory and analysed by a combination of fire assay, cyanide leaching and emission spectroscopy. The results were disappointing from a possible production point of view. Although around 95% of the 392 analyses showed trace gold, only six contained more than 1 g/t Au (up to 11 g/t) and the rest mainly less than 0.1 g/t Au. However, the results also suggested that the most likely locations for plant feed are within the strong geochemical anomalies that cover several hundred hectares of the Exploration Licence and raised the interesting possibility that gold-bearing material excavated during surface exploration testwork on gold-rich zones in the main bedrock target areas could be put through the existing plant if the material was first crushed and ground.
In April 2011, a small reconnaissance bedrock sampling program over a central part of the license area produced excellent results including a 1.5 meter channel sample with more than 10 ounces of gold per tonne. It was logical, therefore, to plan a widespread mapping and sampling program throughout the whole 14 km length of the vein system and on the previously identified geochemical gold anomalies.
The first phase, in late 2011, was undertaken by two teams, each consisting of a geologist and four assistants. Some of the samples were simply lumps taken from rock outcrops, but most were 1 meter to 2 meter-long horizontal chip-channels from trenches. The samples were then sent to an internationally recognized laboratory (ALS Minerals) for gold analysis. A total of 1,150 bedrock samples were collected from trenches within an area of about 10 square kilometres covering the central portion of the vein system and the surrounding bedrock. The results are:
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Five bedrock 'hot spots' were identified in which gold values are commonly over 1 gram per tonne (g/t). They are all on or near parts of the vein system.
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Of the five identified 'hot spots', the largest extends north-south for at least 1km. There is insufficient data to estimate the overall gold grade at this time, but channel sample analyses within the areas go as high as 376 g/t gold.
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·
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The background level of gold over the whole sampled area is high, with 755 samples (62%) containing detectable gold. These may explain many of the broad anomalies shown by previous geochemical surveys.
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The high gold values are scattered throughout the 'hot spot' areas, so it is not possible at this stage to estimate overall grades for these areas.
Phase 2, in early 2012, was a second campaign of surface geological mapping and trench sampling concentrated on the 'hot spots' in order to assess their potential for open-pit mining and also on those parts of the property that had not yet been sampled. A total of 10,113 samples were submitted for analysis and the results are still being assessed.
From July to November 2012 Soltera performed a 3D Geophysical survey of a total of 77,200 metres. The preliminary data of the first 12,000 metres show an interesting relation between the anomaly zones of the stream geochemical prospecting of the channel samples corresponding with geophysical chargeable areas. The final results confirmed the presence of chargeable and resistive anomaly several times linked with stream sediments and trench samples geochemical anomalous superficial area.
B. Zapaleri Project – Argentinean Property
On July 6, 2007, Incas entered into an option agreement with Antonio Agustin Giulianotti. The option agreement covers one mineral claim in Argentina covering 6,395 hectares (15,802 acres) (the "Zapaleri Project"). As of the date of filing of this annual report, there is still a legal dispute that affects Incas' rights on this claim that has to be resolved by the Mining Chamber of the Jujuy Province. As a result of the legal dispute and until it is resolved, Incas is not required to commence any work or expense on this project and can exit from the Zapaleri Project without any expenses. After the resolution of the legal dispute, if positive, Incas will have the exclusive right to explore the mineral claims with an option to acquire a 100% interest in the Zapaleri Project upon fulfilling the following conditions:
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a.
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During the term of the option, Incas is obliged to submit to Mr. Giulianotti a quarterly report with technical data and detailed expenses on the Zapaleri Project.
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b.
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Mr. Giulianotti will be entitled to 1% of the Foundry Net Return, which can be purchased by Incas for $1 million anytime after production commences on the Zapaleri Project.
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c.
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After commencement of production on the Zapaleri Project, Incas will pay Mr. Giulianotti a total of $3.5 million, less any payments made by Incas during the option period which can be a maximum of five years. Incas can choose one of the following payment plans:
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i.
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one lump sum payment; or
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ii.
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$500,000 every six months plus a penalty payment of $350,000.
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d.
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On or before June 30, 2008, Incas was required to pay Mr. Giulianotti $20,000. This payment has not yet been made and has been postponed indefinitely until the legal dispute that affects Incas' rights on this claim has been resolved by the Mining Chamber of the Jujuy Province.
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e.
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On or before June 30, 2009, Incas was required to pay Mr. Giulianotti $40,000. This payment has not yet been made either and also has been postponed indefinitely until the legal dispute that affects Incas' rights on this claim has been resolved by the Mining Chamber of the Jujuy Province.
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f.
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On or before June 30, 2010, Incas was required to pay Mr. Giulianotti $80,000. This payment has not yet been made either and also has been postponed indefinitely until the legal dispute that affects Incas' rights on this claim has been resolved by the Mining Chamber of the Jujuy Province.
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g.
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On or before July 6, 2010, Incas was required to make an investment of $1 million in the exploration of the Zapaleri Project. This investment has not yet been made either and also has been postponed indefinitely until the legal dispute that affects Incas' rights on this claim has been resolved by the Mining Chamber of the Jujuy Province.
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h.
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From June 30, 2011, and until the Zapaleri Project is put into production, Incas will pay Mr. Giulianotti $100,000 biannually, with the first payment due on or before June 30, 2011. This payment has not yet been made either and also has been postponed indefinitely until the legal dispute that affects Incas' rights on this claim has been resolved by the Mining Chamber of the Jujuy Province.
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See Exhibit 10.7 - Second Option Agreement for more details.
Location and Access
The Zapaleri Project is located in the Andean Cordillera in the extreme north-west of Argentina and is about 100 miles in proximity to the El Torno Project.
Access to the Zapaleri Project is difficult as the area is between 4,000 and 5,500 metres (13,123 and 18,044 feet) in the high Cordillera and there is not a consolidated road. The location is near the tripoint of Cerro Zapaleri where Argentina has a joint boundary with Bolivia and Chile.
Climate and Geomorphology
As there is no well maintained road to the Zapaleri Project, it can only be reached between November and April since in other periods snow is abundant.
The morphology of the area is the typical highland Cordillera with big volcanic cone.
Geology and Mineralization
The area is covered by volcanic tertiary and quaternary formations with a strong ferric alteration detectable from satellite images. The target could be an epi- or meso-thermal gold mineralization.
C. Albanian Joint Venture
Soltera, together with two Albanian companies, ENER-ALB PROJECTS sh.p.k. and ELITE MINE sh.a., formed a new joint venture company named the Albanian Mines Company sh.a. (the "Albanian Joint Venture Company") to tender for the rights to mineral properties in Albania. The Albanian Joint Venture Company was formed on October 17, 2008 and came into existence upon the Albanian Joint Venture Company's Act of Incorporation being filed with and acceptance by the Albanian Register. See Exhibit 3.8 – Act of Incorporation for more details.
The shareholdings of the Albanian Joint Venture Company were divided in the ratio: ENER-ALB PROJECTS sh.p.k. 37.5%, ELITE MINE sh.a. 37.5%, and Soltera Mining Corp. 25%.
The first members of the Board of the Albanian Joint Venture Company were Fabio Montanari, Ardi Kollcaku, Bashkim Ulaj, and Isli Sula. The President of the Board was Bashkim Ulaj. The Administrator of the Albanian Joint Venture Company was Fabio Montanari. The Administrator was responsible for the day-to-day affairs of the Albanian Joint Venture Company, subject to the limitations provided under Articles of Association, any agreements between shareholders, and applicable law. The Administrator was appointed for a term of three years.
As the tender over the initial project of interest was not successful, Fabio Montanari resigned from the charge of Administrator on the 28 May 2009. The board of directors decided in November 2012 to abandon the Albanian Joint Venture since the joint venture had been virtually dormant for the previous two years. Soltera will incur no further costs and all rights, responsibilities, and expenses for future operations were passed to the other Albanian Joint Venture partner with no payments between the parties.
Competitive Conditions and Position
The mineral exploration business is an extremely competitive industry. Soltera is competing with many other companies exploring for minerals. Soltera is one of the smallest exploration companies and a very small participant in the mineral exploration business. Being a junior mineral exploration company, Soltera competes with other companies for financing and joint venture partners. Additionally, Soltera competes for resources such as professional geologists, camp staff, helicopters and mineral exploration supplies.
Raw Materials
For the Argentinean Claims, the raw materials for Soltera's exploration program will be items including camp equipment, hand exploration tools, sample bags, first aid supplies, groceries and propane. All of these types of materials are readily available in either the city of Santa Catalina (15 kilometres (9.3 miles) from the mineral claims), La Quiaca (80 kilometres (50 miles) from the mineral claims), Vilazon (Bolivia) (80 kilometres (50 miles) from the mineral claims), San Salvador de Jujuy (380 kilometres (236 miles) from the mineral claims) or in Salta (430 kilometres (267 miles) from the mineral claims) from a variety of suppliers for the El Torno, and Zapaleri Projects.
Dependence on Major Customers
Soltera has no customers.
Patents/Trade Marks/Licences/Franchises/Concessions/Royalty Agreements or Labour Contracts
Soltera has no intellectual property such as patents or trademarks. Additionally, Soltera has no royalty agreements or labor contracts.
Government Controls and Regulations
Soltera's business is subject to various levels of government controls and regulations, which are supplemented and revised from time to time. However, management is unable to predict what additional legislation or revisions may be proposed that might affect its business or when any such proposals, if enacted, might become effective. Such changes, however, could require increased capital and operating expenditures and could prevent or delay certain operations by Soltera.
The various levels of government controls and regulations address, among other things, the environmental impact of mining and mineral processing operations. With respect to the regulation of mining and processing, legislation and regulations in various jurisdictions establish performance standards, air and water quality emission standards and other design or operational requirements for various components of operations, including health and safety standards. Legislation and regulations also establish requirements for decommissioning, reclamation and rehabilitation of mining properties following the cessation of operations, and may require that some former mining properties be managed for long periods of time.
For the Argentinean Claims, Soltera, through its subsidiary Incas Mineral, will be required to abide by laws regulated by the Mining Chamber of the Jujuy Province of Argentina. Soltera has already conducted an environmental impact study on the El Torno Claims and recently received the approval of the Environmental Impact Assessment on the Mina Palca Ingenio and Mina El Torno Sur.
The effect of these existing regulations on the business is that Soltera is able to carry out its exploration program as planned. However, it is possible that a future government could change the regulations that could limit Soltera's ability to explore its claims, but management believes this is highly unlikely.
Costs and Effects of Compliance with Environmental Laws
Soltera currently has no costs to comply with environmental laws concerning its exploration programs.
Expenditures on Research and Development During the Last Two Fiscal Years
Soltera has not incurred any research or development expenditures since its inception on September 21, 2005.
Number of Total Employees and Number of Full Time Employees
Soltera does not have any employees other than Fabio Montanari, Alessandro Murroni, and Arnaldo Massini, the officer and directors of Soltera. Soltera intends to retain the services of independent geologists, prospectors and consultants on a contract basis to conduct the exploration programs on Soltera's mineral claims as required throughout the course of the exploration program. The funds that will be used to pay for the independent geologist, prospectors and consultants will be the funds that already exist in the corporate treasury and from equity funds that Soltera will raise in the future.
Item 1A. Risk Factors.
Soltera is a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and is not required to provide the information required under this item.
Item 1B. Unresolved Staff Comments.
Soltera is a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and is not required to provide the information required under this item.
Item 2. Description of Property.
Soltera's executive offices are located at 3651 Lindell Road, Suite D579, Las Vegas, Nevada, 89103. Currently, Soltera pays $45 per month for this space pursuant to the terms and conditions of a written agreement.
Soltera has an interest in mineral claims located in Argentina as described in Item 1 above.
Item 3. Legal Proceedings.
Soltera is not a party to any material pending legal proceedings and, to the best of Soltera's knowledge, none of Soltera's property or assets are the subject of any material pending legal proceedings, with the exception of the following:
Zapaleri Project
Soltera is aware of a potential claim dispute on the Zapaleri Project. However, management believes that Soltera's ownership rights are in good standing. If Soltera's ownership rights are lost, Soltera will promptly file a Form 8-K with the SEC disclosing the loss of ownership rights. The legal dispute affects Incas' rights on the Zapaleri Project and must be solved by the mining Chamber of the Jujuy Province. Soltera is currently waiting for the decision of the mining Chamber of the Jujuy Province. As a result of the legal dispute and until it is resolved, Incas is not required to commence any work or expense on this project. After the solution of the legal dispute, if positive, Incas will have the exclusive right to explore the mineral claims with an option to acquire a 100% interest in the Zapaleri Project upon fulfilling the conditions of the Second Option Agreement.
Ambrian Resources AG
In July 2010 Soltera Mining Corp. was served with a lawsuit by Ambrian Resources AG. Ambrian sued Soltera for damages on the alleged grounds that Ambrian had negotiated and finalized a binding funding agreement with Soltera during April-June 2010 but instead Soltera chose to enter a financing agreement with another company (Goldlake). Ambrian also claimed that Soltera used a strategy developed by Ambrian and used information provided by a South African mining engineer who visited the project at Ambrian's expense. Ambrian was seeking damages in excess of $20 million dollars.
Soltera denied and continued to deny all claims in the lawsuit and retained a Nevada litigator to defend the action brought against it by Ambrian in the State of Nevada. Soltera was also seeking to have the lawsuit dismissed on the grounds that there was no binding agreement with Ambrian. On January 23, 2013 a Stipulation and Order for Dismissal was entered by both parties in which all outstanding claims were dismissed with prejudice in consideration of nil. (Visit Clark County Courts Records Inquiry website ref.# A619956 for status.)
See the Form 8-K filed by Soltera on June 18, 2010 for more information on the Goldlake financing agreement.
Item 4. Mine Safety Disclosures.
Soltera is not an operator of any mine and has not been an operator of any mine during the time period covered by this report.
PART II
| Item 5. | Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. |
(a) Market Information
Soltera's common stock was quoted on the NASD OTC Bulletin Board under the symbol "AMXC" from May 23, 2006 to May 30, 2007, and is now quoted under the symbol "SLTA" on the NASD OTC Pink Sheets. The table below gives the high and low bid information for each fiscal quarter of trading for the last two fiscal years and for the interim period ended July 29, 2015. The bid information was obtained from Pink OTC Markets Inc. and reflects inter-dealer prices, without retail mark-up, mark-down or commission, and may not represent actual transactions.
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High & Low Bids
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Period ended
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High
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Low
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Source
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29 July 2015
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$0.048
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$0.025
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Pink OTC Markets Inc.
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30 April 2015
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$0.05
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$0.041
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Pink OTC Markets Inc.
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31 January 2015
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$0.08
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$0.034
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Pink OTC Markets Inc.
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31 October 2014
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$0.1501
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$0.058
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Pink OTC Markets Inc.
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31 July 2014
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$0.17
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$0.11
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Pink OTC Markets Inc.
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30 April 2014
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$0.23
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$0.085
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Pink OTC Markets Inc.
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31 January 2014
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$0.135
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$0.06
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Pink OTC Markets Inc.
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31 October 2013
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$0.15
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$0.0201
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Pink OTC Markets Inc.
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31 July 2013
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$0.160
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$0.1001
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Pink OTC Markets Inc.
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30 April 2013
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$0.185
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$0.065
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Pink OTC Markets Inc.
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(b) Holders of Record
Soltera has approximately 20 holders of record of Soltera's common stock as of July 29, 2015. The number of registered shareholders does not include any estimate by Soltera of the number of beneficial owners of common stock held in street name. The transfer agent for Soltera's common stock is Empire Stock Transfer Inc., 1859 Whitney Mesa Drive, Henderson, Nevada, 89014 and their telephone number is 702-818-5898.
(c) Dividends
Soltera has declared no dividends on its common stock, and is not subject to any restrictions that limit its ability to pay dividends on its shares of common stock. Dividends are declared at the sole discretion of Soltera's Board of Directors.
On April 4, 2007, the Board of Directors declared a stock dividend of five shares for every one share of common stock issued. The stock dividend was paid out on April 23, 2007.
(d) Recent Sales of Unregistered Securities
The following is a summary of the sales of unregistered securities within the last three years that would be required to be disclosed pursuant to Item 701 of Regulation S-K:
2012 - $0.15 Warrant Exercises
On February 2, 2012, the board of directors authorized the issuance of 999,991 restricted shares of common stock for the exercise of 999,991 restricted non-transferable share purchase warrants at an exercise price of $0.15 per warrant. Soltera received from Goldlake Italia S.p.A. a completed and signed Subscription Form and funds in the amount of US$149,998.70 representing the full payment for the exercise of the warrants and the issuance of restricted shares of common stock.
On April 22, 2012, the board of directors authorized the issuance of 2,000,138 restricted shares of common stock for the exercise of 2,000,138 restricted non-transferable share purchase warrants at an exercise price of $0.15 per warrant. Soltera received from Goldlake Italia S.p.A. a completed and signed Subscription Form and funds in the amount of US$300,020.61 representing the full payment for the exercise of the warrants and the issuance of restricted shares of common stock.
On June 8, 2012, the board of directors authorized the issuance of 3,000,000 restricted shares of common stock for the exercise of 3,000,000 restricted non-transferable share purchase warrants at an exercise price of $0.15 per warrant. Soltera received from Goldlake Italia S.p.A. a completed and signed Subscription Form and funds in the amount of US$450,000 representing the full payment for the exercise of the warrants and the issuance of restricted shares of common stock.
On September 6, 2012, the board of directors authorized the issuance of 3,999,992 restricted shares of common stock for the exercise of 3,999,992 restricted non-transferable share purchase warrants at an exercise price of $0.15 per warrant. Soltera received from Goldlake Italia S.p.A. a completed and signed Subscription Form and funds in the amount of US$599,998.70 representing the full payment for the exercise of the warrants and the issuance of restricted shares of common stock.
On November 26, 2012, the board of directors authorized the issuance of 1,333,333 restricted shares of common stock for the exercise of 1,333,333 restricted non-transferable share purchase warrants at an exercise price of $0.15 per warrant. Soltera received from Goldlake Italia S.p.A. a completed and signed Subscription Form and funds in the amount of US$200,000 representing the full payment for the exercise of the warrants and the issuance of restricted shares of common stock.
For the exercise of warrants, Soltera relied upon Section 4(2) of the Securities Act of 1933 and Rule 903 of Regulation S promulgated pursuant to that Act by the Securities and Exchange Commission for the issuance of the restricted shares of common stock to Goldlake Italia S.p.A. as a non-US subscriber outside the United States. The value of the restricted shares of common stock was agreed upon between the parties of the Financing Agreement. Management is satisfied that Soltera complied with the requirements of the exemption from the registration and prospectus delivery of the Securities Act of 1933. The offering was not a public offering and was not accompanied by any general advertisement or any general solicitation. Soltera received from the subscriber certain representations and warranties, including, among others, that (a) the subscriber was not a U.S. person, (b) the subscriber subscribed for the shares and warrants for their own investment account and not on behalf of a U.S. person, and (c) there was no prearrangement for the sale of the shares or warrants with any buyer. No offer was made or accepted in the United States and the share certificates representing the shares were issued bearing a legend with the applicable trading restrictions. The investment funds were used primarily for working capital. See Exhibit 10.22 – Financing Agreement for more details.
2013 - $0.15 Warrant Exercises
On April 3, 2013, the board of directors authorized the issuance of 999,670 restricted shares of common stock for the exercise of 999,670 restricted non-transferable share purchase warrants at an exercise price of $0.15 per warrant. Soltera received from Goldlake Italia S.p.A. a completed and signed Subscription Form and funds in the amount of US$149,950.50 representing the full payment for the exercise of the warrants and the issuance of restricted shares of common stock.
The outstanding warrants were initially set to expire on June 20, 2013 and June 30, 2013 and were exercisable for the purchase of 2,999,430 and 14,002,826 common shares respectively at an exercise price of $0.15 per share. On May 1, 2013, management agreed to extend the expiry dates of all outstanding warrants as at that date to September 30, 2013. All warrants have expired as at the date of filing this annual report.
For the exercise of warrants, Soltera relied upon Section 4(2) of the Securities Act of 1933 and Rule 903 of Regulation S promulgated pursuant to that Act by the Securities and Exchange Commission for the issuance of the restricted shares of common stock to Goldlake Italia S.p.A. as a non-US subscriber outside the United States. The value of the restricted shares of common stock was agreed upon between the parties of the Financing Agreement. Management is satisfied that Soltera complied with the requirements of the exemption from the registration and prospectus delivery of the Securities Act of 1933. The offering was not a public offering and was not accompanied by any general advertisement or any general solicitation. Soltera received from the subscriber certain representations and warranties, including, among others, that (a) the subscriber was not a U.S. person, (b) the subscriber subscribed for the shares and warrants for their own investment account and not on behalf of a U.S. person, and (c) there was no prearrangement for the sale of the shares or warrants with any buyer. No offer was made or accepted in the United States and the share certificates representing the shares were issued bearing a legend with the applicable trading restrictions. The investment funds were used primarily for working capital. See Exhibit 10.22 – Financing Agreement for more details.
2014 - $0.11 Unit Offering
On February 7, 2014, Soltera entered into a financing agreement with GTS Gold Trading Service DMCC for a unit offering of up to $5 million at an offering price of $0.11 per unit. Each unit will consist of one restricted share of common stock in the capital of Soltera and one warrant. Each warrant will represent two shares of common stock in the capital of Soltera with an
exercise price of $0.18 per share for a period of two years from the date of the closing of each tranche of financing. If GTS fully subscribes for the unit offering and exercises all of the warrants it receives then GTS will become the registered owner of 136,363,638 restricted shares of common stock in the capital of Soltera, which will represent a 58.1% fully-diluted interest in Soltera. As of the date of this current report Soltera has received $110,000 of the subscription proceeds, but has not yet issued any restricted shares of common stock or warrants. See Exhibit 10.23 - GTS Financing Agreement for more details.
For the issuance of the units, Soltera will rely upon Section 4(2) of the Securities Act of 1933 and Rule 903 of Regulation S promulgated pursuant to that Act by the Securities and Exchange Commission for the issuance of the restricted shares of common stock and warrants to GTS Gold Trading Service DMCC as a non-US subscriber outside the United States. The value of the restricted shares of common stock was agreed upon between the parties of the GTS Financing Agreement. Management is satisfied that Soltera complied with the requirements of the exemption from the registration and prospectus delivery of the Securities Act of 1933. The offering was not a public offering and was not accompanied by any general advertisement or any general solicitation. Soltera received from the subscriber certain representations and warranties, including, among others, that (a) the subscriber was not a U.S. person, (b) the subscriber subscribed for the shares and warrants for their own investment account and not on behalf of a U.S. person, and (c) there was no prearrangement for the sale of the shares or warrants with any buyer. No offer was made or accepted in the United States and the share certificates representing the shares were issued bearing a legend with the applicable trading restrictions.
There are no outstanding options or warrants to purchase, or securities convertible into, shares of Soltera's common stock.
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(d)
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Penny Stock Rules
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Trading in Soltera's common stock is subject to the "penny stock" rules. The SEC has adopted regulations that generally define a penny stock to be any equity security that has a market price of less than $5.00 per share, subject to certain exceptions. These rules require that any broker-dealer who recommends Soltera's common stock to persons other than prior customers and accredited investors, must, prior to the sale, make a special written suitability determination for the purchaser and receive the purchaser's written agreement to execute the transaction. Unless an exception is available, the regulations require the delivery, prior to any transaction involving a penny stock, of a disclosure schedule explaining the penny stock market and the risks associated with trading in the penny stock market. In addition, broker-dealers must disclose commissions payable to both the broker-dealer and the registered representative and current quotations for the securities they offer. The additional burdens imposed upon broker-dealers by such requirements may discourage broker-dealers from effecting transactions in Soltera's securities, which could severely limit their market price and liquidity of Soltera's securities. The application of the "penny stock" rules may affect your ability to resell Soltera's securities.
Item 6. Selected Financial Data.
Soltera is a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and is not required to provide the information required under this item.
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations.
THE FOLLOWING PRESENTATION OF THE PLAN OF OPERATION OF SOLTERA MINING CORP. SHOULD BE READ IN CONJUNCTION WITH THE AUDITED FINANCIAL STATEMENTS AND OTHER FINANCIAL INFORMATION INCLUDED HEREIN.
Overview
Soltera was incorporated in the State of Nevada on September 21, 2005 and on May 30, 2007 changed its name from "Atlin Mineral Exploration Corp." to "Soltera Mining Corp."
Soltera's principal business is the acquisition and exploration of mineral resources. Soltera has not presently determined whether its mineral claims contain mineral reserves that are economically recoverable.
Management has decided to expand Soltera's focus and identify and assess new projects for acquisition purposes that are more global in nature. Management will continue to focus on exploring and adding value to the project interests already acquired but will also now focus on new projects on an international level.
Argentina
On July 24, 2007, Soltera agreed to acquire all of the shares of Incas Mineral, S.A. ("Incas") from the sole shareholder of Incas, Fabio Montanari, for the purchase price of $1,500, which represents the costs for incorporating and organizing Incas in the jurisdiction of Argentina.
Incas has two agreements to explore and an option to purchase two projects in the province of Jujuy, Argentina. The first project is called the "El Torno Project" and the second project is called the "Zapaleri Project". Soltera is currently focusing its efforts on the El Torno Project.
The El Torno Project is located in the Andean Cordillera in the extreme north-west of Argentina near the international border with Bolivia. The region is at altitudes around 4,000 metres (13,123 feet) and the nearest permanent habitation is the village of Santa Catalina village about 20 kilometres (12.5 miles) to the east.
The El Torno option agreement, between Manuel Bernal Mateo and Incas, is dated July 6, 2007 and covers five mineral claims in Argentina covering 7,863.24 hectares (19,430 acres). Incas has the exclusive right to explore the El Torno Project with an option to acquire a 100% interest in the properties upon fulfilling certain conditions. Currently, this option agreement is not in good standing. See "Item 1. Description of Business - (b) Business of Soltera" above for more information.
The Zapaleri Project is also located in the Andean Cordillera in the extreme north-west of Argentina and is about 100 miles in proximity to El Torno.
The Zapaleri option agreement, between Antonio Agustin Giulianotti and Incas, is dated July 6, 2007 and covers one mineral claim in Argentina covering 6,395 hectares (15,802 acres). Incas has the exclusive right to explore the mineral claims with an option to acquire a 100% interest in the mineral claim upon fulfilling certain conditions. Currently, the standing of this option agreement is uncertain as all required payments and exploration activity have been suspended until the potential claim dispute is resolved. See "Item 1. Description of Business (b) Business of Soltera" and "Item 3. Legal Proceedings" above for more information.
Soltera is aware of a potential claim dispute on the Zapaleri Project. However, management believes that Soltera's ownership rights are not impacted by this. If Soltera's ownership rights are lost, Soltera will promptly file a Form 8-K with the SEC disclosing the loss of the ownership rights.
Albania
Soltera, together with two Albanian companies, ENER-ALB PROJECTS sh.p.k. and ELITE MINE sh.a., formed a new joint venture company named the Albanian Mines Company sh.a. to tender for the rights to mineral properties in Albania. As the initial tender was not successful, Fabio Montanari resigned from the charge of Administrator on the 28 May 2009. Soltera has not undertaken any expense for this joint-venture. The Albanian Joint Venture Company is currently in good standing and there have been no expenses of any kind. However, following a request from the other Joint-Venture partner, the board of directors decided on November 21, 2012, for reasons of convenience and efficiency, to leave the Joint-Venture. All rights will pass to the other partner; there were no payments to either party, and the other joint venture partner assumed all responsibility for any existing debt and the future operation of the Albanian Joint Venture Company.
Plan of Operation
Argentina Exploration Plan
Soltera's subsidiary Incas Mineral, S.A., has completed its first four phases of the exploration plan for the El Torno Project but has not started to explore the Zapaleri Project as the administrative situation is still to be resolved. All acquisition option payments on the El Torno Project were made up to June 30, 2013. However, as of the date of this annual report, Soltera has not yet made any of the three outstanding payments under the Renegotiation Agreement, except for a partial payment of $100,000 made to Mr. Giulianotti on February 20, 2014. As a result, the Renegotiation Agreement is currently in default. Soltera intends to renegotiate the payment terms with Mr. Giulianotti, however, Soltera has not yet begun the renegotiations and there is no certainty that Soltera will be successful in negotiating new terms and maintaining its interest in the El Torno Project.
Over the next 12 months management intends to begin a drill program on certain areas of the El Torno Project. The drill program will allow Soltera to start the prefeasibility study on the El Torno Project. Management also intends to keep the Zapaleri Project option agreement in good standing by complying with the terms of that option agreement, and also intends to bring back into good standing the El Torno Project option agreement by renegotiating with the property owner.
In addition, management anticipates incurring the following expenses during the next 12 month period:
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Management anticipates spending approximately $120,000 in ongoing general and administrative expenses per month for the next 12 months, for a total anticipated expenditure of $1,440,000 over the next 12 months. The general and administrative expenses for the year will consist primarily of professional fees for the audit and legal work relating to Soltera's regulatory filings throughout the year, as well as transfer agent fees, annual mineral claim fees and general office expenses.
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Management anticipates spending approximately $100,000 in complying with Soltera's obligations as a reporting company under the Securities Exchange Act of 1934. These expenses will consist primarily of professional fees relating to the preparation of Soltera's financial statements and completing its annual report, quarterly report, and current report filings with the SEC.
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As at October 31, 2014, Soltera had cash of $2,365 and a working capital deficit of $7,898,597. Accordingly, Soltera will require additional financing in the amount of approximately $3.5 million in order to fund its obligations as a reporting company under the Securities Act of 1934 and its general and administrative expenses for the next 12 months.
Risk Factors
An investment in Soltera's common stock involves a number of very significant risks. Prospective investors should refer to all the risk factors disclosed in Soltera's Form SB-2/A filed on March 10, 2006 and Soltera's Form 10-KSB filed on February 21, 2008.
Financial Condition
As at October 31, 2014, Soltera had a cash balance of $2,365.
With the acquisition of Incas and the Argentinean Claims, Soltera will need to make strategic decisions on how to deploy its funds. Soltera's current focus is on the El Torno Project, and the continuation of this project is dependent on the successful renegotiation of payment terms with Mr. Giulianotti. Soltera has not suffered from Argentinean Peso purchasing power as the Argentinean Peso has been devaluated during the fiscal period.
During the next 12 months, management plans to complete an independent geological report on the El Torno Project and to begin a drill program on the El Torno Project. To do so, additional funds are required. The additional funding will come from equity financing from the sale of Soltera's common stock or sale of part of Soltera's interest in its mineral claims. If management is successful in completing an equity financing, existing shareholders will experience dilution of their interest in Soltera. Soltera does not have any financing arranged and cannot provide investors with any assurance that management will be able to raise sufficient funding from the sale of Soltera common stock to fund further exploration or exploitation of the Argentinean Claims. In the absence of such financing, Soltera's business will fail.
Soltera may consider entering into a joint venture partnership by linking with a more senior mining company to provide the required funding to its exploration programs. Management has undertaken some initial steps to seek a joint venture partner for further financing. If Soltera enters into a joint venture arrangement, Soltera will assign a percentage of its interest in the mineral claims to the joint venture partner.
Based on the nature of Soltera's business, Soltera anticipates incurring operating losses in the foreseeable future. Soltera bases this expectation, in part, on the fact that very few mineral claims in the exploration stage ultimately develop into producing, profitable mines. Future financial results are also uncertain due to a number of factors, some of which are outside Soltera's control. These factors include, but are not limited to:
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management's ability to raise additional funding;
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the market price for gold;
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the results of the proposed exploration programs on the mineral property; and
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management's ability to find joint venture partners for the development of Soltera's property interests
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Due to Soltera's lack of operating history and present inability to generate revenues, Soltera's auditors have stated their opinion that there currently exists a substantial doubt about Soltera's ability to continue as a going concern. Even if Soltera completes the current exploration program, and it is successful in identifying a mineral deposit, Soltera will have to spend substantial funds on further drilling and engineering studies before Soltera will know if it has a commercially viable mineral deposit or reserve.
Liquidity and Capital Resources
Soltera had working capital deficiency of $1,332,833 as of October 31, 2014, compared with a working capital deficiency of $785,740 as of October 31, 2013.
There are no assurances that Soltera will be able to achieve further sales of its shares of common stock or any other form of additional financing. If Soltera is unable to achieve the financing necessary to continue its plan of operations, Soltera will not be able to continue its exploration of its properties and its business will fail.
Management estimates that Soltera's current cash will not be sufficient to fully finance its operations at current and planned levels for the next 12 months. Management intends to manage Soltera's expenses and payments to preserve cash until Soltera is profitable, otherwise additional financing must be arranged. Specifically, such cash management actions include donation of rent and services by Soltera's directors and officers. To date the president has personally covered a portion of the expenses of Soltera for travel and other costs in Argentina. If and when Soltera raises the needed funds, the president will be reimbursed for these expenses.
Net Cash Used in Operating Activities
Soltera had cash of $2,365 and working capital deficiency of $1,332,833 at October 31, 2014.
During the fiscal year ended October 31, 2014, Soltera used $226,026 in cash for operating activities compared with $796,421 for the previous fiscal year. This was primarily a result of a smaller operating loss in 2014. Due to the continuing lack of sufficient funds for operating activities, there is a larger amount of unpaid costs in accounts payable and accrued liabilities in 2014 as compared to 2013.
Net Cash (Used In) Provided By Investing Activities
Net cash used in investing activities was $100,020 for the fiscal year ended October 31, 2014 as compared with net cash used by investing activities of $313,069 for the previous fiscal year.
Net Cash Provided by Financing Activities
Net cash provided by financing activities decreased to $258,682, comprised of $148,682 advanced from related parties and $110,000 from stock subscriptions, for the fiscal year ended October 31, 2014 as compared with $435,697 for the previous fiscal year.
Results of Operation for the Period Ended October 31, 2014
Soltera has had no operating revenues since its inception on September 21, 2005, through to October 31, 2014. Soltera's activities have been financed from the proceeds of share subscriptions and advances from the related parties of Soltera. Since inception, on September 21, 2005, to October 31, 2014, Soltera raised a total of $4,747,777 from private offerings of its shares of common stock.
References to the discussion below to fiscal 2014 are to Soltera's fiscal year ended on October 31, 2014. References to fiscal 2013 are to Soltera's fiscal year ended October 31, 2013.
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For the Year Ended
October 31, 2014
$
|
For the Year Ended
October 31, 2013
$
|
|
|
(Audited)
|
(Audited)
|
|
|
Revenue
|
–
|
–
|
|
Expenses
|
||
|
Depreciation
|
24,343
|
37,151
|
|
Exploration and mining expenses
|
4,000
|
183,238
|
|
General and administrative
|
143,678
|
129,496
|
|
Management fees
|
137,500
|
168,010
|
|
Professional fees
|
245,714
|
225,217
|
|
Stock-based compensation
|
-
|
348,245
|
|
Travel accommodation
|
3,101
|
13,617
|
|
Total Expenses
|
558,336
|
1,104,974
|
|
Other Income (Expenses)
|
||
|
Foreign exchange (loss) gain
|
(48,772)
|
(19,993)
|
|
Impairment of mineral property costs
|
(1,150,020)
|
-
|
|
Loss on disposal of assets
|
(1,813)
|
-
|
|
Provision for amounts receivable
|
(443)
|
(9,072)
|
|
Net Loss
|
(1,759,384)
|
(1,134,039)
|
Professional Fees
Professional expenses included legal, accounting and auditing expenses associated with Soltera's corporate organization, the preparation of Soltera's financial statements and Soltera's continuous disclosure filings with the Securities and Exchange Commission.
Mineral Property Costs
Mineral property costs incurred during fiscal 2013 were attributable to the payments made to maintain the contract agreement in good standing and to exploration costs on the El Torno Project in Argentina.
Off-Balance Sheet Arrangements
Soltera has no off-balance sheet arrangements including arrangements that would affect its liquidity, capital resources, market risk support and credit risk support or other benefits.
Material Commitments for Capital Expenditures
On February 7, 2014, Soltera entered into a financing agreement with GTS Gold Trading Service DMCC ("GTS") for a conditional unit offering of up to $5 million at an offering price of $0.11 per unit. Each unit consists of one restricted common share of Soltera and one warrant, with each warrant exercisable for the purchase of two common shares of Soltera at a price of $0.18 per share for a period of two years from the date of the closing of each tranche of financing. To date, Soltera has received stock subscriptions of $110,000 from GTS, however, no shares have yet been issued.
Tabular Disclosure of Contractual Obligations
Soltera is a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and is not required to provide the information required under this item.
Critical Accounting Policies
Soltera's financial statements and accompanying notes are prepared in accordance with generally accepted accounting principles in the United States. Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses. These estimates and assumptions are affected by management's application of accounting policies. Management believes that understanding the basis and nature of the estimates and assumptions involved with the following aspects of Soltera's financial statements is critical to an understanding of Soltera's financial statements.
Use of Estimates
The preparation of the consolidated financial statements in conformity with US generally accepted accounting principles 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 consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Soltera regularly evaluates estimates and assumptions related to the useful life and recoverability of long-lived assets, recoverability of mineral property acquisition costs, and deferred income tax asset valuation allowances measurement of stock-based compensation, and any contingent liabilities. Soltera bases its estimates and assumptions on current facts, historical experience and various other factors that management believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by Soltera may differ materially and adversely from Soltera's estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.
Earnings (Loss) Per Share
Soltera computes earnings (loss) per share in accordance with ASC 260, "Earnings per Share", which requires presentation of both basic and diluted earnings per share ("EPS") on the face of the income statement. Basic EPS is computed by dividing earnings (loss) available to common shareholders by the weighted average number of shares outstanding during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti dilutive. As at October 31, 2014, there were no dilutive securities.
Cash and Cash Equivalents
Soltera considers all highly liquid instruments with maturity of three months or less at the time of issuance to be cash equivalents.
Mineral Property Costs
Soltera has been in the exploration stage since its formation on September 21, 2005 and has not yet realized any revenues from its planned operations. It is primarily engaged in the acquisition and exploration of mining properties. Mineral property exploration costs are expensed as incurred. Mineral property acquisition costs are initially capitalized. Soltera assesses the carrying costs for impairment under ASC 360, Property, Plant, and Equipment at each fiscal quarter end. 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.
Financial Instruments
Financial instruments, which include cash, loan receivable, accounts payable, amounts due to related parties and notes payable were estimated to approximate their carrying values due to the immediate or short-term maturity of these financial instruments. Soltera's operations are in Mexico, Canada, and Argentina, which results in exposure to market risks from changes in foreign currency exchange rates. The financial risk is the risk to the Company's operations that arise from fluctuations in foreign exchange rates and the degree of volatility of these rates. Currently, Soltera does not use derivative instruments to reduce its exposure to foreign currency risk.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk.
Soltera is a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and is not required to provide the information required under this item.
Item 8. Financial Statements and Supplementary Data.
SOLTERA MINING CORP.
(An Exploration Stage Company)
CONSOLIDATED FINANCIAL STATEMENTS
October 31, 2014 and 2013
|
|
Index
|
|
|
|
|
Report of Independent Registered Public Accounting Firm
|
F-1
|
|
|
|
|
Consolidated Balance Sheets
|
F-2
|
|
|
|
|
Consolidated Statements of Comprehensive Loss
|
F-3
|
|
|
|
|
Consolidated Statements of Cash Flows
|
F-4
|
|
|
|
|
Consolidated Statements of Stockholders' Equity (Deficiency)
|
F-5
|
|
|
|
|
Notes to the Consolidated Financial Statements
|
F-6
|
Report of Independent Registered Public Accounting Firm
To the Stockholders of
Soltera Mining Corp.
We have audited the accompanying consolidated balance sheets of Soltera Mining Corp. as of October 31, 2014 and 2013, and the related consolidated statements of comprehensive loss, cash flows and stockholders' equity (deficiency) for the years then ended. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements. The Company is not required to have, nor were we engaged to perform an audit of the Company's internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes assessing the accounting principles used and significant estimates made by management as well as evaluating the overall consolidated financial statement presentation.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Soltera Mining Corp. as of October 31, 2014 and 2013, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States.
The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Note 1 to the consolidated financial statements, the Company has not generated any revenues, has a working capital deficit at October 31, 2014 and has incurred operating losses since inception. These factors raise substantial doubt about the Company's ability to continue as a going concern. Management's plans in regard to these matters are also discussed in Note 1. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
CHARTERED PROFESSIONAL ACCOUNTANTS
Vancouver, Canada
August 12, 2015
Soltera Mining Corp.
Consolidated Balance Sheets
(Expressed in U.S. dollars)
|
October 31,
2014
|
October 31,
2013
|
|||||||
|
$
|
$
|
|||||||
|
ASSETS
|
||||||||
|
Current Assets
|
||||||||
|
Cash
|
2,365
|
20,301
|
||||||
|
Prepaid expenses
|
1,322
|
8,735
|
||||||
|
Total Current Assets
|
3,687
|
29,036
|
||||||
|
Mineral property (Note 5)
|
-
|
1,050,000
|
||||||
|
Note receivable (Note 6)
|
26,000
|
26,000
|
||||||
|
Property and equipment (Note 7)
|
109,338
|
138,201
|
||||||
|
TOTAL ASSETS
|
139,025
|
1,243,237
|
||||||
|
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)
|
||||||||
|
Current Liabilities
|
||||||||
|
Accounts payable
|
7,267
|
8,145
|
||||||
|
Accrued liabilities
|
496,065
|
148,125
|
||||||
|
Due to related parties (Note 8)
|
826,405
|
677,723
|
||||||
|
Note payable (Note 9)
|
6,783
|
6,783
|
||||||
|
TOTAL LIABILITIES
|
1,336,520
|
840,776
|
||||||
|
Stockholders' Equity (Deficiency)
|
||||||||
|
Common Stock, 200,000,000 shares authorized, $0.001 par value;
98,167,597 shares issued and outstanding (2013 - 98,167,597)
|
98,167
|
98,167
|
||||||
|
Additional paid-in capital
|
6,297,805
|
6,297,805
|
||||||
|
Stock subscriptions received
|
110,000
|
-
|
||||||
|
Donated capital
|
17,250
|
17,250
|
||||||
|
Accumulated other comprehensive income
|
177,880
|
128,452
|
||||||
|
Accumulated deficit
|
(7,898,597
|
)
|
(6,139,213
|
)
|
||||
|
Total Stockholders' Equity (Deficiency)
|
(1,197,495
|
)
|
402,461
|
|||||
|
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)
|
139,025
|
1,243,237
|
||||||
|
Nature of Operations and Going Concern (Note 1)
Commitments and Contingency (Note 12)
|
||||||||
(The accompanying notes are an integral part of these consolidated financial statements)
Soltera Mining Corp.
Consolidated Statements of Comprehensive Loss
(Expressed in U.S. dollars)
|
For the Year Ended October 31,
|
||||||||
|
2014
|
2013
|
|||||||
|
$
|
$
|
|||||||
|
EXPENSES
|
||||||||
|
Depreciation
|
24,343
|
37,151
|
||||||
|
Exploration and mining expenses
|
4,000
|
183,238
|
||||||
|
General and administrative
|
143,678
|
129,496
|
||||||
|
Management fees (Note 8)
|
137,500
|
168,010
|
||||||
|
Professional fees
|
245,714
|
225,217
|
||||||
|
Stock-based compensation
|
-
|
348,245
|
||||||
|
Travel and accommodation
|
3,101
|
13,617
|
||||||
|
LOSS BEFORE OTHER ITEMS
|
(558,336
|
)
|
(1,104,974
|
)
|
||||
|
OTHER ITEMS
|
||||||||
|
Foreign exchange loss
|
(48,772
|
)
|
(19,993
|
)
|
||||
|
Impairment of mineral property acquisition costs (Note 5)
|
(1,150,020
|
)
|
-
|
|||||
|
Loss on disposal of assets
|
(1,813
|
)
|
-
|
|||||
|
Provision for amounts receivable (Note 4)
|
(443
|
)
|
(9,072
|
)
|
||||
|
NET LOSS
|
(1,759,384
|
)
|
(1,134,039
|
)
|
||||
|
OTHER COMPREHENSIVE INCOME
|
||||||||
|
Foreign currency translation adjustment
|
49,428
|
8,382
|
||||||
|
COMPREHENSIVE LOSS
|
(1,709,956
|
)
|
(1,125,657
|
)
|
||||
|
Total loss per share - basic and diluted
|
(0.02
|
)
|
(0.01
|
)
|
||||
|
Weighted average number of shares outstanding
|
98,167,597
|
97,464,551
|
||||||
(The accompanying notes are an integral part of these consolidated financial statements)
Soltera Mining Corp.
Consolidated Statements of Cash Flows
(Expressed in U.S. dollars)
|
For the Year Ended October 31,
|
||||||||
|
2014
|
2013
|
|||||||
|
$
|
$
|
|||||||
|
OPERATING ACTIVITIES
|
||||||||
|
Net loss
|
(1,759,384
|
)
|
(1,134,039
|
)
|
||||
|
Adjustments for non-cash items in:
|
||||||||
|
Assets disposed of upon termination of rent agreement
|
2,707
|
-
|
||||||
|
Depreciation
|
24,343
|
37,151
|
||||||
|
Impairment of mineral property acquisition costs
|
1,150,020
|
-
|
||||||
|
Loss on disposal of assets
|
1,813
|
-
|
||||||
|
Provision for amounts receivables
|
443
|
9,072
|
||||||
|
Stock-based compensation
|
-
|
348,245
|
||||||
|
Changes in operating assets and liabilities:
|
||||||||
|
Accounts payable and accrued liabilities
|
347,062
|
(42,287
|
)
|
|||||
|
Amounts receivable
|
(443
|
)
|
(5,828
|
)
|
||||
|
Prepaid expenses
|
7,413
|
(8,735
|
)
|
|||||
|
CASH USED IN OPERATING ACTIVITIES
|
(226,026
|
)
|
(796,421
|
)
|
||||
|
INVESTING ACTIVITIES
|
||||||||
|
Payments for mineral property acquisition
|
(100,020
|
)
|
(300,000
|
)
|
||||
|
Purchase of property and equipment
|
-
|
(13,069
|
)
|
|||||
|
CASH USED IN INVESTING ACTIVITIES
|
(100,020
|
)
|
(313,069
|
)
|
||||
|
FINANCING ACTIVIES
|
||||||||
|
Due to related parties
|
148,682
|
85,745
|
||||||
|
Proceeds from issuance of common stock, net
|
-
|
349,952
|
||||||
|
Stock subscriptions received
|
110,000
|
-
|
||||||
|
CASH PROVIDED BY FINANCING ACTIVITIES
|
258,682
|
435,697
|
||||||
|
EFFECT OF EXCHANGE RATE CHANGES ON CASH
|
49,428
|
8,382
|
||||||
|
DECREASE IN CASH
|
(17,936
|
)
|
(665,411
|
)
|
||||
|
CASH - BEGINNING OF YEAR
|
20,301
|
685,712
|
||||||
|
CASH - END OF YEAR
|
2,365
|
20,301
|
||||||
|
SUPPLEMENTAL DISCLOSURES
|
||||||||
|
Interest paid
|
-
|
-
|
||||||
|
Income taxes paid
|
-
|
-
|
||||||
(The accompanying notes are an integral part of these consolidated financial statements)
Soltera Mining Corp.
Consolidated Statements of Stockholders' Equity (Deficiency)
(Expressed in U.S. dollars)
|
Common Stock
|
Additional
Paid-In
|
Stock Subscriptions
|
Donated
|
Accumulated
Other
Comprehensive
|
Accumulated
|
|||||||||||||||||||||||||||
|
Shares
|
Par Value
|
Capital
|
Received
|
Capital
|
Income
|
Deficit
|
Total
|
|||||||||||||||||||||||||
|
$
|
$
|
$
|
$
|
$
|
$
|
$
|
||||||||||||||||||||||||||
|
Balance – October 31, 2012
|
95,834,594
|
95,834
|
5,601,941
|
-
|
17,250
|
120,070
|
(5,005,174
|
)
|
829,921
|
|||||||||||||||||||||||
|
Common stock issued pursuant to exercise
of warrants at $0.15/share
|
2,333,003
|
2,333
|
347,619
|
-
|
-
|
-
|
-
|
349,952
|
||||||||||||||||||||||||
|
Stock-based compensation
|
-
|
-
|
348,245
|
-
|
-
|
-
|
-
|
348,245
|
||||||||||||||||||||||||
|
Foreign exchange currency translation
|
-
|
-
|
-
|
-
|
-
|
8,382
|
-
|
8,382
|
||||||||||||||||||||||||
|
Net loss for the year
|
-
|
-
|
-
|
-
|
-
|
-
|
(1,134,039
|
)
|
(1,134,039
|
)
|
||||||||||||||||||||||
|
Balance – October 31, 2013
|
98,167,597
|
98,167
|
6,297,805
|
-
|
17,250
|
128,452
|
(6,139,213
|
)
|
402,461
|
|||||||||||||||||||||||
|
Stock subscriptions received
|
-
|
-
|
-
|
110,000
|
-
|
-
|
-
|
110,000
|
||||||||||||||||||||||||
|
Foreign exchange currency translation
|
-
|
-
|
-
|
-
|
-
|
49,428
|
-
|
49,428
|
||||||||||||||||||||||||
|
Net loss for the year
|
-
|
-
|
-
|
-
|
-
|
-
|
(1,759,384
|
)
|
(1,759,384
|
)
|
||||||||||||||||||||||
|
Balance – October 31, 2014
|
98,167,597
|
98,167
|
6,297,805
|
110,000
|
17,250
|
177,880
|
(7,898,597
|
)
|
(1,197,495
|
)
|
||||||||||||||||||||||
(The accompanying notes are an integral part of these consolidated financial statements)
Soltera Mining Corp.
Notes to the Consolidated Financial Statements as of October 31, 2014 and 2013
(Expressed in U.S. dollars)
1. NATURE OF OPERATIONS AND GOING CONCERN
Soltera Mining Corp. (the "Company") was incorporated in the State of Nevada on September 21, 2005. The Company's principal business is the acquisition and exploration of mineral resources. The Company has not presently determined whether its properties contain mineral reserves that are economically recoverable.
These consolidated financial statements have been prepared on a going concern basis, which implies the Company will continue to realize its assets and discharge its liabilities in the normal course of business. The Company has never generated revenues since inception and has never paid any dividends and is unlikely to pay dividends or generate earnings in the immediate or foreseeable future. The continuation of the Company as a going concern is dependent upon the continued financial support from its stockholders, the ability of the Company to obtain necessary equity financing to continue operations, confirmation of the Company's interests in the underlying properties, and the attainment of profitable operations. As at October 31, 2014, the Company has a working capital deficiency of $1,332,833 and has accumulated losses of $7,898,597 since inception. These factors raise substantial doubt regarding the Company's ability to continue as a going concern. Management intends to raise equity and/or debt financing to fund its operations, which may result in substantial dilution to the Company's stockholders or may not be available, if at all, in amounts or on terms acceptable to the Company. If additional capital is not obtained, the Company may be forced to cease operations. These consolidated financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a) Consolidated Financial Statements and Basis of Presentation
These consolidated financial statements and related notes are presented in accordance with accounting principles generally accepted in the United States, and are expressed in US dollars. These financial statements consolidate the Company with its Argentinean wholly-owned subsidiary, Incas Mineral, S.A. ("Incas"). All intercompany transactions have been eliminated. The Company's fiscal year end is October 31.
b) Use of Estimates
The preparation of these consolidated financial statements in conformity with generally accepted accounting principles in the United States 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 consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The Company regularly evaluates estimates and assumptions related to the useful life and recoverability of long-lived assets, recoverability of amounts receivable and mineral property acquisition costs, deferred income tax asset valuation allowances, measurement of stock-based compensation, and any contingent liabilities. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company's estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.
c) Earnings (Loss) Per Share
The Company computes earnings (loss) per share in accordance with ASC 260, Earnings per Share, which requires presentation of both basic and diluted earnings per share ("EPS") on the face of the consolidated statement of comprehensive loss. Basic EPS is computed by dividing earnings (loss) available to common stockholders by the weighted average number of shares outstanding during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti-dilutive. As at October 31, 2014 and 2013 there were no potentially dilutive securities outstanding.
Soltera Mining Corp.
Notes to the Consolidated Financial Statements as of October 31, 2014 and 2013
(Expressed in U.S. dollars)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
d) Comprehensive Income
ASC 220, Comprehensive Income, establishes standards for the reporting and display of comprehensive income and its components in the consolidated financial statements. As at October 31, 2014 and 2013, the Company's only component of comprehensive income was foreign currency translation adjustments.
e) Cash and Equivalents
The Company considers all highly liquid instruments with maturity of three months or less at the time of issuance to be cash equivalents.
f) Mineral Property Costs
The Company has not yet realized any revenues from its planned operations. It is primarily engaged in the acquisition and exploration of mining properties. Mineral property exploration costs are expensed as incurred. Mineral property acquisition costs are initially capitalized. The Company assesses the carrying costs for impairment under ASC 360, Property, Plant, and Equipment at the end of reporting period. 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.
g) Property and Equipment
Property and equipment are recorded at cost. Depreciation is recorded over the useful lives on a straight-line basis over 3 to 10 years as follows:
|
Automobile
|
4 years
|
|
Computer equipment
|
3 years
|
|
Furniture and fixtures
|
10 years
|
|
Machinery and equipment
|
5 years
|
|
Tools and small items
|
3 years
|
|
Leasehold improvements
|
3 years
|
h) Long-lived Assets
In accordance with ASC 360, Property Plant and Equipment, the Company tests long-lived assets or asset groups for recoverability when events or changes in circumstances indicate that their carrying amount may not be recoverable. Circumstances which could trigger a review include, but are not limited to: significant decreases in the market price of the asset; significant adverse changes in the business climate or legal factors; accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of the asset; current period cash flow or operating losses combined with a history of losses or a forecast of continuing losses associated with the use of the asset; and current expectation that the asset will more likely than not be sold or disposed significantly before the end of its estimated useful life. Recoverability is assessed based on the carrying amount of the asset and its fair value which is generally determined based on the sum of the undiscounted cash flows expected to result from the use and the eventual disposal of the asset, as well as specific appraisal in certain instances. An impairment loss is recognized when the carrying amount is not recoverable and exceeds fair value.
i) Asset Retirement Obligations
The Company follows the provisions of ASC 440, Asset Retirement and Environmental Obligations, which establishes standards for the initial measurement and subsequent accounting for obligations associated with the sale, abandonment or other disposal of long-lived tangible assets arising from the acquisition, construction or development and for normal operations of such assets. The Company did not have any asset retirement obligations as at October 31, 2014 and 2013.
Soltera Mining Corp.
Notes to the Consolidated Financial Statements as of October 31, 2014 and 2013
(Expressed in U.S. dollars)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
j) Financial Instruments
ASC 825, Financial Instruments, requires an entity to maximize the use of observable inputs and the fair value of financial instruments, which include cash, note receivable, accounts payable, amounts due to related parties and note payable were estimated to approximate their carrying values due to the immediate or short-term maturity of these financial instruments.
The Company's operations are in Argentina, which results in exposure to market risks from changes in foreign currency exchange rates. The financial risk is the risk to the Company's operations that arise 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.
k) Income Taxes
The Company accounts for income taxes using the asset and liability method in accordance with ASC 740, Income Taxes. The asset and liability method provides that deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities, and for operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using the currently enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company records a valuation allowance to reduce deferred tax assets to the amount that is believed more likely than not to be realized.
The Company recognizes and measures tax positions taken or expected to be taken in its tax return based on their technical merit and assesses the likelihood that the positions will be sustained upon examination based on the facts, circumstances and information available at the end of each period. Interest and penalties on tax liabilities, if any, would be recorded in operating expenses.
l) Stock-based Compensation
The Company records stock-based compensation in accordance with ASC 718, Compensation – Stock Based Payments and ASC 505, Equity Based Payments to Non-Employees, which requires the measurement and recognition of compensation expense based on estimated fair values for all share-based awards made to employees and directors, including stock options.
ASC 718 requires companies to estimate the fair value of share-based awards on the date of grant using an option-pricing model. The Company uses the Black-Scholes option pricing model as its method of determining fair value. This model is affected by the Company's stock price as well as assumptions regarding a number of subjective variables. These subjective variables include, but are not limited to the Company's expected stock price volatility over the term of the awards, and actual and projected employee stock option exercise behaviours. The value of the portion of the award that is ultimately expected to vest is recognized as an expense in the statement of operations over the requisite service period.
All transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable.
Soltera Mining Corp.
Notes to the Consolidated Financial Statements as of October 31, 2014 and 2013
(Expressed in U.S. dollars)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
m) Foreign Currency Translation
The Company's functional and reporting currency is the US dollar. Monetary assets and liabilities denominated in foreign currencies are translated in accordance with ASC 830, Foreign Currency Translation Matters, using the exchange rate prevailing at the consolidated balance sheet date. Gains and losses arising on settlement of foreign currency denominated transactions or balances are included in the determination of income. Foreign currency transactions are primarily undertaken in Canadian dollars and Argentinean pesos. The Company has not, to the date of these consolidated financial statements, entered into derivative instruments to offset the impact of foreign currency fluctuations.
The functional currency of the wholly-owned subsidiary, Incas, is the Argentinean peso. The financial statements of the subsidiary are translated to United States dollars in accordance with ASC 830 using period-end rates of exchange for assets and liabilities, and average rates of exchange for the year for revenues and expenses. Translation gains (losses) are recorded in accumulated other comprehensive income (loss) as a component of stockholders' equity. Foreign currency transaction gains and losses are included in current operations.
n) Reclassification
Certain reclassifications have been made to the prior year's consolidated financial statements to conform to the current year's presentation.
o) Recently Issued Accounting Pronouncements
The Company has implemented all new accounting pronouncements that are in effect and that may impact its consolidated financial statements and does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.
During the year ended October 31, 2014, the Company elected to early adopt Accounting Standards Update No. 2014-10, Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements. The adoption of this standard allowed the Company to remove the previously disclosed inception-to-date information and all references to exploration stage.
3. JOINT VENTURE
On October 17, 2008, the Company formed a joint venture company named the Albanian Mines Company sh.a. with two Albanian companies to tender for the rights to mineral properties in Albania. During the year ended October 31, 2013, the Company disposed of its interest in the joint venture for $Nil proceeds. The joint venture was inactive and had never incurred any costs.
4. PROVISION FOR AMOUNTS RECEIVABLE
During the year ended October 31, 2014, the Company recorded a provision for amounts receivable for VAT sales tax receivables claimed in Argentina of $443 (2013 - $9,072) due to uncertainty in recovery. The VAT may be collected after the Company commences commercial production.
Soltera Mining Corp.
Notes to the Consolidated Financial Statements as of October 31, 2014 and 2013
(Expressed in U.S. dollars)
5. MINERAL PROPERTIES
a) El Torno Project
On July 6, 2007, the Company's wholly owned subsidiary, Incas, entered into a mineral property exploration and option agreement, which was amended on December 30, 2008, whereby Incas has the exclusive right to explore five minerals claims in Argentina until December 30, 2013 with an option to acquire a 100% interest in the mineral claims in Argentina (the "El Torno Project"), upon fulfilling the conditions set forth:
(1) Incas is obliged to submit to the vendor a quarterly report with technical data and detailed expenses on the mineral claim;
(2) Incas will pay to the vendor a 1% Foundry Net Return, which can be purchased by Incas for $1,000,000 anytime after production commences on the mineral claim;
(3) Upon commencement of production or December 31, 2013, if production has not yet commenced, Incas will pay the vendor $3,500,000, less any payments made by Incas during the option period. The Company can make a lump sum payment or begin making installment payments of $500,000 every six months plus a penalty payment of $350,000;
(4) Incas will also pay the vendor the following payments:
1. $50,000 on or before June 30, 2008 (paid)
2. $100,000 on or before June 30, 2009 (paid)
3. $200,000 on or before June 30, 2010 (paid)
4. $150,000 every six months with the first payment due on or before June 30, 2011 (June 30, 2011 – paid; December 31, 2011 – paid; June 30, 2012 – paid; December 31, 2012 – paid; June 30, 2013 – paid);
(5) Incas will make an investment of $1,000,000 in exploration of the El Torno Project on or before July 6, 2009, which was extended to December 31, 2011 (completed).
On February 20, 2014, the Company completed a renegotiation of the El Torno Project mineral property exploration and option agreement (the "Renegotiated Agreement") with the vendor. The payment terms of the El Torno Project mineral property exploration and option agreement are extended such that the remaining $2,750,000 is to be paid on or before the following dates:
(1) $500,000 on or before June 30, 2014;
(2) $500,000 on or before December 30, 2014;
(3) $500,000 on or before June 30, 2015;
(4) $500,000 on or before December 30, 2015;
(5) $500,000 on or before June 30, 2016; and
(6) $250,000 on or before December 30, 2016.
As at October 31, 2014, the Company paid $100,000 as an advance towards the payment (1) above but has failed to make the remaining required payments in accordance with the specified payment terms. The Company intends to renegotiate the payment terms with the vendor, however, there is no certainty that the Company will be successful in doing so. As a result, the Company is in default of the Renegotiated Agreement, and has recorded an impairment of $1,150,020 at October 31, 2014 representing the acquisition costs capitalized in connection with the El Torno Project.
Soltera Mining Corp.
Notes to the Consolidated Financial Statements as of October 31, 2014 and 2013
(Expressed in U.S. dollars)
5. MINERAL PROPERTIES (continued)
b) Zapaleri Project
On July 6, 2007, prior to the Company's acquisition of Incas, Incas entered into a mineral property exploration and option agreement with the vendor whereby the Company has the exclusive right to explore one mineral claim in Argentina with an option to acquire a 100% interest in the mineral claim upon fulfilling the conditions set forth: (1) Incas is obliged to submit a quarterly report to the vendor with technical data and detailed expenses on the mineral claim; (2) Incas will pay to the vendor a 1% Foundry Net Return, which can be purchased by Incas for $1,000,000 anytime after production commences on the mineral claim; (3) upon completion of the option payments, Incas will pay the vendor $3,500,000, less any payments made by Incas during the option period; (4) Incas will also pay the vendor $20,000 on June 30, 2008 (unpaid), $40,000 on June 30, 2009 (unpaid), and $80,000 on June 30, 2010 (unpaid).
Additional terms of the agreement were: (1) within 12 months of signing the option agreement, Incas will conduct a geological and mining inspection and audit of the mineral claim; (2) within 36 months of signing the option agreement, Incas will make an investment of $1,000,000 in the exploration of the mineral claim; (3) from June 30, 2011 until the mineral claim is put into production, Incas will pay the vendor $100,000 bi-annually, with the first payment due on June 30, 2011 (unpaid).
Since October 31, 2009, the Company's rights to explore the claim were under dispute. As a result, the Company has suspended all required payments and exploration activity on the claim until the dispute has been resolved.
6. NOTE RECEIVABLE
During the year ended October 31, 2012, the Company advanced $26,000 to a minority shareholder of the Company. The amount is unsecured, non-interest bearing and is due on demand. The note receivable has been recorded as a long-term receivable.
7. PROPERTY AND EQUIPMENT
|
October 31,
2014
|
October 31,
2013
|
|||||||
|
$
|
$
|
|||||||
|
Automobile
|
181,922
|
181,922
|
||||||
|
Computer equipment
|
3,878
|
4,134
|
||||||
|
Furniture and fixtures
|
17,104
|
21,899
|
||||||
|
Machinery and equipment
|
4,639
|
4,639
|
||||||
|
Tools and small items
|
341
|
341
|
||||||
|
Leasehold Improvements
|
-
|
2,129
|
||||||
|
207,884
|
215,064
|
|||||||
|
Less accumulated depreciation
|
(98,546
|
)
|
(76,863
|
)
|
||||
|
109,338
|
138,201
|
|||||||
8. RELATED PARTY TRANSACTIONS AND BALANCES
a) On July 24, 2007, the Company entered into a management agreement with the CEO of the Company to provide management services in exchange for $8,500 per month. During the year ended October 31, 2014, the Company recorded $93,500 (2013 - $102,000) of management services provided by the CEO of the Company. The services were provided until September 2014 for the year, as the CEO had resigned from his position in October 2014 and was re-appointed to the position subsequent to the year-end in July 2015.
b) As at October 31, 2014, the Company owes $514,405 (2013 - $409,723) to the CEO of the Company which consists of expenses paid on behalf of the Company and management fees owing to the CEO for services rendered. The amount owing is unsecured, non-interest bearing and due on demand.
Soltera Mining Corp.
Notes to the Consolidated Financial Statements as of October 31, 2014 and 2013
(Expressed in U.S. dollars)
8. RELATED PARTY TRANSACTIONS AND BALANCES (continued)
c) As at October 31, 2014, the Company owes $312,000 (2013 - $268,000) to a former director of the Company which consists of $44,000 (2013 - $48,000) of management fees for the year pursuant to an agreement entered into on November 18, 2009. The amount owing is unsecured, non-interest bearing and due on demand. The services were provided until September 2014, as the former director resigned from his position in October 2014.
d) During the year ended October 31, 2014, the Company paid $Nil (2013 - $26,500) to the spouse of the CEO of the Company for accounting and administration services provided to the Company.
e) Refer to Note 3.
All related party transactions were recorded at their exchange amounts, being the amounts agreed upon by the related parties.
9. NOTE PAYABLE
During the year ended October 31, 2009, the Company received a loan of $6,783 from a stockholder of the Company. The amount is unsecured, non-interest bearing and is due on demand. As of October 31, 2014 and 2013, the loan has an outstanding balance of $6,783.
10. COMMON STOCK
Transactions during the years ended October 31, 2014 and 2013:
a) On February 18, 2014, the Company received $110,000 in stock subscriptions (see Note 12). As at October 31, 2014, the Company has not yet issued any shares for these subscriptions.
b) On April 3, 2013, the Company issued 999,670 restricted shares of common stock for the exercise of 999,670 restricted non-transferable share purchase warrants at an exercise price of $0.15 per warrant, for total proceeds of $149,952.
c) On November 26, 2012, the Company issued 1,333,333 restricted shares of common stock for the exercise of 1,333,333 restricted non-transferable share purchase warrants at an exercise price of $0.15 per warrant, for total proceeds of $200,000.
11. SHARE PURCHASE WARRANTS
Transactions during the years ended October 31, 2014 and 2013:
a) During the year ended October 31, 2013, the Company issued 2,333,003 restricted shares of common stock pursuant to the exercise of share purchase warrants, at an exercise price of $0.15, for total proceeds of $349,952.
b) During the year ended October 31, 2013, the Company extended the expiry dates of all warrants outstanding to September 30, 2013. The warrants outstanding were initially set to expire on June 20, 2013 and June 30, 2013 and were exercisable for the purchase of 2,999,430 and 14,002,826 common shares, respectively, at an exercise price of $0.15 per share. The Company recorded stock-based compensation in the amount of $348,245 for the incremental value of the warrants resulting from the extension.
The following table summarizes the continuity of the Company's share purchase warrants:
|
Number of Shares
|
Weighted Average
|
|||||||
|
Issuable for Warrants
|
Exercise Price
|
|||||||
|
Balance – October 31, 2012
|
19,999,879
|
$
|
0.15
|
|||||
|
Exercised
|
(2,333,003
|
)
|
0.15
|
|||||
|
Expired
|
(17,666,876
|
)
|
0.15
|
|||||
|
Balance – October 31, 2013 and 2014
|
-
|
$
|
-
|
|||||
As at October 31, 2014, the Company has no share purchase warrants outstanding.
Soltera Mining Corp.
Notes to the Consolidated Financial Statements as of October 31, 2014 and 2013
(Expressed in U.S. dollars)
12. COMMITMENTS AND CONTINGENCY
a) On February 7, 2014, the Company entered into a financing agreement with GTS Gold Trading Service DMCC ("GTS") for a conditional unit offering of up to $5 million at an offering price of $0.11 per unit. Each unit consists of one restricted common share of the Company and one warrant, with each warrant exercisable for the purchase of two common shares of the Company at a price of $0.18 per share for a period of two years from the date of the closing of each tranche of financing. To date, the Company has received stock subscriptions of $110,000 from GTS, however, no shares have yet been issued.
b) In July 2010, the Company was served with a lawsuit by Ambrian Resources AG. Ambrian sued the Company for damages on the alleged grounds that Ambrian had negotiated and finalized a binding funding agreement with the Company during the period April to June 2010 but instead the Company chose to enter a financing agreement with another company (Goldlake). Ambrian also claimed that the Company used a strategy developed by Ambrian and used information provided by a South African mining engineer who visited the project at Ambrian's expense. Ambrian sought damages in excess of $20 million dollars.
The Company denied all claims in the lawsuit and retained a Nevada litigator to defend the action brought against it by Ambrian in the State of Nevada. The Company also sought to have the lawsuit dismissed on the grounds that there was no binding agreement with Ambrian.
On January 23, 2013, the above-noted lawsuit brought against the Company by Ambrian in July 2010, was dismissed following a Stipulation and Order for Dismissal, which was entered into by both parties, in which all outstanding claims were dismissed in consideration of $0.
c) During the year, the Company was advised of a possible legal claim in the amount of approximately $10,000 in relation to amounts allegedly owed to a third-party. In addition, the Company received notice of a legal claim filed in the courts in the amount of at least approximately $7,000 in relation to amounts allegedly owed to another third-party. The Company believes these possible and actual claims are without merit and intends to vigorously defend its position. Accordingly, as at October 31, 2014, the Company has not recorded any provision for possible loss in these consolidated financial statements.
13. INCOME TAXES
The Company's deferred income taxes reflect the net effects of temporary differences between the recorded amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.
The Company's potential deferred tax assets arise primarily from net operating loss carryovers. The Company has a net operating loss carry forward of $3,854,000 available in United States to offset taxable income in future years which commence expiring in fiscal 2025, and a net operating loss carry forward of $1,908,000 available in Argentina to offset taxable income in future years which commence expiring in fiscal 2015. The Company has recorded a full valuation allowance for the deferred tax assets as the Company's ability to realize these benefits does not meet the "more likely than not" required criteria.
The Company is subject to United States federal and state income taxes at a statutory rate of 35%. The reconciliation of the provision for income taxes at the United States federal statutory rate compared to the Company's income tax expense as reported is as follows:
Soltera Mining Corp.
Notes to the Consolidated Financial Statements as of October 31, 2014 and 2013
(Expressed in U.S. dollars)
13. INCOME TAXES (continued)
|
October 31,
2014
|
October 31,
2013
|
|||||||
|
$
|
$
|
|||||||
|
Income tax recovery at statutory rate
|
(616,000
|
)
|
(397,000
|
)
|
||||
|
Provisions and others
|
-
|
3,000
|
||||||
|
Stock-based compensation
|
-
|
122,000
|
||||||
|
Impairment loss of mineral property
|
403,000
|
-
|
||||||
|
Valuation allowance change
|
213,000
|
272,000
|
||||||
|
Provision for income taxes
|
–
|
–
|
||||||
The significant components of deferred income tax assets and liabilities at October 31, 2014 and 2013 are as follows:
|
October 31,
2014
|
October 31,
2013
|
|||||||
|
$
|
$
|
|||||||
|
Net operating loss carryforward
|
2,017,000
|
1,804,000
|
||||||
|
Valuation allowance
|
(2,017,000
|
)
|
(1,804,000
|
)
|
||||
|
Net deferred income tax assets
|
–
|
–
|
||||||
14. FAIR VALUE MEASUREMENTS
ASC 820, Fair Value Measurement and Disclosures, requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument's categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. ASC 820 prioritizes the inputs into three levels that may be used to measure fair value:
· Level 1 - applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.
· Level 2 - applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data.
· Level 3 - applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.
The Company's financial instruments consist principally of cash, note receivable, accounts payable, due to related parties and note payable. Pursuant to ASC 820, the fair value of the Company's cash is determined based on "Level 1" inputs, which consist of quoted prices in active markets for identical assets.
As at October 31, 2014 and October 31, 2013, there were no liabilities measured at fair value on a recurring basis presented on the Company's consolidated balance sheet. Assets measured at fair value on a recurring basis were presented on the Company's consolidated balance sheet as of October 31, 2014 and October 31, 2013 as follows:
Soltera Mining Corp.
Notes to the Consolidated Financial Statements as of October 31, 2014 and 2013
(Expressed in U.S. dollars)
14. FAIR VALUE MEASUREMENTS (continued)
|
Fair Value Measurements Using
|
||||||||||||||||||||
|
Quoted Prices
|
Significant
|
|||||||||||||||||||
|
In Active Markets
|
Other
|
Significant
|
Balance as of
|
Balance as of
|
||||||||||||||||
|
For Identical
|
Observable
|
Unobservable
|
October 31,
|
October 31,
|
||||||||||||||||
|
Instruments
|
Inputs
|
Inputs
|
2014
|
2013
|
||||||||||||||||
|
(Level 1)
|
(Level 2)
|
(Level 3)
|
||||||||||||||||||
|
$
|
$
|
$
|
$
|
$
|
||||||||||||||||
|
Cash
|
2,365
|
-
|
-
|
2,365
|
20,301
|
|||||||||||||||
|
Total assets measured
at fair value |
2,365
|
-
|
-
|
2,365
|
20,301
|
|||||||||||||||
15. SEGMENT DISCLOSURES
The Company operates in one reportable segment, being the acquisition and exploration of mineral properties. Segmented information has been compiled based on the geographic regions of the Company and its subsidiary.
Assets by geographical segments as at October 31, 2014 and October 31, 2013, are as follows:
|
Canada
|
Argentina
|
Total
|
||||||||||
|
$
|
$
|
$
|
||||||||||
|
Current assets
|
1,732
|
1,955
|
3,687
|
|||||||||
|
Note receivable
|
26,000
|
-
|
26,000
|
|||||||||
|
Property and equipment
|
-
|
109,338
|
109,338
|
|||||||||
|
Total assets, at October 31, 2014
|
27,732
|
111,293
|
139,025
|
|||||||||
|
Current assets
|
20,391
|
8,645
|
29,036
|
|||||||||
|
Note receivable
|
26,000
|
-
|
26,000
|
|||||||||
|
Mineral property
|
-
|
1,050,000
|
1,050,000
|
|||||||||
|
Property and equipment
|
-
|
138,201
|
138,201
|
|||||||||
|
Total assets, at October 31, 2013
|
46,391
|
1,196,846
|
1,243,237
|
|||||||||
Net losses by geographical segments are as follows:
|
Net loss for the year ended October 31, 2014
|
389,735
|
1,369,649
|
1,759,384
|
|||||||||
|
Net loss for the year ended October 31, 2013
|
637,372
|
496,667
|
1,134,039
|
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
There are no changes in and disagreements with Soltera's accountants on accounting and financial disclosure. Soltera's Independent Registered Public Accounting Firm from inception to the current date is Manning Elliott LLP, Chartered Accountants, 1100 - 1050 West Pender Street, Vancouver, British Columbia, V6E 3S7, Canada.
Item 9A. Controls and Procedures.
Disclosure Controls and Procedures
In connection with the preparation of this annual report on Form 10-K, an evaluation was carried out by Soltera's management, with the participation of the Chief Executive Officer and the Chief Financial Officer, of the effectiveness of Soltera's disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 ("Exchange Act")) as of October 31, 2014. Disclosure controls and procedures are designed to ensure that information required to be disclosed in reports filed or submitted under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC rules and forms and that such information is accumulated and communicated to management, including the Chief Executive Officer and the Chief Financial Officer, to allow timely decisions regarding required disclosures.
Based on that evaluation, Soltera's management concluded, as of the end of the period covered by this report, that Soltera's disclosure controls and procedures were not effective in recording, processing, summarizing, and reporting information required to be disclosed, within the time periods specified in the SEC rules and forms and that such information was not accumulated or communicated to management to allow timely decisions regarding required disclosure. In particular, Soltera failed to complete and file its annual report and subsequent quarterly reports in a timely manner, and has identified material weaknesses in internal control over financial reporting, as discussed below.
In May 2009, management implemented the following remediation procedures, which were intended to remediate the causes of Soltera's disclosure procedures and controls ineffectiveness:
|
·
|
adopted a Disclosure Committee Charter (see Exhibit 99.1 for more details)
|
|
·
|
appointed Soltera's officers and directors to the Disclosure Committee
|
|
·
|
adopted policy to utilize external service providers to review and provide comment on disclosure reports and statements
|
Management's Report on Internal Controls over Financial Reporting
Management is responsible for establishing and maintaining adequate internal control over financial reporting, as required by Sarbanes-Oxley (SOX) Section 404 A. Soltera's internal control over financial reporting is a process designed under the supervision of Soltera's Chief Executive Officer and Chief Financial Officer to provide reasonable assurance regarding the reliability of financial reporting and the preparation of Soltera's financial statements for external purposes in accordance with U.S. generally accepted accounting principles. Internal control over financial reporting includes those policies and procedures that:
|
·
|
pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of Soltera's assets;
|
|
·
|
provide reasonable assurance that transactions are recorded as necessary to permit preparation of the financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures are being made only in accordance with authorizations of management and the Board of Directors; and
|
|
·
|
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate.
Management conducted an assessment of the effectiveness of the Company's internal control over financial reporting as of October 31, 2014, based on criteria established in Internal Control –Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO"). As a result of this assessment, management identified material weaknesses in internal control over financial reporting.
A material weakness is a control deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of Soltera's annual or interim financial statements will not be prevented or detected on a timely basis.
The matters involving internal controls and procedures that management considered to be material weaknesses under the standards of the Public Company Accounting Oversight Board were: (1) lack of a functioning audit committee and lack of a majority of outside directors on Soltera's board of directors, resulting in ineffective oversight in the establishment and monitoring of required internal controls and procedures; (2) inadequate segregation of duties consistent with control objectives; (3) insufficient written policies and procedures for accounting and financial reporting with respect to the requirements and application of US GAAP and SEC disclosure requirements; and (4) ineffective controls over period end financial disclosure and reporting processes. The aforementioned material weaknesses were identified by Soltera's Chief Financial Officer in connection with the audit of its financial statements as of October 31, 2014 and communicated the matters to management.
As a result of the material weakness in internal control over financial reporting described above, management has concluded that, as of October 31, 2014, Soltera's internal control over financial reporting was not effective based on the criteria in Internal Control – Integrated Framework issued by COSO.
Management believes that the material weaknesses set forth in items (2), (3) and (4) above did not have an effect on Soltera's financial results. However, management believes that the lack of a functioning audit committee and lack of a majority of outside directors on Soltera's board of directors caused and continues to cause an ineffective oversight in the establishment and monitoring of the required internal controls over financial reporting.
Soltera is committed to improving its financial organization. As part of this commitment and when funds are available, Soltera will create a position to Soltera to segregate duties consistent with control objectives and will increase its personnel resources and technical accounting expertise within the accounting function by: i) appointing one or more outside directors to its board of directors who will also be appointed to the audit committee of Soltera resulting in a fully functioning audit committee who will undertake the oversight in the establishment and monitoring of required internal controls over financial reporting; and ii) preparing and implementing sufficient written policies and checklists that will set forth procedures for accounting and financial reporting with respect to the requirements and application of US GAAP and SEC disclosure requirements.
Management believes that the appointment of one or more outside directors, who will also be appointed to a fully functioning audit committee, will remedy the lack of a functioning audit committee and a lack of a majority of outside directors on Soltera's Board. In addition, management believes that preparing and implementing sufficient written policies and checklists will remedy the following material weaknesses: (i) insufficient written policies and procedures for accounting and financial reporting with respect to the requirements and application of US GAAP and SEC disclosure requirements; and (ii) ineffective controls over period end financial close and reporting processes. Further, management believes that the hiring of additional personnel who have the technical expertise and knowledge will result proper segregation of duties and provide more checks and balances within the department. Additional personnel will also provide the cross training needed to support Soltera if personnel turn-over issues within the department occur. This coupled with the appointment of additional outside directors will greatly decrease any control and procedure issues Soltera may encounter in the future.
Management will continue to monitor and evaluate the effectiveness of Soltera's internal controls over financial reporting on an ongoing basis and are committed to taking further action and implementing additional enhancements or improvements, as necessary and as funds allow.
Soltera's independent auditors have not issued an attestation report on management's assessment of Soltera's internal control over financial reporting. As a result, this annual report does not include an attestation report of Soltera's independent registered public accounting firm regarding internal control over financial reporting. Soltera was not required to have, nor has Soltera, engaged its independent registered public accounting firm to perform an audit of internal control over financial reporting pursuant to the rules of the Securities and Exchange Commission that permit Soltera to provide only management's report in this annual report.
Changes in Internal Controls
There were no changes in Soltera's internal controls over financial reporting (as defined in Rule 13a-15(f) of the Exchange Act) during the fiscal year ended October 31, 2014 that materially affected, or are reasonably likely to materially affect, Soltera's internal control over financial reporting.
Item 9B. Other Information
During the fourth quarter of the fiscal year covered by this Form 10-K, Soltera reported all information that was required to be disclosed in a report on Form 8-K.
PART III
Item 10. Directors, Executive Officers, and Corporate Governance.
(a) Identify Directors and Executive Officers
Each director of Soltera holds office until (i) the next annual meeting of the stockholders, (ii) his successor has been elected and qualified, or (iii) the director resigns.
The Directors and Officers of Soltera are as follow:
|
Name
|
Age
|
Positions Held and Tenure
|
|
Fabio Montanari
|
58
|
Chief Executive Officer, Principal Executive Officer, Chief Financial Officer, Principal Financial Officer, and Corporate Secretary since July 2, 2015
|
|
Alessandro Murroni
|
48
|
Director since April 24, 2012
|
|
Arnaldo Massini
|
73
|
Director since April 24, 2012
|
The Directors named above will serve until the next annual meeting of the stockholders. Thereafter, directors will be elected for one-year terms at the annual stockholders' meeting. Officers will hold their positions at the pleasure of the board of directors, absent any employment agreement, of which none currently exists or is contemplated.
Fabio Montanari ● Mr. Montanari (58 years old) has been an officer of Soltera since July 2015. Mr. Montanari has been a geologist since 1985. Mr. Montanari received his Doctor Degree in Geology in 1985 from the University of Ferrara (Italy). During the past three years, Mr. Montanari has also served as a director of Soltera Mining Corp. (July 2007 to October 2014).
Alessandro Murroni ● Mr. Murroni (48) has been a director of Soltera since April 2012. During the past five years, Mr. Murroni has been the Managing Director of the Goldlake-owned Five Star Mining S.A. de C.V. and Eurocantera S.A. de C.V., both Honduran mining companies. Mr. Murroni received his mining degree at the G. Asproni Technical Mining Institute in Iglesias, Italy.
Arnaldo Massini ● Mr. Massini (73) has been a director of Soltera since April 2012. During the past five years, Mr. Massini has been an Italian Chartered Auditor of Accounts and has been a Goldlake Director. Mr. Massini joined the Goldlake Group in 2003 and contributed to the founding of their companies in both the UK and Central America. Mr. Massini is currently CFO and Vice President of the Goldlake Group. Mr. Massini is also the Chairman of Goldlake-owned Five Star Mining SA de CV, Vice President of Eurocantera SA de CV, and CEO of Terra di Nocera Umbra Srl.
(b) Identify Significant Employees
Soltera has no significant employees other than the directors and officers of Soltera.
(c) Family Relationships
There are no family relationships among the directors, executive officers or persons nominated or chosen by Soltera to become directors or executive officers.
(d) Involvement in Certain Legal Proceedings
Except for the proceeding disclosed below, during the past ten years, none of Soltera's directors or officers has been:
|
·
|
a general partner or executive officer of any business against which any bankruptcy petition was filed, either at the time of the bankruptcy or two years prior to that time;
|
|
·
|
convicted in a criminal proceeding or named subject to a pending criminal proceeding (excluding traffic violations and other minor offenses);
|
|
·
|
subject to any order, judgment or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities;
|
|
·
|
subject to any order, judgment or decree, not subsequently reversed, suspended or vacated, of any Federal or State authority barring, suspending or otherwise limiting for more than 60 days the right of such person to engage in any activity as a futures commission merchant, introducing broker, commodity trading advisor, commodity pool operator, floor broker, leverage transaction merchant, any other person regulated by the Commodity Futures Trading Commission, or an associated person of any of the foregoing, or as an investment adviser, underwriter, broker or dealer in securities, or as an affiliated person, director or employee of any investment company, bank, savings and loan association or insurance company, or engaging in or continuing any conduct or practice in connection with such activity, or to be associated with persons engaged in any such activity;
|
|
·
|
found by a court of competent jurisdiction in a civil action or by the Commission to have violated any Federal or State securities law, and the judgment in such civil action or finding by the Commission has not been subsequently reversed, suspended, or vacated;
|
|
·
|
found by a court of competent jurisdiction in a civil action or by the Commodity Futures Trading Commission to have violated any Federal commodities law, and the judgment in such civil action or finding by the Commodity Futures Trading Commission has not been subsequently reversed, suspended or vacated;
|
|
·
|
the subject of, or a party to, any Federal or State judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated, relating to an alleged violation of:
|
|
·
|
any Federal or State securities or commodities law or regulation; or
|
|
·
|
any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order; or
|
|
·
|
any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or
|
|
·
|
the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization, any registered entity, or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member;
|
(e) Compliance with Section 16(a) of the Exchange Act.
All reports were filed with the SEC on a timely basis and Soltera is not aware of any failures to file a required report during the period covered by this annual report, with the exception that Dr. Stefano Capaccioli, Alessandro Murroni. and Arnaldo Massini each failed to file a Form 3 – Initial Statement of Beneficial Ownership of Securities.
(f) Nomination Procedure for Directors
Soltera does not have a standing nominating committee; recommendations for candidates to stand for election as directors are made by the board of directors. Soltera has not adopted a policy that permits shareholders to recommend candidates for election as directors or a process for shareholders to send communications to the board of directors.
(g) Audit Committee Financial Expert
Soltera has no financial expert. Management believes the cost related to retaining a financial expert at this time is prohibitive. Soltera's Board of Directors has determined that it does not presently need an audit committee financial expert on the Board of Directors to carry out the duties of the Audit Committee. Soltera's Board of Directors has determined that the cost of hiring a financial expert to act as a director of Soltera and to be a member of the Audit Committee or otherwise perform Audit Committee functions outweighs the benefits of having a financial expert on the Audit Committee.
(h) Identification of Audit Committee
Soltera does not have a separately-designated standing audit committee. Rather, Soltera's entire board of directors performs the required functions of an audit committee. Currently, Fabio Montanari, Arnaldo Massini, and Alessandro Murroni are the members who act in the capacity of Soltera's audit committee, but do not meet Soltera's independent requirements for an audit committee member. See Item 12. (c) Director independence below for more information on independence.
In lieu of an audit committee, Soltera's board of directors is responsible for: (1) selection and oversight of Soltera's independent accountant; (2) establishing procedures for the receipt, retention and treatment of complaints regarding accounting, internal controls and auditing matters; (3) establishing procedures for the confidential, anonymous submission by Soltera's employees of concerns regarding accounting and auditing matters; (4) engaging outside advisors; and, (5) funding for the outside auditor and any outside advisors engaged by the audit committee.
As of October 31, 2014, Soltera did not have a written audit committee charter or similar document.
(i) Code of Ethics
Soltera has adopted a financial code of ethics that applies to all its executive officers and employees, including its CEO and CFO. See Exhibit 14 – Code of Ethics for more information. Soltera undertakes to provide any person with a copy of its financial code of ethics free of charge. Please contact Fabio Montanari at (303) 800-5752 to request a copy of Soltera's financial code of ethics. Management believes Soltera's financial code of ethics is reasonably designed to deter wrongdoing and promote honest and ethical conduct; provide full, fair, accurate, timely and understandable disclosure in public reports; comply with applicable laws; ensure prompt internal reporting of code violations; and provide accountability for adherence to the code.
Item 11. Executive Compensation.
Soltera has paid or accrued $137,500 in compensation to its named executive officers during its fiscal year ended October 31, 2014.
SUMMARY COMPENSATION TABLE
|
Name and principal position
(a)
|
Year
(b)
|
Salary
($)
(c)
|
Bonus
($)
(d)
|
Stock
Awards
($)
(e)
|
Option
Awards
($)
(f)
|
Non-Equity Incentive
Plan
($)
(g)
|
Non-
qualified
Deferred
Compen-
sation
Earnings ($)
(h)
|
All other
compen-
sation
($)
(i)
|
Total
($)
(j)
|
|
Fabio Montanari
CEO
July 2007 - Oct 2014
July 2015 - present
CFO
Nov 2009 – Oct 2014
July 2015 - present
|
2012
2013
2014
|
102,000[1]
102,000[1]
93,500[1]
|
nil
nil
nil
|
nil
nil
nil
|
nil
nil
nil
|
nil
nil
nil
|
nil
nil
nil
|
nil
nil
nil
|
102,000
102,000
93,500
|
|
Kevan Ashworth
Director
April 2008 - Oct 2014
|
2012
2013
2014
|
48,000 [1]
48,000[1]
44,000[1]
|
nil
nil
nil
|
nil
nil
nil
|
nil
nil
nil
|
nil
nil
nil
|
nil
nil
nil
|
nil
nil
nil
|
48,000
48,000
44,000
|
[1] This compensation has been accrued rather than paid and is due and owing to the named executive officer.
Since Soltera's inception, no stock options, stock appreciation rights, or long-term incentive plans have been granted, exercised or repriced.
Currently, there are no arrangements between Soltera and any of its directors whereby such directors are compensated for any services provided as directors, with the exception of the following:
Following a Board Resolution of February 18, 2010 Dr. Kevan L. Ashworth will be paid $4,000 per month since April 2008 and the salary of Dr. Montanari and Dr. Ashworth can be paid at the choice also partial of any of them in shares at the market price of 5 cents that was that of the last month. Following a resolution of the November 21, 2012 the Directors decided to postpone part of the payment of its salaries of $4,000 each, excluding that of the President, while the company gets in good standing and fully compliant with SEC. Once Soltera is in good standing and fully compliant with its SEC filings and all the information concerning financials and technical issue will be fully released, any Director will decide if the payment of due salary will be in total or in part in shares at the market share price of the mean of the last month after the full release.
There are no employment agreements between Soltera and any named executive officer, and there are no employment agreements or other compensating plans or arrangements with regard to any named executive officer which provide for specific compensation in the event of resignation, retirement, other termination of employment or from a change of control of Soltera or from a change in a named executive officer's responsibilities following a change in control, with the exception of the following:
On July 24, 2007, Soltera entered into a management agreement with the President of Soltera to provide management services in exchange for $8,500 per month.
Item 12. Security Ownership of Certain Beneficial Holders and Management.
(a) Security Ownership of Certain Beneficial Owners (more than 5%)
|
(1)
Title of Class
|
(2)
Name and Address of Beneficial
Owner
|
(3)
Amount and Nature of
Beneficial Owner [1]
|
(4)
Percent
of Class [2]
|
|
common stock
|
Fabio Montanari
Via il Perugino 8
Cagliari, Italy, 09121
|
31,300,000
|
31.9%
|
|
common stock
|
Goldlake Italia S.p.A.
Via Degli Artigiani, 22
Zona Industriale Padule
06024 Gubbio (PG)
|
27,333,124]
|
27.8%]
|
|
common stock
|
Kevan Ashworth
The Cottage Bullbeggars Lane
Woking, United Kingdom, GU214SQ
|
7,000,000
|
7.1%
|
[1] The listed beneficial owner has no right to acquire any shares within 60 days of the date of this Form 10-K from options, warrants, rights, conversion privileges or similar obligations excepted as otherwise noted.
[2] Based on 98,167,597shares of common stock issued and outstanding as of August 12, 2015.
(b) Security Ownership of Management
|
(1)
Title of Class
|
(2)
Name and Address of Beneficial
Owner
|
(3)
Amount and Nature of
Beneficial Owner [1]
|
(4)
Percent
of Class [2]
|
|
common stock
|
Fabio Montanari
Via il Perugino 8
Cagliari, Italy, 09121
|
31,300,000
|
31.9%
|
|
common stock
|
Alessandro Murroni
Lomas del Guijarro
Paseo Liquidamber
Casa Carissa 13
Tegucigalpa, Honduras CA
|
0
|
0%
|
|
common stock
|
Arnaldo Massini
Via Verdi Giuseppe 72
Gubbio (PG, Italy
06024
|
0 [3]
|
0%
|
|
common stock
|
Directors and Executive Officers
(as a group)
|
31,300,000
|
31.9%
|
[1] The listed beneficial owner has no right to acquire any shares within 60 days of the date of this Form 10-K from options, warrants, rights, conversion privileges or similar obligations excepted as otherwise noted.
[2] Based on 98,167,597shares of common stock issued and outstanding as of August 12, 2015.
[3] Mr. Massini has a 9.853% interest in Goldlake Italia S.p.A. but does not have any beneficial ownership or control over the voting or sale of Goldlake's shares in Soltera, with the exception that Mr. Massini is one member of a five member board of directors of Goldlake.
(c) Changes in Control
Management is not aware of any arrangement that may result in a change in control of Soltera as of the date of this report, with the exception of the following:
Soltera has entered into a financing agreement with GTS Gold Trading Service DMCC for a unit offering of up to $5 million at an offering price of $0.11 per unit. Each unit will consist of one restricted share of common stock in the capital of Soltera and one warrant. Each warrant will represent two shares of common stock in the capital of Soltera with an exercise price of $0.18 per share for a period of two years from the date of the closing of each tranche of financing. If GTS fully subscribes for the unit offering and exercises all of the warrants it receives then GTS will become the registered owner of 136,363,638 restricted shares of common stock in the capital of Soltera, which will represent a 58.1% fully-diluted interest in Soltera. As of the date of this report Soltera has received $110,000 of the subscription proceeds, but has not issued any restricted shares of common stock or warrants. Also, GTS is in default for failing to deliver subscription funds on a timely manner pursuant to the terms and conditions of the agreement. The parties are currently negotiating amendments to the GTS Financing Agreement regarding delivery of payments and deadlines for making payments. See Exhibit 10.23 - GTS Financing Agreement for more details.
Item 13. Certain Relationships and Related Transactions.
Since the beginning of Soltera's last fiscal year, no director, executive officer, security holder, or any immediate family of such director, executive officer, or security holder has had any direct or indirect material interest in any transaction or currently proposed transaction, which Soltera was or is to be a participant, that exceeded the lesser of (1) $120,000 or (2) one percent of the average of Soltera's total assets at year-end for the last three completed fiscal years, except for the following:
1. Acquisition of Subsidiary
Pursuant to the terms and conditions of a stock acquisition agreement, Soltera acquired all of the shares of Incas Mineral, S.A. from Fabio Montanari, Soltera's President, for the purchase price of $1,500. Incas is a wholly-owned subsidiary of Soltera, with 98% of the shares registered in the name of Soltera and 2% of the shares registered in the name of Fabio Montanari, Soltera's president, who is holding the shares in trust for Soltera pursuant to the terms and conditions of a bare trust. See Exhibit 10.5 – Stock Acquisition Agreement and Exhibit 10.12 - Bare Trust for more details.
2. Financing Agreement
On June 9, 2010 Soltera entered into an agreement with Goldlake Italia S.p.A. (the "Financing Agreement") with the intention and objective of both parties to co-operate in the re-start of the alluvial exploitation operation and the subsequent completion of the exploration and resources definition plan for Soltera's El Torno Project. Pursuant to the terms of the Financing Agreement, Goldlake has agreed to provide $1.5 million in financing to Soltera for the following purposes:
|
a)
|
to maintain the property licence option ($200,000);
|
|
b)
|
to restructure Soltera's corporate finance ($400,000);
|
|
c)
|
to re-start the alluvial gold production on Soltera' El Torno Project ($600,000); and
|
|
d)
|
to undertake initial test work on the major gold targets on the El Torno Project ($300,000).
|
As of the date of this annual report, Soltera has received from Goldlake an aggregate $3,349,968 of the financing, including the proceeds from the exercise of warrants. See Exhibit 10.22 – Financing Agreement for more details.
3. Management Fees
During the year ended October 31, 2014, Soltera had incurred a total of $137,500 management fees with Fabio Montanari, President and CEO, and Kevan Ashworth, former director, for the management services rendered to Soltera
4. Accounting Services
On September 3, 2013, Soltera paid Iren Lobina, the spouse of Fabio Montanari, $26,500 for accounting and administrative services rendered for Incas Mineral S.A. During the year ended October 31, 2014 Soltera made no payments to Iren Lobina for any services.
(b) Promoters and control persons
During the past five fiscal years, Fabio Montanari has been the sole promoter of Soltera's business, but Mr. Montanari has not received anything of value from Soltera nor is any person entitled to receive anything of value from Soltera for services provided as a promoter of the business of Soltera.
(c) List of subsidiaries
The following is a list of subsidiaries of Soltera and the percentage of voting securities owned by Soltera in each subsidiary:
|
Subsidiary
|
Voting Percentage
|
|
Incas Mineral S.A.
|
100%
|
(d) Director independence
Soltera's board of directors currently consists of Alessandro Murroni and Arnaldo Massini. Pursuant to Item 407(a)(1)(ii) of Regulation S-B of the Securities Act, Soltera's board of directors has adopted the definition of "independent director" as set forth in Rule 4200(a)(15) of the NASDAQ Manual. In summary, an "independent director" means a person other than an executive officer or employee of Soltera or any other individual having a relationship which, in the opinion of Soltera's board of directors, would interfere with the exercise of independent judgement in carrying out the responsibilities of a director, and includes any director who accepted any compensation from Soltera in excess of $200,000 during any period of 12 consecutive months with the three past fiscal years. Also, the ownership of Soltera's stock will not preclude a director from being independent.
In applying this definition, Soltera's board of directors has determined that none of the directors qualify as an "independent director" pursuant to the same Rule.
As of the date of the report, Soltera did not maintain a separately designated compensation or nominating committee.
Soltera has also adopted this definition for the independence of the members of its audit committee. Alessandro Murroni and Arnaldo Massini serve on Soltera's audit committee. Soltera's board of directors has determined that none of the directors are "independent" for purposes of Rule 4200(a)(15) of the NASDAQ Manual, applicable to audit, compensation and nominating committee members, and is "independent" for purposes of Section 10A(m)(3) of the Securities Exchange Act.
Item 14. Principal Accounting Fees and Services
(1) Audit Fees
The aggregate fees billed for each of the last two fiscal years for professional services rendered by the principal accountant for Soltera's audit of consolidated annual financial statements and for review of financial statements included in Soltera's Form 10-Q's or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for those fiscal years was:
2014 - $56,215 – Manning Elliott LLP – Chartered Accountants
2013 - $72,870 – Manning Elliott LLP – Chartered Accountants
(2) Audit-Related Fees
The aggregate fees billed in each of the last two fiscal years for assurance and related services by the principal accountants that are reasonably related to the performance of the audit or review of Soltera's consolidated financial statements and are not reported in the preceding paragraph:
2014 - $nil – Manning Elliott LLP – Chartered Accountants
2013 - $nil – Manning Elliott LLP – Chartered Accountants
(3) Tax Fees
The aggregate fees billed in each of the last two fiscal years for professional services rendered by the principal accountant for tax compliance, tax advice, and tax planning was:
2014 - $nil – Manning Elliott LLP – Chartered Accountants
2013 - $nil – Manning Elliott LLP – Chartered Accountants
(4) All Other Fees
The aggregate fees billed in each of the last two fiscal years for the products and services provided by the principal accountant, other than the services reported in paragraphs (1), (2), and (3) was:
2014 - $nil – Manning Elliott LLP – Chartered Accountants
2013 - $nil – Manning Elliott LLP – Chartered Accountants
(6) The percentage of hours expended on the principal accountant's engagement to audit Soltera's consolidated financial statements for the most recent fiscal year that were attributed to work performed by persons other than the principal accountant's full time, permanent employees was nil %.
Item 15. Exhibits, Financial Statements Schedules.
(a) Index to and Description of Exhibits.
All Exhibits required to be filed with the Form 10-K are included in this annual report or incorporated by reference to Soltera's previous filings with the SEC, which can be found in their entirety at the SEC website at www.sec.gov under SEC File Number 000-51841 and SEC File Number 333-131232.
|
Exhibit
|
Description
|
Status
|
|
3.1
|
Articles of Incorporation of Atlin Mineral Exploration Corp., filed as an Exhibit to Soltera's Form SB-2 filed on January 24, 2006 and incorporated herein by reference.
|
Filed
|
|
3.2
|
By-Laws of Atlin Mineral Exploration Corp., filed as an Exhibit to Soltera's Form SB-2 filed on January 24, 2006 and incorporated herein by reference.
|
Filed
|
|
3.3
|
Certificate of Amendment of Soltera Mining Corp. dated May 30, 2007, filed as an Exhibit to Soltera's Form 8-K filed on May 31, 2007 and incorporated herein by reference.
|
Filed
|
|
3.4
|
Articles of Incorporation of Incas (translated), filed as an Exhibit to Soltera's Form 10-KSB (Annual Report) on February 21, 2008 and incorporated herein by reference.
|
Filed
|
|
3.5
|
Licence of Atzek Mineral SA de CV dated September 25, 2007, filed as an Exhibit to Soltera's Form 8-K (Current Report) on March 10, 2008 and incorporated herein by reference.
|
Filed
|
|
3.6
|
Articles of Incorporation of Atzek Mineral SA de CV dated September 25, 2007, filed as an Exhibit to Soltera's Form 8-K (Current Report) on March 10, 2008 and incorporated herein by reference.
|
Filed
|
|
3.7
|
Certificate of Amendment of Soltera Mining Corp. dated July 23, 2008, filed as an Exhibit to Soltera's Form 8-K filed on October 1, 2008, and incorporated herein by reference.
|
Filed
|
|
3.8
|
Act of Incorporation for Albanian Mines Company sh.a., filed as an Exhibit to Soltera's Form 8-K (Current Report) on October 23, 2008 and incorporated herein by reference.
|
Filed
|
|
10.1
|
Property Agreement dated September 22, 2005 between Atlin Mineral Exploration Corp. and Nadwynn Sing, filed as an Exhibit to Soltera's Form SB-2 filed on January 24, 2006 and incorporated herein by reference.
|
Filed
|
|
10.2
|
Trust Agreement dated September 22, 2005 between Atlin Mineral Exploration Corp. and Nadwynn Sing, filed as an Exhibit to Soltera's Form SB-2 filed on January 24, 2006 and incorporated herein by reference.
|
Filed
|
|
10.3
|
Management Agreement dated May 1, 2007 between Atlin Mineral Exploration Corp. and Nadwynn Sing, filed as an Exhibit to Soltera's Form 8-K filed on May 2, 2007 and incorporated herein by reference.
|
Filed
|
|
10.4
|
Letter Agreement dated May 22, 2007 between Atlin Mineral Exploration Corp. and Decoors Mining Corp., filed as an Exhibit to Soltera's Form 8-K filed on May 29, 2007 and incorporated herein by reference.
|
Filed
|
|
10.5
|
Stock Acquisition Agreement dated July 24, 2007 between Soltera Mining Corp. and Fabio Montanari, filed as an Exhibit to Soltera's Form 8-K (Current Report) on August 2, 2007 and incorporated herein by reference.
|
Filed
|
|
10.6
|
First Option Agreement dated July 6, 2007 between Antonio Agustin Giulianotti and Incas Mineral, S.A. , filed as an Exhibit to Soltera's Form 8-K (Current Report) on August 2, 2007 and incorporated herein by reference.
|
Filed
|
|
10.7
|
Second Option Agreement dated July 6, 2007 between Manuel Bernal Mateo and Incas Mineral, S.A. , filed as an Exhibit to Soltera's Form 8-K (Current Report) on August 2, 2007 and incorporated herein by reference.
|
Filed
|
|
10.8
|
Share Transfer Agreement dated July 24, 2007 between Nadwynn Sing and Fabio Montanari, filed as an Exhibit to Soltera's Form 8-K (Current Report) on August 2, 2007 and incorporated herein by reference.
|
Filed
|
|
10.9
|
Loan Agreement dated July 30, 2007 among Soltera Mining Corp., Incas Mineral, S.A., and Antonio Agustin Giulianotti, filed as an Exhibit to Soltera's Form 8-K (Current Report) on August 2, 2007 and incorporated herein by reference.
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Filed
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10.10
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Share Transfer Agreement Amendment #1 dated August 20, 2007 between Nadwynn Sing and Fabio Montanari, filed as an Exhibit to Soltera's Form 8-K (Current Report) on September 14, 2007 and incorporated herein by reference.
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Filed
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10.11
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Management Agreement dated August 29, 2007, between Soltera Mining Corp. and Nadwynn Sing, filed as an Exhibit to Soltera's Form 8-K (Current Report) on September 24, 2007 and incorporated herein by reference.
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Filed
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10.12
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Bare Trust dated July 24, 2007, filed as an Exhibit to Soltera's Form 10-KSB (Annual Report) on February 21, 2008 and incorporated herein by reference.
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Filed
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10.13
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Assignment Agreement dated February 29, 2008 between Soltera Mining Corp. and Fabio Montanari, filed as an Exhibit to Soltera's Form 8-K (Current Report) on March 10, 2008 and incorporated herein by reference.
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Filed
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10.14
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Option Agreement dated March 21, 2007 among TNR Gold Corp., Antonio Agustin Giulianotti, and Fabio Montanari, filed as an Exhibit to Soltera's Form 8-K (Current Report) on March 10, 2008 and incorporated herein by reference.
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Filed
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10.15
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Stock Acquisition Agreement dated February 29, 2008 between Soltera Mining Corp. and Fabio Montanari, filed as an Exhibit to Soltera's Form 8-K (Current Report) on March 10, 2008 and incorporated herein by reference.
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Filed
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10.16
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Cananea Exploration Agreement with an Option to Purchase dated September 25, 2007 among Atzek Mineral S.A. de C.V. and Luis Enrique Fierros Hernandez, Rossina Hernandez Baldenebro, Luigi Meglioli, and Dagoberto Gomez Y Hoyuela, filed as an Exhibit to Soltera's Form 8-K (Current Report) on March 10, 2008 and incorporated herein by reference.
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Filed
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10.17
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Colorada Exploration Agreement with an Option to Purchase dated September 26, 2007 among Atzek Mineral S.A. de C.V. and Rafael Vila Melendez, Luis Enrique Vila Mazon, José Vila Mazon, and Beatriz Ontiveros Felix, filed as an Exhibit to Soltera's Form 8-K (Current Report) on March 10, 2008 and incorporated herein by reference.
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Filed
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10.18
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Irrevocable Offer dated April 1, 2009 among Antonio Agustin Giulianotti, Soltera Mining Corp., and TNR Gold Corp., filed as an Exhibit to Soltera's Form 8-K (Current Report) on May 13, 2009 and incorporated herein by reference.
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Filed
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10.19
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Assignment Agreement dated March 29, 2010 among Fabio Montanari, Incas Mineral, S.A., and Soltera Mining Corp., filed as an Exhibit to Soltera's Form 8-K (Current Report) on April 6, 2010 and incorporated herein by reference.
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Filed
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10.20
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Joint-Venture or Joint Enterprise Agreement dated February 8, 2010 between Antonio Augustin Giulianotti and Fabio Montanari, filed as an Exhibit to Soltera's Form 8-K (Current Report) on April 6, 2010 and incorporated herein by reference.
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Filed
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10.21
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Exploration Contract with an Option to Purchase dated February 8, 2010 between Antonio Augustin Giulianotti and Fabio Montanari, filed as an Exhibit to Soltera's Form 8-K (Current Report) on April 6, 2010 and incorporated herein by reference.
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Filed
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10.22
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Financing Agreement dated June 9, 2010 between Soltera Mining Corp. and Goldlake Italia S.p.A., filed as an Exhibit to Soltera's Form 8-K (Current Report) on June 18, 2010 and incorporated herein by reference.
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Filed
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10.23
|
GTS Financing Agreement dated February 7, 2014 between Soltera Mining Corp. and GTS Gold Trading Services DMCC, filed as an Exhibit to Soltera's Form 8-K (Current Report) on March 14, 2014 and incorporated herein by reference.
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Filed
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10.24
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Renegotiation Agreement dated February 20, 2014 between Antonio Augustin Giulianotti and Incas Mineral, S.A. , filed as an Exhibit to Soltera's Form 8-K (Current Report) on March 14, 2014 and incorporated herein by reference.
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Filed
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14
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Code of Ethics, filed as an Exhibit to Soltera's Form 10-QSB (Quarterly Report) on September 18, 2007 and incorporated herein by reference.
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Filed
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Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
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Included
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Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
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Included
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99.1
|
Disclosure Committee Charter, filed as an Exhibit to Soltera's Form 10-K (Annual Report) on August 28, 2009 and incorporated herein by reference.
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Filed
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101 *
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Financial statements from the annual report on Form 10-K of Soltera Mining Corp. for the fiscal year ended October 31, 2014, formatted in XBRL: (ii) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Operations and Comprehensive Loss; (iii) the Consolidated Statements of Cash Flows, (iv) the Consolidated Statements of Change in Stockholders' Equity (deficit); and (v) the Notes to Consolidated Financial Statements.
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Included
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* In accordance with Rule 406T of Regulation S-T, the XBRL ("eXtensible Business Reporting Language") related information is furnished and not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, and otherwise is not subject to liability under these sections.
SIGNATURES
In accordance with the requirements of the Securities Exchange Act of 1934, Soltera Mining Corp. has caused this report to be signed on its behalf by the undersigned duly authorized person.
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SOLTERA MINING CORP.
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|||||
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Dated:
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August 12, 2015
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By:
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/s/ Fabio Montanari
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||
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Name:
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Fabio Montanari
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||||
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Title:
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CEO and CFO
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||||
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(Principal Executive Officer and Principal Financial Officer)
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|||||
Pursuant to the requirements of the Securities Exchange Act of 1934, the following persons on behalf of Soltera Mining Corp. and in the capacities and on the dates indicated have signed this report below.
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Signature
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Title
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Date
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/s/ Fabio Montanari
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Chief Executive Officer,
Principal Executive Officer,
Chief Financial Officer, Treasurer,
Corporate Secretary, Principal Financial Officer,
and Principal Accounting Officer
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August 12, 2015
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/s/ Alessandro Murroni
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Member of the Board of Directors
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August 12, 2015
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/s/ Arnaldo Massini
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Member of the Board of Directors
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August 12, 2015
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