U S PRECIOUS METALS INC - FORM 10-K

Attached files

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EX-21 - EXHIBIT 21 - U S PRECIOUS METALS INC	ex21x.htm
EX-31.2 - EXHIBIT 31.2 - U S PRECIOUS METALS INC	ex31x2.htm
EX-32.2 - EXHIBIT 32.2 - U S PRECIOUS METALS INC	ex32x2.htm
EX-31.1 - EXHIBIT 31.1 - U S PRECIOUS METALS INC	ex31x1.htm
EX-32.1 - EXHIBIT 32.1 - U S PRECIOUS METALS INC	ex32x1.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

(Mark One)

☒		ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

		For the fiscal year ended: May 31, 2015

☐		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
		For the transition period:
		Commission file number: 000-50703

U.S. PRECIOUS METALS, INC.
(Exact name of registrant as specified in its charter)

Delaware		14-1839426
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

242A West Valley Brook Road Califon, New Jersey		07830
(Address of principal executive offices)		(Zip Code)

	(732) 851-7707
	(Registrant's telephone number, including area code)
	(Former name, former address and former fiscal year, if changed since last report)

Securities registered under Section 12(b) of the Exchange Act:			None
Securities registered under Section 12(g) of the Exchange Act:			Common Stock $0.00001 par value
			(Title of Class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

☐ Yes ☒ No

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. ☐ Yes ☒ 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 preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-K (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). ☒ Yes ☐ No

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) 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.

Large accelerated filer	☐		Accelerated filer	☐
Non-accelerated filer	☐		Smaller reporting company	☒

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). ☐ Yes ☒ No

State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant's as of the last business day of the registrant's most recently completed second fiscal quarter: $42,786,906 at November 30, 2014.

Indicate the number of shares outstanding of each of the registrant's classes of common stock, as of the latest practicable date. The registrant had 190,087,480 shares of common stock issued and outstanding as of September 14, 2015.

DOCUMENTS INCORPORATED BY REFERENCE

List hereunder the following documents if incorporated by reference and the Part of the Form 10-K (e.g., Part I, Part II, etc.) into which the document is incorporated: (1) Any annual report to security holders; (2) Any proxy or information statement; and (3) Any prospectus filed pursuant to Rule 424(b) or (c) under the Securities Act of 1933, as amended (the "Securities Act"): None

U.S. PRECIOUS METALS, INC.

FORM 10-K

MAY 31, 2015

TABLE OF CONTENTS

PART I		Page
ITEM NO.
1	BUSINESS	3
1A	RISK FACTORS	15
1B	UNRESOLVED STAFF COMMENTS	28
2	PROPERTIES	28
3	LEGAL PROCEEDINGS	31
4	MINE SAFETY DISCLOSURES	33

PART II
5	MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES	33
6	SELECTED FINANCIAL DATA	37
7	MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	37
7A	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	49
8	FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA	49
9	CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE	49
9A	CONTROLS AND PROCEDURES	49
9B	OTHER INFORMATION	51

PART III
10	DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE	51
11	EXECUTIVE COMPENSATION	56
12	SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS	59
13	CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE	60
14	PRINCIPAL ACCOUNTANT FEES AND SERVICES	63

PART IV
15	EXHIBITS, FINANCIAL STATEMENT SCHEDULES	64
	SIGNATURES	112

NOTE REGARDING FORWARD-LOOKING STATEMENTS

The Private Securities Litigation Reform Act of 1995 provides a "safe harbor" for certain forward-looking statements. This annual report on Form 10-K (this "Annual Report") contains certain forward-looking statements that are subject to risks and uncertainties. The statements contained in this Annual Report that are not purely historical are 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. When used in this Annual Report, the words "anticipate," "believe," "plan," "target," "estimate," "intend," "expect" and similar expressions are intended to identify such forward-looking statements. Such forward-looking statements include, but are not limited to, statements regarding our strategy, future plans for exploration and production, future expenses and costs, future liquidity and capital resources, and estimates of mineralized material. All forward-looking statements in this Annual Report are based upon information available to our management on the date of this Annual Report.

Forward-looking statements are subject to a number of risks and uncertainties and there can be no assurance that such statements will be accurate. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may differ materially and adversely from those described herein as anticipated, believed, planned, targeted, estimated, intended or expected. Although we believe the assumptions underlying and expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity or achievements. Actual results could differ materially and adversely from those discussed in this Annual Report.

Factors that could affect the accuracy of our forward-looking statements include, but are not limited to, those factors discussed under "Item 1A. Risk Factors." More broadly, these factors include, but are not limited to:

- Our ability to raise capital;

- Our auditors have expressed a going concern opinion due to our lack of capital;

- Our current financial condition which reflects significant debt;

- Dilution resulting from additional funds;

- Lack of revenues;

- Limited geological work performed on our properties;

- No proven or probable reserves;

- Cost of exploration and exploitation;

- Changes in exploration and overhead costs;

- Access to and availability of materials, equipment, supplies, labor and supervision, power and water;

- Results of future feasibility studies, if any;

- Risks inherent in doing business in Mexico;

- Environmental concerns;

- Interpretation of drill hole results and the geology, grade and continuity of mineralization;

- Uncertainty of mineralized material estimates and timing of development expenditures;

- Commodity price fluctuations; and

- Existing litigation in Mexico.

We qualify all of our forward-looking statements by the cautionary statements listed above, as well as those factors described under "Item 1A. Risk Factors." The list above, together with the factors described under "Item 1A. Risk Factors," is not exhaustive of the factors that may affect the accuracy of our forward-looking statements. You should read this Annual Report completely and with the understanding that our actual future results may be materially and adversely different from what we expect. These forward-looking statements represent our beliefs, expectations and opinions only as of the date of this Annual Report. Except as required by applicable law, including the securities laws of the United States, we assume no obligation to update any such forward-looking statements.

PART I

ITEM 1. BUSINESS

Summary Of Business

U.S. Precious Metals, Inc. (OTC-QB: Symbol "USPR") was incorporated in the State of Delaware on January 21, 1998. As used herein, " we," " us," " our," the " Company " or " USPR " mean U.S. Precious Metals, Inc. and U.S. Precious Metals de Mexico, S.A. de C.V. (our " Mexican Subsidiary ") unless otherwise indicated. We are an exploration stage company engaged in the acquisition, exploration and development of mineral properties. We focus on gold, silver and copper primarily located in the State of Michoacán, Mexico where we own eight exploration and exploitation concessions to approximately 37,000 contiguous acres of land (the "Solidaridad Property"). Our mining concessions grant us the right to explore and exploit the minerals found in the ground pursuant to the regulations, rules and directives imposed by the Mexican government. See "Item 2. Properties" for more information about our mining concessions.

In addition to our mining concessions in Mexico, we had received licensing and other rights to a technology known as plasma processing from Resource Technology Corp. ("RTC") and an affiliated entity. However, these agreements were terminated, among other claims, due to lack of performance by RTC and the affiliated entity effective May 12, 2015 (See "Item 1 - Transactions with Resource Technology Corp" below). RTC has subsequently filed a law suit against us in respect of the cancellation of these agreements which we are aggressively defending See "Item 3 – Legal Proceedings" below)

Location of Concessions and Maps

The Company's mining concessions are located in southeastern Michoacán near the western border with State of Guerrero. The property is located within a metallogenic province that has a long history of mining. The property can be accessed by a paved road from the city of Morelia to the small village of Paso de Nunez, which is a 4 hour drive south. From Paso de Nunez, the property is 14 kilometers north on a road that is partially paved. The property lies within a region referred to as Tierra Caliente in an area of valleys and peaks ranging from 610 to 1,100 meters in elevation. The climate is usually very warm with a rainy season from July through the early part of September.

The following map illustrates the location of the State of Michoacán in Mexico.

The following is a geographic map of the State of Michoacán. The capital of Michoacán is Morelia depicted by a red star. The primary route from Morelia to our concessions is shown as a black irregular line and the concessions are indicated by a red rectangle.

Geology and Mineralization

The Solidaridad Property is located within the geographic region of southern Michoacán referred to as Tierra Caliente and south of the Trans-Mexican Volcanic Belt. This geographic region is characterized by rugged volcanic mountain terrain.

Our drilling programs have identified a sedimentary sequence consisting of phyllites and schists on the surface. The sedimentary sequence is believed to be Cretaceous/Tertiary in age. Below the metasediments are black shales, thin lenses of sandstone and mudstones with interbedded volcanic dikes and sills. The entire sequence is dipping approximately 50 degrees. The property is heavily faulted. Quartz sulfide veins also exist, frequently and inconclusively concordant with the sedimentary units and are enriched in sulfide mineralization consisting mainly of pyrite and chalcopyrite in varying proportions. Galena and sphalerite occur infrequently. Gold and silver tend to occur in the pyrite and chalcopyrite, however silver minerals have been found in veins exposed on the surface. Additionally copper oxide minerals are found routinely on the surface and within the dry washes.

Prior Exploration Activities

The property was discovered in 1995 by La Esperanza de Oro, SA de CV. ("La Esperanza") after a favorable report by their geologist. Exploration on the property was conducted by La Esperanza in 1996 and MIM Holdings (now Xstrata) ("MIM") in 1997 – 1998. Geochemical soil surveys by La Esperanza showed anomalous mineralized material readings for gold, silver and copper. The anomalies extended out several thousand feet both north and south of the workings. MIM also identified large coincident gold-in-soil and induced-polarization anomalies, which broadly define a mineralized area measuring 3 kilometers north-south by 500 meters east-west. MIM identified several NE/SW trending mineralized structures within this area, and tested them with 21 reverse circulation (RC) drill holes. Most of the drill holes reached depths of only 150 meters. The drilling identified an area known as the Main Zone and indicated gold-copper-silver mineralization. Two other areas of mineralization identified by MIM include the North Zone, which lies 300 meters north of the Main Zone, and Cuendeo, which lies 2 kilometers to the south. Little is known of the sampling methods made by La Esperanza or MIM Holdings. We have not substantiated their findings and do not currently have the funding to do so.

Present Condition of Our Property

To date, we have invested approximately $3.5 million in our preliminary determinations of mineralized material located on the Solidaridad Property, which includes three core drilling programs conducted in 2008, 2010 and 2015. More recently, we have conducted satellite imagery and a FSPEF/VERS geophysical ground study described below. As of the date of this report, we completed approximately 4,000 meter core drilling program under which we drilled a total of 27 holes on our property.

Prior Drilling Programs.

In 2008, we conducted a core drilling program wherein we completed 14 drill holes within an area of approximately five acres. Ten of the drill holes demonstrated significant mineralized material, of which four holes twinned the MIM reverse circulation holes, and confirmed the prior MIM results. The remaining six drill holes expanded the Main Zone, and provided information to assist in calculating a resource estimate. Additional drilling in this area will be necessary in order to provide an accepted resource estimate. Four of the drill holes did not demonstrate significant results however they did provide parameters of the mineralized zones. As a result of this drilling program, we determined that gold, silver and copper are present in the drilled portion of the Solidaridad Property. This five acre area drilled in 2008 represents approximately 0.00135% of the Solidaridad Property (the "Explored Area"), meaning approximately 99.965% of the Solidaridad Property remains unexplored (the "Unexplored Area").

Based on the results of the 2008 drilling campaign, the Company's Board of Directors decided that a second phase of drilling was appropriate to understand more about the mineral occurrence within the concessions. The second phase was initiated in April 2010 with plans to drill an additional 10,000 meters. We completed 11 additional drill holes or approximately 3,000 meters in the 2010 drilling campaign. Our drilling program was reduced due to lack of funds at the time. Our drilling focused on defining the previously discovered mineralized zones from 2008 and expanding to new areas and targets that met specific guidelines. This approach has resulted in the discovery of additional zones of mineralized material. Of the 11 drill holes, we believe that 2 important drill holes (intercepts) changed our drilling strategy for our next drilling campaign. One drill hole located approximately 200 meters south of the Main Zone and referred to as the "Southern Extension," intersected a 3 meter section of sulfide ore approximately 600 feet below the valley floor. Previous drilling was not conducted at these depths. A second core hole was drilled between the North Zone identified by MIM and the Main Zone to investigate whether these two zones (approximately 1 kilometer apart) are connected at depth. Mineralized material was intersected in the second hole but additional drilling is required to define the mineralized zone that possibly connects the North Zone and Main Zone. The results of the 2010 drilling campaign further indicate that gold, silver and copper are present on a portion of the Solidaridad Property, and that additional exploration on the property is warranted.

As mentioned, we have completed a total of twenty five drill holes. Of the total, five holes did not show significant mineralization. As part of our core drilling program approximately 7,300 meters of core were produced. The core was sent to our laboratory in Morelia where the core was logged in detail and mineralized intercepts are sawed and sampled. These processed samples are then shipped to ALS Chemex Laboratory in Guadalajara, Mexico, where the core is crushed, pulverized, and split with a small sample shipped to an ALS Chemex facility in Vancouver, Canada. Subsequently, ALS Chemex provided the core log and assay results to us. We complied the information and then plotted on cross sections allowing our geological staff to interpret the ore zones, stratigraphy, structural components, which provides invaluable information for additional drill targets

The map below depicts the drill hole locations for the 2008, 2010 and 2015 drilling programs.

During fiscal 2010 and 2011,, we have been unable to raise sufficient funds to complete the entire proposed 2010 drilling program. Our management believes that our property is highly prospective and will continue to invest resources into the exploration of the Solidaridad Property. Subject to the availability of funds, we expect to further define through surface exploration and additional drilling the mineral potential of the Explored Area, as well as determine whether the Unexplored Area contains mineralized material. Proposed future exploration would include mapping and sampling of the Unexplored Area designed to increase our understanding of any mineralized material present. To help us determine future drill locations, we would enter data about our current samples into a computer modeling program. We currently expect to focus our future exploration and drilling program on three areas, which we refer to as the Main Zone, the North Zone and Cuendeo. We have identified these three areas based on a number of data points, including surface samples taken during 2008. In addition, additional potential locations were identified from the results of our satellite imagery. However, we may need to conduct further exploration and field mapping, which will include the results of geophysical ground studies (discussed below), before we finalize our decisions as to target locations.

Our proposed exploration and drilling strategy has two components: (i) definition drilling designed to increase our understanding of any mineralized material to include a resource estimate located on the Explored Area; and (ii) exploratory drilling on targets generated by field mapping, soil surveys and stream sediment surveys on the Unexplored Area.

We also may engage mining professionals as consultants and/or employees to survey the property, apply industry standard methodologies and to develop and implement a business plan appropriate for the size of the Solidaridad Property as well as any mineralized material identified during the exploration process. We cannot predict the results of our efforts, however our technical team is confident that there are numerous areas with a high probability for in-situ mineralization because of the superior assay results from samples taken from the dry washes and outcrops.

Satellite Imagery, FSPEF/VERS and Future Exploration/Exploitation.

On May 22, 2013, we entered into a Mining Services Agreement with Mesa Acquisitions Group, LLC, a Florida limited liability company ("Mesa Acquisitions"), in association with Alba Petroleos De El Salvador Sem De CV, a Venezuelan company. Under the agreement, Mesa Acquisition has agreed to perform certain mining services on a portion of the Company's Mexican mining concessions (See "Mining Services Agreement of this Part 1 below" and "Item 7 Management's Discussion And Analysis Of Financial Condition And Results Of Operations – Mining Services Agreement").

In connection with Phase I of the Mining Services Agreement ("MSA"), Mesa Acquisition commissioned and completed a high spectrum UV laser satellite imaging of approximately 2,000 acres of our property, mainly in Solidaridad I and parts of Solidaridad II and III. The technology was developed in Ukraine and carried out by Consorcio de Tecnologias Avanzadas de Columbia Ltda (CTAC). The satellite imaging, initially using a 1:6000 resolution, identified 27 anomalies of gold mineralization. The satellite imaging data subsequently was re-run using a using a 1:2000 resolution and resulted in identifying a total of 71 anomalies. In June 2014, Mesa Acquisitions partially completed the ground work or second part of Phase I under the MSA of identifying and defining mineralization previously depicted by satellite imagery. The ground work consisted of two specific geophysical techniques; "Forming Short-Pulsed Electromagnetic Fields" (FSPEF) and "Vertical Electric-Resonance Sounding" (VERS). An 8 person ground crew worked on site for a total of 15 days, taking 210 readings on 70 kilometers of lines, concentrating mainly on the 71 identified satellite imagery anomalies. In addition, the geophysical survey was significantly expanded to include areas well outside the original contracted area. These areas included terrain in the north where sulfide veins occur on the surface, to the east where higher grade anomalies were detected and to the south in an area known as Cuendeo, which has received limited exploration work in prior years.

Prefeasibility and Feasibility Study

We believe a more comprehensive understanding of the estimated mineralized material on the property and a Prefeasibility Study, followed by a Feasibility Study, would allow the Company more options as we look to monetize the value of the mineralized materials. The Prefeasibility Study is an industry standard report that would assess our estimates of mineralized material by evaluating and analyzing the core, assay results, maps, ore calculations, metallurgical testing and geologic data against accepted standards. This study will substantiate or question the validity of our exploration data. If our data is substantiated and we have sufficient funding, we currently plan to move toward producing a Feasibility Study. A Feasibility Study would analyze the potential economics of exploiting the mineralized material from the Solidaridad Property, the infrastructure necessary to mine and produce metals, the available markets for the metals, the taxation requirements and the environmental and socio-economic impact for the State of Michoacán, Mexico. We believe this study would provide sufficient information about the potential value and exploitability of the mineralized material to assist us in determining whether we could seek bank financing or additional debt or equity investment through the public markets and on what terms.

We have determined there is sufficient access to and from the Solidaridad Property as well as between the Solidaridad Property and regional ports, although we will have to develop additional infrastructure in order to access the entire Solidaridad Property and to engage in meaningful exploration and drilling. There is currently limited or no infrastructure on the Solidaridad Property. Additional information on the necessary infrastructure for the Solidaridad Property will be determined through development of our mining activities. We believe that in Morelia, which is the city closest to the Solidaridad Property, we will have sufficient access to personnel and supplies to support our expanded exploration and drilling operations as well as our planned exploitation program. During the current drilling campaign, we drilled two water wells on our property. The water level in drill holes fluctuate but we believe that water may lie relatively close to the surface. The local climate is conducive to year-round operations and is not expected to pose any significant barriers to our exploration and drilling program or our planned exploitation program. During 2010, a heavy rainfall washed out access roads to the claim sites and created water drainage problems, therefore we made road improvements to allow access to the sites. We have made limited road improvements to address the water drainage problems included creating some concrete drainage ditches and water sumps. We will need to build more roads to access other areas targeted for exploration and drilling. We will need additional funding to complete these roads and drill paths moving forward.

If we raise sufficient funds to complete an on-site metallurgical laboratory, we expect to transition our metallurgical testing of the ore from outside laboratories to an on-site laboratory. We have a limited laboratory in Morelia that includes two pilot plants. Additional laboratory equipment is necessary to complete the Lab.

In June 2011, we completed a Technical Report on its mining property located in Michoacán, Mexico ("Technical Report"). The Technical Report is entitled PRECIOUS AND BASE METALS DEPOSIT AT LA SABILA RANCH IN SOUTHERN MICHOACAN, MEXICO. The Technical Report has been authored jointly as Qualified Persons by Michael Floersch of Applied Minerals, Inc., Thompson Falls, Montana and Betty Gibbs of Gibbs Associates, Boulder, Colorado. The Company believes that the Technical Report is compliant with National Instrument 43-101–Standards of Disclosure for Mineral Projects implemented by the Canadian Securities Administrators, however, the Company has not filed its report with any Canadian authority to determine compliance. Moreover, the Technical Report has not been reviewed and/or accepted by any Canadian or US regulatory authority. Please refer to the Company Form 8-K filed on June 9, 2011 or to the Company's website for a complete copy of the Technical Report (usprgold.com).

Current Exploration Activities

In March 2015, we hired ACT Holdings, LLC, (ACT), Kings Mountain, North Carolina to act as operator for the Company's 2015 core drilling program. Pursuant to the drilling program we completed approximately 4,000 meters of drilling over 27 holes.

Based upon data from the initial 22 drill holes that have been cored and assayed, USPR has identified 1 new area of mineralization and expanded 3 areas of known mineralization. The new area is approximately 100 meters east of the "Main Zone," and called the "East Zone." Definitional drilling also extended known mineralization in the "Main Zone," "West Zone" and the "Northwest Zone."

Please refer to the attached a map which depicts various zones of interest on approximately 120 acres of USPR's 37,000 acre concession, www.usprgold.com/exploration/maps.

The following is a brief description of 4 of the zones referenced above within the 120 acres and the location of the 27 holes.

Main Zone. [2008: 11 holes, 2010: 1 hole, 2015: 12 holes completed (#9, 13-15,19-23, 25, 26 & 27)] This area has been the subject of the most exploration work on our property to date. Prior drill results showed strong mineralization within quartz sulfide veins. In 2008, hole #5 had high grade intercepts of 29 g/t Au and 135 g/t Ag. Our 2015 campaign, continued, if not, exceeded, our 2008 campaign with high grade intercepts ranging from 13 to 50 g/t Au and 2-3% Cu (1).

Northwest Zone: [2010: 3 holes, 2015: 7 holes (#1-7)] In 2010, we did not encounter high grade intercepts in this zone. During our recent campaign, we had intercepts as high as 39 g/t Au and 2-3% Cu (1). Previously, we believed the "North Zone" was separated from the "Main Zone" by a fault because of the orientation of the quartz sulfide veins exposed on the surface. However, our recent drilling results lead us to conclude that this mineralized zone appears to be connected with the "Main Zone." This area is located approximately 220 meters from the closest point of the "Main Zone."

East Zone: [2015: 4 holes (#14-18 & 24)] We were unable to reach this area in prior drilling campaigns due to the lack of accessibility. New road construction during the recent drilling campaign allowed access to this area. We had intercepts as high as 25.56 Au and 129 Ag 7.97 % Cu (1). This area has been of interest due to exposed quartz sulfide veins of approximately 20 meters. This area is located approximately 300 meters south and east of the closest point in the "Main Zone."

West Zone: [2008: 3 holes, 2015: 4 holes (#8-12)] In 2008, we encountered exceptionally high grade silver intercepts, as high as 123 g/t Ag. Our recent drilling was north of the 2008 locations. LS-15-011 was significant as it intercepted 10 feet of high grade copper and silver with a weighted average over 3.4 meters of 431 g/t Ag (1). This area is approximately 300 meters from the closest point in the Main Zone.

(1) Please refer to a complete description of our 2015 drilling results for holes 1 through 22 at the following link on our webs-site: http://www.usprgold.com/exploration/assays-2015-drill-campaign-results.

The purpose of the 2015 campaign was to expand known areas of mineralization from prior drilling, which in turn would enable USPR to complete a resource estimate of mineralization. Prior to our recent drilling, we did not have sufficient information to make a geologic connection of the Northwest, East and West Zones to the Main Zones. The recent drilling, however, has yielded geologic characteristics in Northwest, East and West Zones, which are similar in nature to that of the "Main Zone." These characteristics lead us to reasonably conclude that there appears to be a geologic continuity between Northwest, East and West Zones to the "Main Zone." In addition, based upon results from 2010, management believes the same geologic continuity exists between the "Main Zone" and the "Southern Zone" (Please refer to Contour Map of Zones of Interest on our web-site- www.usprgold.com/exploration/maps).

Company Background

We were incorporated in the State of Delaware on January 21, 1998 as a wholly owned subsidiary of American International Ventures, Inc. ("American International"). On May 9, 2002, the board of directors of American International declared a dividend, in the form of our common stock to be issued to its shareholders of record on such date. On the record date of such dividend, American International had 274 shareholders of record. The ratio of common shares of the Company received by each American International shareholder was one share of Company common stock for each 10 shares of American International common stock held by such record owner. On or about June 10, 2004, a total of 1,961,184 shares of common stock were issued to the shareholders of American International on the record date. These shares represented all of the issued and outstanding capital stock of the Company on such date. American International did not retain any shares of our common stock.

In March 2002, we entered into an oral arrangement with the owners of a mining property located in Mexico known locally as the Solidaridad mining claims. At the time, little geological information was known about the property to American International other than information collected by local residents. Based upon available information, the board of directors of American International determined that they were more interested in identifying mineral properties in the United States that had proven or probable resources, and were not interested in properties outside the United States requiring significant exploration work. Consequently, the board of directors of American International determined to separate the two companies by declaring the stock dividend discussed above so that each company could focus exclusively on it respective business.

On March 5, 2003, we formed our Mexican Subsidiary. Virtually all of our activities take place in Mexico through our Mexican Subsidiary.

Employees

Our directors and officers devote such time and attention as is required to the business and affairs of the Company. In the US we currently retain two consultants on a full time basis, one of which is a director and four consultants on a part time basis, two of which are directors. We also employ three Mexican nationals as permanent, full time employees of the Mexican Subsidiary

Competitive Business Conditions

The exploration for, and the acquisition of gold, silver and copper properties, are subject to intense competition. Due to our limited capital and personnel, we are at a competitive disadvantage compared to other companies with regard to exploration and, if warranted, development of the Solidaridad Property. Our present limited funding means that we are currently unable to compete for additional properties to be explored and developed. We believe the competition in our sector will continue to be intense in the future, including the competition for funding.

The availability of funds for exploration is sometimes limited, and we may find it difficult to compete with larger and well established companies for capital. Our inability to develop the Solidaridad Property due to a lack of funding, even if such development is warranted, would have a material adverse effect on our operations and financial position.

Governmental Regulations and Permits

In connection with our mining and business activities in Mexico, we must comply with all regulations, rules and directives imposed by the Mexican government. We are subject to extensive Mexican federal, state and local laws and regulations governing the protection of the environment, including laws and regulations relating to protection of air and water quality, hazardous waste management and mine reclamation as well as protection of endangered or threatened species. The department responsible for environmental protection in Mexico is SEMARNAT, which is similar to the United States Environmental Protection Agency. SEMARNAT has broad authority to shut down and/or levy fines against facilities that do not comply with its environmental regulations or standards. Potential areas of environmental consideration for mining companies, including ours if we are successful in commencing mining operations, include, but are not limited to, acid rock drainage, cyanide containment and handling, contamination of water courses, dust and noise.

Prior to the commencement of any exploitation program, we will secure various regulatory permits from federal, state and local agencies. These government and regulatory permits generally govern the processes being used to operate, the stipulations concerning air quality and water issues, and the plans and obligations for reclamation of the properties at the conclusion of operations. Regulations require that an environmental impact statement, known in Mexico as a Manifiestacion de Impacto Ambiental ("MIA"), be prepared by a third-party contractor for submission to SEMARNAT. Studies required to support the MIA include a detailed analysis of the following areas, among others: soil, water, vegetation, wildlife, cultural resources and socio-economic impacts. The Company's has prepared an application for a new exploitation permit, which includes an MIA. The application has been reviewed by the University of Michoacán. We anticipate that the new application will be submitted to SEMARNAT on or before September 30, 2015. The new application encompasses approximately 56 hectares.

We will obtain at the appropriate time the necessary environmental permits, licenses or approvals required for our operations. We are not aware of any material violation of environmental permits, licenses or approvals issued with respect to our operations.

Likewise, we must comply with all mining regulations imposed by the Mexican government, including the periodic filing of reports disclosing prospecting efforts, drilling and property upgrades such as water wells, and road improvement, and the payment of surface taxes with respect to our mining concessions. The department responsible for all mining activities is the Ministry of Economy through its General Mining Bureau Direcciуn General de Minas. The General Mining Bureau issues all mining permits, licenses and approvals required with respect to mining concessions. All mining companies, agreements, resolutions and other rights and obligations related to mining concessions have to be recorded before the Public Registry of Mining Registro Publico de Mineria. We are not aware of any material violation of mining regulations, permits, licenses or approvals issued with respect to our mining concessions.

In connection with our business activities in Mexico, under Mexican law, all Mexican corporations in which foreign investors participate as shareholders, regardless of the amount of the investment, must be registered before the National Registry of Foreign Investment Registro Nacional de Inversiones Extranjeras ("NRFI") and shall comply with the periodical obligations and filings provided by the Foreign Investment Law Ley de Inversiуn Extranjera ("FIL"). We have registered our Mexican Subsidiary before the NRFI and complied with all obligations under the FIL. In addition, Mexican law imposes certain corporate obligations to all Mexican companies under the General Law of Commercial Companies Ley General de Sociedades Mercantiles and our Mexican Subsidiary is in compliance of all its corporate obligations imposed by such law.

Because we have employees in Mexico, we are also subject to regulations affecting employee pay, benefits and the like. These laws are different in Mexico than they are in the U.S. and can be more costly to the Company.

Transactions with Resource Technology Corp.

On May 20, 2013, the Company filed a Form 8-K to disclose the Share Exchange Agreement with Resource Technology Corp., a newly formed Florida corporation ("RTC") and the RTC shareholders ("Share Exchange Agreement") to acquire all of the issued and outstanding shares of RTC in exchange for 300 million shares of common stock of the Company, subject to the terms and conditions therein. This agreement was terminated ab initio and superseded by the Restructuring Agreement and related agreements and instruments described herein below. In addition, as described below, we rescinded the Restructuring Agreement and cancelled the preferred stock that was originally issued under the agreement. On August 8, 2015, RTC filed suit against us with respect to the termination of the Restructuring Agreement and cancellation of the preferred stock (See "Item 3 – Legal Proceedings").

While the Share Exchange Agreement and related transactions are generally described below, please refer to the stated Form 8-K for a more complete description of the stated transaction.

The transaction included three ore supply contracts with third party suppliers, and a Plasmafication™ Toll Processing Agreement with Plasma Processing, LP., a Florida limited partnership ("PP LP"). The ore supply agreements and the Toll Processing Agreement enabled RTC to receive 1/3rd of the revenues derived from the plasma processing of ore concentrates from the ore supply agreements. PP LP owned the right to operate a plasma processing facility located in 29 Palms, California, We were informed that the plant took three years to build and was permitted to process ore concentrate. The parties believed that initial upgrades to the facility would commence within 90 to 120 days from the date of the agreement which would enable the facility to process concentrates at the rate of approximately 9 tons/day. PP LP expected to make further upgrades to the facility, which would increase its capacity to approximately 27 tons/day. PP LP guaranteed a benchmark run of 5 tons/day for 20 consecutive days ("Benchmark Run") with a minimum value of $50,000 (net to RTC) per ton using the RTC concentrate (or a total of $5,000,000 in net proceeds to RTC) from the existing ore supply contracts. The agreement provided that if the Benchmark Run did not yield net cash proceeds of Five Million Dollars ($5,000,000) to RTC, then the number of Exchange Shares in total wiould be proportionately reduced. The completion date for the Benchmark Run was June 1, 2014.

We were informed that the RTC shareholders were Wolz International, LLC ("Wolz"), which owned 50%, Titan Productions, Inc. ("Titan"), which owned 25%, and Mercury6, LP ("Mercury6") which owned 25%. Assuming a completion of the transaction without further proportionate reduction in the USPR Shares, Wolz, Titan and Mercury would have received a proportionate amount of the 300 million shares of our common stock. We were informed that Mr. Gennaro Pane, our former Chairman and Chief Executive Officer, was the sole officer and member of Wolz (and would have owned approximately 51% of such shares), and Chad Altieri, our former Board member, was the sole owner of Mercury. In addition, we were informed that Messrs Pane and Altieri owned or controlled limited partnership interests in PP LP.

The Share Exchange Agreement was approved by an independent committee of Directors, subject however to shareholder approval. In addition to normal closing conditions, the Company would have been required to obtain shareholder approval of the transaction, as well as shareholder approval to an increase in its authorized shares necessary to complete the transaction. No approval was obtained as this Agreement was terminated and replaced by Restructuring Agreement (described below).

On January 30, 2014, the Company entered into a Restructuring Agreement with RTC, the RTC Shareholders, and Plasmafication Technology Holding, LLC, a Florida limited liability company ("PTH"). PTH was an affiliate of RTC and owned and operated a plasma processing plant located in 29 Palms, California which employed the Plasmafication™ technology ("Plasma Plant").

The Restructuring Agreement and related agreements and instruments provide for the following material terms and conditions, among others:

Processing Rights. Under the Restructuring Agreement, PTH agreed to process the Company's ore concentrate¹ at its Plasma Plant five (5) days per month for each month during a term agreed by the parties. The term begins with the date that the Plasma Plant was ready to commence commercial operations at the processing rate of 5 tons/day and terminating on the date that the Company Plasma Facility (defined below) was fully permitted and ready to commence commercial operations at a processing rate of 10 tons/day. PTH informed the Company that it expected to be fully operational during the fourth calendar quarter of 2014. The Company has agreed to pay its ratable share of PTH overhead and direct costs as set forth in the agreement, and apart from the foregoing, PTH would not receive any royalty or other fee.

Licensing Rights. Under the Technology Licensing Agreement, PTH granted the Company a non-exclusive, royalty free license to use PTH's Plasmafication™ technology for a term of 25 years. The technology covered and related to the construction and use of a Company owned plasma plant described below. The Licensing Agreementwas subject to other customary terms and conditions.

Construction of a Company Owned Plasma Plant. Under the Equipment Purchase Agreement, PTH agreed to construct, on behalf of the Company, a 10 ton/day plasma processing plant on its premises located in 29 Palms, California ("Company Facility"). The plant was to be constructed on an actual costs basis without markup by PTH, and PTH also has agreed to pay for 1/3^rd of the construction costs. The estimated costs of construction for the Company Facility was approximately $18 million. The parties intended to formulate a draw schedule which would detail construction and payment milestones, however, in order to initiate the construction process, the Company would be required to pay a down payment of $1.5 million. In addition to other terms and conditions therein, PTH agreed to assist in obtaining the necessary Federal, state and local permits and licenses to construct and operate the Company Plasma facility, however, the Company would be required to bear the related costs. Upon completion of the facility, the Company would own 100% of the Company Facility, however, any Licensed Technical Information would be subject to the Licensing Agreement. In addition, the parties would be required to enter into a operating and maintenance agreement, which would address the operation and maintenance of the Company Owned Plasma Plant.

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¹At the present time, the Company does not have any reserves indicating ore or "mineralized material."

Promissory Note. As a material inducement for the Company to enter into the Restructuring Agreement, PTH has delivered to the Company a Promissory Note in the principal amount is $5 million. The note was payable on or before January 30, 2015 with no interest prior to the payment due date. The promissory note may be offset under certain conditions set forth therein.

Preferred Stock and Certificate of Designation. The Company issued to RTC 1,250,000 shares of its newly created Class A Super Voting Preferred Stock ("Preferred Stock"). Each share of the Preferred Stock has identical rights as 100 shares of the Company's common stock. These rights, privileges and preferences include among others; (i) each share of Preferred Stock shall have 100 to 1 voting rights, voting along with the Company's common stock, (ii) each share of Preferred Stock shall have 100 to 1 rights upon liquidation and distribution of the Company, (iii) each share of Preferred Stock shall have the right to convert into 100 shares of common stock of the company.

In addition, under the Restructuring Agreement, the Company and RTC and its shareholders granted mutual releases, and provided customary representations and warranties. The share exchange agreement was adopted by the unanimous consent of the Board of Directors of; the Company, RTC, each of the RTC shareholders and PTH. All of the shareholders of RTC were signatories to the agreement.

As mention above, the Company was informed that the RTC shareholders were Wolz International, LLC ("Wolz") owning 50% of RTC, Titan Productions, Inc. ("Titan") owning 25% of RTC, and Mercury6, LP ("Mercury6") owning 25% of RTC. Assuming the issuance of the Preferred Stock to its shareholders, Wolz would have received 625,000 shares of Preferred Stock convertible into 62.5 million shares of common stock, and each of Titan and Mercury would have received 312,500 shares of Preferred Stock convertible into 31.5 million shares of common stock. We were informed that Mr. Gennaro Pane, our former Chairman and Chief Executive Officer, was the sole officer of Wolz and owned approximately 51% of Wolz, and Chad Altieri, our former Board member, was the sole officer and owner of Mercury. In addition, we were informed that Mr. Pane was a managing member of PTH and Messrs Pane and Altieri owned or controlled approximately 20% and 8%, respectively of PTH.

The above descriptions of the Restructuring Agreement, the Licensing Agreement, the Equipment Purchase Agreement, the Promissory Note and the Certificate of Designations are not complete, and are qualified in their entirety by reference to each respective agreement which are filed as Exhibits to this Form 8-K filed on February 5, 2014.

The Plasma Plant and Plasmafication™.

It was represented to us that PTH owned and operated a plasma processing facility located in 29 Palms, California, the plant took three years to build, was permitted to process ore concentrate and had been in the process of upgrading the plasma facility to process concentrates at the rate of approximately 10 tons/day. PTH has informed us the Company that they expect to be fully operational during the third calendar quarter of 2014.

Plasmafication™ or plasma processing employs extreme temperatures (in excess of 7,000 F) to dissociate ore concentrates into their basic elemental state. Plasmafication™ is unique to the mining industry, and the parties believe that this process will yield significantly greater processing returns than milling processes currently employed in the mining industry. Current milling methods will recover the desired mineral down to a certain particle size (ie 300 or 600 mesh) based on the parameters of the existing machinery. However, conventional processes are not highly effective in recovering precious metals from highly complex ore structures. The high temperatures of plasma processing separate the metals from the substrate and turns organics from a solid to a gas. The metalloid fractions are then sent through a hydraulic cooling system to produce dore pellets. Secondary and tertiary processing is then applied to further recover and refine the desired precious metal constituents.

Termination of Agreement with RTC and PTH

PTH failed to pay the $5 million due under the Promissory Note. The failure of RTC constituted a material breach to the Restructuring Agreement. As a result of that breach, along with other factors, the Company rescinded the Restructuring Agreement and cancelled the Preferred Stock, including all rights, privileges and preferences thereto. On May 12, 2015 and again on May 14, 2015, the Company notified RTC that it has rescinded the Restructuring Agreement and cancelled the Preferred Stock, including all rights, privileges and preferences thereto, effective immediately. The Company provided a similar notification to PTH cancelling the Restructuring Agreement and related agreements with PTH.

On May 15, 2015, the Company received notification from an attorney at law acting as the custodian for RTC requesting the conversion of the Preferred Stock into 125 million shares of common stock of the Company. The Company's position is that RTC has no rights to the Preferred Stock and the Company will take no action with respect to the purported conversion notice from RTC.

The Company undertook the above-described actions unilaterally and these actions were not the product of a negotiated settlement between the Company and the counterparties to the Restructuring Agreement, including RTC. As described below, RTC has filed a lawsuit against us. Shareholders should be aware that the cost of litigation may prove expensive and, in this regard, the Company will be required to raise additional funds, which may result in significant dilution to existing shareholders.

Lawsuit with RTC

As discussed in "Item 3 – Legal Proceedings" below, on August 8, 2015, we were served with a lawsuit by Resource Technology Corporation ("RTC"). Please refer to that disclosure for a complete description of this matter.

ITEM 1A. RISK FACTORS

RISKS RELATING TO OUR COMPANY

Our business, exploration results and financial condition are subject to various risks and uncertainties, including, without limitation, those set forth below, any one of which could cause a material reduction in the value of our Company or our ability to raise capital or cause our ability to operate in accordance with our current business plan to vary materially and adversely from recent results or from our anticipated future results. An investment in our securities is highly speculative and involves an extremely high degree of risk. Therefore, you should thoroughly consider the risk factors discussed below and elsewhere in this Annual Report before purchasing our securities. You should understand that you may lose all or part of your investment. No person should consider investing who cannot afford to lose their entire investment or who is in any significant way dependent upon the funds that they are investing. The risk factors contained herein are not meant to be exhaustive.

WE ARE AN EXPLORATION STAGE COMPANY WITH LIMITED OPERATING HISTORY

We are an exploration stage company with limited operating history. These two factors make it impossible to reliably predict future growth and operating results. Accordingly, we are subject to all the risks and uncertainties which are characteristic of a relatively new business enterprise, including the substantial problems, expenses and other difficulties typically encountered in the course of its business, in addition to normal business risks. We face a high risk of business failure because we have commenced extremely limited business operations and have no revenues. We were organized in 1998, have not earned any revenues as of the date of this Annual Report and have had only losses since our inception. We expect to continue to incur losses well into the future. Our activities to date have been limited to organizational efforts, including fundraising, acquiring the Solidaridad Concessions (as defined below), and conducting limited exploration on a small portion of the Solidaridad Property. There is no history upon which to base any assumption as to the likelihood that our business will be successful, and there can be no assurance that we will be able to raise sufficient capital to begin operations, that we will generate significant operating revenues in the future or that we will ever be able to achieve profitable operations in the future. We face all of the risks commonly encountered by other businesses that lack an established operating history, including, but not limited to, the need for additional capital and personnel, and intense competition.

OUR COMPANY HAS LIMITED OPERATING HISTORY MAKING AN EVALUATION OF THE COMPANY DIFFICULT.

The Company has only had limited operations to date and requires additional financing for working capital, exploration and mining initiatives, including additional exploration on the Solidaridad Property. While the results of prior geological studies and prior drilling results appear to be promising along with our recent satellite imaging, nonetheless it may be difficult for the Company to attract funding necessary to conduct additional exploration activities on the property. The Company cannot predict whether any future exploration activities will be successful. Moreover, no assurances can be given that, even with a capital infusion, the Company will be able to successfully and profitably develop the Solidaridad Property.

OUR AUDITORS HAVE EXPRESSED A GOING CONCERN OPINION

As shown in the accompanying financial statements, we have experienced continuing losses and as at May 31, 2015, have a working capital deficit of $6,585,059, accumulated losses of $55,978,765 recurring negative cash flows from operations and presently do not have sufficient resources to meet our outstanding liabilities or accomplish our objectives during the next twelve months. Accordingly, the opinion of our auditors for the years ended May 31, 2015 and 2014 is qualified and subject to uncertainty as to whether we will be able to continue as a going concern. This may negatively impact our ability to obtain additional funding that we may require or to do so on terms attractive to us and may negatively impact the market price of our stock.

CURRENT FINANCIAL CONDITION AND SHORTFALL OF FUNDING

Our independent registered public accounting firm's report to our audited financial statements for the fiscal year ended May 31, 2015, indicates there are a number of factors that raise substantial doubt about our ability to continue as a going concern, including the amount of our past due convertible note obligations $1,068,925 and approximately $90,000 due to a former attorney under an arbitration award against us, which collectively total $1,158,925. If we are unable to pay our outstanding debt and continue our exploration and drilling program, it is likely that we will go out of business and our investors will lose all of their investments. We currently have minimal operations and are not generating any revenues.

Pursuit of the Company's business plan is dependent upon obtaining sufficient funding to support such plan. If we do not obtain sufficient funding, our business will fail. Our current operating funds are insufficient to pay down our debt, complete our planned exploration of the Solidaridad Property or begin a limited exploitation program. Therefore, we will need to obtain additional funding in order to implement our business plan. There is no guarantee that such funding will be available on terms acceptable to us or at all. Additionally, even if we are able to obtain sufficient funding, there can be no assurance that we will be able to successfully implement our plan or that unanticipated expenses, problems or difficulties will not occur which would result in material delays in its implementation.

Our current business plan contemplates that we will incur significant expenses in connection with the exploration and, if warranted, exploitation of the Solidaridad Property. We do not currently have sufficient funds to continue our exploration and drilling program or to commence a small scale exploitation program on the Solidaridad Property. We will require additional funding even to continue our limited mining activities. We will also require additional funding if the costs of our exploration or exploitation, if any, on the Solidaridad Property are greater than anticipated.

We will require additional funding to sustain our business operations. We do not currently have any arrangements for funding and we can provide no assurance to investors that we will be able to find such funding on terms acceptable to us or at all. Obtaining additional funding would be subject to a number of factors, including, without limitation, the market prices for copper, silver and gold, investor acceptance of our business plan, the credibility of our exploration results, investor confidence and interest in our sector generally and our Company in particular and general market conditions. These factors may make the timing, amount, terms or conditions of additional funding unavailable to us.

SIGNIFICANT DEBT OBLIGATIONS

As of May 31, 2015, we have significant current debt obligations. The amount includes $1,068,925 in obligations resulting from the issuance of convertible debt instruments during 2009 and 2010 all of which are past due. A further balance of convertible debt instruments totaling $1,746,337 is due and payable, $1,485,448 within the next 12 months and the balance of $260,889 within the next two years. As of the date of this report, we do not have the funds available to repay this debt as it falls due.

DILUTION AND VOLATILITY RESULTING FROM OUR FUND RAISING EFFORTS

Since May 31, 2011, management was successful in raising sufficient funds to enable it to continue to meet its operating needs. However, we have incurred significant dilution as a result of these fund raising efforts, which has included debt instruments that convert at a discount to the market price (see Notes 6 and 11 to our Audited Financial Statements). In the future, we will be required to raise significant additional funding to meet our existing obligations and to continue with our proposed operations. As a result, we expect to incur significant dilution to our existing shareholders in the future, which also may cause downward pressure on our stock price.

WE DO NOT EXPECT TO GENERATE REVENUES

We are an exploration stage company. We cannot guarantee that we produce any significant revenues from such agreement or any other operations on our property. Therefore, it is conceivable that we will continue to incur increased operating expenses into the foreseeable future without realizing any revenues.

RELIANCE ON THIRD PARTY FOR EXPLORATION/DEVELOPMENT EFFORTS

On May 22, 2013, we entered into a Mining Services Agreement with Mesa Acquisitions Group, LLC, a Florida limited liability company ("Contractor"), in association with Alba Petroleos De El Salvador Sem De CV, a Venezuelan company. The agreement provides for the exploration and potential development of a portion of our Solidaridad Property by the Contractor, subject to certain conditions, including the results of the satellite imaging to be conducted. (See "Item 7 Management's Discussion And Analysis Of Financial Condition And Results Of Operations – Recent Events"). Notwithstanding the positive results of the satellite imaging program, the Contractor's inability to proceed with the further exploration and/or development of our mining property as required under our agreement for any reason, including financial, will have a negative impact on us and our operations. As of the date of this filing, however, the Contractor performed the satellite imaging and a portion of the ground survey, however, he has not performed any further services under the agreement or otherwise.

THE EXPLORATION INDUSTRY IS CAPITAL INTENSIVE AND HIGH RISK

The industry within which the Company expects to engage in is historically capital intensive and of high risk. The Company's ability to achieve profitable operations will be dependent upon many factors, including its ability to raise sufficient capital to explore the Solidaridad Property and ability to discover viable and economic mineralized material. The ability to discover such mineralized materials are subject to numerous factors, most of which are beyond the Company's control and are not predictable. Exploration for gold is speculative in nature, involves many risks and is frequently unsuccessful. Any exploration program entails risks relating to:

- The ability to discover economic ore deposits;

- The subsurface location of economic ore deposits;

- The development of appropriate metallurgical processes;

- The receipt of necessary governmental approval; and

- The construction of mining and processing facilities at any site chosen for mining.

In addition, the commercial viability of a mineral deposit is dependent on a number of factors including:

- The current market price of the respective commodities;

- Exchange rates among the various countries, such as the United States, Mexico and any third party purchaser; and

- The particular attributes of the deposit, such as its size, grade and proximity to infrastructure, financing costs, taxation, royalties, land tenure, land use, water use, power use, importing and exporting, and environmental protection.

The effect of these factors cannot be accurately predicted, and the occurrence of any one or more factors could have a material adverse impact on the Company and its proposed operations.

LIMITED GEOLOGICAL WORK HAS BEEN CONDUCTED ON EXISTING MINING CLAIMS THEREFORE THE COMPANY DOES NOT HAVE EVIDENCE THAT ECONOMIC RESOURCES EXIST ON THE PROPERTY

The Company has conducted limited geological work on the Solidaridad Property. The work consisted of preliminary geological sampling and surveys performed by two independent mining geologists. In June 2011, we completed a Technical Report on its mining property located in Michoacán, Mexico ("Technical Report"). The Technical Report discloses certain technical information about the Company's mineral project. As a result of our recent drilling campaign, we believe that we have sufficient information to supplement our Technical Report to include a resource estimate. However, we will require additional exploration on our property in the future to enhance any resource estimate. In addition, through prefeasibility and feasibility studies, we will have to determine whether these resources estimates are economically recoverable. The amount and cost of such exploration work and studies cannot be determined at this time. No assurances can be given whether such mineral deposits are recoverable in commercial quantities and whether the Company will be able to raise additional capital to conduct the additional exploration activities or studies, or that such additional activities will prove successful.

THE SPECULATIVE PRICES OF GOLD, SILVER, AND COPPER MAY ADVERSELY IMPACT COMMERCIALIZATION EFFORTS

As stated above, exploration and production is highly speculative and involves numerous natural risks that may not be overcome by knowledge and experience. In particular, even if the Company is successful in identifying gold, silver, or copper deposits, for which no assurances can be given, the commercialization will be dependent upon the existing market price for gold, silver, or copper, among other factors. The market price of gold, silver, and copper has historically been unpredictable, and subject to wide fluctuations. The decline in the price of gold, silver, or copper could render a discovered property uneconomic for unpredictable periods of time.

THE MINERAL EXPLORATION INDUSTRY IS SUBJECT TO NUMEROUS REGULATIONS WHICH MAY ADVERSELY IMPACT OUR MINING EFFORTS

The mineral exploration and mining industry is subject to numerous statutory and regulatory requirements and controls at various governmental levels. Regulations can impact the manner and methodology of mining activities undertaken by the Company. The impact of such regulations cannot be predicted, and may cause unexpected delays, and/or become cost prohibitive, thereby rendering any prospect uneconomic.

The legal and regulatory environment that pertains to the mining industry is uncertain and may change. Uncertainty and new regulations could increase our operating costs and prevent us from exploring and drilling for mineralized material and developing the Solidaridad Property, even if we determine such development is warranted. In addition to new laws and regulations being adopted, existing laws may be applied to mining operations that have not yet been so applied. Any such new laws may increase our operating costs which could have a material adverse effect on our results of operations and financial condition. Changes in regulatory policy could also have a material adverse effect on our exploration and future production activities. Any changes in government policy may result in changes to laws affecting, without limitation:

- ownership of our concessions;

- land tenure;

- development of infrastructure;

- mining policies;

- monetary policies;

- taxation;

- rates of exchange;

- environmental regulations; and/or labor relations.

Any such changes may affect our ability to continue our exploration and drilling program, to undertake mining operations with respect to the Solidiaridad Property in the manner currently contemplated, or our ability to explore or develop future properties. We must take into account the possibility, particularly in Mexico, that future governments may adopt substantially different policies, which might extend to expropriation of assets.

ENVIRONMENTAL AND OTHER RISKS COULD HAVE A MATERIAL ADVERSE IMPACT ON OUR BUSINESS

Mining activities pose certain environmental risks, as well as personal injury risks. While the Company will attempt to manage its risks, one or more incidents of environmental damage or personal injury resulting from its mining activities could have a material adverse impact on the business of the Company. Our mining operations are subject to environmental regulation by the SEMARNAT, the environmental protection agency of Mexico. If we become subject to onerous government regulations or other legal uncertainties, our business would likely be negatively affected. The government regulates the environmental impacts of mining operations and requires, under certain circumstances, certain environmental permits, work permits, posting of bonds, and the performance of remediation work for any physical or other disturbance to the land or the environment. We may incur significant costs and expenses in connection to comply with such governmental regulations. Depending on market conditions and the options available to us, we may attempt to enter into a joint venture with an operating company or permit an operating company to undertake exploration work on the Solidaridad Property. We may also consider seeking equity or debt financing (including borrowing from commercial lenders) or a sale of the Company or its assets.

WE ARE AN EXPLORATION STAGE COMPANY

We are an exploration stage company and face a high risk of business failure because of the unique difficulties and uncertainties inherent in mineral exploration ventures. Potential investors should be aware of the difficulties normally encountered by mineral exploration companies and the high rate of failure of such companies. The likelihood of our success must be considered in light of the problems, expenses, difficulties, complications and delays that could be encountered in connection with our planned exploration and drilling of the Solidaridad Property. These potential problems include, but are not limited to, unanticipated problems relating to exploration and additional costs and expenses that may exceed current estimates. Additional expenditures related to exploration of the Solidaridad Property may not result in the discovery of additional mineralized material. Problems such as unusual or unexpected formations and other conditions are involved in mineral exploration and often result in unsuccessful exploration efforts. If the results of our exploration do not reveal viable commercial mineralized material, we may decide to abandon the Solidaridad Concessions and acquire new concessions for new exploration or terminate our activities all together. The acquisition of additional concessions will be dependent upon us possessing capital resources at that time in order to purchase and/or maintain such concessions. If no funding is available, we may be forced to cease our operations.

WE HAVE NO PROVEN OR PROBABLE RESERVES

We have not established the presence of any proven or probable reserves, as those terms are defined by the U.S. Securities and Exchange Commission (the "SEC"), on the Solidaridad Property. If the Solidaridad Property does not contain mineralized material that we can extract at a profit, any funds spent by us on exploration or development of the Solidaridad Property could be lost. The SEC defines a "reserve" as "that part of a mineral deposit which could be economically and legally extracted or produced at the time of the reserve determination." Any mineralized material discovered by us should not be considered proven or probable reserves.

In order to demonstrate the existence of proven or probable reserves under SEC Guidelines, it would be necessary for us to continue exploration to demonstrate the existence of sufficient mineralized material with satisfactory continuity and then obtain a positive feasibility study that demonstrates with reasonable certainty that the mineralized material can be economically extracted and produced. We have not completed a feasibility study with regard to the Solidaridad Property, nor do we intend to perform such feasibility study until such time as we obtain sufficient funding and it is advisable under our then current business plan. Exploration is inherently risky, the probability of any individual property having reserves is extremely remote and few properties ultimately prove economically successful.

ESTIMATES OF MINERALIZED MATERIAL ARE BASED ON INTERPRETATION AND ASSUMPTIONS WHICH MAY BE UNRELIABLE

Estimates of our mineralized material located on the Solidaridad Property are based on interpretation and assumptions and may yield less under actual conditions than current estimates. Unless otherwise indicated, the mineralized material presented in our filings with the SEC and in press releases and other public statements are based upon estimates made by our consultants. When making determinations about whether to advance any of our projects to production, we must rely upon such estimated calculations as to the mineralized material on the Solidaridad Property. Until the mineralized material is actually mined and processed, any amounts and values can only be considered estimates.

These estimates are imprecise and depend on geological interpretation and statistical inferences drawn from drilling and assay sampling analysis, which may prove to be unreliable. We cannot assure you that the estimates of our mineralized material will be accurate or that we can mine or process this mineralized material profitably.

Any material changes in estimates of our mineralized material could affect the economic viability of the Solidaridad Property and could have a material adverse effect on our operations and financial position. There can be no assurance that minerals recovered in small scale will be recovered at production scale.

OUR OPERATIONS ARE SUBJECT TO PERMITTING REQUIREMENTS

Our operations are subject to permitting requirements which could require us to delay, suspend or terminate our operations. Our operations, including, but not limited to, any exploitation program, require permits from the Mexican government. We may be unable to obtain these permits in a timely manner, on reasonable terms, or at all. If we cannot obtain or maintain the necessary permits, or if there is a delay in receiving these permits, our timetable and business plan for exploration and/or exploitation, if any, of the Solidaridad Property may be materially and adversely affected.

COMPETITION IN THE MINING INDUSTRY IS INTENSE AND WE HAVE LIMITED FINANCIAL AND PERSONNEL RESOURCES WITH WHICH TO COMPETE

Competition in the mining industry is extremely intense in all aspects, including, but not limited to, raising investment capital for exploration and obtaining qualified managerial and technical employees. We are an insignificant participant in the mining industry due to our limited financial and personnel resources. Our competition includes large established mining companies, with substantial capabilities and with greater financial and technical resources than we have, as well as the myriad of other exploration stage companies. As a result of this competition, we may be unable to attract the necessary funding or qualified personnel. If we are unable to successfully compete for funding or for qualified personnel, our mining activities may be slowed, suspended or terminated, any of which would have a material adverse effect on our ability to continue operations.

WE MAY EXPERIENCE SUPPLY AND EQUIPMENT SHORTAGES

We may not be able to purchase all of the supplies and materials we need to continue our mining activities due to shortage of funds, lack of availability or other reasons. This could cause us to delay or suspend operations. Competition and unforeseen limited sources of supplies in the industry could result in occasional spot shortages of supplies, such as explosives, and certain equipment, such as bulldozers, drilling equipment and excavators, that we might need to conduct our mining activities. If we cannot find the supplies and equipment we need, we may have to suspend our operations until we do find the supplies and equipment we need. If we are unable to find the supplies in Mexico but can find them in another location, the cost will increase significantly, as will the time to deliver.

THERE ARE RISKS INHERENT IN DOING BUSINESS IN MEXICO

The Solidaridad Property is located in the State of Michoacán, Mexico. Risks of doing business in a foreign country could materially and adversely affect our results of operations and financial condition. We face risks normally associated with doing business in a foreign country. These risks include, but are not limited to:

- labor disputes;

- invalidity of governmental orders;

- uncertain or unpredictable political, legal and economic environments;

- war;

- civil and political unrest, including the impact of drug cartels ;

- crime and security issues including but not limited to drug cartel activity;

- property disputes;

- changes to existing laws or policies relating to the mining industry that increase our costs;

- unpredictable changes in or application of taxation regulations;

- delays in obtaining or the inability to obtain necessary governmental permits;

- governmental seizure of land or mining concessions;

- limitations on ownership;

- limitations on the repatriation of earnings;

- increased financial costs;

- import and export regulations, including restrictions on the export of gold, silver and copper; and/or

- foreign exchange controls.

The occurrence of one or more of these events or a change in existing policy could have a material adverse effect on our cash flows, earnings, results of operations, and financial condition. These risks may limit or disrupt our operations, restrict the movement of funds, impair contract rights, or result in the taking of property by nationalization or expropriation without fair compensation. Finally, Mexico's status as a developing country may make it more difficult for us to obtain required funding.

WE ARE REQUIRED TO MAKE PAYMENTS TO RETAIN THE SOLIDARIDAD CONCESSIONS

Our ability to retain good title to the Solidaridad Concessions and continue our exploration and drilling program is subject to payment of surface taxes imposed by the Mexican government. The amount of surface taxes is set by regulation and may increase over the life of the concession and include periodic adjustments for inflation. Our failure or inability to pay the surface taxes to the Mexican government may cause us to lose our rights in one or more of our concessions. As of the date of this report, we have made the mining rights payment for the Solidaridad I concession, however, we have not made the payment (approximately $90,000) for the remaining concessions which were due on July 31, 2015.

OUR CONCESSIONS ARE LOCATED IN A REMOTE AREA

There is extremely limited infrastructure on the Solidaridad Property, which may impair our access to the property. Inclement weather and/or natural disasters may affect the roads surrounding the Solidaridad Property, which may delay or prevent us from conducting our proposed business operations or cause significant damage to costly infrastructure, for which we may or may not be insured. While we plan to conduct our exploration and drilling year round, it is possible that inclement weather and/or natural disasters could delay our mining activities, which could have a material adverse effect on our business, results of operations and financial condition.

DEFECTIVE TITLE TO THE SOLIDARIDAD CONCESSIONS COULD HAVE A MATERIAL ADVERSE EFFECT ON OUR EXPLORATION AND EXPLOITATION ACTIVITIES

There are uncertainties as to title matters in the mining industry, and in particular Mexico. We believe we have good title to the Solidaridad Concessions; however, any defects in such titles that cause us to lose our rights in these mineral properties would seriously jeopardize our planned business operations. We have investigated our rights to explore, exploit and develop the Solidaridad Property in manners consistent with industry practice and, to the best of our knowledge, those rights are in good standing. However, we cannot guarantee that the title to or our rights to explore, exploit and develop the Solidaridad Property will not be challenged by third parties or governmental agencies. In addition, there can be no assurance that the Solidaridad Concessions and the Solidaridad Property to which the concessions relate, are not subject to prior unregistered agreements, transfers or claims. Our title may be affected by undetected defects. Any such defects could have a material adverse effect on us.

In the event of a dispute regarding title to the Solidaridad Concessions or any facet of our operations, it will likely be necessary for us to resolve the dispute in Mexico, where we would be faced with unfamiliar laws and procedures. The resolution of disputes in foreign countries can be costly and time consuming, similar to the situation in the United States. However, in a foreign country, we face the additional burden of understanding unfamiliar laws and procedures. We may not be entitled to a jury trial, as we might be in the United States. Further, to litigate in a foreign country, we would be faced with the necessity of hiring lawyers and other professionals who are familiar with the foreign laws. For these reasons, we may incur unforeseen losses if we are forced to resolve a dispute in Mexico or any other foreign country (See Risk Factor - Existing Litigation and Item 3. - Legal Proceedings).

EXISTING LITIGATION

Title Litigation

As disclosed herein in Item 3. - Legal Proceeding of this Part, on April 3, 2012, our Mexican subsidiary company, US Precious Metals SA de CV, was served with a lawsuit by Mr. Israel Tentory Garcia ("Plaintiff") regarding one of our mining concessions. Plaintiff asserted a number of claims against us, including a demand for the return of one of our concessions (Solidaridad I) for failure to develop the concession. The case was filed in a local court in the Federal District of Mexico City. On May 21, 2013, the Court ruled that the Plaintiff did not prove the claims asserted in the lawsuit, and that our subsidiary is not liable to for any of such claims.

On June 12, 2014, our Mexican subsidiary, US Precious Metals SA de CV was served with another lawsuit from Mr. Israel Tentory Garcia along with seven other plaintiffs. The lawsuit was filed in a commercial court in Mexico City. The claims of the new lawsuit essentially restate the claims of the original lawsuit filed in April 2012.

By way of background, the plaintiffs obtained the exploration rights to the concession known as Solidaridad I from the Mexican government on November 24, 1996. These exploration rights expired on November 23, 2001 under the terms of the concession from the government and as prescribed by the governing statute. On March 13, 2003, we entered into an agreement with the plaintiffs pursuant to which they assigned their rights to this (expired) concession to our Mexican subsidiary. In July 2003, our Mexican subsidiary then applied for and obtained a new exploration and exploitation concession from the Mexican government covering Solidaridad I. The new concession expires July 2053.

Pursuant to this 2003 agreement with the plaintiffs, we issued 1.5 million shares of our common stock to them. The agreement further provided for the payment of $1 million to the plaintiffs upon the occurrence of a sale of the concession for exploitation purposes. In the original action filed in 2012 and in the current action, plaintiff(s) claim that under the agreement the $1 million payment was due and payable no later than 2009 and ownership of the mining concession should revert back to the plaintiff(s) due to the non-payment.

We have retained counsel in Mexico to represent our subsidiary in this matter. We strongly dispute the allegations raised in the lawsuit and intend to vigorously defend the lawsuit. Our defense will include, among other positions, the fact that plaintiffs had no concession rights to assign under the March 2003 agreement as their concession expired 16 months earlier, we independently obtained the rights to a new (and current) concession from the Mexican government in July 2003, the agreement is ambiguous as to the payment requirement in 2009 and the matter was previously adjudicated in our favor in earlier action, albeit in a different court. We have filed an answer to the above complaint.

Lawsuit with RTC

As discussed in "Item 3 – Legal Proceedings" below, on August 8, 2015, we were served with a lawsuit by Resource Technology Corporation ("RTC").

The Lawsuit was filed in the 11th Judicial Circuit Court, Dade County, Florida (Case: 2015-017057-CA-01). The Plaintiff, RTC, contends that the Restructuring Agreement does not allow for the unilateral termination of the agreement, rescission of the Certificate of Designations relating to the Preferred Stock nor the cancellation of the Preferred Stock. It further states that the obligations of PTH were not intertwined with that of RTC, and therefore the Company's termination of the agreement and cancellation of the Preferred Stock was inappropriate and ineffective, and further the Company's sole remedy would be to seek judgment against PTH for its default under the Promissory Note. The action seeks declaratory relief from the Court: (i) to declare that the Company did not have the legal right to terminate the Restructuring Agreement and rescind the Series A Preferred Stock, (ii) to determine that the unilateral actions by the Company in terminating the Restructuring Agreement and rescinding the Series A Preferred Stock is without merit, (iii) to enter a final judgment directing the issuance of the Preferred Stock to Plaintiff, (iv) to enter an order finding that any shareholder vote that have taken place without Plaintiff be declared null and void, (v) alternatively, if it is held that the Company did have the right to terminate the Restructuring Agreement and rescind the Series A Preferred Stock, to declare that the original Share Exchange Agreement with RTC be reinstated along with an extension of performance time periods (for RTC) as determined by the Court, and (vi) be awarded attorney's fees and court costs. In addition, the action asserts that the Company converted the Series A Preferred Stock, which was property of Plaintiff. The Plaintiff demands a judgment of $20,000,000 plus interest and court costs, and seeks a trial by jury.

The Company disputes Plaintiff's contentions described above. The Company's termination and rescission actions were based in part on the Promissory Note default by PTH and RTC's failure to cause PTH to perform under the Restructuring Agreement, which were material breaches of the agreement.

The Company has retained outside counsel to vigorously defend its position in this matter and avail itself of all legal and equitable rights and remedies against PTH, RTC and all other culpable parties in this matter. The Company expects to incur significant legal costs in the defense of this matter and the advancement of its claims against RTC and other culpable parties. On September 4, 2015, the Company filed a Notice of Removal to the United States District Court, Southern District of Florida.

RESTRICTED ACCESS TO THE SOLIDARIDAD CONCESSIONS COULD HAVE A MATERIAL ADVERSE EFFECT ON OUR EXPLORATION AND FUTURE PRODUCTION ACTIVITIES

There are uncertainties as to our ability to gain access rights to the Solidaridad Property where the Solidaridad Concessions are located. We currently have secured access rights to the portion of the Solidaridad Property where our concessions Solidaridad I, Solidaridad III, and Solidaridad V are located by way of a written agreement entered into by and between our Mexican Subsidiary and the owners of the portion of the Solidaridad Property where these concessions are located. We are in the process of securing, but have not yet secured, access rights to other portions of the Soldiaridad Property, which we plan to do in the future in connection with any decision to begin exploration and/or exploitation of those areas. If we are ultimately unable to receive access, or unable to receive access at a reasonable price, it may affect our ability to explore for, or exploit, mineralized material from those areas and could have a material adverse effect on us.

OUR PRIMARY TARGETS FOR EXPLORATION AND EXPLOITATION ARE SUBJECT TO A TEMPORARY OCCUPANCY AGREEMENT IN FAVOR OF A THIRD PARTY WHICH REQUIRES US TO PAY ANNUAL RENT

Our current primary targets for exploration and exploitation are located on the portion of the Solidaridad Property where our concessions Solidaridad I, Solidaridad III, and Solidaridad V are located. We have secured access rights to the portion of the Solidaridad Property where these concessions are located by way of a Temporary Occupancy Agreement with a third party. This agreement requires us to pay annual rent to the owners of the portion of the Solidaridad Property where these concessions are located. Our failure or inability to pay the annual rent may cause us to lose our right to access the portion of the Solidaridad Property where these concessions are located and could have a material adverse effect on our business operations. Any breach of the agreement by the property owner could also cause costly litigation.

OUR ABILITY TO DEVELOP THE SOLIDARIDAD CONCESSIONS ARE SUBJECT TO THE RIGHTS OF THE EJIDO (LOCAL INHABITANTS)

Our ability to develop the Solidaridad Property are subject to the rights of the Ejido. Ejidos are groups of local inhabitants who are granted rights by the Mexican government to conduct agricultural activities on the surface of the property. Our ability to exploit the mineralized material from the portion of the Solidaridad Property where these concessions are located is subject to making satisfactory arrangements with the Ejido for access and surface disturbances. We have negotiated agreements with all the Ejido known to us that affect our property. If there are other Ejido unknown to us, we will have to negotiate and maintain a satisfactory arrangement with these inhabitants in order to disturb or discontinue their rights to conduct such agricultural activities. If we are unable to successfully negotiate such an arrangement or, if we cannot maintain our existing Ejido agreements, it could impair or impede our ability to successfully exploit the minerals from the portion of the Solidaridad Property where these concessions are located.

MATERIAL LOSSES IN EXCESS OF INSURANCE COVERAGE COULD ADVERSELY AFFECT OUR EXPLORATION AND FUTURE PRODUCTION ACTIVITIES

We have limited insurance against losses or liabilities obtained from third party contractors that could arise from our operations. If we incur material losses or liabilities in excess of our insurance coverage, our financial position could be materially and adversely affected. Mining operations involve a number of risks and hazards, including, without limitation:

- environmental hazards;

- industrial accidents;

- metallurgical and other processing problems;

- failure of pit walls or dams;

- acts of God; and/or

- equipment and facility performance problems.

Such risks could have various negative consequences, including, without limitation:

- damage to, or destruction of, mineral properties or production facilities;

- personal injury or death;

- environmental damage;

- delays in exploration; and/or

- monetary losses.

Industrial accidents could have a material adverse effect on our future business and operations. We currently maintain general liability insurance and automobile insurance coverage. We cannot be certain the insurance we have in place will cover all of the risks associated with our mining activities or that we will be able to maintain insurance to cover these risks at economically feasible premiums. We also might become subject to liability for pollution or other hazards which we cannot insure against or which we may elect not to insure against because of premium costs or other reasons. Losses from such events may have a material adverse effect on our ability to continue operations.

WE ARE DEPENDENT UPON OUR OFFICERS

The Company is dependent on its current officers, directors, and consultants to effectuate many of the Company's services and plans for the implementation of the Company's proposed activities and business. The Company's former President, who is also a current director, has significant experience in the area of exploring for and/or mining precious metals. None of our officers or board members has made any long term commitment to the Company. If one or more of these individuals were to resign, there is no guarantee that we could replace them with qualified individuals in a timely or economic manner or if at all. Investors must be willing to entrust all of the affairs of the Company to current management.

AT THE PRESENT TIME WE ARE UNABLE TO PAY ANY DIVIDENDS

The Company has not paid any cash dividends and does not anticipate paying any cash dividends on its Common Stock in the foreseeable future. It is anticipated that earnings, if any, which may be generated from operations will be used to finance the continued operations of the Company. Investors who anticipate the immediate need of cash dividends from their investment should refrain from purchasing any of the securities offered hereby.

FUTURE ISSUANCE OF SECURITIES COULD CAUSE DILUTION TO EXISTING SHAREHOLDERS

The Company has the authority to issue up to 325,000,000 shares of common stock, 10,000,000 shares of preferred stock and to issue options and warrants to purchase shares of our common stock without stockholder approval. Future issuances of common and preferred stock will dilute the holdings of our existing stockholders and may reduce the market price of our common stock. Holders of our common stock are not entitled to preemptive.

THE ADVERSE EVALUATION OF OUR INTERNAL CONTROLS COULD RESULT IN LOSS OF INVESTOR CONFIDENCE

Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we evaluated the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Rules 13a-15 and 15d-15 of the Exchange Act. Based on such evaluation, our principal executive officer and principal financial officer concluded that, as of the end of the period covered by this Annual Report on Form 10-K, our disclosure controls and procedures are not effective. Specifically, we concluded that we had identified a significant deficiency with respect to the operation of our internal controls relating to the documentation and authorization procedures of certain travel and entertaining expenses incurred by certain directors, officers and non-Company personnel as of May 31, 2015. Investors could lose confidence in our financial reports and our stock price may decline as a result of this adverse evaluation.

WE INDEMNIFY OUR OFFICERS AND DIRECTORS TO THE FULLEST EXTENT PROVIDED BY LAW

The laws of the State of Delaware permit us to indemnify our directors and officers who were or are parties, or are threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative by reason of the fact that the person is or was a director or officer of the Company. Our Amended and Restated Bylaws permit us to indemnify our officers and directors against all damages incurred in connection with our business to the fullest extent provided or allowed by law. These indemnification provisions may require us to use our limited assets to defend our directors and officers against claims, including claims arising out of their negligence, poor judgment or other circumstances.

WE ARE SUBJECT TO ADVERSE CHANGES IN CURRENCY VALUES

Since most of our expenses are paid in Mexican pesos, and our investment capital is in United States dollars, we are subject to adverse changes in currency values which will be difficult to prevent or predict. Our operations in the future could be affected by changes in the value of the Mexican peso against the United States dollar. At the present time, since we have no production and limited investment, we have no plans or policies to utilize forward sales contracts or currency options to minimize this exposure. If and when these measures are implemented, there is no assurance they will be cost effective or be able to fully offset the effect of any currency fluctuations.

STOCK PRICE VOLATILITY

Our stock price may be volatile and as a result investors could lose all or part of their investment. In addition to volatility associated with over-the-counter securities in general, the value of any investment could decline due to the impact of any of the following factors upon the market price of our common stock:

- changes in the worldwide price for gold, silver and copper;

- disappointing results from our exploration and drilling efforts;

- fluctuation in production costs that make mining uneconomical;

- unanticipated variations in grade and other geological problems;

- unusual or unexpected rock formations;

- failure to reach commercial production or producing at rates lower than those targeted;

- decline in demand for our common stock;

- downward revisions in securities analysts' estimates or changes in general market conditions;

- investor perception of our industry, our Company or the Solidaridad Concessions; and/or

- general economic trends.

In addition, stock markets have experienced extreme price and volume fluctuations and the market price of securities has been highly volatile. These fluctuations are often unrelated to asset value and may have a material adverse effect on the market price of our common stock. As a result, investors may be unable to resell their shares at a fair price.

THERE IS CURRENTLY A LIMITED TRADING MARKET FOR OUR COMMON STOCK AND OUR STOCK EXPERIENCES PRICE FLUCTUATIONS

There is currently a limited market for our common stock and we can provide no assurance to investors that a more robust market will develop. If a market for our common stock does not develop, our shareholders may not be able to resell the shares of our common stock they have purchased and they may lose all of their investment. Our stock is thinly traded and is therefore subject to significant fluctuations if the amount of trading increases significantly for a short period of time. Even one large trade could materially affect the price of the stock even though the status of the Company remains unchanged.

The trading price of our common stock has been and in the future may be subject to wide fluctuations. Trading prices of our common stock may fluctuate in response to a number of factors, many of which will be beyond our control, including, without limitation, public announcements regarding our Company, purchases or sales by existing stockholders, changes in government regulations, conditions in our market segment or changes in earnings estimates by analysts. These fluctuations may have a material adverse effect on the trading price of our common stock.

In addition, the stock market in general, and the market for junior mining companies in particular, has experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of such companies. Market and industry factors may adversely affect the market price of our common stock, regardless of our operating performance. In the past, following periods of volatility in the market price of a company's securities, securities class-action litigation has often been instituted. Such litigation, if instituted, could result in substantial costs and a diversion of management's attention and resources. In addition, we may not have complied in the past with federal and/or state securities laws and regulations, which could potentially result in litigation, penalties and/or fines, other substantial costs and expenses and a substantial diversion of management's attention and resources.

THE VALUE OF OUR COMMON STOCK IS PARTIALLY RELATED TO THE VALUE OF OUR MINERALIZED MATERIAL

The value of our common stock may relate directly and/or indirectly to the value of the mineralized material contained in the Solidaridad Property and fluctuations in the price of any such mineralized material could have a material adverse effect on the value of any investment in our common stock.

Several factors may affect the prices for mineralized material, including, without limitation:

- global supply and demand;

- global or regional political, economic or financial events and situations;

- investors' expectations with respect to the rate of inflation;

- currency exchange rates;

- interest rates; and/or

- investment and trading activities of hedge funds and commodity funds.

In addition, investors should be aware that there is no assurance that our mineralized material will maintain a constant price or have long term value. In the event the price of our mineralized material declines, the value of an investment in our common stock may also decline.

REPORTING OUR INVESTMENTS IN MINERAL PROPERTIES AS AN EXPENSE MAY HAVE A NEGATIVE IMPACT ON OUR STOCK PRICE

Since we have no proven or probable reserves, our investment in the Solidaridad Property is not reported as an asset in our financial statements which may have a negative impact on the price of our stock. We prepare our financial statements in accordance with accounting principles generally accepted in the United States of America and intend to report substantially all exploration and drilling expenditures as expenses until we are able to establish proven or probable reserves. If we are able to establish proven or probable reserves, we would report development expenditures as an asset subject to future amortization using the units-of-production method. Since it is uncertain when, if ever, we will establish proven or probable reserves, it is uncertain whether we will ever report these expenditures as an asset. Accordingly, our financial statements report fewer assets and greater expenses than would be the case if we had proven or probable reserves, which could have a negative impact on our stock price.

ITEM 1B. UNRESOLVED STAFF COMMENTS

None.

ITEM 2. PROPERTIES

Description of Our Concessions

Mineral rights in Mexico belong to the Mexican government and are administered pursuant to Article 27 of the Mexican Constitution. Mining concessions may be granted to Mexican citizens or companies incorporated under Mexican law and grant the holder the right to explore and exploit all minerals found in the ground. The table below reflects certain information about the mining concessions we currently hold through our Mexican Subsidiary. These concessions are registered with the Public Registry of Mining in Mexico City. The Solidaridad Property to which the following concessions relate is in the exploration stage and has no proven or probable reserves.

Name of Concession	Title Number	Hectares	Date Acquired	Expiration Date
Solidaridad I	220315	174.5408	July 11, 2003	July 10, 2053
Solidaridad II	220503	2162.2311	August 14, 2003	August 13, 2053
Solidaridad II, Fraction A	220504	1.4544	August 14, 2003	August 13, 2053
Solidaridad II, Fraction B	220505	0.0072	August 14, 2003	August 13, 2053
Solidaridad III	223444	294.0620	December 14, 2004	December 13, 2054
Solidaridad IV	220612	149.4244	September 4, 2003	September 3, 2053
Solidaridad V (also known as Le Ceiba)	223119	921.3201	October 19, 2004	October 18, 2054
La Sabila	227272	11,405.000	June 2, 2006	June 1, 2056

The above group of concessions are collectively referred to as the "Solidaridad Concessions." Our concessions have a term of fifty years from the date first acquired and can be renewed for another fifty years. In order to maintain the concessions, the Company must pay surface taxes semi-annually in January and July and perform a minimum amount of assessment work on a calendar year basis. Assessment work reports are required to be filed annually in May for the preceding calendar year. The amount of surface taxes and annual assessments are set by regulation and may increase over the life of the concession and include periodic adjustments for inflation

Location and Access

The Company's mining concessions, or mineral rights related to specific parcels of property, are located in southern Michoacán, which is in the southeastern portion of Mexico. Local and regional geologic evidence strongly suggests the possibility that the concessions owned by the Company are located within a mineral rich area of the state. Approximately 30 miles to the southwest of the Solidaridad Property is a mine from which copper has been produced for over 100 years. The owners of that mine have continued exploration, which resulted in the discovery of another mineral deposit separate from the 100 year old working mine. According to information we have obtained, the ore produced at that mine has similar characteristics to the mineralized material we have found from the exploration we have conducted to date on the Solidaridad Property. In the northern part of the Solidaridad Property are two abandoned mines and a few small hand worked mines. To the south of and within the Solidaridad Property exist two additional abandoned mines, all of which will require routine but formal investigation.

The Solidaridad Property is accessible by a paved road from the city of Morelia, the capital of Michoacán, and the claim sites are accessible by a gravel road from the village of Paso de Nunez. The Solidaridad Property lies within the Tierra Caliente basin of southeastern Michoacán, and rests in an area of valleys and peaks ranging from 610 to 1,100 meters in elevation. The surrounding area is predominantly agrarian. Villages immediately near the claim sites offer little or no amenities; however, there are some hardware, cement, and other suppliers in relatively close proximity. There is no heavy industry in the region. Electricity is currently being provided to us by our contractors through generators.

Mining concessions do not automatically grant the holder the right to enter or use the surface land of the property where such mining concessions are located. In order to access the surface land, the holder must obtain permission from the surface owner. We currently have secured access rights to the portion of the Solidaridad Property where our concessions Solidaridad I, Solidaridad III, and Solidaridad V are located by way of a written agreement entered into by and between our Mexican Subsidiary and the owners of the portion of the Solidaridad Property where these concessions are located. This agreement requires us to pay an annual rent to the landowner. We are in the process of securing, but have not yet secured, access rights to other portions of the Solidaridad Property, which we plan to do in the future in connection with any decision to begin exploration and/or exploitation of those areas. If we are ultimately unable to receive access, or unable to receive access at a reasonable price, it may affect our ability to explore for, or exploit, mineralized material from those areas.

All or portion of the Solidaridad Property where concessions Solidaridad II, Solidaridad III, Solidaridad IV, Solidaridad V and La Sabila are located are Ejido lands. Ejidos are groups of local inhabitants who are granted rights by the Mexican government to conduct agricultural activities on the surface of the property. Mexican law recognizes mining as a land use generally superior to agricultural. However, the law also grants rights to the Ejido for compensation in the event mining activities interrupt or discontinues their use of the agricultural lands. Compensation is typically made in the form of a cash payment to the holder of the agricultural rights. The amount of such compensation is generally related to the perceived value of the agricultural rights as would be negotiated between the Ejidos and the Company. If the parties are unable to reach agreement on the amount of the compensation, the decision will be referred to the Mexican government. Our ability to exploit the mineralized material from the portion of the Solidaridad Property where these concessions are located is subject to making satisfactory arrangements with the Ejido for access and surface disturbances. We must negotiate and maintain a satisfactory arrangement with these inhabitants in order to disturb or discontinue their rights to conduct such agricultural activities. Amendments to Article 27 of the Mexican Constitution in 1994 allow the Ejido to enter into commercial ventures with individuals or entities. Presently, we believe that have agreements with all of the local Ejidos known to us allowing us to explore for, or exploit, the mineralized material in the property where these concessions are located. We believe that most of the Ejidos are located in the southern, unexplored portion of our property.

Office Facilities

The Company leases a warehouse (storage) facility in the city of Morelia, Michoacán, Mexico at a monthly rental of $1,700. This lease expired on February 1, 2015 and was extended until February 1, 2016 on the same terms.

Effective January 1, 2014 we entered into a new rental agreement with the landowner of the land on which our mining concessions are located. Under the terms of the new agreement we agreed to pay a monthly rental of approximately $4,249 on a going basis to be able to have access to our mining concessions.

The warehouse in Morelia houses the core laboratory, provides a core sample storage area and temporary offices. We have not completed the metallurgical and chemistry laboratory due to lack of funds. The Company has suspended any construction efforts until such time as it receives sufficient funding to move forward. If and when the laboratory becomes functional, we currently plan to use it to assist the technical staff in all necessary real time testing and evaluations of mineralization during the exploration and drilling stages as well as in developing the Feasibility A and B reports at the end of the two year exploration and drilling program discussed above. Otherwise, we will continue to have the metallurgical testing conducted by outside laboratories.

Glossary

Core Samples

Cylindrical pieces of subsurface material removed by a drill and brought to the surface for examination.

Development

The process following exploration, whereby a mineral deposit is further evaluated and prepared for production. This generally involves significant drilling and may include underground work.

Dike	A vertical or near vertical tabular body of igneous rock that cross cuts across the existing country rock. Dikes form when magma rises into an existing fracture, or creates a new crack by forcing its way through existing rock, and then solidifies.

Drilling

The process of boring a hole in the rock to obtain a sample for determination of metal content. "Reverse Circulation Drilling" involves chips of rock being forced back through the center of the drill pipe using air or water.

Ejido

Are agrarian cooperative lands granted by the Mexican federal government to local inhabitants to conduct agricultural activities on the property pursuant to Article 27 of the Mexican Constitution.

Exploration

The search for mineral deposits using prospecting, geological mapping, geochemical and geophysical surveys, drilling, sampling and other means used to detect and perform initial evaluations of mineral deposits.

Hectare

A metric unit of measurement for surface area. One hectare equals 1/200th of a square kilometer, 10,000 square meters or 2.47 acres.

Igneous

A type of rock which has been formed by the consolidation of magma, a molten substance from the earth's core.

Metallurgy Testing

The testing of metals and their physical and chemical properties in bulk.

Mineralized Material

Minerals or any mass of host rock in which minerals of potential commercial value occur.

Mudstone

Fine grained sedimentary rock whose original constituents were clays or muds.

Ore

A natural mineral compound of elements of which one at least is a metal (e.g. copper, lead, molybdenum, zinc, gold). The term is applied more loosely to all metalliferous rock and occasionally to compounds of nonmetallic substances and industrial minerals such as sulphur ore. In economic terms, an ore is a mineral of sufficient value as to quality and quantity that it may be mined at a profit.

Phyllite

A type of foliated metamorphic rock primarily composed of quartz, sericite mica, and chlorite. The rock represents a gradation in the degree of metamorphism between slate and mica schist. Minute crystals of graphite, sericite, or chlorite impart a silky, sometimes golden sheen to the surfaces of cleavage (or schistosity). Phylite is formed from the continued metamorphism of slate.

Production

The process following development whereby mineral deposits are exploited from the ground, and as required, the subsequent processing into products.

Reserves

That part of a mineral deposit which could be economically and legally extracted or produced at the time of the reserve determination.

(1) Proven (Measured) Reserves: Reserves for which (a) quantity is computed from dimensions revealed in outcrops, trenches, workings or drill holes; grade and/or quality are computed from the results of detailed sampling and (b) the sites for inspection, sampling and measurement are spaced so closely and the geologic character is so well defined that size, shape, depth and mineral content or reserves are well-established.

(2) Probable (Indicated) Reserves: Reserves for which quantity and grade and/or quality are computed from information similar to that used from proven (measured) reserves, but the sites for inspection, sampling and measurement are farther apart or are otherwise less adequately spaced. The degree of assurance, although lower than that for proven (measured) reserves, is high enough to assume continuity between points of observation.

Schists

A group of medium-grade metamorphic rocks, chiefly notable for the predominance of lamellar minerals such as micas, chlorite, talc, hornblende, graphite, and others. Quartz often occurs in drawn-out grains to such an extent that a particular form called quartz schist is produced. By definition, schist contains more than 50% platy and elongated minerals, often finely interleaved with quartz and feldspar. Schist is often garnetiferous.

Shale

Fine grained sedimentary rock whose original constituents were clay minerals or muds. Black Shales are dark, as a result of being especially rich in unoxidized carbon.

Sills

A tabular body of intrusive igneous rock, parallel to the layering of the rocks into which it intrudes.

Tierra

Caliente

Used in Latin America to refer to those places within that realm which have a distinctly tropical climate. The Tierra Caliente forms at Sea Level to about 2,500 ft.

ITEM 3. LEGAL PROCEEDINGS

Title Dispute

On April 3, 2012, as we have previously reported, Mr. Israel Tentory Garcia filed an action against our Mexican subsidiary, US Precious Metals SA de CV, wherein the plaintiff asserted a number of claims against us, including a demand for the return of one of our concessions (Solidaridad I) for failure to develop the concession. The case was filed in a local court in the Federal District of Mexico City. On May 21, 2013, the Court ruled that the Plaintiff did not prove the claims asserted in the lawsuit, and that our subsidiary is not liable to for any of such claims.

Termination of RTC Agreement

As previously disclosed, on August 8, 2015, we were served with a lawsuit by Resource Technology Corporation ("RTC").

The Company has retained outside counsel to vigorously defend its position in this matter and avail itself of all legal and equitable rights and remedies against PTH, RTC and all other culpable parties in this matter. On September 4, 2015, the Company filed a Notice of Removal to the United States District Court, Southern District of Florida.

ITEM 4. MINE SAFETY DISCLOSURES

Mining operations and properties in the United States are subject to regulation by the Federal Mine Safety and Health Administration ("MSHA") under the Federal Mine Safety and Health Act of 1977 (the "Mine Act"). Pursuant to Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the "Dodd-Frank Act"), issuers are required to disclose specified health and safety violations, orders and citations, related assessments and legal actions, and mining-related fatalities.

During the twelve months ending May 31, 2015 and 2014, we did not conduct mining operations nor maintain any mining properties in the US. Consequently we were not subject to any health or safety violations, orders and citations, related assessments and legal actions, and mining-related fatalities during the twelve months ending May 31, 2015 and 2014.

PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Market Information

Our common stock currently trades on the OTC-QB Market under the symbol "USPR". The table below sets forth, for the fiscal quarters indicated, the high and low bid prices per share of our common stock as reflected on the OTC-QB. The quotations represent inter-dealer prices without adjustment for retail markups, markdowns or commissions, and may not necessarily represent actual transactions.

Quarterly Period	High		Low
Fiscal year ended May 31, 2014:
First Quarter	$	0.21	$	0.10
Second Quarter		0.27		0.14
Third Quarter		0.17		0.16
Fourth Quarter		0.17		0.12

Fiscal year ended May 31, 2015:
First Quarter		0.24		0.12
Second Quarter		0.33		0.18
Third Quarter		0.33		0.12
Fourth Quarter		0.20		0.11

Fiscal year ended May 31, 2016:
First Quarter			0.20				0.04

Penny Stock Rules

Due to the price of our common stock, as well as the fact that we are not listed on NASDAQ or a national securities exchange, our stock is characterized as a "penny stock" under applicable securities regulations. Our stock will therefore be subject to rules adopted by the SEC regulating broker-dealer practices in connection with transactions in penny stocks. The broker or dealer proposing to effect a transaction in a penny stock must furnish the customer a document containing information prescribed by the SEC and obtain from the customer an executed acknowledgement of receipt of that document. The broker or dealer must also provide the customer with pricing information regarding the security prior to the transaction and with the written confirmation of the transaction. The broker or dealer must also disclose the aggregate amount of any compensation received or receivable by him in connection with such transaction prior to consummating the transaction and with the written confirmation of the trade. The broker or dealer must also send an account statement to each customer for which he has executed a transaction in a penny stock each month in which such security is held for the customer's account. The existence of these rules may have an effect on the price of our stock, and the willingness of certain brokers to effect transactions in our stock.

Transfer Agent

Issuer Direct Corporation ('Issuer Direct") is the transfer agent for our common stock. The principal office of Issuer Direct is located at 500 Perimeter Park Drive, Suite D, Morrisville, NC, 27560 and its telephone number is (919) 481-4000.

Holders

As of May 31, 2015, there were approximately 345 holders of record of our common stock. This does not reflect persons or entities that hold their stock in nominee or "street name."

Warrants Outstanding

As of May 31, 2015, there were warrants to purchase 6,225,630 shares of common stock outstanding.

Dividends

There are no restrictions in our Amended and Restated Certificate of Incorporation or our Amended and Restated Bylaws that restrict us from declaring dividends except for restrictions imposed by law. The General Corporation Law of the State of Delaware, however, does prohibit us from declaring dividends where, after giving effect to the distribution of the dividend, we would not be able to pay our debts as they become due in the usual course of business or our total assets would be less than the sum of our total liabilities, plus the amount that would be needed to satisfy the rights of shareholders who have preferential rights superior to those receiving the distribution.

We have never declared or paid cash dividends on our common stock and do not currently intend to declare a cash dividend on our common stock in the foreseeable future. The declaration and payment of dividends is subject to the discretion of our Board of Directors and to the above mentioned limitations imposed under the General Corporation Law of the State of Delaware. The timing, amount and form of dividends, if any, will depend on, among other things, our results of operation, financial condition, cash requirements and other factors deemed relevant by our Board of Directors.

Securities Authorized for Issuance Under Equity Compensation Plans

The following table shows information with respect to each equity compensation plan under which the Company's common stock is authorized for issuance as of the fiscal year ended May 31, 2015.

Equity Compensation Plan Information

Plan Category	Number of Securities to be Issued upon Exercise of Outstanding Options	Weighted-Average Exercise Price of Outstanding Options,	Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans

Equity compensation plans approved by security holders	16,000,000(1)(2)	$0.15		4,000,000(3)

Equity compensation plans not approved by security holders	0			0

(1). In December 2007, the Company's Board of Directors approved the 2007 Stock Option Plan (the "Plan") and in August 2008, the shareholders of the Company approved the Plan. The following issuances were effected under the Plan:

a. In August 2010, the Company granted to (i) its new Chairman stock option to acquire 1,000,000 shares of common stock at a $0.11 per share exercise price, and (ii) two existing officers and directors each a stock option to acquire 1,000,000 shares of common stock.

b. During the year ended May 31, 2011, the Company appointed three new directors to its Board of Directors, and awarded each director with a stock option to acquire 1,000,000 shares of common stock. The per share exercise price for each director set of options was $0.065, $0.69, and $0.105. In March 2011, the Company and each of the eight directors agreed to cancel 8,000,000 in existing options and the Company granted new options to each of the existing directors. The new options have an exercise price of $0.065 per share. All options granted during the fiscal year ended May 31, 2011 to existing and new directors were priced at a penny per share above the closing price of our common stock on the date of grant (which in the case of a new director, is the date of the appointment). One officer and director resigned in April 2011, and his option for 1,000,000 shares expired 90 days thereafter.

c. During the year ended May 31, 2012, the Company appointed (i) two new directors to its Board of Directors, and awarded each director with a stock option to acquire 1,000,000 shares of common stock, with a per exercise price of $0.16 for one director and $0.18 for the second director, and (ii) two new officers, and awarded each officer with a stock option to acquire 1,000,000 shares of common stock, with an exercise price of $0.16 per share. In addition, each officer received an additional 250,000 incentive stock options with an exercise price of $0.16. In addition during the period, the Company appointed a new Chief Executive Officer and a new Chief Financial Officer and granted each of these officers' stock options to receive 500,000 shares of common stock at exercise prices of $0.20 and $0.18, respectively.

d. During the year ended May 31, 2013, 2,000,000 fully vested stock options valued at $420,995 were issued, 1,000,000 to each of two newly appointed directors with exercise prices of $0.19 and $0.25. The Company also issued 1,000,000 fully vested stock options valued at $114,682 to a newly appointed officer of the Company with an exercise price of $0.12.

e. During the year ended May 31, 2014, 1,500,000 fully vested stock options valued at $302,084 were issued, 1,000,000 to a newly appointed director with exercise prices of $0.22 and 500,000 to an officer with an exercise price of $0.19. We also cancelled 500,000 options with an exercise price of $0.18 on the resignation of one of our officers.

f. During the year ended May 31, 2015, 3 million, fully vested stock options valued at $724,730 were issued, 1 million stock options to a newly appointed director with an exercise price of $0.29, 1 million stock options to a Mexican national appointed to our advisory board with an exercise price of $0.23 per share and 1 million stock options to an officer of the company with an exercise price of $0.28. A former officer and director of the company exercised 1 million options at an exercise price of $0.065 per share and 3 million options with exercise price of $0.07, $0.185 and $0.23 expired or were cancelled during the year.

(2). As of May 31, 2015, 16,000,000 stock options remain outstanding, of which 10,000,000 are held by former and existing directors, 5,000,000 are held by former or existing officers of the Company and 1,000,000 held by an advisory board member to the Company

(3). Represents the number of stock options and warrants remaining in the 2007 Stock Option Plan.

On August 27, 2014, the Company's Board of Directors approved a 2014 Stock Option Plan for up to 20,000,000 shares of common stock. A copy of that plan is attached hereto as Exhibit 10.21 to our Form 10-K for the Annual Period ended May 31, 2014. In addition, on that same date, the Company's Board of Directors approved the creation of an advisory board, and appointed a Mexican national to its advisory board to assist the Company with its operations in Mexico, including regulatory affairs. The Company also granted 1,000,000 stock options to this individual under the newly created 2014 Stock Option Plan. The option exercise price is $0.23 per share.

Recent Sales of Unregistered Equity Securities

During the three months ended May 31, 2015 we made the following issuances of unregistered securities:

500,000 shares of our common stock, together with twelve month warrants to acquire 250,000 shares of our common stock with an exercise price of $0.15, for proceeds of $22,425.

1,335,141 shares of our common stock in settlement of convertible notes payable with principal balances of $83,333 and accrued interest of $10,000.

On March 26, 2015, we issued a convertible debenture to Lender E for $317,250 under which we received net proceeds of $291,000, net of original debt discount of $26,250. The convertible debenture has a 9 month term and was bears interest at 9.5%. The convertible debenture could be prepaid with prepayments penalties of 120%. At any time after the issuance date of the convertible loan, the lender has the right to convert the balance into shares of the common stock at a 40% discount to the lowest intra day trading price of the prior 20 trading days.

On April 28, 2014, we received $47,500, net of original debt discount of $2,500, under a convertible debenture with Lender A with a two year term bearing interest at 12% per annum. The lender may convert the convertible promissory note into shares of our common stock at any time after six months at a 40% discount to the lowest trade price in the 25 trading days prior to conversion.

On May 8, 2015 we received $47,500, net of original debt discount of $2,500, under a convertible debenture with Lender C with a two year term bearing a one off interest charge of 12% or $6,000 was accrued on the convertible promissory note on issuance. The lender may convert the convertible promissory note into shares of our common stock at any time at a 40% discount to the lowest trade price in the 25 trading days prior to conversion.

On May 12, 2015, we issued a convertible debenture to lender F for $105,000 under which we received net proceeds of $96,000, net of original debt discount of $9,000. The convertible debenture had a 12 month term and was bears interest at 10%. The convertible debenture could be prepaid with prepayments penalties ranging between 120% and 150%. At any time after the issuance date of the convertible loan, the lender has the right to convert the balance into shares of the common stock at a 40% discount to the lowest intra day trading price of the prior 20 trading days

On May 13, 2015, we issued a convertible debenture to a Lender G for $105,000 under which we received net proceeds of $96,000, net of original debt discount of $9,000. The convertible debenture had a 12 month term and was bears interest at 10%. The convertible debenture could be prepaid with prepayments penalties ranging between 120% and 150%. At any time after the issuance date of the convertible loan, the lender has the right to convert the balance into shares of the common stock at a 40% discount to the lowest intra day trading price of the prior 20 trading days.

On May 15, 2015, we issued a convertible debenture to Lender H for $150,000 under which we received $147,000, net of fees of $3,000. The convertible debenture has a 6 month term and was bears interest at 12%. The convertible debenture could be prepaid with prepayments penalties of 150%, subject to approval of the lender. At any time after the issuance date of the convertible loan, the lender has the right to convert the balance into shares of the common stock at a 42.5% discount to the lowest intra day trading price of the prior 20 trading days.

Each investor was an accredited investor and agreed to hold such shares for investment purposes. In addition, the shares issued to the investor contained a restricted legend. The option exercise was a result of an option issued to a former director of the company under a stock option plan. All of the securities issuances referred to above were exempt from registration pursuant to Section 4(2) of the Securities Act of 1933, as amended (the "Act") or the rules and regulations promulgated thereunder, including Regulation D and Rule 701.

Issuer Repurchases of Equity Securities

None.

ITEM 6. SELECTED FINANCIAL DATA

As a "smaller reporting company" as defined by Item 10 of Regulation S-K, we are not required to provide information required by this Item.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Management's discussion and analysis of financial condition, changes in financial condition and results of operations is provided as a supplement to the accompanying consolidated financial statements and notes to help provide an understanding of the Company's financial condition and results of operations.

Overview

We were formed as a mineral exploration company on January 21, 1998. We are engaged in the acquisition, exploration and development of mineral properties. We focus on gold and base minerals primarily located in the State of Michoacán, Mexico where we own exploration and exploitation concessions to approximately 37,000 acres of land (the "Solidaridad Property"). See "Item 2. Properties" for more information about our mining concessions. Mineral exploration requires significant capital and our assets and resources are limited. We have never earned revenue from our operations and have relied on equity and debt financing to fund our operations to date.

We are considered an exploration stage company for accounting purposes because we have not demonstrated the existence of proven or probable reserves. In accordance with accounting principles generally accepted in the United States of America, all expenditures for exploration and evaluation of our properties have been expensed as incurred. Furthermore, unless our mineralized material is classified as proven or probable reserves, substantially all expenditures have been or will be expensed as incurred. Since substantially all of our expenditures to date have been expensed, most of our investment in mining properties do not appear as an asset on our balance sheet.

RTC Transactions.

As previously reported by the Company on its Form 8-K filed on May 17, 2013 and as stated above, on May 11, 2013, the Company entered into a Share Exchange Agreement with Resource Technology Corp., a newly formed Florida corporation ("RTC"), and the RTC shareholders to acquire all of the issued and outstanding shares of RTC in exchange for 300 million shares of common stock of the Company. The transaction included three ore supply contracts with third party suppliers, and a Plasmafication™ Toll Processing Agreement with Plasma Processing, LP., a Florida limited partnership ("PP LP"). The ore supply agreements and the Toll Processing Agreement enabled RTC to receive 1/3rd of the revenues derived from the plasma processing of ore concentrates from the ore supply agreements.

It was represented to us that PP LP owned the right to operate a plasma processing facility located in 29 Palms, California that the plant took three years to build and was permitted to process ore concentrate. The parties believed that initial upgrades to the facility would commence within 90 to 120 days which will enable the facility to process concentrates at the rate of approximately 9 tons/day. PP LP expected to make further upgrades to the facility which would increase its capacity to approximately 27 tons/day. PP LP guaranteed a benchmark run of 5 tons/day for 20 consecutive days ("Benchmark Run") with a minimum value of $50,000 (net to RTC) per ton using the RTC concentrate (or a total of $5,000,000 in net proceeds to RTC) from the existing ore supply contracts. The agreement provided that if the Benchmark Run does not yield net cash proceeds of Five Million Dollars ($5,000,000) to RTC, then the number of Exchange Shares in total will be proportionately reduced. The completion date for the Benchmark Run was June 1, 2014.

We were informed that the RTC shareholders are Wolz International, LLC ("Wolz"), which owned 50%, Titan Productions, Inc. ("Titan"), which owned 25%, and Mercury6, LP ("Mercury6") which owned 25%. Assuming a completion of the transaction without further proportionate reduction in the USPR Shares, Wolz, Titan and Mercury would have received a proportionate amount of the 300 million shares of our common stock. We were informed that Mr. Gennaro Pane, our former Chairman and Chief Executive Officer, was the sole officer and member of Wolz (and would have owned approximately 51% of such shares), and Chad Altieri, our former Board member, is the sole owner of Mercury. In addition, Messrs Pane and Altieri owned or controlled limited partnership interests in PP LP.

The above description is a summary of the May 11, 2013 transactions with RTC. For more complete information, please refer to the above stated Form 8-K filed on May 17, 2013.

On January 30, 2014, the Company entered into a Restructuring Agreement with RTC, the RTC Shareholders, and Plasmafication Technology Holding, LLC, a Florida limited liability company ("PTH"). It was represented to us that PTH was an affiliate of RTC and that it owned and operated a plasma processing plant located in 29 Palms, California which employs the Plasmafication™ technology ("Plasma Plant").

Pursuant to the Restructuring Agreement, the Company, RTC and the RTC Shareholders terminated ab initio the Share Exchange Agreement, and the Company entered into new agreements and instruments with the counter parties described below consisting of (i) the Restructuring Agreement, the Technology License Agreement by and between the Company and PTH ("License Agreement"), (ii) An Equipment Purchase and Sale Agreement by and between the Company and PTH ("Equipment Purchase Agreement"), and (iii) A Promissory Note issued by PTH in favor of the Company in the amount $5,000,000 ("Promissory Note"), and (iv) A Certificate of Designations relating to 1,250,000 shares of Preferred Stock (defined below) issued to RTC in connection with the transaction ("Certificate of Designations"). The closing of the Restructuring Agreement occurred on February 4, 2014 ("Closing").

Processing Rights. Under the terms of the Restructuring Agreement, PTH agreed to process the Company's ore concentrate² at its Plasma Plant five (5) days per month for each month during a term agreed by the parties. The term was to begin with the date that the Plasma Plant is ready to commence commercial operations at the processing rate of 5 tons/day and terminating on the date that the Company Plasma Facility (defined below) was fully permitted and ready to commence commercial operations at a processing rate of 10 tons/day. PTH informed the Company that it expected to be fully operational during the fourth calendar quarter of 2014. The Company agreed to pay its ratable share of PTH overhead and direct costs as set forth in the agreement, and apart from the foregoing, PTH would not receive any royalty or other fee.

Licensing Rights. Under the Technology Licensing Agreement, PTH granted the Company a non-exclusive, royalty free license to use PTH's Plasmafication™ technology for a term of 25 years. The technology covered and related to the construction and use of a Company owned plasma plant described below. The Licensing Agreement was subject to other customary terms and conditions.

Construction of a Company Owned Plasma Plant. Under the Equipment Purchase Agreement, PTH agreed to construct, on behalf of the Company, a 10 ton/day plasma processing plant on its premises located in 29 Palms, California ("Company Facility"). The plant was to be constructed on an actual costs basis without markup by PTH, and PTH also has agreed to pay for 1/3^rd of the construction costs. The estimated costs of construction for the Company Facility was approximately $18 million. The parties intended to formulate a draw schedule which would detail construction and payment milestones, however, in order to initiate the construction process, the Company would be required to pay a down payment of $1.5 million. In addition to other terms and conditions therein, PTH agreed to assist in obtaining the necessary Federal, state and local permits and licenses to construct and operate the Company Plasma facility, however, the Company would have been required to bear the related costs. Upon completion of the facility, the Company would have owned 100% of the Company Facility, however, any Licensed Technical Information would have been subject to the Licensing Agreement. In addition, the parties agreed to enter into a operating and maintenance agreement, which would address the operation and maintenance of the Company Owned Plasma Plant.

Promissory Note. As a material inducement for the Company to enter into the Restructuring Agreement, PTH delivered to the Company a Promissory Note in the principal amount is $5 million. The note was payable on or before January 30, 2015 with no interest prior to the payment due date. The promissory note had certain offset provisions set forth therein.

No value was assigned to the Processing Rights, Licensing Rights, PTH's assistance to construct a Company owned plant or the Promissory Note in these financial statements.

Preferred Stock and Certificate of Designation. The Company issued to RTC 1,250,000 shares of its newly created Class A Super Voting Preferred Stock ("Preferred Stock"). The Preferred Stock has the rights privileges and preferences as is set forth in the Certificate of Designations. As stated in the Certificate of Designations, each share of the Preferred Stock has identical rights as 100 shares of the Company's common stock. These rights, privileges and preferences include among others; (i). each share of Preferred Stock shall have 100 to 1 voting rights, voting along with the Company's common stock, (ii). each share of Preferred Stock shall have 100 to 1 rights upon liquidation and distribution of the Company, and (iii). each share of Preferred Stock shall have the right to convert into 100 shares of common stock of the company.

_____________________________

² At the present time, the Company does not have any reserves indicating ore or "mineralized material."

The market value of the 1,250,000 shares of its newly created Class A Super Voting Preferred Stock is assumed to equate to 125,000,000 shares of the common stock which was $16,250,000 on January 30, 2014 when the Company became contractually obligated to issue these shares.

In addition, under the Restructuring Agreement, the Company and RTC and its shareholders granted mutual releases, and provided customary representations and warranties.

The Restructuring Agreement was adopted by the unanimous consent of the Board of Directors of the Company, RTC, each RTC shareholders and PTH. All of the shareholders of RTC were signatories to the agreement.

As mention above, the Company was informed that the RTC shareholders were Wolz International, LLC ("Wolz") owning 50% of RTC, Titan Productions, Inc. ("Titan") owning 25% of RTC, and Mercury6, LP ("Mercury6") owning 25% of RTC. Assuming the issuance of the Preferred Stock to its shareholders, Wolz would have received 625,000 shares of Preferred Stock convertible into 62.5 million shares of common stock, and each of Titan and Mercury would have received 312,500 shares of Preferred Stock convertible into 31.5 million shares of common stock. We were informed that Mr. Gennaro Pane, our former Chairman and Chief Executive Officer, was the sole officer of Wolz and owned approximately 51% of Wolz, and Chad Altieri, our former Board member, is the sole officer and owner of Mercury. In addition, we were informed that Mr. Pane was a managing member of PTH and Messrs Pane and Altieri owned or controlled approximately 20% and 8%, respectively of PTH.

Termination of Agreement with RTC

PTH failed to pay the $5 million due under the Promissory Note and such failure continues as of the date of this report. The failure of RTC constituted a material breach to the Restructuring Agreement. As a result of that breach, along with other factors, the Company rescinded the Restructuring Agreement and cancelled the Preferred Stock, including all rights, privileges and preferences thereto. On May 12, 2015 and again on May 14, 2015, the Company notified RTC that it rescinded the Restructuring Agreement and cancelled the Preferred Stock, including all rights, privileges and preferences thereto, effective immediately. The Company provided a similar notification to PTH cancelling the Restructuring Agreement and related agreements with PTH.

The Company undertook the above-described actions unilaterally and these actions were not the product of a negotiated settlement between the Company and the counterparties to the Restructuring Agreement, including RTC. As a result of these actions, and in view of the purported conversion notice received from RTC, it is conceivable RTC or related parties may initiate litigation against the Company seeking the enforcement of the Restructuring Agreement (including the rights to the Preferred Stock and/or common stock) and/or the original Stock Exchange Agreement, among other demands. In the event litigation results in these matters, the Company intends to aggressively defend its position against such claims. Shareholders should be aware that the cost of litigation may prove expensive and, in this regard, the Company will be required to raise additional funds, which may result in significant dilution to existing shareholders.

Lawsuit with RTC

As discussed in "PART I, Item 3 – Legal Proceedings" above, on August 8, 2015, we were served with a lawsuit by Resource Technology Corporation ("RTC"). Please refer to that disclosure for a complete description of this matter.

Mining Services Agreement.

On May 22, 2013, the Company entered into a Mining Services Agreement with Mesa Acquisitions Group, LLC, a Florida limited liability company ("Contractor"), in association with Alba Petroleos De El Salvador Sem De CV, a Venezuelan company. Under the agreement, Contractor agreed to perform certain mining services on a portion of the Company's Mexican mining concessions (Solidaridad I & II mining concessions (or approximately 5,000 acres)). These services were to be performed in three, separate phases described below:

● Phase 1 entailed the immediate commission of high-tech satellite imaging to identify mineralization and confirm the two previous drilling campaigns on the mining concessions known as Solidaridad I and/or Solidaridad II.

The estimated costs of Phase 1 was approximately $400,000.

● Phase 2 required the development of the necessary infrastructure to conduct full scale mining operations on the Solidaridad I and/or Solidaridad II mining concessions, including limited exploration, establishment of roads, water, power (electricity) and staging area for employees on site.

The estimated costs of Phase 2 was approximately $10 million.

● Phase 3 required the construction of a processing plant to process the ore, which will be owned by the Company, and the performance of all surface and underground mining operations.

The estimated costs for the construction of the processing plant was approximately $40 million.

Contractor is responsible for the costs and expenses of: the satellite imaging described in Phase 1, the limited exploration and build out of the infrastructure described in Phase 2, and the construction of the processing plant described in Phase 3 and all mining costs. The obligation of contractor to proceed to Phases 2 and 3 will be dependent upon the company receiving positive results of the satellite imaging. The size and capacity of the processing plant to be constructed by the Contractor will be determined by parties, subject however to the results of the satellite imaging. Actual mining costs will be paid for by Contractor and milling and processing expenses will be allocated between the parties in proportion to their revenue allocation described below (70% for Company/30% for Contractor).

As consideration for the mining services, Contractor was to receive the following consideration from the Company:

Phase 1 and Phase 2. As consideration for completion of Phases 1 and 2, the Company agreed to issue to Contractor 10 million shares of its common stock. The Company issued the common stock to the Contractor, however, the Contractor failed to perform all of the required services under Phase 1 and Phase 2.

Phase 3. As consideration for completion of Phase 3, Contractor would have earned a 30% revenue interest in the revenues resulting from the sale of the ore, subject to it paying its proportionate share of the milling expenses. If Contractor fails to perform or elects not to perform Phase 3 for any reason within 12 months from the completion of Phase 2, Contractor will forfeit all rights to the project.

In addition to the consideration stated above, as a further inducement for Contractor to enter into the Mining Services Agreement, the Company's former Chairman agreed to issue to Contractor an additional 5 million shares of our common stock held by the Chairman. This is not a Company obligation and will occur after completion of development under separate agreement.

The parties are obligated to share in the milling and processing costs and revenues generated from any ore processing on a proportionate basis, that is 70% to the Company and 30% to Contractor.

The Mining Services Agreement contains extensive terms and obligations regarding the performance of the mining services by Contractor. Accordingly, the descriptions of the Mining Services Agreement is not complete, and is qualified in their entirety by reference to each agreement which is filed as an exhibit to our Annual Report on Form 10-K/A for the fiscal year ended May 31, 2013, filed with the Securities and Exchange Commission on September 16, 2013.

Mr. George Mesa, the sole owner of Contractor, has been the Company's Director of Security for the Company's Mexican mining concessions since September 2012. Mr. Mesa received stock options to acquire 1 million shares of our common stock at an exercise price of $0.12 in connection with that appointment.

On September 19, 2013, the Company in conjunction with its Mining Services partners Mesa Acquisition Group LLC/Alba Petroleos De El Salvador Sem De Cv, reported the results of the Phase 1 Satellite Imaging program under the Mining Services Agreement.

As at the date of this report, communications with Mesa Acquisition Group LLC has ceased and no further operations have been undertaken under the Mining Service Agreement. It is not clear, if, or when, any furtherwork will be performed under the terms of this agreement.

New Drilling Programs

In May 2014, we paid $35,000 as a deposit on a sales proposal to install limited production equipment on our property in Mexico for a total cost of $450,000. In August and September 2014, we made a two further deposits of $21,250 and $75,000, respectively, under the terms of the sales proposal. As at the date of this report, no progress has taken place in respect of this project.

In February 2015, we entered into a further contract with the same Contractor to drill 5,000 meters for $1,762,047, $195,790 payable in common stock and the balance of $1,566,257 payable in cash.

Pursuant to the drilling program we have completed approximately 4,000 meters of drilling over 27 holes.

During the period from February 2015 through May 31, 2015, we paid $800,000 in cash and as of May 31, 2015, a balance of $193,263 had been invoiced to us and was due and payable to the Contractor. As reported in Note 11 Subsequent Events below, the Company paid a further $380,251 in cash and issued 1,398,444 shares of our common stock in respect of this contract. As of the date of the issuance of this report, a balance of $124,146 had been invoiced to us and was due and payable to the Contractor for work performed and a further $261,860 work was outstanding to be performed under the terms of the contract. As of the issuance of this report, we do not have the funding to pay the balance due and payable or the balance of the work to be performed under the terms of the contract and we will need to raise the additional funds through the sale of further equity or debt instruments. These is no guarantee that we will be success in raising the necessary funding.

Corporate Matters.

On January 31, 2014, the Company filed the Certificate of Designations with the Delaware Secretary of State. The Certificate of Designation allows for the creation and issuance of the 1,250,000 shares of Preferred Stock. As stated in the Certificate of Designations, each share of the Preferred Stock has identical rights as 100 shares of the Company's common stock. These rights, privileges and preferences include among others; (i) each share of Preferred Stock shall have 100 to 1 voting rights, voting along with the Company's common stock, (ii) each share of Preferred Stock shall have 100 to 1 rights upon liquidation and distribution of the Company, (iii) each share of Preferred Stock shall have the right to convert into 100 shares of common stock of the Company. On January 29, 2014, the Company's Board of Directors approved the Certificate of Designations, the filings of the Certificate of Designations with the Delaware Secretary of State and the issuance of the Preferred stock created thereby to RTC.

On June 24, 2014, the Company and Dr. Edgar Choueiri entered into a Consulting Agreement, pursuant to which Dr. Choueiri agreed to provide certain consulting services to the Company with respect to plasma processing. The agreement is on a month to month basis, and Dr. Choueiri, among other terms, will receive a remuneration of $4,000 per month. In addition, in connection with the agreement, Dr. Choueiri resigned from the Board of Directors of the Company. Payments under this agreement have subsequently ceased.

On August 27, 2014, the Board of Directors approved the following:

the establishment of a 2014 Stock Option Plan for up to 20,000,000 shares of common stock, and

the creation of an advisory board, and appointed a Mexican national to its advisory board to assist the Company with its operations in Mexico, including regulatory affairs. The Company also granted 1,000,000 stock options to this individual under the newly created 2014 Stock Option Plan. The option exercise price is $0.23 per share.

Effective October 31, 2014, we and our former attorneys amended our Settlement Agreement to provide for the payment of $500,000 and the issuance of 500,000 shares of our common stock in full settlement of all amounts and claims due under prior agreements which includes a release of lien on the Company's Mexican properties under the pre-existing Pledge Agreement. The delivery of payment to our former attorneys was to occur prior to December 1, 2014 or the agreement to release the liens would terminate. On December 18, 2014, we successfully completed our obligations under an amended Settlement Agreement dated December 8, 2014 by paying our former attorneys $500,000 and issuing 600,000 shares of our common stock to them in full settlement of all amounts and claims due under prior agreements which includes a release of their lien on the our Mexican properties under the pre-existing Pledge Agreement.

On November 5, 2014, we appointed Mr. Scott Hartman to our Board of Directors. In addition, Mr. Hartman also was appointed as Director of Mergers and Acquisitions. Mr. Hartman received a stock option grant under the Company's 2014 Stock Option Plan of 1,000,000 shares of common stock at $0.29 price per share. In addition, on December 4, 2014, we entered into an agreement with Mr. Scott Hartman as Director of Mergers and Acquisitions, pursuant to which he received 1,000,000 shares of common stock. Moreover, upon the closing of a fundamental transaction in which we or our properties are sold to third parties, Mr. Hartman would receive a successful efforts fee of 2% of the sales price, provided that the total fees payable by us in the transaction do not exceed 5%. Mr. Hartman was also a Director of the Company.

On November 6, 2014, the Company appointed Dr. Michael Berry to its Advisory Board, as an advisor to the Chairman. The parties have agreed that he will receive 1,000,000 shares of common stock of the Company as compensation for acting in such capacity.

On January 5, 2015, Mr. Gennaro Pane resigned as the Company's Chairman, Chief Executive Officer and a director of the Company. Former Ambassador Hans H. Hertell was appointed as the Company's new Chairman and Mr. Scott Hartman as the Company's new Chief Executive Officer.

On February 11, 2015, Mr. Scott Hartman resigned as the Company's Chief Executive Officer but remained a Director of the Company and Director of Mergers and Acquisitions. Mr. Hans H. Hertell, the Company's Chairman and President acted temporarily as the Company's principal executive officer. On April 22, 2015, Mr. Scott Hartman resigned as a Director of the Company and as Director of Mergers and Acquisition of the Company

Effective February 20, 2015, Mr. John Gildea, a director of the Company, was appointed as the Company's Chief Operating Officer and Mr. Ruben Fiquerado formerly the Company's Chief operating Officer, was appointed Director of Mexican Operations. The Company and Mr. Gildea entered into an oral arrangement under which Mr. Gildea will receive $5,000 per month as remuneration for his role as Chief Operating Officer.

On May 14, 2015, Mr. Chad Altieri resigned as a Director of the Company.

On June 25, 2015, the Board of Directors of the Company appointed John Gildea as the Company's Chief Executive Officer and on that same date, Mr. Gildea resigned as the Company's Chief Operating Officer. The Company and Mr. Gildea have entered into an oral arrangement pursuant to which Mr. Gildea will receive a monthly compensation of $8,000 for acting in such capacity. In addition, Mr. Gildea will receive an initial grant of common stock in the amount of 500,000 shares, and he will receive a quarterly common stock grant of 200,000 shares, subject to Board of Directors approval.

Liquidity and Capital Resources

Our present plans to overcome these difficulties, the realization of which cannot be assured, include, but are not limited to, continuing efforts to raise new funding in the public and private markets, to sell some or all of our assets and to initiate a renegotiation of the terms of scheduled repayments to our creditors.

There is no assurance that commercially viable mineral deposits exist in sufficient amounts in our areas of exploration to justify exploitation. Further exploration will be required before a final evaluation as to the economic and legal feasibility of the mining rights we own can occur. Because we are still in our exploration stage, we have no revenues and have had only losses since our inception. Our plan of operations for the next 12 months is to continue the drilling program and begin a small exploitation program, provided that we receive sufficient funding to do so.

Depending on market conditions and the options available to us, we may attempt to enter into a joint venture with an operating company or permit an operating company to undertake exploration work on the Solidaridad Property, or we may seek equity or debt financing (including borrowing from commercial lenders) or we may consider a sale of the Company or its assets.

We do not intend to hire any additional employees at this time. All of the work related to our business will be conducted by our current employees and independent contractors. To the extent we receive funding, this is likely to change.

All of the Company's plans are predicated on the Company's ability to raise sufficient capital to implement and complete such plan, which we cannot assure you will occur in a timely manner, on terms acceptable to the Company, or at all. Because the exploration phase of our business plan is essentially a research and development activity, the results of our exploration activities will have a significant effect on our future business model. This model can change substantially based upon our exploration activities, liquidity position or other factors. Accordingly, estimating expenditures is an imprecise process, made even more so by the unpredictable nature of our business plan. We believe it would, therefore, not be helpful to estimate beyond the next 12 months. Even these estimates are subject to change depending on our ability to raise additional capital and execute our business plan in accordance with our estimates.

For the fiscal years ended May 31, 2015 and May 31, 2014 respectively, we raised $1,800,000 and $747,000, through the issuance of convertible notes payable, $743,745 and $407,500 from the sale of shares of our common stock, $40,000 and $103,333 from the exercise of warrants, $65,000 and $0 from the exercise of stock options and $50,000 and $0 by way of related party debt. At this time, we cannot provide investors with any assurance that we will be able to raise sufficient funding from the sale of our common stock or through sales of additional convertible promissory notes or otherwise to meet our obligations over the next 12 months.

During the next 12 months, the Company anticipates that it will incur approximately $1,300,000 in overhead without giving effect to any mining exploration or exploitation activities. Of the total amount, it is estimated that $570,000 will be allocated to our offices in Mexico and annual fees for our mining concessions, $420,000 in payments to our officers and consultants, $106,000 for legal and accounting services and SEC filing costs, and $204,000 for rent, travel and entertainment and other miscellaneous costs.

We must obtain additional financing to continue our operations. There can be no guarantee that we will be able to obtain additional funding on terms that are favorable to the Company or at all. These terms may cause significant dilution to our shareholders. As an exploration stage company, the Company has no current ability to generate revenue and no plans to do so in the foreseeable future. Our assets consist of cash, prepaid expenses, nominal equipment and certain mineral property interests. There can be no assurance that we will obtain sufficient funding to continue operations, or if we do receive funding, to generate revenues in the future or to operate profitably in the future. We have incurred net losses in each fiscal year since inception of our operations. These conditions raise substantial doubt about our ability to continue as a going concern.

RESULTS OF OPERATIONS FOR THE YEAR ENDED MAY 31, 2015 COMPARED TO THE YEAR ENDED MAY 31, 2014

Revenue

We did not earn any revenues during the years ending May 31, 2015 and 2014.

We do not anticipate earning revenues until such time, if any, that we are able to begin exploitation of mineralized material from the land related to our mining rights. Although our prior exploration drilling programs and current satellite imaging have produced results which we believe to be extremely encouraging, we can provide no assurance that we will discover mineralized material in sufficient quantities and of sufficient quality that we can obtain funding to monetize the mineralized material through additional funding for exploitation, joint venture, sale or otherwise.

Operating expenses

We incurred operating expenses in the amount of $4,851,708 and $3,841,129 during the years ended May 31, 2015 and 2014, respectively, an increase of $1,010,579. The increase primarily related to the exploration expenses of $1,089,513 incurred during the twelve months ended May 31, 2015 relating to our new drilling program and proposed establishment of a limited production facility.

RTC Restructuring Agreement – Related Party

Pursuant to the RTC Restructuring Agreement that we entered into on January 30, 2014, the Company issued 1,250,000 shares of its preferred stock with a market value of $16,250,000 in return for certain considerations, all of which are described in detail above. With respect to the Restructuring Agreement, no value has been assigned to the Processing Rights, Licensing Rights, PTH's assistance to construct a Company Owned Facility or the promissory note in these financial statements. Effective as of the date of the issuance of the preferred stock, the Company, RTC and PTH, were all development stage companies, none of which have the existing financials resources, established business operating processes or ongoing profitable business operations to meet their obligations under the terms of these agreements at this time. The Company, RTC and PTH's ability to meet their obligations under the terms of these agreements is dependent on the future ability to raise the future funding required and to successful development and implement their business plans which cannot be guaranteed at this time. Accordingly the realization of any future value from these rights and notes is highly uncertain at this time and accordingly no value has been assigned to them.

While the RTC agreement was terminated during the year ended May 31, 2015, under US GAAP rules, we are unable to recognize a credit for any reversal of this expense incurred in the prior period.

Operating Loss

We incurred an operating loss of $4,851,708 and $20,091,129 respectively for the twelve months ended May 31, 2015 and 2014 due to the factors discussed above.

Gain on Settlement of Accounts Payable

Effective May 23, 2012, we amended our Settlement Agreement and Payment Agreement with our former attorneys. As result of the amendment, the payment of the initial installment of $403,554, originally due on May 24, 2012, was extended to July 24, 2012. In addition, commencing May 23, 2012, interest accrued on the amount due, which is $1,614,216, at the rate of 5% per annum. We were unable to make the scheduled payment of $403,554 and accrued interest on July 24, 2012 and defaulted under the terms of this agreement, and the entire amount, including interest, became due and payable. On October 1, 2012, we entered into a second amendment to our Settlement Agreement and Payment Agreement with our former attorneys effective July 23, 2012. As a result of the second amendment, the date for the payment of the initial installment of $403,554 was extended to December 1, 2012.

Effective October 31, 2014, we and our former attorneys amended our Settlement Agreement to provide for the payment of $500,000 and the issuance of 500,000 shares of our common stock in full settlement of all amounts and claims due under prior agreements which includes a release of lien on the Company's Mexican properties under the pre-existing Pledge Agreement. On December 18, 2014, we successfully completed our obligations under the Settlement Agreement, as amended, by paying our former attorneys $500,000 and issuing 600,000 shares of our common stock to them in full settlement of all amounts and claims due under prior agreements which includes a release of their lien on the our Mexican properties under the pre-existing Pledge Agreement.

Accordingly, we recognized a gain of $1,136,072 on the settlement of a liability of $1,589,216 and accrued interest of $204,856 by payment of $500,000 cash and the issuance of 600,000 shares of our common stock valued at $158,000.

In addition, in October 2014, we settled liabilities with another firm of attorneys totaling $19,670 for a payment of $2,000 and consequently recognized a gain of $17,670 on the settlement of this liability.

Gain on Derivative Liability

During the twelve months ended May 31, 2015 we recognized a loss of $1,103,268 compared to a gain of $41,253 during the twelve months ended May 31, 2014 on derivative liabilities arising on convertible notes payable that we issued during these respective years. The variance between the two periods reflected the increase in the value of convertible notes issued and outstanding in the two periods, $1,800,000 were issued in the twelve months ended May 31, 2015 compared to $647,000 issued during the twelve months ended May 31, 2014, and the increased volatility of our share price in 2015 as compared to 2014.

Interest Expense

Interest expense for the years ended May 31, 2015 and 2014 was $1,632,775 and $517,234 respectively, an increase of $1,115,541. The increase was largely due to increase in the value of convertible notes issued and outstanding in the two period, $1,800,000 were issued in the twelve months ended May 31, 2015 compared to $647,000 issued during the twelve months ended May 31, 2014 and as a result interest expense and amortization of the debt discount increased in line with the additional principal balance of these convertible loan notes issued and outstanding.

Loss Before Income Taxes

We incurred losses before income taxes of $6,434,009 and $20,567,110 respectively for the twelve months ended May 31, 2015 and 2014 due to the factors discussed above.

Provision for Income Taxes

We incurred taxable losses in both the twelve months ended May 31, 2015 and 2014 and consequently no provision was required for income taxes in either year.

Net Loss

The Company incurred net losses of $6,434,009 and $20,567,110 respectively for the twelve months ended May 31, 2015 and 2014 due to the factors discussed above.

CASH FLOW INFORMATION FOR THE YEAR ENDED MAY 31, 2015 COMPARED TO THE YEAR ENDED MAY 31, 2014

Operating activities

Net cash flow used in operations in the year ended May 31, 2015 was $2,640,334 compared to $1,177,680 for year ended May 31, 2014, a decrease of $1,462,654.

During the year ended May 31, 2015, our net loss of $6,434,009 was reduced for cash flow purposes by net noncash gains and expenses of $3,517,666 and an increase in accounts payable and accrued expenses of 275,677 resulting in net cash of $2,640,344 being used in operating activities. By comparison, in the year ended May 31, 2014, our net loss was $20,567,110 which was offset for cash flow purposes by $3,346,500 in non-cash items and an increase in our net operating liabilities of $617,426 to arrive at net cash used in operations of $1,177,680.

Investing activities

Net cash flow generated by investing activities in the fiscal years ended May 31, 2015 and May 31, 2014 was $0 and $112,910 respectively. We neither generated nor used cash flow in investing activities during the year ended May 31, 2015. By comparison, during the twelve months ended May 31, 2014 we received a refund of certain fees previously paid in respect of our mining interests in Mexico.

Financing activities

Net cash flow generated from financing activities was $2,698,574 in the year ended May 31, 2015 compared to $1,157,833 for the year ended May 31, 2014, an increase of $1,540,741.

During the year ended May 31, 2015, we generated $1,800,000 from the issuance of convertible notes payable, $743,475 from the sale of shares of our common stock, $65,000 from the exercise of stock options, $50,000 by way of loan from related party and $40,000 from the exercise of warrants. By comparison, in the year ended May 31, 2014, we generated net cash of $647,000 from the issuance of convertible notes payable, $407,000 from the sale of shares of our common stock, and $103,333 through the exercise of our warrants.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.

Critical Accounting Policies and Estimates

The Company has determined from the significant accounting policies disclosed in Note 2 of the Company's financial statements, that the following disclosures are critical accounting policies.

Proven and Probable Reserves

The definition of proven and probable reserves is set forth in SEC Industry Guide 7. Proven reserves are reserves for which (a) quantity is computed from dimensions revealed in outcrops, trenches, workings or drill holes; grade and/or quality are computed from the results of detailed sampling and (b) the sites for inspection, sampling and measurement are spaced so closely and the geologic character is so well defined that size, shape, depth and mineral content of reserves are well established. Probable reserves are reserves for which quantity and grade and/or quality are computed from information similar to that used for proven reserves, but the sites for inspection, sampling and measurement are farther apart or are otherwise less adequately spaced. The degree of assurance, although lower than that for proven reserves, is high enough to assume continuity between points of observation. In addition, reserves cannot be considered proven and probable until they are supported by a feasibility study, indicating that the reserves have had the requisite geologic, technical and economic work performed and are economically and legally extractable at the time of the reserve determination.

Mine Development Costs

Mine development costs include engineering and metallurgical studies, drilling and other related costs to delineate an ore body, the removal of overburden to initially expose an ore body at open pit surface mines and the building of access ways, shafts, lateral access, drifts, ramps and other infrastructure at underground mines. Costs incurred before the mineralized material is classified as proven and probable reserves are expensed and classified as mine development costs.

Revenue Recognition Policy

Revenue will be recognized when the price is determinable, upon delivery and transfer of title to the customer and when there is a reasonable assurance of collection of the sales proceeds. The Company has not yet entered into any contractual obligation to deliver ore product or finished metals.

Income Taxes

Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating losses. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Valuation allowances are established when necessary to reduce deferred tax assets to the amount that is expected to be realized. At May 31, 2015 and 2014, based upon its evaluation, the Company had a full valuation allowance against its deferred tax assets.

Share Based Compensation

The cost of equity instruments issued to non-employees in return for goods and services is measured by the fair value of the goods or services received or the measurement date fair value of the equity instruments issued, whichever is the more readily determinable. The cost of employee services received in exchange for equity instruments is based on the grant date fair value of the equity instruments issued.

ITEM 7A. SELECTED FINANCIAL DATA

As a "smaller reporting company" as defined by Item 10 of Regulation S-K, we are not required to provide information required by this Item.

ITEM 8. FINANCIAL STATEMENTS

The financial statements required by this Item are set forth on page 66 below.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

ITEM 9A. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures.

The Company maintains disclosure controls and procedures, as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Disclosure controls and procedures are designed to ensure that information required to be disclosed in an issuer's reports filed under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in the SEC rules and forms and (ii) accumulated and communicated to management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosures.

Based on such evaluation, our principal executive officer and principal financial officer concluded that, as of the end of the period covered by this Annual Report on Form 10-K, our disclosure controls and procedures are not effective.

Management's Annual Report on Internal Control Over Financial Reporting.

Our management is responsible for establishing and maintaining adequate internal control over financial reporting. The Securities Exchange Act of 1934 defines internal control over financial reporting in Rules 13a-15(f) and 15d-15(f) as a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that:

- Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect our transactions and any disposition of our assets;

- Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and

- Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.

Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting as of the end of fiscal year May 31, 2015. In making this assessment, our management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control — Integrated Framework. Our management has concluded that as of May 31, 2015, our internal control over financial reporting was not effective based on these criteria. Specifically, we concluded that we had identified a significant deficiency with respect to the operation of our internal controls relating to the documentation and authorization procedures of certain travel and entertaining expenses incurred by certain directors, officers and non-Company individuals as of May 31, 2015.

However, a control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. The design of any system of controls is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions, regardless of how remote. Because of the inherent limitations in a control system, misstatements due to error or fraud may occur and may not be detected.

This Annual Report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by the Company's registered public accounting firm pursuant to "Dodd-Frank Wall Street Reform and Consumer Protection Act" (Wall Street Reform Act) recently approved which permanently exempts small public companies with less than $75 million in market capitalization (non-accelerated filers) from the requirement to obtain an external audit on the effectiveness of internal financial reporting controls provided in Section 404(b) of the Sarbanes-Oxley Act of 2002 (SOX). Section 404(b) requires a registrant to provide an attestation report on management's assessment of internal controls over financial reporting by the registrant's external auditor. Disclosure of management attestations on internal control over financial reporting under existing Section 404(a) is included as required in this report

Changes in Internal Control over Financial Reporting.

There were no changes in our internal control over financial reporting during the last fiscal quarter that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

ITEM 9B. OTHER INFORMATION

None.

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

Identification of Directors and Executive Officers

MANAGEMENT

The directors and executive officers of the Company, their ages, and the positions they hold are set forth below. The directors of the Company hold office until the next annual meeting of stockholders of the Company and until their successors in office are elected and qualified. All officers serve at the discretion of the Board of Directors.

Name	Age		Title
John Gildea		43	Chief Executive Officer and Director
Hans H. Hertell		64	President and Director
David W. Burney		63	Director
Sheldon Baer		75	Director
Daniel H. Luciano		63	Director
(Daniel) Moon Joon Sikk		67	Former President and Director
Michael Volkov		57	Director
David Cutler		59	Chief Financial Officer

John Gildea. Mr. Gildea was appointed to the Company's Board of Directors on January 6, 2011. On February 20, 2015, Mr. Gildea was appointed Chief Operating Officer of the Company, and on June 25, 2015, he was appointed Chief Executive Officer of the Company and concurrently resigned as Chief Operating Officer. From 1998 to 2007, Mr. Gildea worked in various capacities with Allied Irish Bank plc. In 2007, Mr. Gildea is the founder and Director of SGG Enterprises, Dublin, Ireland, which provides venture capital and management restructuring services, to public and private companies.

Hans H Hertell. Mr. Hertel is an attorney with over 30 years' experience in government, public affairs, business, and banking, Ambassador Hans H. Hertell was sworn in as the United States Ambassador to the Dominican Republic on November 8, 2001. At the time, the Dominican Republic was the fourth largest trading partner of the United States in the Western Hemisphere after Canada, Brazil and Mexico and the largest economy in Central America and the Caribbean. When he finished his tour on May 1, 2007, Ambassador Hertell was the second longest serving U.S. Ambassador in the world.

Since 2008 to the present, he has been Chairman and Chief Executive Officer of the Hertell Group LLC, and international merchant banking and consulting company with offices in San Juan, Puerto Rico. From 1992 to 1996 Ambassador Hertell was Managing Director of Latin America and the Caribbean for Black, Kelly, Scruggs and Healey, a government and public affairs company based in Washington, D.C. He was responsible for all aspects of the firm's activities in Latin America and the Caribbean. In that capacity, Ambassador Hertell represented several Fortune 50 companies as well as governments in the region. Previously, he was Chief Executive Officer and Chairman of Ponce Federal Bank (NYSE), one of the largest publicly traded corporations in the Caribbean, with $1.3 billion in assets. Ambassador Hertell was also one of the founding partners of the third largest full service law firm in Puerto Rico, Goldman, Antonetti, Ferraiuoli, Axtmayer and Hertell.

David W. Burney. Mr. Burney was as a Director of the Company on October 1, 2009. Mr. Burney was an underground mine geologist for Amax Lead Company of Missouri, Buick Mine, and was later assigned to the mine's exploration group. During the 1990's, as adjunct faculty with Cochise College, Sierra Vista, AZ, Mr. Burney taught several geology courses while continuing his quest for mineral resources. Additionally, Mr. Burney has explored for copper resources in the Southwest United States. Mr. Burney holds a Master's Degree in Geology, Ore Deposits Exploration from the New Mexico Institute of Mining and Technology. In addition, he is a "Qualified Person" in Geology as determined by Mining and Metallurgical Society of America.

Sheldon Baer. Mr. Baer has been a director since December 6, 2007. Mr. Baer is also currently the President of Golden Hands Construction Inc., a company which he personally founded in 1977. Golden Hands specializes in construction of medical, commercial and industrial facilities, including mining facilities. It has been featured in prestigious publications such as the Physician Magazine of the Los Angeles Medical Association and Contract Magazine.

Daniel H. Luciano. Mr. Luciano was appointed to the Company's Board of Directors on September 21, 2010. Mr. Luciano has been an attorney since 1977 and is a member of the New Jersey Bar and Texas Bar. Mr. Luciano specializes in corporate and securities law providing services to small and mid-sized public and private companies domestically and internationally.

(Daniel) Moon Joon Sikk. Mr. Moon was appointed as a Director of the Company on December 29, 2011 and President of the Company on June 13, 2012. Mr. Moon resigned as President of the Company on September 4, 2013, however he remains as a director of the Company. Mr. Moon has been President and Chief Executive Officer of LUCKY TCL from 1993 to the present. LUCKY TCL, with offices in Beijing, Hong Kong and Seoul, core business is designing and manufacturing smelters for the mining industry with a primary focus on gold, copper and iron ores. From 1996 to present, Mr. Moon also has been President and Chief Executive Officer of FLAMBAU Ltd, a commodity trading business located in Hong Kong. Mr. Moon is a graduate of Han Yang University, Seoul Korea with a degree in architectural engineering and also is a graduate from South Dakota State University with a degree in Civil Engineering.

Michael Volkov. Mr. Volkov was appointed as a Director of the Company on September 16, 2013.Mr. Volkov, CEO and owner of The Volkov Law Group, LLC, has over 30 years of experience in practicing law. A former federal prosecutor and veteran white collar defense attorney, he has expertise in areas of compliance, internal investigations and enforcement matters. Mr. Volkov spent 17 years as a federal prosecutor in the U.S. Attorney's Office for the District of Columbia. As an Assistant US Attorney, he had over 75 jury trials and extensive federal court experience. He also served on the Senate and House Judiciary Committees as the chief crime and terrorism counsel for the respective committees. In addition, Mr. Volkov served as a deputy assistant attorney general in the Office of Legislative Affairs of the U.S. Department of Justice (DOJ) and as a trial attorney in the DOJ's Antitrust Division. Mr Volkov maintains a highly popular FCPA blog – Corruption, Crime & Compliance. He is a regular speaker at events around the globe, and is frequently cited in the media for his knowledge on criminal issues, enforcement matters, compliance and corporate governance. In February 2013, Michael Volkov created the Volkov Law Group, a firm specializing in compliance, internal investigations and white collar defense, including the Foreign Corrupt Practices Act (FCPA) and the UK Bribery Act, antitrust criminal, health care fraud, off-label marketing of pharmaceuticals and medical devices, securities, export controls and sanctions, environmental enforcement, and other emerging compliance and enforcement issues.

David Cutler. On October 16, 2013, Mr. David Cutler was re-appointed Chief Financial Officer of the Company. Mr. Cutler has previously resigned his position on July 17, 2013.. Mr. Cutler has been a director and Chief Financial Officer of Discovery Gold Corporation, a publicly quoted mineral exploration company with interests in Ghana, since August 2012 and is the Principal of Cutler & Co., LLC, a PCAOB registered auditing company. Mr. Cutler has a Masters degree from St. Catharine's College in Cambridge, United Kingdom and qualified as a British Chartered Accountant and Chartered Tax Advisor with Arthur Andersen & Co. in London. He was subsequently admitted as a Fellow of the UK Institute of Chartered Accountants. Since arriving in the United States, Mr. Cutler has qualified as a Certified Public Accountant, a Certified Valuation Analyst of the National Association of Certified Valuation Analysts and obtained an executive MBA from Colorado State University.

Conflicts of Interest; Lack of Employment Contracts

All of the Company's officers are not full time employees and are involved in other outside business activities, including, at least one other publicly held company. In addition, the Company is involved with a material transaction with RTC, which is controlled by our Chairman and another director. Presently, the Company does not have a formal conflicts of interest policy governing its officers and directors. In addition, the Company does not have written employment agreements with any of its officers, other than Mr. Hans H. Hertell, the Company's President. Its officers intend to devote sufficient business time and attention to the affairs of the Company to develop the Company's business in a prudent and business-like manner. However, the officers may engage in other businesses related and unrelated to the business of the Company. As a result, the officers of the Company may have a conflict of interest in allocating their respective time, services, and future resources, and in exercising independent business judgment with respect to their other businesses and that of the Company (See "Risk Factors" and "Item 13 - Certain Relationships and Related Transactions, and Director Independence").

None of our employees have employment contracts, other than Mr. Hans H. Hertell (See "Item 13 - Certain Relationships and Related Transactions, and Director Independence"). Accordingly, other than Mr. Hertell, our officers can terminate their employment at anytime. Mr. Hertell's employment agreement may be terminated by either party with 10 days prior written notice. Therefore, if any or all of our officers were terminated, their employment replacements may be difficult to find, and it could have a material adverse effect on our business plans.

Involvement in Certain Legal Proceedings

To the knowledge of the Company, none of its executive officers or directors has been personally involved in any of the following:

(1) A petition under the Federal bankruptcy laws or any state insolvency law was filed by or against, or a receiver, fiscal agent or similar officer was appointed by a court for the business or property of such person, or any partnership in which he was a general partner at or within two years before the time of such filing, or any corporation or business association of which he was an executive officer at or within two years before the time of such filing;

(2) Such person was convicted in a criminal proceeding or is a named subject of a pending criminal proceeding (excluding traffic violations and other minor offenses);

(3) Such person was the subject of any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining him from, or otherwise limiting, the following activities:

(i) Acting 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;

(ii) Engaging in any type of business practice; or

(iii) Engaging in any activity in connection with the purchase or sale of any security or commodity or in connection with any violation of Federal or State securities laws or Federal commodities laws;

(4) Such person was the subject of 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 described in paragraph (f)(3)(i) of this section, or to be associated with persons engaged in any such activity;

(5) Such person was 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;

(6) Such person was 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;

(7) Such person was 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:

(i) Any Federal or State securities or commodities law or regulation; or

(ii) 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

(iii) Any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or

(8) Such person was the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Exchange Act (15 U.S.C. 78c(a)(26))), any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act (7 U.S.C. 1(a)(29))), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934 requires our directors, officers, and every person who is directly or indirectly the beneficial owner of more than 10 percent of any class of the Company's equity securities (the "Beneficial Owners") to file with the Securities and Exchange Commission (the "SEC") initial statements of beneficial ownership on Form 3, statements of changes in beneficial ownership on Form 4, and/or annual statements of changes in beneficial ownership on Form 5. Our directors, officers and Beneficial Owners are required by SEC regulations to furnish the Company with copies of all Section 16(a) forms they file.

Based solely on the Company's review of such Section 16(a) forms received by it, the Company believes that, with respect to the fiscal year ended May 31, 2014, the Company's directors, officers and Beneficial Owners were not in compliance with all Section 16(a) filing requirements.

The current officers, directors and Beneficial Owners have indicated that they intend bring their filings current and to file timely in the future.

Code of Ethics

The Company has adopted a Code of Ethics which is filed as an exhibit to its Form 10-K for the Annual Period ended May 31, 2010. The Code of Ethics is designed to deter wrong-doing and promote honest and ethical conduct, full, fair, accurate, timely, and understandable disclosure, and compliance with applicable laws.

Audit Committee and Financial Expert

Our Board of Directors currently serves as our audit committee. Our board members are not "independent" in accordance with rule 4200(a)(14) of the Nasdaq Marketplace Rules. Our board of directors does not have an "audit committee financial expert," within the meaning of that phrase under applicable regulations of the Securities and Exchange Commission because it has no audit committee and is not required to have an audit committee because its securities are not listed on any exchange. The board of directors believes that each member is financially literate and experienced in business matters and is capable of (1) understanding generally accepted accounting principles ("GAAP") and financial statements, (2) assessing the general application of GAAP principles in connection with our accounting for estimates, accruals and reserves, (3) analyzing and evaluating our financial statements, (4) understanding our internal controls and procedures for financial reporting, and (5) understanding audit committee functions, all of which are attributes of an audit committee financial expert. However, the board of directors believes that no audit committee member has obtained these attributes through the experience specified in the SEC's definition of "audit committee financial expert." Further, as is the case with many small companies, it would be difficult for us to attract and retain board members who qualify as "audit committee financial experts," and competition for such individuals is significant. The board of directors believes that its current members are able to fulfill its role under SEC regulations despite not having a designated "audit committee financial expert."

ITEM 11. EXECUTIVE COMPENSATION.

Summary Compensation

Set forth below in the Summary Compensation Table are the particulars of compensation paid to the following persons:

-	our principal executive officer;

-	our principal financial officer

-	our two most highly compensated executive officers other than our principal executive officer who were serving as executive officers at the end of the fiscal year ended May 31, 2015; and

-	who we will collectively refer to as the "Named Executive Officers" for the fiscal year ended May 31, 2015.

The following Summary Compensation Table summarizes the total compensation awarded to, earned by, or paid to our Named Executive Officers for all services rendered in all capacities to us for during the fiscal years ended May 31, 2015 and 2014:

SUMMARY COMPENSATION TABLE

Name and Principal	Fiscal Year	Salary		Bonus		Stock Awards		Option Awards		Incentive Plan Compensation		Non-Qualified Compensation Deferred Earnings		All Other Compensation
position	Ended	($)		($)		($)		($)		($)		($)		($)		Total ($)
Gennaro (Jerry) Pane, Former CEO (1)	2015		0		0		0		0		0		0		72,580		72,580
	2014		0		0		0		0		0		0		96,744		96,744
David Cutler, CFO (2)	2014		0		0		0		254,172		0		0		60,000		314,172
	2013		0		0		0		90,884		0		0		60,000		150,844
Juan Serrat, COO (3)	2015		180,000		60,000		0		0		0		0		0		240,000
	2014		180,000		60,000		0		0		0		0		0		240,000
Ruben Fiqueredo, CTO (4)	2015		180,000		60,000		0		0		0		0		0		240,000
	2014		180,000		60,000		0		0		0		0		0		240,000
Hans Hertell, President (5)	2015		0		0		0		0		0		0		0		0
	2014		0		0		0		0		0		0		1,530,000		1.530,000
John Gildea, COO(6)	2015		5,000		0		0		0		0		0		0		5,000
	2014		0		0		0		0		0		0		0		0

(1) Mr. Pane was appointed as our Chief Executive Officer on October 3, 2011. During the period from June 1, 2014 to his resignation on January 9, 2015, we paid $60,000 as an unaccountable expense allowance and accrued $12,580. During the twelve months ended May 31, 2014, Mr. Pane received cash advances totaling $96,744 as an unaccountable expense allowance. Effective November 2013. Mr. Pane received $10,000 month from the Company as an unaccountable expense allowance while he was our CEO

(2) Mr. Cutler was appointed as our Chief Financial Officer on November 29, 2011. On July 17, 2013, Mr. Cutler resigned as our Chief Financial Officer and was subsequently reappointed as our Chief Financial Officer on October 16, 3013. As consideration for his services in such capacity, Mr. Cutler was paid a monthly consulting fee of $5,000 and was granted five year, fully vested, stock options to purchase 500,000 shares of our common stock at $0.19 per share in 2014 and 1,000,000 shares of occur common stock at $0.28 per share in 2015.

(3) Mr. Serrat was appointed our Chief Operating Officer on May 11, 2012. Mr. Serrat is to be paid an annual salary of $180,000 and entitled to an annual bonus of $60,000. Payment of the salary is deferred until the Company receives sufficient funding to support the salary requirement. We have accrued amounts due to Mr. Serrat. On August 13, 2015, the Company entered into a Settlement Agreement with Mr. Serrat pursuant to which all amounts accrued were cancelled in exchange for certain considerations whereby we issued to Mr. Serrat 1 million shares of our common stock and 1 million, five year stock options with an exercise price of $007 in full and final settlement of any and all balance owed to him by the Company.

(4) Mr. Fiqueredo was appointed our Chief Technical Officer on May 11, 2012. Mr. Fiqueredo is paid an annual salary of $180,000 and entitled to an annual bonus of $60,000. Payment of the salary is deferred until the Company receives sufficient funding to support the salary requirement. We have accrued amounts due to Mr. Fiqueredo. On August 13, 2015, the Company entered into a Settlement Agreement with Mr. Fiqueredo whereby we issued Mr. Fiquerado 1 million shares of our common stock and 1 million, five year stock options with an exercise price of $007 in full and final settlement of any and all balance owed to him by the Company.

(5) Effective August 28, 2013, we appointed Mr. Hans H. Hertell as the Company's President. In addition, on that same date, our Board of Directors approved an Employment Agreement with Mr. Hertell and a Consulting Agreement with Hertell Group, LLC. ("Hertell Group"). Mr. Hertell is the sole officer and member of Hertell Group. Under the Employment Agreement, among other terms, we agreed to pay Mr. Hertell an annual salary of $500,000. The salary commences at such time as we generate monthly gross revenues from our plasma processing operations of at least one million dollars ($1,000,000) for two (2) consecutive months ("Performance Event"), and (ii) upon our achievement of the Performance Event, the Base Salary shall commence effective as of the first day of the stated two (2) consecutive month period and shall continue throughout the Term. In addition, upon occurrence of the Performance Event, the Executive will be entitled to receive a stock award of 1,000,000 shares of common stock ("Stock Grant"), which shall vest immediately. Either party may terminate the Agreement by providing at least ten (10) days written notice to the other party. As of the date of this report, no consideration has been paid to Mr. Hertell in his capacity as President of the Company. Under the Consulting Agreement, the Hertell Group received 9,000,000 shares of our common stock. The term of the Consulting Agreement is three years. The value of the 9,000,000 shares issued to Mr. Hertell was $1,530,000 at the date of issuance.

(6) Mr. Gildea was appointed as the Company's Chief Operating Officer effective February 20, 2015. The Company and Mr. Gildea entered into an oral arrangement under which Mr. Gildea will receive $5,000 per month as remuneration for his role as Chief Operating Officer. On June 25, 2015, the Board of Directors of the Company appointed John Gildea as the Company's Chief Executive Officer and on that same date, Mr. Gildea resigned as the Company's Chief Operating Officer. The Company and Mr. Gildea have entered into an oral arrangement pursuant to which Mr. Gildea will receive a monthly compensation of $8,000 for acting in such capacity. In addition, Mr. Gildea will receive an initial grant of common stock in the amount of 500,000 shares, and he will receive a quarterly common stock grant of 200,000 shares, subject to Board of Directors approval.

During fiscal year 2015, in addition to the above, the Company has retained (i) a geologist, who also is a director, to provide various geological consulting services to the Company at a rate of $8,000 a month and (ii) an attorney, who also is a director, to provide various legal services to Company at a rate of $4,000 per month.

As of the date of this Report, other than as stated herein, the Company has no written or oral agreements with any of its officers regarding compensation or any other form of remuneration in excess of $100,000, and has no compensation or remuneration of any kind due or accrued and unpaid to any officer other than as indicated above. Any compensation paid to an officer is a result of an agreement between the parties.

Director Compensation

Except as stated herein, the directors receive no monetary compensation for their work for the Company during the year ended May 31, 2015.

The following Director Compensation Table lists all compensation (cash, equity or other) received by each person in their respective capacity as a director during the fiscal year ended May 31, 2015:

Name	Fees Earned or Paid in Cash $		Stock Awards ($) (1)		Option Awards ($)		Non-Equity Incentive Plan Compensation $		Non-Qualified Deferred Compensation Earnings ($)		All Other Compensation ($)		Total ($)
David W. Burney		-		55,000		-		-		-		-		55,000
Gennaro (Jerry) Pane		-		55,000		-		-		-		-		55,000
Sheldon Baer		-		55,000		-		-		-		-		55,000
Daniel Luciano		-		55,000		-		-		-		-		55,000
John Gildea		-		55,000		-		-		-		-		55,000
(Daniel) Moon Joon Sikk		-		55,000		-		-		-		-		55,000
Chad Altieri		-		55,000		-		-		-		-		55,000
Hans H. Hertell		-		55,000		-		-		-		-		55,000
Michael Volkow		-		55,000		-		-		-		-		55,000
Scott Hartman (2)		-		-		263,600		-		-		-		263,600

(1) On August 27, 2014, we issued 2,250,000 shares of our common stock valued as $495,000 as compensation to our directors. Each of our directors at the time received 250,000 shares of common stock.

(2) Mr. Scott Hartman was appointed a director on November 5, 2014. Mr. Hartman was granted five year, fully vested, stock options to purchase 1,000,000 shares of our common stock at $0.28 per share under the Company's 2014 Stock Option Plan. Under this plan, these options expired 90 days following his termination.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

Security Ownership of Certain Beneficial Owners and Management.

As of September 14, 2015, there were a total of 190,087,480 shares of our common stock issued and outstanding and 16 million outstanding stock options.

Subject to the foregoing, the following table describes the beneficial ownership of our voting securities as of September 8, 2015 by: (i) each of our officers and directors; (ii) all of our officers and directors as a group; and (iii) each shareholder known to us to own beneficially more than 5% of our common stock. In addition, the Common Stock includes the Preferred Stock on an "as converted" basis. Unless otherwise stated, the address of each individual is our address, 242A West Valley Brook Road, Califon, New Jersey, 07830. All ownership is direct, unless otherwise stated.

Name and Address of Beneficial Owner	Title of Class	Amount and Nature of Beneficial Ownership		Percent of Class*
Officer and Directors

Sheldon Baer(2)	Common		2,736,395	1.3%
Dave Burney(3)	Common		2,610,000	1.3%
Daniel H. Luciano(4)	Common		2,094,000	1.0%
John Gildea(5)	Common		2,500,000	1.2%
(Daniel) Moon Joon Sikk(6)	Common		1,750,000	0.8%
Hans H. Hertell(7)	Common		10,500,000		5.1%
Michael Volkov(8)	Common		1,250,000	0.6%
David Cutler (9)	Common		1,500,000		0.7%
All officers and directors (8 persons)	Common		24,940,935		12.1%

(1) "Beneficial ownership" means having or sharing, directly or indirectly (i) voting power, which includes the power to vote or to direct the voting, or (ii) investment power, which includes the power to dispose or to direct the disposition, of shares of the common stock of an issuer. The definition of beneficial ownership includes shares underlying options or warrants to purchase common stock, or other securities convertible into common stock, that currently are exercisable or convertible or that will become exercisable or convertible within 60 days. Unless otherwise indicated, the beneficial owner has sole voting and investment power.

(2) Represents stock options to acquire 1,000,000 shares held by the reporting person and 1,736,395 shares held by the reporting person.

(3) Represents stock options to acquire 1,000,000 shares held by the reporting person and 1,610,000 shares held by the reporting person.

(4) Represents stock options to acquire 1,000,000 shares held by the reporting person and 1,094,000 shares of common stock owned by the reporting person.

(5) Represents stock options to acquire 1,000,000 shares held by the reporting person and 1,500,000 shares of common stock owned by the reporting person.

(6) Represents stock options to acquire 1,000,000 shares held by the reporting person and 750,000 shares of common stock owned by the reporting person.

(7) Represents (i) stock options to acquire 1,000,000 shares held by the reporting person, (ii) 500,000 shares held by the reporting person and (iii) 9,000,000 shares of common stock issuable to the Hertell Group, LLC under a consulting agreement with the Company. Mr. Hertell is Chairman and Chief Executive Officer of The Hertell Group LLC.

(8) Represents stock options to acquire 1,000,000 shares held by the reporting person and 250,000 shares held by the reporting person.

(9) Represents stock options to acquire 1,500,000 shares held by the reporting person.

Securities Authorized for Issuance Under Equity Compensation Plans

Details of securities authorized for issuance under equity compensation plans are provided in Item 5-Market For Registrant's Common Equity, Related Stockholder Matters And Issuer Purchases Of Equity Securities.

As of May 31, 2015, 16,000,000 stock options remain outstanding, of which 10,000,000 are held by former and existing directors, 5,000,000 are held by former or existing officers of the Company and 1,000,000 held by an advisory board member to the Company.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

Certain Relationships and Related Transactions

During the year ended May 31, 2015, we issued:

2,250,000 shares of our common stock valued as $495,000 as compensation to our directors. Each of our nine directors at the time received 250,000 shares of common stock.

1,000,000 shares of our common stock, valued at $280,000, and a 1,000,000 fully vested stock options with an exercise price of $0.29, valued at $263,600, as compensation to a newly appointed director of ours. The 1,000,000 stock grant is compensation for acting as Director of Mergers and Acquisitions. The 1,000,000 stock options is due to his appointment to the Company's Board of Directors.

1,000,000 fully vested stock options with an exercise price of $0.23, valued at $206,958, were issued to a Mexican national appointed to our advisory board to assist the Company with its operations in Mexico, including regulatory affairs.

1,000,000 shares of our common stock, valued at $300,000 were issued to a new member of our advisory board.

1,000,000 fully vested stock options with an exercise price of $0.28, valued at $254,172, were issued to an officer of the Company.

On November 13, 2014, we received an, unsecured loan from our former Chairman and Chief Executive Officer in the amount of $25,000. We received a further an unsecured loan of $25,000 from this former officer and director on December 3, 2014 and as on the date of the report, the balance due to this former officer and director is $50,000.

On August 27, 2014, the Company's Board of Directors approved a 2014 Stock Option Plan for up to 20,000,000 shares of common stock. A copy of that plan is attached hereto as Exhibit 10.21. In addition, on that same date, the Company's Board of Directors approved the creation of an advisory board, and appointed a Mexican national to its advisory board to assist the Company with its operations in Mexico, including regulatory affairs. The Company also granted 1,000,000 stock options to this individual under the newly created 2014 Stock Option Plan. The option exercise price is $0.23 per share.

Termination of Agreement with RTC

As stated elsewhere herein, on January 30, 2014, the Company entered into a Restructuring Agreement with RTC, the RTC Shareholders, and Plasmafication Technology Holding, LLC, a Florida limited liability company ("PTH"). Pursuant to the Restructuring Agreement 1,250,000 shares of our designated Class of Preferred stock, valued at $16,250,000 was issued to the RTC shareholders. This transaction involved a former officer and director of the Company and a former director of the Company.

PTH failed to pay the $5,000,000 due under the Promissory Note and such failure continues as of the date of this report. The Company believes that the failure of RTC constitutes a material breach to the Restructuring Agreement. As a result of that breach, along with other factors, the Company rescinded the Restructuring Agreement and cancelled the Preferred Stock, including all rights, privileges and preferences thereto. On May 12, 2015 and again on May 14, 2015, the Company notified RTC that it has rescinded the Restructuring Agreement and cancelled the Preferred Stock, including all rights, privileges and preferences thereto, effective immediately. The Company provided a similar notification to PTH cancelling the Restructuring Agreement and related agreements with PTH.

The Company undertook the above-described actions unilaterally and these actions were not the product of a negotiated settlement between the Company and the counterparties to the Restructuring Agreement, including RTC. As a result of these actions, and in view of the purported conversion notice received from RTC, it is conceivable RTC or related parties may initiate litigation against the Company seeking the enforcement of the Restructuring Agreement (including the rights to the Preferred Stock and/or common stock) and/or the original Stock Exchange Agreement, among other demands. In the event litigation results in these matters, the Company intends to aggressively defend its position against such claims. Shareholders should be aware that the cost of litigation may prove expensive and, in this regard, the Company will be required to raise additional funds, which may result in significant dilution to existing shareholders.

Lawsuit with RTC

In July and August 2013, the Company paid a total of $125,000 to a company controlled by Mr. George Mesa, our Director of Security, and owner of Mesa Acquisitions Group LLC. Mr. Mesa had previously advanced a like amount of funds to Resource Technology Corp. ("RTC") in connection with the transportation of ore supply, and related costs. As mentioned below, in May 2013, we entered into a Share Exchange Agreement with RTC and its shareholders, which includes our Chairman and a director, to acquire the issued and outstanding shares of RTC from the RTC shareholders.

Effective August 28, 2013, we appointed Mr. Hans H. Hertell as the Company's President. In addition, on that same date, our Board of Directors approved an Employment Agreement with Mr. Hertell and a Consulting Agreement with Hertell Group, LLC. ("Hertell Group"). Mr. Hertell is the sole officer and member of Hertell Group.

Under the Employment Agreement, among other terms, we agreed to pay Mr. Hertell an annual salary of $500,000. The salary commences at such time as we generate monthly gross revenues from our plasma processing operations of at least one million dollars ($1,000,000) for two (2) consecutive months ("Performance Event"), and (ii) upon our achievement of the Performance Event, the Base Salary shall commence effective as of the first day of the stated two (2) consecutive month period and shall continue throughout the Term. In addition, upon occurrence of the Performance Event, the Executive will be entitled to receive a stock award of 1,000,000 shares of common stock ("Stock Grant"), which shall vest immediately. Either party may terminate this Agreement by providing at least ten (10) days written notice to the other party.

Under the Consulting Agreement, among other terms, the Hertell Group will provide general business consulting services including but not limited to business development strategy, introduction of prospective business acquisitions or joint venture participation, deal-making, introduction to capital markets, marketing strategies, and other duties as mutually agreed upon by the parties. As consideration or the services, the Hertell Group will receive 9,000,000 shares of our common stock which will be issued immediately. The term of the Consulting Agreement is three years.

During the year ended May 31, 2014, we issued 2,250,000 shares of our common stock valued as $382,500 as compensation to our directors. Each of our directors at the time received 250,000 shares of common stock. In addition, 1,500,000 fully vested stock options valued at $302,084 were issued, 1,000,000 to a newly appointed director with exercise prices of $0.22 and 500,000 to an officer with an exercise price of $0.19. The officer had previously resigned and in connection with such resignation, the original options had expired.

Director independence

Our common stock is quoted on the OTC-QB interdealer quotation system, which does not have director independence requirements. Under NASDAQ rule 4200(a)(15), a director is not considered to be independent if he or she is also an executive officer or employee of the corporation.

Employment Contracts and Termination of Employment and Change in Control Arrangements

Except as stated herein, we have not entered into an employment agreement or consulting agreement with our board of directors and executive officers.

Pension, Retirement or Similar Benefit Plans

There are no arrangements or plans in which we provide pension, retirement or similar benefits for directors or executive officers. We have no material bonus or profit sharing plans pursuant to which cash or non-cash compensation is or may be paid to our directors or executive officers, except that stock options may be granted at the discretion of the Board of Directors or a committee thereof under the Company's 2007 Stock Option Plan.

We have no plans or arrangements in respect of remuneration received or that may be received by our executive officers to compensate such officers in the event of termination of employment (as a result of resignation, retirement, change of control) or a change of responsibilities following a change of control, where the value of such compensation exceeds $60,000 per executive officer.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

The following table sets forth fees billed to us by the principal accountants to the Company for professional services rendered for the fiscal years ended May 31, 2015 and 2014:

Fee Category	Fiscal Year 2015 Fees		Fiscal Year 2014 Fees
Audit Fees	$	30,000	$	39,500
Audit Related Fees		-		-
Tax Fees		-		3,000
All Other Fees		-		-
Total Fees	$	30,000	$	42,500

Audit Fees

Consists of fees billed for professional services rendered for the audit of our financial statements and review of interim consolidated financial statements included in quarterly reports and services that are normally provided by the principal accountants in connection with statutory and regulatory filings or engagements.

Audit Related Fees

Consists of fees billed for assurance and related services that are reasonably related to the performance of the audit or review of our consolidated financial statements and are not reported under "Audit Fees."

Tax Fees

Consists of fees billed for professional services for tax compliance, tax advice and tax planning. These services include preparation of federal and state income tax returns.

All Other Fees

Consists of fees for product and services other than the services reported above.

Pre-Approval Policies and Procedures

Prior to engaging its accountants to perform a particular service, the Company's Board of Directors obtains an estimate for the service to be performed. All of the services described above were approved by the Board of Directors in accordance with its procedures.

PART IV

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES

		Incorporation by Reference
Exhibit Number	Exhibit Description	Form	Exhibit	File Date	Filed herewith
3.1	Certificate of Incorporation for the Company	10-SB	3 (i)(a)	04/23/2004
3.2	Amended and Restated Certificate of Incorporation for the Company	10-SB	3(i)(b)	04/23/2004
3.3	Articles of U.S. Precious Metals de Mexico, S.A. de C.V.	10-SB	3(i)(c)	04/23/2004
3.4	Bylaws of the Company	10-SB	3(ii)(a)	04/23/2004
3.5	Amended and Restated Bylaws of the Company	8-K	3.1	12/03/2008
3.6	Certificate of Designations of Series A Preferred Stock	8-A	3.1	03/19/2009
4.2	Rights Agreement dated March 17, 2009, by and between the Company and Interwest Transfer Company, Inc., as rights agent	8-A	4.1	03/19/2009
10.1	2007 Stock Option Plan	PRE 14A	App. A	05/20/2008
10.2	Temporary Occupation and Right of Way Agreement by and between Victorio Gutierrez Cardenas, Irma Banuelos Serrato and the Mexican Subsidiary dated August 20, 2007	10-K	10.2	09/16/2009
10.3	Temporary Occupation and Right of Way Agreement by and between Victorio Gutierrez Cardenas, Irma Banuelos Serrato and the Mexican Subsidiary dated August 20, 2007 (English Translation)	10-K	10.3	09/16/2009
10.4	Amendment to the Temporary Occupation by and between Victorio Gutierrez Cardenas, Irma Banuelos Serrato and the Mexican Subsidiary dated June 23, 2009	10-K	10.4	09/16/2009
10.5	Amendment to the Temporary Occupation by and between Victorio Gutierrez Cardenas, Irma Banuelos Serrato and the Mexican Subsidiary dated June 23, 2009 (English Translation)	10-K	10.5	09/16/2009
10.6	Lease Agreement by and between Salomon Rosales Lira and the Mexican Subsidiary dated February 1, 2009 for the warehouse facility located in Morelia, Michoacán, Mexico	10-K	10.6	09/16/2009
10.7	Lease Agreement by and between Salomon Rosales Lira and the Mexican Subsidiary dated February 1, 2009 for the warehouse facility located in Morelia, Michoacán, Mexico (English Translation)	10-K	10.7	09/16/2009

10.8	Payment Agreement and General Release		10.1	01/19/2010
10.9	Pledge Agreement		10.2	01/19/2010
10.10	Pledge Agreement (English Translation)		10.3	01/19/2010
10.11	Stock Exchange Agreement dated May 11, 2012 by and between US Precious Metals, Inc., Resource Technology Corp. and the Shareholders of Resource Technology Corp.	8-K	10.11	5/17/2013
10.12	Escrow Agreement by and between US Precious Metals, Inc., Resource Technology Corp. and the Shareholders of Resource Technology Corp. and the Escrow Agent.	8-K	10.12	5/17/2013
10.13	Mining Services Contract by and between US Precious Metals, Inc. and Mesa Acquisitions LLC.	8-K	10.13	5/29/2013
10.14	Employment Agreement dated August 28, 2013 by and between US Precious Metals, Inc., and Hans H. Hertell.	8-K	10.14	9/10/2013
10.15	Consultant Agreement dated August 28, 2013 by and between US Precious Metals, Inc., and Hertell Group, LLC.	8-K	10.15	9/10/2013
10.16	Restructuring Agreement dated January 29, 2014 by and between US Precious Metals, Inc., Resource Technology Corp. the Shareholders of Resource Technology Corp, and Plasmafication Technologies Holdings, LLC.	8-K	10.16	2/5/2014
10.17	Technology Licensing Agreement dated January 29, 2014 by and between US Precious Metals, Inc. and Plasmafication Technologies Holdings, LLC	8-K	10.17	2/5/2014
10.18	Equipment Purchase and Sale Agreement dated January 29, 2014 by and between US Precious Metals, Inc. and Plasmafication Technologies Holdings, LLC.	8-K	10.18	2/5/2014
10.19	Promissory Note dated January 31, 2014 from Plasmafication Technologies Group, LLC. to US Precious Metals, Inc.	8-K	10.19	2/5/2014
10.20	Consultant Agreement dated by and between US Precious Metals, Inc., and Dr. Edgar Choueiri	8-K	10.20	9/10/2013
10.21	2014 Stock Option Plan of U.S. Precious Metals, Inc.		10.21
14.	Code of Ethics	10-K	14	9/14/2010
16.1	Letter dated March 9, 2009 from Robert Jeffrey, to the Securities Exchange Commission		16.1	03/10/2009
21.1	List of Subsidiaries of the Company				X
31	Certification of Principal Executive Officer as required by Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended				X
32	Certification of Principal Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350)				X
101.INS	XBRL Instance Document (1)
101.SCH	XBRL Taxonomy Extension Schema Document (1)
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document (1)
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document (1)
101.LAB	XBRL Taxonomy Extension Label Linkbase Document (1)
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document (1)

(1) Pursuant to Rule 406T of Regulation S-T, this interactive data file is deemed 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.

U.S. PRECIOUS METALS, INC.
(An Exploration Stage Company)
CONSOLIDATED FINANCIAL STATEMENTS

MAY 31, 2015

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

CONTENTS

	Page
Report of Independent Registered Public Accounting Firm	67
Consolidated Balance Sheets	68
Consolidated Statements of Operations	69
Consolidated Statements of Changes in Stockholders' Deficit	70
Consolidated Statements of Cash Flows	71
Notes to Consolidated Financial Statements	72 - 111

John Scrudato CPA

CERTIFIED PUBLIC ACCOUNTING FIRM

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of
U.S. Precious Metals, Inc.

We have audited the accompanying consolidated balance sheets of U. S. Precious Metals, Inc. and subsidiary company (an exploration stage company) as of May 31, 2015 and 2014 and the related consolidated statements of operations, changes in stockholders' deficit and cash flows for the years then ended.. These financial statements are the responsibility of the Company management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit 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. The Company is not required to have, nor were we engaged to perform, an audit of its 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 examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of U.S. Precious Metals, Inc. and subsidiary at May 31, 2015 and 2014, and the results of their operations and their cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.

The accompanying consolidated financial statements have been prepared assuming that U.S. Precious Metals, Inc. and subsidiary will continue as a going concern. As more fully described in Note 3, at May 31, 2015 the Company had no established source of revenues, a working capital deficit and had accumulated losses at May 31, 2015. These conditions raise substantial doubt about the ability of the Company to continue as a going concern. Management's plans in regards to these matters are also described in Note 3. The consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the outcome of this uncertainty.

/s/ John Scrudato CPA

Califon, New Jersey
September 11, 2015

	7 Valley View Drive Califon, New Jersey 07830
	Registered Public Company Oversight Board

U.S. PRECIOUS METALS, INC.

(An Exploration Stage Company)
CONSOLIDATED BALANCE SHEETS

	May 31, 2015			May 31, 2014
ASSETS
Current Assets:
Cash	$	179,895		$	121,754
Prepaid and other current assets		32,762			23,802
Total current assets		212,657			145,556

Fixed Assets, net		15,432			25,543

Investment in mining rights and other		44,106			44,437

Total Assets	$	272,195		$	215,536

LIABILITES AND STOCKHOLDERS' DEFICIT
Current Liabilities:
Accounts payable and accrued expenses	$	2,479,667		$	3,457,557
Convertible notes payable, net of debt discount		1,717,860			1,262,298
Derivative liability		2,600,189			-
Total current liabilities		6,797,716			4,719,855

Long Term Liabilities
Convertible notes payable, net of debt discount		42,475			34,472
Derivative liability on long term convertible note payable		528,409			149,674
Total long term liabilities		570,884			184,146

Commitments and Contingencies

Stockholders' Deficit:
Preferred stock: authorized 10,000,000 shares of $0.00001 par value: 0 and 1,250,000 shares issued or outstanding, respectively		-			13
Common stock: authorized 325,000,000 and 150,000,000 respectively, of $0.00001 par value, 164,573,557 and 143,748,746 shares issued and outstanding, respectively		1,646			1,437
Additional paid in capital		48,880,714			44,854,841
Deficit accumulated		(55,978,765	)		(49,544,756	)
Total stockholders' deficit		(7,096,405	)		(4,688,465	)

Total Liabilities and Stockholders' Deficit	$	272,195		$	215,356

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

U.S. PRECIOUS METALS, INC.

(An Exploration Stage Company)
CONSOLIDATED STATEMENTS OF OPERATIONS

	For the Years Ended May 31,
	2015			2014

Revenues	$	-		$	-

General and administrative expenses		4,851,708			3,841,129
RTC restructuring agreement – related party		-			16,250,000
Operating Loss		(4,851,708	)		(20,091,129	)

Other Income (Expense):
Gain on settlement of accounts payable		1,153,742			-
Gain (loss) on revaluation of derivative liabilities		(1,103,268	)		41,253
Interest expense		(1,632,775	)		(517,234	)
Net other expense		(1,582,301	)		(213,054	)

Loss before income taxes		(6,434,009	)		(20,567,110	)

Provision for income taxes		-			-

Net Loss	$	(6,434,009	)	$	(20,567,110	)

Net Loss per Share - Basic and Diluted	$	(0.04	)	$	(0.15	)

Weighted Average Number of Shares Outstanding - Basic and Diluted		157,354,622			133,822,022

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

U.S. PRECIOUS METALS, INC.

(An Exploration Stage Company)
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT

	Preferred Stock						Common Stock				Additional Paid In		Deficit Accumulated During Exploration
	Shares			Amount			Shares		Amount		Capital		Stage			Total
Balance, May 31 2013		-		$	-			121,781,244	$	1,218	$	25,325,355	$	(28,977,646	)	$	(3,651,073	)

RTC restructuring agreement – related party		1,250,000			13			-		-		16,249,987		-			16,250,000
Shares issued for cash		-			-			4,800,000		48		407,452		-			407,500
Shares issued as compensation		-			-			2,250,000		22		382,478		-			382,500
Shares issued for services		-			-			9,450,000		94		1,601,906		-			1,602,000
Notes payable converted for shares		-			-			4,600,835		46		482,255		-			482,301
Warrants exercised		-			-			866,667		9		103,324		-			103,333
Stock options issued		-			-			-		-		302,084		-			302,084
Net loss for the year		-			-			-		-		-		(20,567,110	)		(20,567,110	)

Balance, May 31, 2014		1,250,000			13			143,748,746		1,437		44,854,841		(49,544,756	)		(4,688,465	)

Shares issued for cash		-			-			7,921,667		79		743,396		-			743,475
Shares issued for compensation		-			-			3,250,000		33		774,967		-			775,000
Shares issued for services		-			-			2,050,000		21		601,479		-			601,500
Notes payable converted for shares		-			-			5,703,144		57		918,307		-			918,364
Accounts payable converted for shares		-			-			600,000		6		157,994		-			158,000
Warrants exercised		-			-			300,000		3		39,997		-			40,000
Stock options issued		-			-			-		-		724,730		-			724,730
Stock options exercised		-			-			1,000,000		10		64,990		-			65,000
Termination of RTC restructuring agreement		(1,250,000	)		(13	)		-		-		13		-			-
Net loss for the year		-			-			-		-		-		(6,434,009	)		(6,434,009	)

Balance, May 31, 2015		-		$	-			164,573,557	$	1,646	$	48,880,714	$	(55,978,765	)	$	(7,096,405	)

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

U.S. PRECIOUS, INC.

(An Exploration Stage Company)

CONSOLIDATED STATEMENTS OF CASH FLOWS

	For the Years Ended May 31,
	2015			2014
Operating Activities:
Net Loss	$	(6,434,009	)	$	(20,567,110	)
Adjustments required to reconcile net loss to net cash consumed by operating activities:

(Income) charges not requiring the use of cash:
Depreciation		10,111			10,110
RTC restructuring agreement – related party		-			16,250,000
Gain on settlement of accounts payable		(1,153,742	)		-
Stock and stock option based compensation		2,092,270			2,286,583
Loss on origination of derivative liability		700,384			124,572
(Gain) or loss on revaluation of derivative liability		1,103,268			(41,253	)
Amortization of debt discount		643,561			142,091
Accrued interest on convertible notes payable and 2013 adjustment		121,815			125,513

Changes in operating assets and liabilities:
Prepaid expenses and other assets		-			(15,040	)
Deposits		332			76
Accounts payable and accrued expenses		275,676			506,879
Net Cash Used in Operating Activities		(2,640,334	)		(1,177,680	)

Investing Activities:
Refund of fees paid for mining rights		-			112,910
Net Cash Provided by (Used in) Investing Activities		-			112,910

Financing Activities:
Proceeds from sales of common stock		743,475			407,500
Proceeds from exercises of warrants		40,000			103,333
Proceeds from issuance of stock options		65,000			-
Proceeds from related party loan		50,000			-
Proceeds from issuance convertible notes payable		1,800,000			647,000
Net Cash Provided by Financing Activities		2,698,475			1,157,833

Net increase (decrease) in cash balance		58,141			93,063

Cash balance, beginning of period		121,754			28,691

Cash balance, end of period	$	179,895		$	121,754

The accompanying notes are an integral part of these financial statements

U.S. PRECIOUS METALS, INC.

(AN EXPLORATION COMPANY)

FOOTNOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED MAY 31, 2015 AND 2014

1. NATURE OF OPERATIONS

U.S. Precious Metals, Inc. was incorporated in the state of Delaware in 1998 as a mineral exploration company. U.S. Precious Metals, Inc. and its wholly owned Mexican subsidiary company, U.S. Precious Metals de Mexico, S.A. de C.V, ("U.S. Precious Metals Mexico"), (collectively "the Company", "We" or "Us") are engaged in the acquisition, exploration and development of mineral properties. We currently focus on gold and base minerals primarily located in the State of Michoacán, Mexico where we own exploration and exploitation concessions to approximately 37,000 contiguous acres of land (the "Solidaridad Property").

The Company has acquired exploration or exploitation concessions to approximately 37,000 acres of land in Michoacán, Mexico. Below is a list of the concessions which the Company has acquired:

Name of Concession	Title Number	Hectares*	Date Acquired	Expiration Date
Solidaridad I	220315	174.5408	July 11, 2003	July 10, 2053
Solidaridad II	220503	2162.2311	August 14, 2003	August 13, 2053
Solidaridad II, Fraction A	220504	1.4544	August 14, 2003	August 13, 2053
Solidaridad II, Fraction B	220505	.0072	August 14, 2003	August 13, 2053
Solidaridad III	223444	294.0620	December 14, 2004	December 13, 2054
Solidaridad IV	220612	149.4244	September 4, 2003	September 3, 2053
Solidaridad V (also known as Le Ceiba)	223119	921.3201	October 19, 2004	October 18, 2054
La Sabila	227272	11,405.0000	June 2, 2006	June 1, 2056

*A Hectare is equivalent to 2.47 acres.

The above group of concessions are collectively referred to as the "Solidaridad Concessions" The Company's concessions have a term of fifty years from the date first acquired and can be renewed for another fifty years. Concessions grant the holder the right to explore and exploit all minerals found in the ground. In order to maintain the concessions, the Company must pay surface taxes semi-annually in January and July and perform minimum amounts of assessment work, on a calendar year basis. Assessment work reports are required to be filed annually in May for the preceding calendar year. The amount of surface taxes and annual assessments are set by regulation and may increase over the life of the concession and include periodic adjustments for inflation.

Mining concessions do not automatically grant the holder the right to enter or use the surface land of the property where such mining concessions are located. In order to access the surface land, the holder must obtain permission from the surface owner. The Company currently has secured access rights to the portions of the Solidaridad Property where its concessions Solidaridad I, Solidaridad III, and Solidaridad V are located by way of a written agreement entered into by and between its Mexican Subsidiary and the owners of the portions of the Solidaridad Property where these concessions are located. This agreement requires the Company to pay an annual rent to the landowner. The Company is in the process of securing, but has not yet secured, access rights to the other portions of the Solidaridad Property, which it plans to do in the future in connection with any decision to begin exploration and/or exploitation of those areas. If the Company is ultimately unable to receive access, or unable to receive access at a reasonable price, it may affect the ability of the Company to explore for, or exploit, mineralized material from those areas.

Original Transaction with Resource Technology Corp

On May 11, 2013, the Company entered into a Share Exchange Agreement with Resource Technology Corp., a newly formed Florida corporation ("RTC"), and the RTC shareholders to acquire all of the issued and outstanding shares of RTC in exchange for 300 million shares of common stock of the Company. The agreement was subject to shareholder approval along with shareholder approval to increase the authorized number of shares of common stock to 480 million. As part of the transaction, RTC had three ore supply contracts with third party suppliers, and a Plasmafication™ Toll Processing Agreement with Plasma Processing, LP., a Florida limited partnership ("PP LP") and an affiliated entity of RTC. The ore supply agreements and the Toll Processing Agreement would enable RTC to receive 1/3rd of the revenues derived from the plasma processing of ore concentrates from the ore supply agreements.

The Plasma Plant and Plasma Processing.

It was represented to us that PP LP owned the right to operate a plasma processing facility located in 29 Palms, California, the plant took three years to build and is permitted to process ore concentrate. Plasmafication™ or plasma processing employs extreme temperatures (in excess of 7,000 F) to dissociate ore concentrates into their basic elemental state. At the time of the transaction, the plant was not in commercial production. The parties at the time believed that initial upgrades to the facilitywould commence within 90 to 120 days which would enable the facility to process concentrates at the rate of approximately 9 tons/day. PP LP expected to make further upgrades to the facility which would increase its capacity to approximately 27 tons/day. These upgrades were subject to PP LP raising funds sufficient to complete necessary improvements to its plasma processing plant.

Plasmafication™ Toll Processing Agreement.

The Toll Processing Agreement between PP LP and RTC required PP LP to deliver a range of services, including the Plasmafication™ of the RTC concentrate from the ore supply contracts. These services would be provided at the sole cost and expense of PP LP. The agreement required an initial processing capacity of 5 tons/day of RTC concentrate for approximately 200 days per annum. PP LP was required to upgrade its current plant to achieve this processing rate which as mentioned above was expected to occur within 90 to 120 days. These upgrades were expected to bring the total processing rate of the plant to about 9 tons/day. The agreement allowed for an increased capacity to process 10 tons/day of RTC concentrate for approximately 300 days per annum. In order to achieve this rate, total plant capacity would need to be increased to about 29 tons/day.

PP LP guaranteed a benchmark run of 5 tons/day for 20 consecutive days ("Benchmark Run") with a minimum value of $50,000 (net to RTC) per ton using the RTC concentrate (or a total of $5,000,000 in net proceeds to RTC) from the existing ore supply contracts. The guarantee is limited to the proportionate reduction of the number of shares of USPR common stock issuable to the RTC shareholders (as described below). The completion date for the Benchmark Run was June 1, 2014.

Share Exchange Agreement.

As stated above, pursuant to the Share Exchange Agreement, the Company agreed to acquire all of the issued and outstanding shares of RTC ("RTC Shares") from the RTC shareholders in exchange for 300 million shares of common stock of the Company. The transaction shares were to be held in escrow, however, voting rights would remain with the named party. The agreement further provided that if the Benchmark Run did not yield net cash proceeds of $5 million to RTC, then the number of exchange shares in total would be proportionately reduced. The closing of the transactions contemplated by the Agreement was expected to occur no later than June 1, 2014. The agreement contained customary representations and warranties by all parties. On September 10, 2013, the Company amended the Share Exchange Agreement with RTC and the RTC shareholders. Under the amendment, the parties agreed to reduce the number of "Exchange Shares" as defined in Section 4.01 of the Agreement (issuable to the RTC shareholders) from 300,000,000 shares of USPR common stock to 290,000,000 shares of USPR common stock.

We were informed that the RTC shareholders are Wolz International, LLC ("Wolz"), which owns 50%, Titan Productions, Inc. ("Titan"), which owns 25%, and Mercury6, LP ("Mercury6") which owns 25%. Assuming a completion of the transaction without further proportionate reduction in the USPR Shares, Wolz, Titan and Mercury would have received a proportionate amount of the 300 million shares of our common stock. We were informed that Mr. Gennaro Pane, our former Chairman and Chief Executive Officer, was the sole officer and member of Wolz (and would have owned approximately 51% of such shares), and Chad Altieri, our former Board member, is the sole owner of Mercury. In addition, we were informed that Messrs Pane and Altieri owned or controlled limited partnership interests in PP LP.

Restructuring Agreement with RTC

On January 30, 2014, the Company entered into a Restructuring Agreement with RTC, the RTC Shareholders, and Plasmafication Technology Holding, LLC, a Florida limited liability company ("PTH"). As mentioned above, it was represented that PTH was an affiliate of RTC and it owned and operated a plasma processing plant located in 29 Palms, California which employs the Plasmafication™ technology ("Plasma Plant").

Pursuant to the Restructuring Agreement, the Company, RTC and the RTC Shareholders terminated ab initio the Share Exchange Agreement, and the Company entered into new agreements and instruments with the counter parties described below. These new agreements and instruments consist of (i) the Restructuring Agreement, the Technology License Agreement by and between the Company and PTH ("License Agreement"), (ii) an Equipment Purchase and Sale Agreement by and between the Company and PTH ("Equipment Purchase Agreement"), (iii) a Promissory Note issued by PTH in favor of the Company in the amount $5,000,000 ("Promissory Note"), and (iv) a Certificate of Designations relating to 1,250,000 shares of Preferred Stock (defined below) issued to RTC in connection with the transaction ("Certificate of Designations"). The closing of the Restructuring Agreement occurred on February 4, 2014 ("Closing").

The Restructuring Agreement and related agreements and instruments contained the following material terms and conditions, among others:

Processing Rights.

Under the terms of the Restructuring Agreement, PTH agreed to process the Company's ore concentrate at its Plasma Plant five (5) days per month for each month during a term agreed by the parties. The term begins with the date that the Plasma Plant is ready to commence commercial operations at the processing rate of 5 tons/day and terminating on the date that the Company Plasma Facility (defined below) is fully permitted and ready to commence commercial operations at a processing rate of 10 tons/day. PTH informed the Company that it expected to be fully operational during the fourth calendar quarter of 2014. The Company agreed to pay its ratable share of PTH overhead and direct costs as set forth in the agreement, and apart from the foregoing, PTH would not receive any royalty or other fee.

Licensing Rights.

Under the Technology Licensing Agreement, PTH granted the Company a non-exclusive, royalty free license to use PTH's Plasmafication™ technology for a term of 25 years. The technology covers and relates to the construction and use of a Company owned plasma plant described below. The Licensing Agreement was subject to other customary terms and conditions.

Construction of a Company Owned Plasma Plant.

Under the Equipment Purchase Agreement, PTH agreed to construct, on behalf of the Company, a 10 ton/day plasma processing plant on its premises located in 29 Palms, California ("Company Facility"). The plant was to be constructed on an actual costs basis without markup by PTH, and PTH also agreed to pay for 1/3rd of the construction costs. The estimated costs of construction for the Company Facility was approximately $18 million. The parties intended to formulate in the near future a draw schedule which would detail construction and payment milestones, however, in order to initiate the construction process, the Company would have been be required to pay a down payment of $1.5 million. In addition to other terms and conditions therein, PTH agreed to assist in obtaining the necessary Federal, state and local permits and licenses to construct and operate the Company Plasma facility, however, the Company was required to bear the related costs. Upon completion of the facility, the Company would own 100% of the Company Facility, however, any Licensed Technical Information will be subject to the Licensing Agreement.

In addition, the parties would be required to enter into an operating and maintenance agreement which would address the operation and maintenance of the Company Owned Plasma Plant.

Promissory Note.

As a material inducement for the Company to enter into the Restructuring Agreement, PTH delivered to the Company a Promissory Note in the principal amount is $5 million. The note was payable on or before January 30, 2015 with no interest prior to the payment due date. The promissory note provided for certain conditions set forth therein.

No value has been assigned to the Processing Rights, Licensing Rights, PTH's assistance to construct a Company Owned Plant or Promissory Note in these financial statements. Effective as the date of this agreement, the Company, RTC and PTH, were all development stage companies, none of which have the existing financials resources, established business operating processes or ongoing profitable business operations to meet their obligations under the terms of these agreements at rge time the agreements were signed. The Company, RTC and PTH's ability to meet their obligations under the terms of these agreements wasdependent on their ability to raise the future funding required and to successfully develop and implement their business plans which could not be guaranteed at the time the agreements were signed. Accordingly the realization of any future value from these rights and notes was highly uncertain at the time the agreements were signed and accordingly no value was assigned to them.

Preferred Stock and Certificate of Designation. In connection with the Restructuring Agreement, the Company issued to RTC 1,250,000 shares of its newly created Class A Super Voting Preferred Stock ("Preferred Stock"). The Preferred Stock has the rights privileges and preferences as is set forth in the Certificate of Designations filed with the Delaware Secretary of State. As stated in the Certificate of Designations, each share of the Preferred Stock has identical rights as 100 shares of the Company's common stock. These rights, privileges and preferences include among others; (i). each share of Preferred Stock has 100 to 1 voting rights, voting along with the Company's common stock, (ii). each share of Preferred Stock has 100 to 1 rights upon liquidation and distribution of the Company, (iii). each share of Preferred Stock has the right to convert into 100 shares of common stock of the company. The Company increased its authorized shares of common stock from 150 million to 325 million in order to allow for the conversion of the Preferred Stock, among other considerations.

The market value of the 1,250,000 shares of its newly created Class A Super Voting Preferred Stock is assumed to equate to the value of 125,000,000 shares of the common stock which was $16,250,000 on January 30, 2014 when the Company became contractually obligated to issue these shares.

In addition, under the Restructuring Agreement, the Company and RTC and its shareholders granted mutual releases, and provided customary representations and warranties.

The Share Exchange Agreement was adopted by the unanimous consent of the Board of Directors of the Company, RTC, each RTC shareholders and PTH. All of the shareholders of RTC were signatories to the agreement.

As mention above, the Company was informed that the RTC shareholders are Wolz International, LLC ("Wolz") owning 50% of RTC, Titan Productions, Inc. ("Titan") owning 25% of RTC, and Mercury6, LP ("Mercury6") owning 25% of RTC. Assuming the issuance of the Preferred Stock to its shareholders, Wolz would have receive 625,000 shares of Preferred Stock convertible into 62.5 million shares of common stock, and each of Titan and Mercury will receive 312,500 shares of Preferred Stock convertible into 31.5 million shares of common stock. We were informed that Mr. Gennaro Pane, our former Chairman and Chief Executive Officer, was the sole officer of Wolz and owned approximately 51% of Wolz, and Chad Altieri, our former Board member, is the sole officer and owner of Mercury. In addition, we were informed that Mr. Pane was a managing member of PTH and Messrs Pane and Altieri owned or controlled approximately 20% and 8%, respectively of PTH.

Unregistered Sale of Securities.

At Closing, the Company issued to RTC 1,250,000 shares of Preferred Stock. Each share of Preferred Stock has identical rights as 100 shares of common stock except that each share Preferred Stock is convertible to 100 shares of common stock (or a total of 125 million shares of common stock of the Company).

These securities qualified for exemption under Section 4(2) of the Securities Act and the rules and regulations promulgated thereunder. The offering was not a "public offering" as defined in Section 4(2) due to the insubstantial number of persons involved in the offering, manner of the offering and number of securities offered. These shareholders made certain representations and warranties, including their investment intent. They also agreed to and received share certificates bearing a legend stating that such securities are restricted pursuant to Rule 144 of the Securities Act.

Material Modification to Rights of Security Holders.

Change of Control of Registrant.

At Closing of the Restructuring Agreement, the Company issued to RTC 1,250,000 shares of Preferred Stock. Each share of Preferred Stock has identical rights as 100 shares of common stock except that each share Preferred Stock is convertible to 100 shares of common stock (or a total of 125 million shares of common stock of the Company). As a result, a change of control occurred with respect to the Company. Immediately prior to Closing, the Company had 150 million shares of common stock authorized, of which 135,259,321 shares were issued and outstanding and 10 million shares of preferred stock, of which no shares were outstanding.

Immediately after Closing, the authorized, issued and outstanding shares of common stock of the Company were unchanged and the Company had 10 million shares of preferred stock authorized, of which the Company had 1,250,000 shares of preferred stock issued and outstanding designated the Series A Super Voting Preferred Stock referred to herein as the "Preferred Stock."

After giving effect to the conversion of the Preferred Stock by RTC, RTC would own approximately 125 million shares of common stock or approximately 48% of the common stock of the Company after giving effect to the conversion of the Preferred Stock to common stock. The RTC shareholders were Wolz International, LLC (" Wolz ") owning 50% of RTC, Titan Productions, Inc. (" Titan ") owning 25% of RTC, and Mercury6, LP (" Mercury6 ") owning 25% of RTC. Wolz received 625,000 shares of Preferred Stock convertible into 62.5 million shares of common stock (or approximately 24% of the Company's issued and outstanding common stock), and each of Titan and Mercury received 312,500 shares of Preferred Stock convertible into 31.25 million shares of common stock (or approximately 12% of the Company's issued and outstanding common stock for each entity). Mr. Gennaro Pane, our former Chairman and Chief Executive Officer,was an officer and a member of Wolz owning 51% of that company, and Chad Altieri, our former Board member, was the sole owner of Mercury.

Termination of Agreement with RTC

PTH failed to pay the $5,000,000 due under the Promissory Note and such failure continues as of the date of this report. The Company believes that the failure of RTC constituted a material breach to the Restructuring Agreement. As a result of that breach, along with other factors, the Company rescinded the Restructuring Agreement and cancelled the Preferred Stock, including all rights, privileges and preferences thereto. On May 12, 2015 and again on May 14, 2015, the Company notified RTC that it rescinded the Restructuring Agreement and cancelled the Preferred Stock, including all rights, privileges and preferences thereto, effective immediately. The Company provided a similar notification to PTH cancelling the Restructuring Agreement and related agreements with PTH.

On May 15, 2015, the Company received notification from an attorney at law acting as the custodian for RTC requesting the conversion of the Preferred Stock into 125,000,000 shares of common stock of the Company. The Company's position is that RTC has no rights to the Preferred Stock and the Company will take no action with respect to the purported conversion notice from RTC.

The Company undertook the above-described actions unilaterally and these actions were not the product of a negotiated settlement between the Company and the counterparties to the Restructuring Agreement, including RTC. As a result of these actions, and in view of the purported conversion notice received from RTC, it is conceivable RTC or related parties may initiate litigation against the Company seeking the enforcement of the Restructuring Agreement (including the rights to the Preferred Stock and/or common stock) and/or the original Stock Exchange Agreement, among other demands. In the event litigation results in these matters, the Company intends to aggressively defend its position against such claims. Shareholders should be aware that the cost of litigation may prove expensive and, in this regard, the Company will be required to raise additional funds, which may result in significant dilution to existing shareholders.

Lawsuit with RTC

As disclosed in Note 11 Subsequent Events below, on August 8, 2015, we were served with a lawsuit by Resource Technology Corporation ("RTC"). Please refer to Note 11 for a complete discussion of the matter.

Mining Services Agreement with Mesa Acquisition Group LLC

On May 22, 2013, US Precious Metals, Inc. ("Company") entered into a Mining Services Agreement with Mesa Acquisitions Group, LLC, a Florida limited liability company ("Contractor"), in association with Alba Petroleos De El Salvador Sem De CV, a Venezuelan company. Under the agreement, Contractor has agreed to perform certain mining services on a portion of the Company's Mexican mining concessions (Solidaridad I & II mining concessions (or approximately 5,000 acres)). These services were to be performed the various mining services in three, separate phases described below:

● Phase 1 required the immediate commission of high-tech satellite imaging to identify mineralization and confirm the two previous drilling campaigns on the mining concessions known as Solidaridad I and/or Solidaridad II.

The estimated costs of Phase 1 was approximately $400,000.

The estimated costs of Phase 2 was approximately $10 million.

● Phase 3 required the construction of a processing plant to process the ore, which will be owned by the Company and the performance of all surface and underground mining operations.

The estimated costs for the construction of the processing plant was approximately $40 million.

As consideration for the mining services, Contractor was to receive the following consideration from the Company:

Phase 3. As consideration for completion of Phase 3, Contractor would earn a 30% revenue interest in the revenues resulting from the sale of the ore, subject to it paying its proportionate share of the milling expenses. If Contractor fails to perform or elects not to perform Phase 3 for any reason within 12 months from the completion of Phase 2, Contractor will forfeit all rights to the project.

In addition to the consideration stated above, as a further inducement for Contractor to enter into the Mining Services Agreement, the Company's former Chairman has agreed to issue to Contractor an additional 5 million shares of our common stock. This is not a Company obligation but will be treated as a capital contribution and will occur after completion of development under separate agreement.

The parties are obligated to share in the milling and processing costs and revenues generated from any ore processing on a proportionate basis that is 70% to the Company and 30% to Contractor. The Mining Services Agreement contains extensive terms and obligations regarding the performance of the mining services by Contractor. Accordingly, the descriptions of the Mining Services Agreement are not complete, and are qualified in their entirety by reference to each agreement which is an exhibit to our Annual Report on Form 10-K/A for the fiscal year ended May 31, 2013 filed with the Securities and Exchange Commission on September 16, 2013.

Mr. George Mesa, the sole owner of Contractor, has been the Company's Director of Security for the Company's Mexican mining concessions since September 2012. On September 21, 2012, Mr. Mesa received stock options to acquire 1 million share of our common stock at an exercise price of $0.12 in connection with that appointment.

As at the date of this report, communications with Mesa Acquisition Group LLC has ceased and no further operations have been undertaken under the Mining Service Agreement. It is not clear, if, or when, any further work will be performed under the terms of this agreement.

New Production and Drilling Programs

In February 2015, we entered into a further contract with the same contractor to drill 5,000 meters for $1,762,047, $195,790 payable in stock and the balance of $1,566,257 payable in cash.

Pursuant to the drilling program we have completed approximately 4,000 meters of drilling over 27 holes.

Corporate Matters.

On June 24, 2014, the Company and Dr. Edgar Choueiri entered into a Consulting Agreement, pursuant to which Dr. Choueiri agreed to provide certain consulting services to the Company with respect to plasma processing. The agreement was on a month to month basis, and Dr. Choueiri, among other terms, would receive a remuneration of $4,000 per month. In addition, in connection with the agreement, Dr. Choueiri resigned from the Board of Directors of the Company. Payments under this agreement have subsequently ceased.

On August 27, 2014, the Board of Directors approved the following:

the establishment of a 2014 Stock Option Plan for up to 20,000,000 shares of common stock, and

On November 5, 2013, we appointed Mr. Scott Hartman to our Board of Directors. In addition, Mr. Hartman also was appointed as Director of Mergers and Acquisitions. Mr. Hartman received a stock option grant under the Company's 2014 Stock Option Plan of 1,000,000 shares of common stock at $0.29 price per share. In addition, on December 4, 2014, we entered into an agreement with Mr. Scott Hartman as Director of Mergers and Acquisitions, pursuant to which he received 1,000,000 shares of common stock. Moreover, upon the closing of a fundamental transaction in which we or our properties are sold to third parties, Mr. Hartman was to receive a successful efforts fee of 2% of the sales price, provided that the total fees payable by us in the transaction do not exceed 5%. Mr. Hartman was also a Director of the Company.

Effective February 20, 2015, Mr. John Gildea, a director of the Company, was appointed as the Company's Chief Operating Officer and Mr. Ruben Fiquerado was appointed Director of Mexican Operations. The Company and Mr. Gildea entered into an oral arrangement under which Mr. Gildea will receive $5,000 per month as remuneration for his role as Chief Operating Officer.

On May 14, 2015, Mr. Chad Altieri resigned as a Director of the Company.

The Company and Mr. Gildea have entered into an oral arrangement pursuant to which Mr. Gildea will receive a monthly compensation of $8,000 for acting in such capacity. In addition, Mr. Gildea will receive an initial grant of common stock in the amount of 500,000 shares, and he will receive a quarterly common stock grant of 200,000 shares, subject to Board of Directors approval.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Exploration Stage Accounting

The Company is an exploration stage company, as defined in pronouncements of the Financial Accounting Standards Board (FASB) and Industry Guide #7 of the Securities and Exchange Commission. Generally accepted accounting principles govern the recognition of revenue by an exploration stage enterprise and the accounting for costs and expenses. As an exploration stage company is also required to make additional disclosures as defined under the then current Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") 915, "Development-Stage Entities". Additional disclosures required are that our financial statements be identified as those of an exploration stage company, and that the statements of operations, changes in changes in stockholders' deficit and cash flows disclosed activity since the date of its Inception (January 21, 1998). Effective June 10, 2014, the FASB changed its regulations with respect to development stage entities and these additional disclosures are no longer required for annual reporting periods beginning after December 15, 2015, with the option for entities to early adopt these new provisions. The Company has elected to early adopt these provisions and consequently these additional disclosures are not included in its financial statements

Proven and Probable Reserves

The definition of proven and probable reserves is set forth in SEC Industry Guide 7. Proven reserves are reserves for which (a) quantity is computed from dimensions revealed in outcrops, trenches, workings or drill holes; (b) grade and/or quality are computed from the results of detailed sampling; and (c) the sites for inspection, sampling and measurement are spaced so closely and the geologic character is so well defined that size, shape, depth and mineral content of reserves are well-established. Probable reserves are reserves for which quantity and grade and/or quality are computed from information similar to that used for proven reserves, but the sites for inspection, sampling, and measurement are farther apart or are otherwise less adequately spaced. The degree of assurance, although lower than that for proven reserves, is high enough to assume continuity between points of observation.

In addition, reserves cannot be considered proven and probable until they are supported by a feasibility study, indicating that the reserves have had the requisite geologic, technical and economic work performed and are economically and legally extractable at the time of the reserve determination. As of May 31, 2015, none of our mineralized material met the definition of proven or probable reserves.

Consolidated Statements

The consolidated financial statements include the accounts of the Company and its subsidiary company. All significant intercompany balances and transactions have been eliminated in consolidation.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimated

Foreign Currency Translation

The assets of the Mexican subsidiary are located in Mexico. The Mexican subsidiary depends on the ability of the parent company to raise cash which is transferred to the subsidiary to meet its operating cash needs. Therefore, the Company's management has determined that the functional currency of the Mexican subsidiary is the US dollar. Since that is the case, the Company remeasures its subsidiary financial statements in US dollars. Any gains or losses are reflected on the Statements of Operations.

The accounts of the Mexican subsidiary are remeasured in US dollars as follows:

(a) Current assets, current liabilities, and long-term monetary assets and liabilities are translated based on the rates of exchange in effect at the balance sheet dates.

(b) Non-monetary assets, liabilities, and equity accounts are translated at the exchange rates prevailing at the times of acquisition of assets, assumption of liabilities or equity investments.

(c) Revenues and expenses are translated at the average exchange rates for each period, except for charges for amortization and depreciation of non-monetary assets which are translated at the rates associated with the assets.

Cash Equivalents

The Company considers all short term investments purchased with an original maturity of three months or less to be cash equivalents.

Financial Instruments

The estimated fair values for financial instruments were determined at discrete points in time based on relevant market information. These estimates involved uncertainties and could not be determined with precision. The carrying amounts of notes receivable, accounts receivable, accounts payable and accrued liabilities approximated fair value because of the short-term maturities of these instruments. The fair value of notes payable approximated their carrying value as generally their interest rates reflected our effective annual borrowing rate.

Fair Value Measurements:

ASC Topic 820, Fair Value Measurements and Disclosures ("ASC 820"), provides a comprehensive framework for measuring fair value and expands disclosures which are required about fair value measurements. Specifically, ASC 820 sets forth a definition of fair value and establishes a hierarchy prioritizing the inputs to valuation techniques, giving the highest priority to quoted prices in active markets for identical assets and liabilities and the lowest priority to unobservable value inputs. ASC 820 defines the hierarchy as follows:

Level 1 – Quoted prices are available in active markets for identical assets or liabilities as of the reported date. The types of assets and liabilities included in Level 1 are highly liquid and actively traded instruments with quoted prices, such as equities listed on the New York Stock Exchange.

Level 2 – Pricing inputs are other than quoted prices in active markets, but are either directly or indirectly observable as of the reported date. The types of assets and liabilities in Level 2 are typically either comparable to actively traded securities or contracts, or priced with models using highly observable inputs.

Level 3 – Significant inputs to pricing that are unobservable as of the reporting date. The types of assets and liabilities included in Level 3 are those with inputs requiring significant management judgment or estimation, such as complex and subjective models and forecasts used to determine the fair value of financial transmission rights.

Our financial instruments consist of cash and cash equivalents, prepaid expenses, payables, accruals and convertible notes payable. The carrying values of cash and cash equivalents, prepaid expenses, payables, accruals and convertible notes payable approximate their fair value due to their short maturities.

Concentrations of Credit Risk

Financial instruments which potentially subject the Company to concentrations of credit risk consist primarily of cash, a small portion of which is located in Mexico.

Property and equipment

Property and equipment are stated at cost. Depreciation of property and equipment is calculated using the straight-line method over the estimated useful lives of the assets. Leasehold improvements are amortized using the straight-line method over the shorter of their estimated useful lives or the related reasonably assured lease term. The estimated useful lives are as follows:

Vehicles	4 years
Machinery and equipment	3-10 years

We review our property and equipment for impairment whenever events or changes in circumstances indicate that the carrying value of such assets may not be recoverable.

Maintenance and repairs of property and equipment are charged to operations. Major improvements are capitalized. Upon retirement, sale or other disposition of property and equipment, the cost and accumulated depreciation are eliminated from the accounts and any gain or loss is included in operations.

Investments in Mining Rights

Mining rights held for development are recorded at the cost of the rights, plus related acquisition costs. These costs will be amortized when extraction begins.

Mine Development Costs

Mine development costs include engineering and metallurgical studies, drilling and other related costs to delineate an ore body, the removal of overburden to initially expose an ore body at open pit surface mines and the building of access ways, shafts, lateral access, drifts, ramps and other infrastructure at underground mines. Costs incurred at a mine site before proven reserves have been established are expensed as mine development costs. At the point proven reserves have been established at a mine site, such costs will be capitalized and will be written off as depletion expense as the minerals are extracted.

As of May 31, 2015, none of the mine concessions met the requirements for qualification as having proven reserves.

Impairment of Long-Lived and Intangible Assets

In the event that facts and circumstances indicated that the cost of long-lived and intangible assets may be impaired, an evaluation of recoverability will be performed. If an evaluation was required, the estimated future undiscounted cash flows associated with the asset would be compared to the asset's carrying amount to determine if a write-down to market value or discounted cash flow value was required. No impairment was recorded during the years ended May 31, 2015 and 2014.

Deferred Costs and Other

Offering costs with respect to issue of common stock, warrants or options by us were initially deferred and ultimately offset against the proceeds from these equity transactions if successful or expensed if the proposed equity transaction is unsuccessful.

Derivative Financial Instruments:

We do not use derivative instruments to hedge exposures to cash flow, market or foreign currency risks. We evaluate all of our financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the statements of operations. For stock-based derivative financial instruments, the Company used a Black Scholes valuation model to value the derivative instruments at inception and on subsequent valuation dates. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement or conversion of the instrument could be required within 12 months of the balance sheet date.

Income Taxes

We account for income taxes under the liability method, which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial statements and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Current tax benefits are offset by a valuation reserve as they are considered not likely to be realized in the foreseeable future.

Recognition of Revenue

Revenue will be recognized when persuasive evidence of an arrangement exists, such as when a purchase order or contract is received from a customer, the price is fixed, title to the goods has passed, and there is reasonable assurance of collection. The Company has not yet entered into any contractual arrangement to deliver product or services.

Advertising Costs

The Company will expense advertising costs when advertisements occur. There has been no spending thus far on advertising.

Stock Based Compensation

Discount and Amortization of Debt Discount:

Debt discount represents costs incurred in obtaining the debt funding and the fair value of embedded conversion options of various convertible debt instruments and attached convertible equity instruments issued in connection with debt instruments. The debt discount is amortized over the earlier of (i) the term of the debt or (ii) conversion of the debt, using the straight-line method which approximates the interest method. The amortization of debt discount is included as a component of other expenses in the accompanying statements of operations.

Net Income (Loss) Per Share

The Company computes net income (loss) per common share in accordance with ASC Topic 260), Earnings Per Share, which requires the presentation of both basic and diluted earnings per share ("EPS")on the consolidated income statements.. Under these provisions, basic and diluted net income (loss) per common share are computed by dividing the net income (loss) available to common shareholders for each period by the weighted average number of shares of common stock outstanding during the period. At May 31, 2014 and 2013 there were warrants and options outstanding to purchase Company common stock and notes payable that are convertible into shares of the Company's common stock. The common share equivalents of these have not been included in the calculations of loss per share because such inclusions would have anti-dilutive effects as the Company incurred a loss from operations during the years ended May 31, 2015 and 2014.

Other Comprehensive Income (Loss)

The Company reports as other comprehensive income (loss) those revenues, gains and losses not included in the determination of net income. During the years ended May 31, 2015 and 2014, the Company did not have any gains and losses resulting from activities or transactions that resulted in comprehensive income or loss.

Segment Reporting

Management treats the operation of the Company as one segment.

New Accounting Pronouncements

The Company has reviewed all recently issued, but not yet effective, accounting pronouncements and does not believe the future adoption of any such pronouncements may be expected to cause a material impact on its financial condition or the results of its operations.

3. GOING CONCERN AND LIQUIDITY

We have experienced continuing losses since Inception (January 21, 1998), and as at May 31, 2015, have a working capital deficit of $6,585,059, accumulated losses of $55,978,765, recurring negative cash flows from operations and presently do not have sufficient resources to meet our outstanding liabilities or accomplish our objectives during the next twelve months.

As at May 31, 2015, we were in default on repayment of convertible promissory notes with principal balances of $550,000 together with accrued interest of $518,916, totaling $1,068,916.

In addition, we owe a former attorney the sum of approximately $90,000 under an arbitration award. The attorney has initiated efforts to effect a judgment against the Company.

At the time of this report, we do not have the funding available to repay the convertible promissory notes or pay the arbitration award to the other former attorney.

These conditions raise substantial doubt about our ability to continue as a going concern.

In our audited financial statements for the fiscal years ended May 31, 2015 and 2014, contained in our Annual Report, the Report of the Independent Registered Public Accounting Firm includes an explanatory paragraph that describes substantial doubt about our ability to continue as a going concern.

4. SUPPLEMENTAL CASHFLOWS INFORMATION

	Year Ended May 31,
	2015		2014

Income taxes paid	$	-	$	-
Interest paid	$	-	$	-

Liabilities settled for shares of common stock

4,600,835 shares of common stock issued on conversion of	$	-	$	482,301
$317,080 notes payable, $21,137 accrued interest, $174,186
debt discount and $320,271 derivative liability.
5,703,144 shares of common stock issued on conversion of $467,781 notes payable, $34,000 accrued interest, $156,711 debt discount and $573,295 derivative liabilities.		918,365		-

600,000 shares of common stock issued as partial settlements of accounts payable		158,000		-

Total liabilities settled for shares of common stock	$	1,076,365	$	482,301

5. FIXED ASSETS

As at May 31, 2015 and 2014, fixed assets consisted of the following:

	May 31, 2015			May 31, 2014
Vehicles	$	41,877		$	41,877
Machinery and equipment		92,515			92,515
Total fixed assets - cost		134,392			134,392
Less accumulated depreciation		(118,960	)		(108,849	)

Total fixed assets - net	$	15,432		$	25,543

Depreciation expense was $10,111 and $10,110 for the twelve months ended May 31, 2015 and 2014 respectively.

6. CONVERTIBLE NOTES PAYABLE

	Principal Balance			Loan Discount			Accrued Interest			Total

May 31, 2013	$	575,000		$	-		$	355,923		$	930,923
Issued in the year		676,000			(414,726	)		-			261,280
Converted into shares of common stock		(317,080	)		174,181			(20,137	)		(163,036	)
Amortization of debt discount		-			142,091			-			142,091
Interest accrued		-			-			125,512			125,512
May 31, 2014		933,920			(98,448	)		461,298			1,296,770
Issued in the year		1,800,000			(1,756,741	)		-
Converted into shares of common stock		(467,781	)		156,711			(34,000	)		(345,070	)
Amortization of debt discount		-			643,561			-			643,561
Interest accrued		-			-			121,815			121,815
May 31, 2015		2,266,139			(1,054,917	)		549,113			1,760,334

Less long term		(238,889	)		218,414			(22,000	)		(42,474	)

Short term	$	2,027,250		$	(836,503	)	$	527,113		$	1,717,860

Convertible Notes Payable in Default

As at May 31, 2015, we were in default on repayment of various convertible promissory notes included in the above table with principal balances of $550,000, together with accrued interest of $518,915, totaling $1,068,915. The notes in default bear simple interest at an annual rate of 16% and may be converted into the shares of our common stock at the option of the note holder or automatically, if we complete any financing that results in proceeds of at least $10 million to us, or upon the occurrence of a change in control of us.

on September 30, 2013, a holder of our convertible notes served us with a lawsuit. The lawsuit demanded repayment of a total of $632,666 in principal and interest due under the convertible notes. The lawsuit was dismissed by court due to lack of jurisdiction.

Convertible Notes Payable – Current Year Activity

During the year ended May 31, 2015, the Company issued eight additional convertible notes payable for $1,800,000, and settled three previously outstanding convertible notes payable and their related debt discount, accrued interest and derivative liabilities totaling $918,365 through the issuance of a total of 5,703,144 shares of our common stock as follows:

Convertible Note Payable – Lender A

On September 26, 2013, we entered into a convertible promissory note with a maximum amount of $300,000, to be funded during a two year term, bearing interest at 12%. The maximum proceeds to be received under the note is $270,000 with the balance of $30,000 representing a discount on issue.

Tranche One

We initially received $150,000 upon closing the note. The lender may convert the convertible promissory note into shares of our common stock at any time after six months at a 40% discount to the lowest trade price in the 25 trading days prior to conversion. The $150,000 was received net of a debt discount of $16,667 and the principal balance to be repaid is $166,667. The $16,667 debt discount was recorded as reduction (contra-liability) to the convertible debenture and is being amortized over the life of the convertible debenture.

We evaluated the terms of the conversion features of the convertible debenture in accordance with ASC Topic No. 815 - 40, Derivatives and Hedging - Contracts in Entity's Own Stock and determined it is indexed to the Company's common stock and that the conversion features meet the definition of a liability and therefore bifurcated the conversion feature and accounted for it as a separate derivative liability.

We valued the conversion feature at origination at $259,659 using the Black Scholes valuation model with the following assumptions: dividend yield of zero, 18 month term to maturity, risk free interest rate of 0.34% and annualized volatility of 143%. $150,000 of the value assigned to the derivative liability was recognized as a debt discount on the convertible debenture. The debt discount was recorded as reduction (contra-liability) to the convertible debenture and is being amortized over the life of the convertible debenture. The balance of $109,659 of the value assigned to the derivative liability was recognized as origination interest on the derivative liability and expensed on origination.

ASC 815 requires we assess the fair market value of derivative liability at the end of each reporting period and recognize any change in the fair market value as other income or expense item.

At November 30, 2013, we revalued the conversion feature of the convertible debenture using the Black Scholes valuation model with the following assumptions: 6 month risk free interest rate of 0.26% and annualized volatility of 133% and determined that, since origination, the fair value of our derivative liability had decreased by $33,956 to $225,703. Accordingly, we recognized a corresponding gain on derivative liability in conjunction with this revaluation.

Tranche Two

On February 20, 2014, we received a further net advance for $30,000 under the terms of the note.

The $30,000 advance was received net of a debt discount of $3,333 and the principal balance to be repaid is $33,333. The $3,333 debt discount was recorded as reduction (contra-liability) to the convertible debenture and is being amortized over the life of the convertible debenture.

We evaluated the terms of the conversion features of the convertible debenture in accordance with ASC Topic No. 815 - 40, Derivatives and Hedging - Contracts in Entity's Own Stock and determined it is indexed to the Company's common stock and that the conversion features meet the definition of a liability and therefore bifurcated the conversion feature and accounted for it as a separate derivative liability.

We valued the conversion feature at origination at $42,385 using the Black Scholes valuation model with the following assumptions: dividend yield of zero, 18 month term to maturity, risk free interest rate of 0.25% and annualized volatility of 128%. $30,000 of the value assigned to the beneficial conversion feature was recognized as a debt discount on the convertible debenture. The debt discount was recorded as reduction (contra-liability) to the convertible debenture and is being amortized over the life of the convertible debenture. The balance of $12,385 of the value assigned to the beneficial conversion feature was recognized as origination interest on the derivative liability and expensed on origination.

ASC 815 requires we assess the fair market value of derivative liability at the end of each reporting period and recognize any change in the fair market value as other income or expense item.

At February 28, 2014, we revalued the conversion feature of the entire $200,000 convertible debenture using the Black Scholes valuation model with the following assumptions: 18 month term, risk free interest rate of 0.25% and annualized volatility of 128% and determined that, since the previous revaluation or origination, the fair value of our derivative liability had increased by $37,892 to $305,980 Accordingly we recognized a corresponding loss on derivative liability in conjunction with this revaluation.

Between March 26, 2014 and May 15, 2014, the holder made 4 separate conversion requests and converted the $91,080 of the principal receiving a total of 1,320,000 shares of our common stock upon such conversions.

On each partial settlement, we revalued the proportionate amount of the derivative liability to it fair value and recognized any gain or loss on the change in fair value of the derivative liability as other income or expense in the statement of operations. On issuance of shares of our common stock on partial settlement of the note, we transferred the proportionate balance of the derivative liability together with the proportionate balance of unamortized debt discount to additional paid in capital.

At May 31, 2014, we revalued the conversion feature of the remaining balance of $132,920 principal and interest outstanding using the Black Scholes valuation model with the following assumptions: dividend yield of zero, 16 month term, risk free interest rate of 0.195% and annualized volatility of 120% and determined that, since the previous revaluation, the fair value of our remaining derivative liability had decreased by $27,310 to $146,674 Accordingly we recognized a corresponding gain on derivative liability in conjunction with this revaluation.

Between June 1, 2014 and August 20, 2014 the holder made 4 separate conversion requests and converted the remaining $132,920 of the principal receiving a total of 1,724,266 shares of our common stock upon such conversions.

As at August 31, 2014, no balance was outstanding under this convertible note payable.

Tranche Three

On September 3, 2014, we received a further net advance for $75,000 under the terms of the note.

The $75,000 advance was received net of a debt discount of $8,333 and the principal balance to be repaid is $83,333. The $8,333 debt discount was recorded as reduction (contra-liability) to the convertible debenture and is being amortized over the life of the convertible debenture.

We evaluated the terms of the conversion features of the convertible debenture in accordance with ASC Topic No. 815 - 40, Derivatives and Hedging - Contracts in Entity's Own Stock and determined it is indexed to the Company's common stock and that the conversion features meet the definition of a liability and therefore bifurcated the conversion feature and accounted for it as a separate derivative liability.

We valued the conversion feature at origination at $112,164 using the Black Scholes valuation model with the following assumptions: dividend yield of zero, 18 term month to maturity, risk free interest rate of 0.52% and annualized volatility of 123%. $75,000 of the value assigned to the beneficial conversion feature was recognized as a debt discount on the convertible debenture. The debt discount was recorded as reduction (contra-liability) to the convertible debenture and is being amortized over the life of the convertible debenture. The balance of $37,164 of the value assigned to the beneficial conversion feature was recognized as origination interest on the derivative liability and expensed on origination.

ASC 815 requires we assess the fair market value of derivative liability at the end of each reporting period and recognize any change in the fair market value as another income or expense item.

At November 30, 2014, we revalued the conversion feature of the entire $83,333 convertible debenture using the Black Scholes valuation model with the following assumptions: 18 month term, risk free interest rate of 0.45% and annualized volatility of 117% and determined that the fair value of our derivative liability had decreased by $4,057 to $108,107 Accordingly we recognized a corresponding gain on derivative liability in conjunction with this revaluation.

On December 3, 2014, a one time interest expense of 12%, or $10,000, was accrued on the principal balance of $83,333 and we valued the conversion feature in respect of the $10,000 interest accrual using the Black Scholes valuation model with the following assumptions: 18 month term, risk free interest rate of 0.389% and annualized volatility of 117% and determined that the initial value of the derivative liability related to the accrued interest was $13,409. Accordingly $10,000 of the value assigned to the beneficial conversion feature was recognized as a debt discount on the accrued interest. The debt discount was recorded as reduction (contra-liability) to the accrued interest and is being amortized over the life of the convertible debenture. The balance of $3,409 of the value assigned to the beneficial conversion feature was recognized as origination interest on the derivative liability and expensed on origination.

At February 28, 2015, we revalued the conversion feature of the entire $83,333 convertible debenture and the accrued interest of $10,000 using the Black Scholes valuation model with the following assumptions: 18 month term, risk free interest rate of 0.4312% and annualized volatility of 105% and determined that the fair value of our derivative liability had decreased by $3,799 to $117,717 Accordingly we recognized a corresponding gain on derivative liability in conjunction with this revaluation.

Between March 3, 2015 and April 24, 2015, the holder made 4 separate conversion requests and converted the entire principal balance of $83,333 and accrued interest of $10,000 into a total of 1,335,141 shares of our common stock upon such conversions in full repayment of this tranche of the note payable.

Tranche Four

On December 17, 2014, we received a further net advance for $75,000 under the terms of the note.

We evaluated the terms of the conversion features of the convertible debenture in accordance with ASC Topic No. 815 - 40, Derivatives and Hedging - Contracts in Entity's Own Stock and determined it is indexed to the Company's common stock and that the conversion features meet the definition of a liability and therefore bifurcated the conversion feature and accounted for it as a separate derivative liability.

We valued the conversion feature at origination at $101,931 using the Black Scholes valuation model with the following assumptions: dividend yield of zero, 24 month term to maturity, risk free interest rate of 0.62% and annualized volatility of 115%. $75,000 of the value assigned to the beneficial conversion feature was recognized as a debt discount on the convertible debenture. The debt discount was recorded as reduction (contra-liability) to the convertible debenture and is being amortized over the life of the convertible debenture. The balance of $26,931 of the value assigned to the beneficial conversion feature was recognized as origination interest on the derivative liability and expensed on origination.

ASC 815 requires we assess the fair market value of derivative liability at the end of each reporting period and recognize any change in the fair market value as another income or expense item.

At February 28, 2015, we revalued the conversion feature of the entire $83,333 convertible debenture using the Black Scholes valuation model with the following assumptions: 22 month term, risk free interest rate of 0.62% and annualized volatility of 109% and determined that the fair value of our derivative liability had increased by $8,944 to $110,875 Accordingly we recognized a corresponding loss on derivative liability in conjunction with this revaluation.

On March 17, 2015, a one time interest expense of 12%, or $10,000, was accrued on the principal balance of $83,333.

At May 31, 2015, we revalued the conversion feature of the entire $83,333 convertible debenture and $10,000 in accrued interest using the Black Scholes valuation model with the following assumptions: 18 month term, risk free interest rate of 0.458% and annualized volatility of 110% and determined that the fair value of our derivative liability had increased by $75,825 to $186,700 Accordingly we recognized a corresponding loss on derivative liability in conjunction with this revaluation.

As disclosed In Note 11 Subsequent Events below, between June 17, 2015 and July 22, 2015, the holder made 4 separate conversion requests and converted the entire principal balance of $83,333 and accrued interest of $10,000 into a total of 1,251,113 shares of our common stock upon such conversions in full repayment of this tranche of the note payable.

Tranche Five

On April 28, 2014, we received a further net advance for $50,000 under the terms of the note.

The $50,000 advance was received net of a debt discount of $5,556 and the principal balance to be repaid is $55,556. The $5,556 debt discount was recorded as reduction (contra-liability) to the convertible debenture and is being amortized over the life of the convertible debenture.

We evaluated the terms of the conversion features of the convertible debenture in accordance with ASC Topic No. 815 - 40, Derivatives and Hedging - Contracts in Entity's Own Stock and determined it is indexed to the Company's common stock and that the conversion features meet the definition of a liability and therefore bifurcated the conversion feature and accounted for it as a separate derivative liability.

We valued the conversion feature at origination at $71,928 using the Black Scholes valuation model with the following assumptions: dividend yield of zero, 24 term month to maturity, risk free interest rate of 0.56% and annualized volatility of 118%. $50,000 of the value assigned to the beneficial conversion feature was recognized as a debt discount on the convertible debenture. The debt discount was recorded as reduction (contra-liability) to the convertible debenture and is being amortized over the life of the convertible debenture. The balance of $21,928 of the value assigned to the beneficial conversion feature was recognized as origination interest on the derivative liability and expensed on origination.

ASC 815 requires we assess the fair market value of derivative liability at the end of each reporting period and recognize any change in the fair market value as another income or expense item.

At May 31, 2015, we revalued the conversion feature of the entire $55,556 convertible debenture using the Black Scholes valuation model with the following assumptions: 23 month term, risk free interest rate of 0.588% and annualized volatility of 109% and determined that the fair value of our derivative liability had increased by $42,161 to $114,089 Accordingly we recognized a corresponding loss on derivative liability in conjunction with this revaluation.

As of May 31, 2015, a total of $148,888 was outstanding under this convertible note in respect of principal and accrued interest relating to Tranches Four and Five.

Tranche Six

As disclosed In Note 11 Subsequent Events below, effective August 28, 2015, we received a further net advance for $75,000 under the terms of the note.

Convertible Notes Payable – Lender B

On January 30, 2014, we issued a convertible debenture to a former lender for $125,000. The convertible debenture had a 6 month term and bore interest of 12%. The convertible debenture could have been prepaid at a rate of 150% of the principal balance outstanding along with accrued interest. At any time after the maturity date of the convertible loan, if any principal balance was still outstanding, the balance was convertible into shares of the common stock at a 40% discount to the lowest closing price of the prior 20 trading days. As the conversion feature only applied after the maturity of the convertible debenture, no value was assigned to it at origination of the loan and no loan discount was recognized on the convertible debenture at origination. This convertible debenture was due on July 30, 2014 and the holder converted the entire principal amount of the note as described further below.

We evaluated the terms of the conversion features of the convertible debenture in accordance with ASC Topic No. 815- 40, Derivatives and Hedging - Contracts in Entity's Own Stock. Since the conversion price can change with reductions in the price of Company common stock, the conversion feature meets the definition of a derivative. We therefore bifurcated the conversion feature and accounted for it as a separate derivative liability. We valued the conversion feature at default at $111,975 using the Black Scholes valuation model with the following assumptions: dividend yield of zero, 3 month term to maturity, risk free interest rate of 0.03% and annualized volatility of 59%. The balance of $111,975 was recognized as interest on origination and expensed in full on default.

Between January 30, 2014 and August 15, 2014, the holder made 6 separate conversion requests and converted the entire $125,000 principal amount of the note receiving a total of 1,316,356 shares of our common stock. The holder waived their right to charge interest on this loan. As of August 31, 2014, the note has been satisfied in full.

On April 4 2014, we issued a further convertible debenture for $150,000 to this lender. The convertible debenture has a 6 month term and bears interest of 10%. The convertible debenture could have been prepaid at a rate of 150% of the principal balance outstanding along with accrued interest. At any time after the maturity date of the convertible loan, if any principal balance was still outstanding, the balance could be convertible into shares of the common stock at a 40% discount to the lowest closing price of the prior 20 trading days. As the conversion feature only applies after the maturity of the convertible debenture, no value has been assigned to it and no loan discount has been recognized on the convertible debenture. This convertible debenture was due on October 4, 2014 and the holder converted the entire principal amount of the note as described further below.

We evaluated the terms of the conversion features of the convertible debenture in accordance with ASC Topic No. 815- 40, Derivatives and Hedging - Contracts in Entity's Own Stock. Since the conversion price can change with reductions in the price of Company common stock, the conversion feature meets the definition of a derivative. We therefore bifurcated the conversion feature and accounted for it as a separate derivative liability. We valued the conversion feature at default at $157,587 using the Black Scholes valuation model with the following assumptions: dividend yield of zero, 3 month to maturity, risk free interest rate of 0.02% and annualized volatility of 49%. The balance of $157,587 was recognized as interest on origination and expensed in full on default.

Between October 6, 2014 and October 20, 2014, the holder made 4 separate conversion requests and converted the entire $150,000 principal amount of the note receiving a total of 1,128,968 shares of our common stock. The holder waived their right to charge interest on this loan. As of November 30, 2014, the note has been satisfied in full.

On December 16, 2014, we issued a convertible debenture to this lender for $500,000. The convertible debenture had a 6 month term and was not subject to interest. The convertible debenture could be prepaid for $600,000 in the first 90 days of the loan and for $650,000 from the 91^stto the 120^th day of the loan. Interest accrued at 5% per annum after the loan matured. At any time after the maturity date of the convertible loan, if any principal balance was still outstanding, the balance was convertible into shares of the common stock at a 40% discount to the lowest closing price of the prior 20 trading days.

We evaluated the terms of the conversion features of the convertible debenture in accordance with ASC Topic No. 815 - 40, Derivatives and Hedging - Contracts in Entity's Own Stock and determined it is indexed to the Company's common stock and that the conversion features meet the definition of a liability and therefore bifurcated the conversion feature and accounted for it as a separate derivative liability.

We valued the conversion feature at origination at $502,152 using the Black Scholes valuation model with the following assumptions: dividend yield of zero, 6 month to maturity, risk free interest rate of 0.16% and annualized volatility of 107%. $500,000 of the value assigned to the derivative liability was recognized as a debt discount on the convertible debenture. The debt discount was recorded as reduction (contra-liability) to the convertible debenture and is being amortized over the life of the convertible debenture. The balance of $2,152 of the value assigned to the derivative liability was recognized as origination interest on the derivative liability and expensed on origination.

ASC 815 requires we assess the fair market value of derivative liability at the end of each reporting period and recognize any change in the fair market value as another income or expense item.

At February 28, 2015, we revalued the conversion feature of the convertible debenture using the Black Scholes valuation model with the following assumptions: 6 month risk free interest rate of 0.1% and annualized volatility of 73% and determined that, since origination, the fair value of our derivative liability had increased by $1,821 to $503,973. Accordingly, we recognized a corresponding loss on derivative liability in conjunction with this revaluation

At May 31, 2015, we revalued the conversion feature of the convertible debenture using the Black Scholes valuation model with the following assumptions: 3 month risk free interest rate of 0.02% and annualized volatility of 59% and determined that, since origination, the fair value of our derivative liability had increased by $483,683 to $987,656. Accordingly, we recognized a corresponding loss on derivative liability in conjunction with this revaluation.

As of May 31, 2015, a balance of $500,000 principal was outstanding under the terms of this convertible note payable.

As disclosed In Note 11 Subsequent Events below, between June 16, 2015 and August 18, 2015, the holder made 7 separate conversion requests and converted a principal balance of $465,000 into a total of 7,304,763 shares of our common stock upon such conversion. Further on August 26, and August 28, 2015, we made cash repayment of $25,000 and $27,500, respectively, in full repayment of the remaining balance of $35,000 and related repayment penalties.

Convertible Note Payable – Lender C

On January 28, 2015, we entered into a convertible promissory note with a new lender for a maximum amount of $250,000, to be funded during a two year term, bearing interest at 12%. The maximum proceeds to be received under the note is $225,000 with the balance of $25,000 representing a discount on issue.

Tranche One

We initially received a net of $47,500 upon closing the note. The lender may convert the convertible promissory note into shares of our common stock at any time at a 40% discount to the lowest trade price in the 25 trading days prior to conversion. The $47,500 was received net of a debt discount of $2,500 and the principal balance to be repaid is $50,000. The $2,500 debt discount was recorded as reduction (contra-liability) to the convertible debenture and is being amortized over the life of the convertible debenture. A one off interest charge of 12% or $6,000 was accrued on the convertible promissory note on issuance.

We evaluated the terms of the conversion features of the convertible debenture in accordance with ASC Topic No. 815 - 40, Derivatives and Hedging - Contracts in Entity's Own Stock and determined it is indexed to the Company's common stock and that the conversion features meet the definition of a liability and therefore bifurcated the conversion feature and accounted for it as a separate derivative liability.

We valued the conversion feature at origination at $66,725 using the Black Scholes valuation model with the following assumptions: dividend yield of zero, 24 month term to maturity, risk free interest rate of 0.50% and annualized volatility of 125%. $56,000 of the value assigned to the derivative liability was recognized as a debt discount on the convertible debenture and its accrued interest. The debt discount was recorded as reduction (contra-liability) to the convertible debenture and is being amortized over the life of the convertible debenture. The balance of $10,725 of the value assigned to the derivative liability was recognized as origination interest on the derivative liability and expensed on origination.

ASC 815 requires we assess the fair market value of derivative liability at the end of each reporting period and recognize any change in the fair market value as other income or expense item.

At February 28, 2015, we revalued the conversion feature of the convertible debenture using the Black Scholes valuation model with the following assumptions: 24 month term to maturity, a risk free interest rate of 0.587% and annualized volatility of 121% and determined that, since origination, the fair value of our derivative liability had increased by $5,316 to $72,041. Accordingly, we recognized a corresponding gain on derivative liability in conjunction with this revaluation.

At May 31, 2015, we revalued the conversion feature of the convertible debenture using the Black Scholes valuation model with the following assumptions: 20 month to maturity, a risk free interest rate of 0.486% and annualized volatility of 108% and determined that, since origination, the fair value of our derivative liability had increased by $40,346 to $112,387. Accordingly, we recognized a corresponding gain on derivative liability in conjunction with this revaluation.

As disclosed In Note 11 Subsequent Events below, on August 4 and 21, 2015, the holder made 2 separate conversion requests and converted a principal balance of $27,300 into a total of 700,000 shares of our common stock upon such conversion.

Tranche Two

On May 8, 2015 we received a further net of $47,500 under the terms of the note. The lender may convert the convertible promissory note into shares of our common stock at any time at a 40% discount to the lowest trade price in the 25 trading days prior to conversion. The $47,500 was received net of a debt discount of $2,500 and the principal balance to be repaid is $50,000. The $2,500 debt discount was recorded as reduction (contra-liability) to the convertible debenture and is being amortized over the life of the convertible debenture. A one off interest charge of 12% or $6,000 was accrued on the convertible promissory note on issuance.

We evaluated the terms of the conversion features of the convertible debenture in accordance with ASC Topic No. 815 - 40, Derivatives and Hedging - Contracts in Entity's Own Stock and determined it is indexed to the Company's common stock and that the conversion features meet the definition of a liability and therefore bifurcated the conversion feature and accounted for it as a separate derivative liability.

We valued the conversion feature at origination at $87,305 using the Black Scholes valuation model with the following assumptions: dividend yield of zero, 24 month term to maturity, risk free interest rate of 0.50% and annualized volatility of 125%. $56,000 of the value assigned to the derivative liability was recognized as a debt discount on the convertible debenture and its accrued interest. The debt discount was recorded as reduction (contra-liability) to the convertible debenture and is being amortized over the life of the convertible debenture. The balance of $33,805 of the value assigned to the derivative liability was recognized as origination interest on the derivative liability and expensed on origination.

ASC 815 requires we assess the fair market value of derivative liability at the end of each reporting period and recognize any change in the fair market value as other income or expense item.

At May 31, 2015, we revalued the conversion feature of the convertible debenture using the Black Scholes valuation model with the following assumptions: 23 month to maturity, a risk free interest rate of 0.596% and annualized volatility of 109% and determined that, since origination, the fair value of our derivative liability had increased by $27,928 to $115,233. Accordingly, we recognized a corresponding gain on derivative liability in conjunction with this revaluation.

As of May 31, 2015, the total balance due under this note convertible was $112,000 relating to the principal and accrued interest payable under tranches one and two

Convertible Note Payable – Lender D

On February 20, 2015, we issued a convertible debenture to a former lender for $300,000. The convertible debenture had a 12 month term and was not subject to interest. The convertible debenture could be prepaid with prepayments penalties ranging from 120% to 135%. At any time after the issuance date of the convertible loan, the lender has the right to convert the balance into shares of the common stock at a 45% discount to the lowest closing price of the prior 20 trading days.

We evaluated the terms of the conversion features of the convertible debenture in accordance with ASC Topic No. 815 - 40, Derivatives and Hedging - Contracts in Entity's Own Stock and determined it is indexed to the Company's common stock and that the conversion features meet the definition of a liability and therefore bifurcated the conversion feature and accounted for it as a separate derivative liability.

We valued the conversion feature at origination at $396,646 using the Black Scholes valuation model with the following assumptions: dividend yield of zero, 12 month term to maturity, risk free interest rate of 0.16% and annualized volatility of 107%. $300,000 of the value assigned to the derivative liability was recognized as a debt discount on the convertible debenture. The debt discount was recorded as reduction (contra-liability) to the convertible debenture and is being amortized over the life of the convertible debenture. The balance of $96,646 of the value assigned to the derivative liability was recognized as origination interest on the derivative liability and expensed on origination.

ASC 815 requires we assess the fair market value of derivative liability at the end of each reporting period and recognize any change in the fair market value as other income or expense item.

At February 28, 2015, we revalued the conversion feature of the convertible debenture using the Black Scholes valuation model with the following assumptions: dividend yield of zero, 12 month term to maturity, risk free interest rate of 0.22% and annualized volatility of 104% and determined that, since origination, the fair value of our derivative liability had increased by $1,821 to $393,151. Accordingly, we recognized a corresponding loss on derivative liability in conjunction with this revaluation

At May 31, 2015, we revalued the conversion feature of the convertible debenture using the Black Scholes valuation model with the following assumptions: dividend yield of zero, 9 month term to maturity, risk free interest rate of 0.12% and annualized volatility of 94% and determined that, since origination, the fair value of our derivative liability had increased by $123,935 to $517,086. Accordingly, we recognized a corresponding loss on derivative liability in conjunction with this revaluation.

As of May 31, 2015, a balance of $300,000 principal was outstanding under the terms of this convertible note payable.

As disclosed In Note 11 Subsequent Events below, on between August 26, and September 4, 2015, we made cash repayments of $35,000, $50,000 and $105,000, respectively, as partial repayment on the convertible note payable.

Convertible Note Payable – Lender E

On March 26, 2015, we issued a convertible debenture to a new lender for $317,250 under which we received net proceeds of $291,000, net of original debt discount of $26,250. The convertible debenture has a 9 month term and bears interest at 9.5%. The convertible debenture could be prepaid with prepayments penalties of 120%. At any time after the issuance date of the convertible loan, the lender has the right to convert the balance into shares of the common stock at a 40% discount to the lowest intra day trading price of the prior 20 trading days.

We evaluated the terms of the conversion features of the convertible debenture in accordance with ASC Topic No. 815 - 40, Derivatives and Hedging - Contracts in Entity's Own Stock and determined it is indexed to the Company's common stock and that the conversion features meet the definition of a liability and therefore bifurcated the conversion feature and accounted for it as a separate derivative liability.

We valued the conversion feature at origination at $282,565 using the Black Scholes valuation model with the following assumptions: dividend yield of zero, 9 month term to maturity, risk free interest rate of 0.205% and annualized volatility of 94%. The value assigned to the derivative liability was recognized as a debt discount on the convertible debenture. The debt discount was recorded as reduction (contra-liability) to the convertible debenture and is being amortized over the life of the convertible debenture.

ASC 815 requires we assess the fair market value of derivative liability at the end of each reporting period and recognize any change in the fair market value as other income or expense item.

At May 31, 2015, we revalued the conversion feature of the convertible debenture using the Black Scholes valuation model with the following assumptions: dividend yield of zero, 6 month term to maturity, risk free interest rate of 0.12% and annualized volatility of 81% and determined that, since origination, the fair value of our derivative liability had increased by $215,176 to $497,741. Accordingly, we recognized a corresponding loss on derivative liability in conjunction with this revaluation.

As of May 31, 2015, a balance of $323,595 principal and accrued interest was outstanding under the terms of this convertible note payable.

Convertible Note Payable – Lender F

On May 12, 2015, we issued a convertible debenture to a new lender for $105,000 under which we received net proceeds of $96,000, net of original debt discount of $9,000. The convertible debenture had a 12 month term and was bears interest at 10%. The convertible debenture could be prepaid with prepayments penalties ranging between 120% and 150%. At any time after the issuance date of the convertible loan, the lender has the right to convert the balance into shares of the common stock at a 40% discount to the lowest intra day trading price of the prior 20 trading days.

We evaluated the terms of the conversion features of the convertible debenture in accordance with ASC Topic No. 815 - 40, Derivatives and Hedging - Contracts in Entity's Own Stock and determined it is indexed to the Company's common stock and that the conversion features meet the definition of a liability and therefore bifurcated the conversion feature and accounted for it as a separate derivative liability.

We valued the conversion feature at origination at $144,755 using the Black Scholes valuation model with the following assumptions: dividend yield of zero, 12 months to maturity, risk free interest rate of 0.24% and annualized volatility of 108%. $96,000 of the value assigned to the derivative liability was recognized as a debt discount on the convertible debenture. The debt discount was recorded as reduction (contra-liability) to the convertible debenture and is being amortized over the life of the convertible debenture. The balance of $48,755 of the value assigned to the derivative liability was recognized as origination interest on the derivative liability and expensed on origination

ASC 815 requires we assess the fair market value of derivative liability at the end of each reporting period and recognize any change in the fair market value as other income or expense item.

At May 31, 2015, we revalued the conversion feature of the convertible debenture using the Black Scholes valuation model with the following assumptions: dividend yield of zero, 12 months to maturity, risk free interest rate of 0.2414% and annualized volatility of 109% and determined that, since origination, the fair value of our derivative liability had increased by $34,771 to $179,226. Accordingly, we recognized a corresponding loss on derivative liability in conjunction with this revaluation.

As of May 31, 2015, a balance of $105,547 principal and accrued interest was outstanding under the terms of this convertible note payable.

Convertible Note Payable – Lender G

On May 13, 2015, we issued a convertible debenture to a new lender for $105,000 under which we received net proceeds of $96,000, net of original debt discount of $9,000. The convertible debenture had a 12 month term and was bears interest at 10%. The convertible debenture could be prepaid with prepayments penalties ranging between 120% and 150%. At any time after the issuance date of the convertible loan, the lender has the right to convert the balance into shares of the common stock at a 40% discount to the lowest intra day trading price of the prior 20 trading days.

We evaluated the terms of the conversion features of the convertible debenture in accordance with ASC Topic No. 815 - 40, Derivatives and Hedging - Contracts in Entity's Own Stock and determined it is indexed to the Company's common stock and that the conversion features meet the definition of a liability and therefore bifurcated the conversion feature and accounted for it as a separate derivative liability.

ASC 815 requires we assess the fair market value of derivative liability at the end of each reporting period and recognize any change in the fair market value as other income or expense item.

At May 31, 2015, we revalued the conversion feature of the convertible debenture using the Black Scholes valuation model with the following assumptions: dividend yield of zero, 12 months to maturity, risk free interest rate of 0.2414% and annualized volatility of 109% and determined that, since origination, the fair value of our derivative liability had increased by $34,771 to $179,226. Accordingly, we recognized a corresponding loss on derivative liability in conjunction with this revaluation.

As of May 31, 2015, a balance of $105,547 principal and accrued interest was outstanding under the terms of this convertible note payable.

Convertible Note Payable – Lender H

On May 15, 2015, we issued a convertible debenture to a new lender for $150,000 under which we received $147,000, net of fees of $3,000. The convertible debenture has a 6 month term and was bears interest at 12%. The convertible debenture could be prepaid with prepayments penalties of 150%, subject to approval of the lender. At any time after the issuance date of the convertible loan, the lender has the right to convert the balance into shares of the common stock at a 42.5% discount to the lowest intra day trading price of the prior 20 trading days.

We evaluated the terms of the conversion features of the convertible debenture in accordance with ASC Topic No. 815 - 40, Derivatives and Hedging - Contracts in Entity's Own Stock and determined it is indexed to the Company's common stock and that the conversion features meet the definition of a liability and therefore bifurcated the conversion feature and accounted for it as a separate derivative liability.

We valued the conversion feature at origination at $180,146 using the Black Scholes valuation model with the following assumptions: dividend yield of zero, 6 months to maturity, risk free interest rate of 0.08% and annualized volatility of 76%. $147,000 of the value assigned to the derivative liability was recognized as a debt discount on the convertible debenture. The debt discount was recorded as reduction (contra-liability) to the convertible debenture and is being amortized over the life of the convertible debenture. The balance of $33,146 of the value assigned to the derivative liability was recognized as origination interest on the derivative liability and expensed on origination.

ASC 815 requires we assess the fair market value of derivative liability at the end of each reporting period and recognize any change in the fair market value as other income or expense item.

At May 31, 2015, we revalued the conversion feature of the convertible debenture using the Black Scholes valuation model with the following assumptions: dividend yield of zero, 6 months to maturity, risk free interest rate of 0.0478% and annualized volatility of 77% and determined that, since origination, the fair value of our derivative liability had increased by $58,808 to $238,954. Accordingly, we recognized a corresponding loss on derivative liability in conjunction with this revaluation.

As of May 31, 2015, a balance of $150,789 principal and accrued interest was outstanding under the terms of this convertible note payable.

Movement in Derivative Liabilities

The effect of changes in the value of our derivative liabilities described in this note are summarized in the following table:

May 31, 2013	$	-
Value acquired during the period		511,197
Settled on issuance of common stock		(320,270	)
Revaluation on settlement on issuance of common stock or at reporting dates		(41,253	)

May 31, 2014		149,674
Value acquired during the year		2,,448,891
Settled on issuance of common stock		(573,295	)
Revaluation on settlement on issuance of common stock or at reporting dates		1,103,268

May 31, 2015		3,128,598

Less: long term		(528,409	)

Short term	$	2,600,189

7. INCOME TAXES

The Internal Revenue Code allows net operating losses (NOL's) to be carried forward and applied against future profits for a period of twenty years. The change of ownership following the RTC restructuring agreement may have limited our ability to utilize these US NOLs under the terms of IRC Section 381. The Mexican equivalent of the Internal Revenue Code allows NOL's to be carried forward for ten years.

We did not provide any current or deferred US federal income tax provision or benefit for any of the periods presented in these financial statements because we have experienced losses since Inception. When it is more likely than not, that a tax asset cannot be realized through future income, the Company must record an allowance against any future potential future tax benefit. We provided a full valuation allowance against the net deferred tax asset, consisting of net operating loss carry forwards, because management has determined that it is more likely than not that we will not earn income sufficient to realize the deferred tax assets during the carry forward periods.

The Company has not taken a tax position that, if challenged, would have a material effect on the financial statements for the years ended May 31, 2015 and 2014 as defined under ASC 740, "Accounting for Income Taxes." We did not recognize any adjustment to the liability for uncertain ta position and therefore did not record any adjustment to the beginning balance of the accumulated deficit on the balance sheet.

The provision for income taxes differs from the amount computed by applying the statutory federal income tax rate to income before provision for income taxes. The sources and tax effects of the differences for the periods presented are as follows:

	May 2015		May 2014

Income tax provision at the federal statutory rate		39%		39%
Effect of operating losses		(39%)		(39%)

		-%		-%

Changes in the cumulative net deferred tax assets consist of the following:

	May 2015			May 2014

Net loss carry forward	$	21,831,719		$	19,322,455
Valuation allowance		(21,831,719	)		(19,322,455	)

	$	-		$	-

A reconciliation of income taxes computed at the statutory rate is as follows:

	May 2015			May 2014

Tax at statutory rate	$	2,509,264		$	8,021,173
Valuation allowance		(2,509,264	)		(8,021,173	)

	$	-		$	-

8. COMMITMENTS AND CONTINGENCIES

Lease – Head Office

From May 2012 through December 2014, our headquarters was in Marlboro New Jersey where we rented office space under the terms of a 12 month lease, with an option to extend the term of the lease for a further 12 months, at $1,300 per month and operating expenses. This lease was personally guaranteed by one of our former officers and directors. Neither the lease nor the personal guarantee were ever been finalized or signed. In January 2015 we relocated our head office to Califon, New Jersey where our head office location is provided to us, free of charge, by one of our directors.

Leases – Mexican Operation

The Company leases a warehouse (storage) facility in the city of Morelia, Michoacán, Mexico at a monthly rental of $1,700. This lease expired on February 1, 2014 and was extended for a further twelve month period on the same terms. Effective February 1, 2015 we extended the terms of the lease for a further twelve months on the same terms as before.

Mining rights

The Company is required to make payments to the Mexican government on a bi-annual basis to maintain its mining concessions. In the twelve months ended May 31, 2015 the Company made payments of $189,868 (2014 - $147,105) to the Mexican government to maintain its mining concessions. It is anticipated that these payments will increase in the twelve months ending May 31, 2016. As of the date of this report, we have made the mining rights payment for the Solidaridad I concession, however, we have not made the payment (approximately $90,000) for the remaining concessions which were due on July 31, 2015.

Other Commitments

Drilling Contractor

In February 2015, we entered into a further contract with the same contractor to drill 5,000 meters for $1,762,047, $195,790 payable in stock and the balance of $1,566,257 payable in cash.

Pursuant to the drilling program we have completed approximately 4,000 meters of drilling over 27 holes.

Employment Agreement

Effective August 28, 2013, we appointed Mr. Hans H. Hertell as the Company's President. In addition, on that same date, our Board of Directors approved an Employment Agreement with Mr. Hertell and a Consulting Agreement with Hertell Group, LLC. ("Hertell Group"). Mr. Hertell is the sole officer and member of Hertell Group.

100

Under the Consulting Agreement, among other terms, the Hertell Group will provide general business consulting services including but not limited to business development strategy, introduction of prospective business acquisitions or joint venture participation, deal-making, introduction to capital markets, marketing strategies, and other duties as mutually agreed upon by the parties. As consideration for the services, the Hertell Group will receive 9,000,000 shares of our common stock which will be issued immediately. The term of the Consulting Agreement is three years.

Legal

Title Dispute

101

Termination of RTC Agreement

9. SHAREHOLDERS' DEFICIT

Preferred Stock

The Company is authorized to issue 10,000,000 shares of preferred stock with a par value of 0.00001 per share.

Unregistered Sale of Securities.

On January 30, 2014, the Company entered into a Restructuring Agreement with RTC, the RTC Shareholders, and Plasmafication Technology Holding, LLC, a Florida limited liability company ("PTH"). Under the terms of the agreement, the Company was contracted to issue at Closing 1,250,000 shares of Class A Preferred Stock to RTC. Each share of this Class A Preferred Stock has identical rights as 100 shares of common stock except that each share of this Class A Preferred Stock is convertible to 100 shares of common stock (or a total of 125 million shares of common stock of the Company).

102

Material Modification to Rights of Security Holders.

Cancellation of Preferred Stock

Termination of Agreement with RTC

PTH failed to pay the $5,000,000 due under the Promissory Note and such failure continues as of the date of this report. The failure of RTC constituted a material breach to the Restructuring Agreement. As a result of that breach, along with other factors, the Company rescinded the Restructuring Agreement and cancelled the Preferred Stock, including all rights, privileges and preferences thereto. On May 12, 2015 and again on May 14, 2015, the Company notified RTC that it has rescinded the Restructuring Agreement and cancelled the Preferred Stock, including all rights, privileges and preferences thereto, effective immediately. The Company provided a similar notification to PTH cancelling the Restructuring Agreement and related agreements with PTH.

The Company undertook the above-described actions unilaterally and these actions were not the product of a negotiated settlement between the Company and the counterparties to the Restructuring Agreement, including RTC. As a result of these actions, and in view of the purported conversion notice received from RTC, it is conceivable RTC or related parties may initiate litigation against the Company seeking the enforcement of the Restructuring Agreement (including the rights to the Preferred Stock and/or common stock) and/or the original Stock Exchange Agreement, among other demands. In the event litigation results in these matters, the Company intends to aggressively defend its position against such claims. Shareholders should be aware that the cost of litigation may prove expensive and, in this regard, the Company will be required to raise additional funds, which may result in significant dilution to existing shareholders.

Lawsuit with RTC

103

Common Stock and Warrants

The Company is authorized to issue 150,000,000 shares of common stock with a par value of $0.00001 per share. On or about February 25, 2014, a majority of the Company's shareholders approved the increase of the authorized common stock from 150,000,000 to 325,000,000 shares. The Board of Directors previously approved the stated corporate action. On March 26, 2014, the Company filed with the Securities and Exchange Commission and mailed to its shareholders a Definitive Schedule 14C Information Statement with respect to the stated increase in authorized shares.

The following shares of common stock and warrants were issued and warrants cancelled in the twelve months ending May 31 2015 and 2014:

	Common Stock		Warrants

May 31, 2013		121,781,244		7,827,180

Issued for cash proceeds of $407,500		4,800,000		2,690,000
Issued as compensation for directors at a value of $382,500		2,250,000		-
Issued as compensation under consulting agreements valued at $1,602,000		9,450,000		-
Issued on conversion of loan notes with principal balances of, $316,080, accrued interest of $20,137, debt discount of $174,181 and associated derivative liabilities of $320,270		4,600,835		-
Issued on exercised of warrants at $0.010 and $0.125 for $103,333		866,667		(866,667	)
Warrants expired, unexercised		-		(6,085,716	)

May 31, 2014		143,748,746		3,564,797

Issued for cash proceeds of $743,475		7,921,667		3,960,833
Issued as compensation for directors at a value of $775,000		3,250,000		-
Issued as compensation under consulting agreements valued at $601,500		2,050,000		-
Issued on conversion of $467,781 notes payable, $34,000 accrued interest, $156,711 debt discount and $573,295 derivative liabilities.		5,073,144		-
Issued on settlement of accounts payable for $158,000		600,000		-
Issued on exercised of warrants at $0.125 and $0.15 for $40,000		300,000		(300,000	)
Issued on the exercise of stock options at $0.065 for $65,000		1,000,000		-
Warrants expired, unexercised		-		(1,000,000	)

May 31, 2015		164,573,557		6,225,630

During the year ended May 31, 2015, we issued:

7,921,667 shares of our common stock, together with warrants to buy 3,960,833 shares of our common stock at prices of $0.075, $0.10 or $0.15 per unit for proceeds of $743,396. The warrants had terms of 12 months and exercise prices of $0.125, $0.15 or $0.20 per share.

ii)

3,250,000 shares of our common stock, valued at $775,000, as compensation to our directors.

2,250,000 shares of our common stock (50,000 shares per director) valued at $495,000 as compensation to our nine directors and 1,000,000 shares of our common stock, valued at $280,000, as compensation to our new Director of Mergers and Acquisitions.

104

iii)

2,050,000 shares of our common stock, valued $601,500, as compensation for services.

1,000,000 shares of our common stock, valued at $300,000, as compensation to a new member of our advisory board, 450,000 shares of our common stock, valued at $139,500 and 600,000 shares of our common stock, valued at $160,000 issued for investor relations services.

iv)

5,073,144 shares of our commons stock in settlement of $467,781 notes payable, $34,000 accrued interest, $156,711 debt discount and $573,295 derivative liabilities

600,000 shares of our common stock, valued at $158,000, which in conjunction with a payment of $500,000, settled an outstanding liability of $1,659,072 with our former attorneys.

vi)

300,000 shares of our common stock on the exercise of 300,000 warrants at $0.125 and $0.15 per share

vii)

1,000,000 shares of our common stock on the exercise of 1,000,000 stock options by a former officer and director at $0.065 per share.

viii)

As an incentive for making a further investment in the Company, 1,606,667 warrants for 8 investors due to expire in April and August 2015, were extended for 6 months to October 2015 and February 2016 respectively.

ix)

1,000,000 of our warrants expired, unexercised.

The following table summarizes information about warrants outstanding at December, 2015:

Exercise Price		Warrants Outstanding		Weighted Average Life of Outstanding Warrants in Months
	$0.125		3,346,666		2.7
	$0.15		1,437,500		9.2
	$0.16		924,797		2.6
	$0.20		516,667		5

			6,225,630		4.4

Stock Options

In August 2008, our shareholders approved a Stock Option Plan (the "Plan"). Under the terms of the Plan, options to purchase up to 20,000,000 shares of Company common stock may be issued to officers, directors, key employees and consultants.

In August 2014, our Board of directors approved the establishment of a 2014 Stock Option Plan for up to 20,000,000 shares of Company common stock.

105

The following schedule presents the activity of Company options during the years ended May 31, 2015 and 2014:

	# of Options			Weighted-Average Exercise Price

Options outstanding and vested, May 31, 2013		16,500,000		$	0.13
Granted		1,500,000			0.21
Exercised		(500,000	)		(0.18	)
Cancelled or forfeited		-			-

Options outstanding and vested May 31, 2014		17,500,000			0.13

Granted		3,000,000			0.23
Exercised		(1,000,000	)		(0.065	)
Cancelled of forfeited		(3,500,000	)		(0.18	)

Options outstanding and vested at May 31, 2015		16,000,000		$	0.15

On August 27, 2014, the Company's Board of Directors appointed a Mexican national to its advisory board to assist the Company with its operations in Mexico, including regulatory affairs and granted 1,000,000 stock options to this individual under the newly created 2014 Stock Option Plan. The option exercise price of the option was $0.23 per share.

On November 4, 2014, the Company's Board of Directors issued 1,000,000 stock options to an officer of the Company under the 2008 Stock Option Plan. The option exercise price of the option was $0.28 per share.

On November 5, 2014, the Company's Board of Directors issued 1,000,000 stock options to a newly appointed director of the Company under the 2014 Stock Option Plan. The option exercise price of the option was $0.29 per share.

Option agreements approved by our Board of Directors have not been executed by all directors and/or consultants at this time.

The following table summarizes information about stock options outstanding at May 31, 2015:

Exercise Price		Options Outstanding and Exercisable		Intrinsic Value of Options Outstanding and Exercisable(1)		Weighted Average Life of Options Outstanding and Exercisable In Years
	$0.065		5,000,000	$	625,000		1.1
	$0.12		1,000,000		70,000		2.3
	$0.16		3,500,000		105,000		1.9
	$0.18		1,000,000		10,000		1.6
	$0.19		1,500,000		-		2.0
	$0.22		1,000,000		-		3.3
	$0.25		1,000,000		-		3.0
	$0.23		1,000,000		-		4.2
	$0.28		1,000,000		-		4.4

			16,000,000	$	810,000		2.2

(1) Based on closing share price of $0.19 at close of business on May 29, 2015

106

The total fair value of options issued during the years ended May 31, 2015 and 2014 were $724,730 and $302,084 respectively.

The fair value of options granted under the Plan are estimated on the date of grant using the Black-Scholes option pricing model with the following assumptions during the twelve months ending May 31, 2015:


Weighted-average risk-free interest rate	1.63 – 1.65%
Weighted-average expected life	5 yrs
Weighted-average expected volatility	168%
Weighted-average expect dividends	$ 0

The Company expects to issue shares upon exercise of these options from its authorized shares of common stock.

10. RELATED PARTY TRANSACTIONS

During the year ended May 31, 2015, we issued:

-	2,250,000 shares of our common stock valued as $495,000 as compensation to our directors. Each of our nine directors at the time received 250,000 shares of common stock.

-	1,000,000 fully vested stock options with an exercise price of $0.23, valued at $206,958, were issued to a Mexican national appointed to our advisory board to assist the Company with its operations in Mexico, including regulatory affairs.

-	1,000,000 shares of our common stock, valued at $300,000 were issued to a new member of our advisory board.

-	1,000,000 fully vested stock options with an exercise price of $0.28, valued at $254,172, were issued to an officer of the Company.

On November 13, 2014, we received an unsecured loan from our former Chairman and Chief Executive Officer in the amount of $25,000. We received a further unsecured loan of $25,000 from this former officer and director on December 3, 2014 and asof the date of the report, the balance due to this former officer and director is $50,000.

Termination of Agreement with RTC

107

The Company undertook the above-described actions unilaterally and these actions were not the product of a negotiated settlement between the Company and the counterparties to the Restructuring Agreement, including RTC. As a result of these actions, and in view of the purported conversion notice received from RTC, it is conceivable RTC or related parties may initiate litigation against the Company seeking the enforcement of the Restructuring Agreement (including the rights to the Preferred Stock and/or common stock) and/or the original Stock Exchange Agreement, among other demands. In the event litigation results in these matters, the Company intends to aggressively defend its position against such claims. Shareholders should be aware that the cost of litigation may prove expensive and, in this regard, the Company will be required to raise additional funds, which may result in significant dilution to existing shareholders.

Lawsuit with RTC

As disclosed in Note 11 Subsequent Events below, on August 8, 2015, we were served with a lawsuit by Resource Technology Corporation ("RTC").

As stated elsewhere herein, on January 30, 2014, the Company entered into a Restructuring Agreement with RTC, the RTC Shareholders, and Plasmafication Technology Holding, LLC, a Florida limited liability company ("PTH"). Pursuant to the Restructuring Agreement 1,250,000 shares of our designated Class of Preferred stock, valued at $16,250,000 was issued to the RTC shareholders. This transaction involved a formed officer and direct or of the Company and a former director of the Company. .

108

11. SUBSEQUENT EVENTS

Compensation to drilling contractor

Between May 5 and July 16, 2015, we paid a further $380,251 in cash to the contractor performing drilling services for us on our Mexican property and on August 18, 2015 we issued 1,398,444 shares of our common stock in respect of this contract.

Debt conversion and payments in settlement of convertible note with lender B

Between June 16, 2015 and August 18, 2015, the holder of Note B made 7 separate conversion requests and converted a principal balance of $465,000 into a total of 7,304,763 shares of our common stock upon such conversion. Further on August 26, and August 28, 2015, we made cash repayment of $25,000 and $27,500, respectively, in full repayment of the remaining balance of $35,000 and related repayment penalties

Debt conversion in settlement of convertible note with lender A

Between June 17, 2015 and July 22, 2015, the holder of Note A made 4 separate conversion requests and converted the entire principal balance of $83,333 and accrued interest of $10,000 into a total of 1,251,113 shares of our common stock upon such conversions in full repayment of this tranche of the note payable.

Debt conversion in partial settlement of convertible note with lender C

On August 4 and 21, 2015, the holder of Note C made 2 separate conversion requests and converted a principal balance of $27,300 into a total of 700,000 shares of our common stock upon such conversion.

Lawsuit with RTC

On August 8, 2015, we were served with a lawsuit by Resource Technology Corporation ("RTC").

109

The Company has retained outside counsel to vigorously defend its position in this matter and avail itself of all legal and equitable rights and remedies against PTH, RTC and all other culpable parties in this matter. On September 4, 2015, the Company filed a Notice of Removal to United Stated District Court, Southern District of Florida.

Issuance of Stock for Cash

On June 9 and 10, 2015, we issued 564,285 shares of our common stock and 282,143 twelve month warrants with an exercise price of $0.26 to four investors for cash consideration of $79,000.

Between August 24 and September 4, 2015, we issued 12,328,650 shares and 6,164,325 twelve month warrants with an exercise price of $0.08 per share to 21 investors for cash consideration of $493,946, of which the initial $360,000 was committed to the repayment of $360,000 of the Company's convertible debt. In the event that the Company's shares close at less than $0.04 on April 1, 2016 the Company will issue additional shares to these investors so that the average price per share for these investors will be equivalent to 80% of the closing price on April 1, 2016, if it were to be less than $0.04.

Exercise of Warrants

On June 9 and 10, 2015, two warrant holders exercised 316,668 warrants at $0.125 per warrant for total cash consideration of $39,584.

Issuance of Stock for Services

On June 4, and July 31, 2015, we issued 30,000 and 100,000 shares to consultants for services they have provided to the Company.

Appointment of New Chief Executive Officer

110

Cancellation of Stock Grant

Effective July 18, 2015 we cancelled the proposed issuance of 1 million shares of our common stock to a proposed member of our advisory board for nonperformance.

Separation Agreements

Effective August 13, 2015 we entered into Separation agreements with Messrs Serrat and Figueredo, our former Director of Mexican Operations and Chief Technology Officer, respectively, whereby we issued each of them 1 million shares of our common stock and 1 million, five year stock options with an exercise price of $0.07 in full and final settlement of any and all balances owed to them by the Company.

Payments in partial settlement of convertible note with lender D

On August 26, and August 28, 2015, we made cash repayment of $35,000 and $50,000, respectively, as partial repayment on the convertible note payable D.

Further advance under Convertible note with Lender B

On August 28, 2015, the holder of Note A made a further net advance to us of $75,000 under the terms of the note.

The Company evaluated subsequent events through the date these financial statements were issued. Other than those set out above, there have been no subsequent events after May 31, 2015 for which disclosure is required.

111

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


	U.S. Precious Metals, Inc.

	By:	/s/ John Gildea
		Name: John Gildea
		Title: Chief Executive Officer
		Date: September 14, 2015




	By:	/s/ David Cutler
		Name: David Cutler
		Title: Chief Financial Officer
		Date: September 14, 2015

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.


Signature	Title	Date

/s/ (Daniel) Moon Joon Sikk	Director	September 14, 2015
(Daniel) Moon Joon Sikk

/s/ David W. Burney	Director	September 14, 2015
David W. Burney

/s/ Sheldon Baer	Director	September 14, 2015
Sheldon Baer


/s/ Daniel H. Luciano	Director	September 14, 2015
Daniel H. Luciano

/s/ John Gildea	Director	September 14, 2015
John Gildea

/s/ Michael Volkow	Director	September 14, 2015
Michael Volkow

/s/ Hans H. Hertell	President and Director	September 14, 2015
Hans H. Hertell

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