ITEM
1. FINANCIAL STATEMENTS
GOLDEN
STAR RESOURCE CORP.
FINANCIAL
STATEMENTS
THREE
MONTHS ENDED
SEPTEMBER
30, 2017 AND 2016
(Stated
in U.S. Dollars)
(Unaudited)
GOLDEN STAR RESOURCE CORP.
INTERM BALANCE SHEETS
(Stated in U.S. Dollars)
(Unaudited)
|
|
|
SEPTEMBER 30, 2017
|
|
|
JUNE 30, 2017
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
|
|
|
|
|
|
|
|
|
|
Cash
|
|
$
|
1
|
|
|
$
|
6
|
|
|
Prepaid fees
|
|
|
5,000
|
|
|
|
2,000
|
|
|
TOTAL ASSETS
|
|
$
|
5,001
|
|
|
$
|
2,006
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIENCY)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
|
|
|
|
|
|
|
|
|
|
Accounts payables and accrued liabilities
|
|
$
|
170,952
|
|
|
$
|
171,940
|
|
|
Loan payable
(Note 7)
|
|
|
201,558
|
|
|
|
201,558
|
|
|
Due to related parties
(Note 6)
|
|
|
163,392
|
|
|
|
152,626
|
|
|
TOTAL LIABILITIES
|
|
|
535,902
|
|
|
|
526,124
|
|
|
|
|
|
|
|
|
|
|
|
|
STOCKHOLDERS’ (DEFICIENCY) EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital stock
(Note 5)
|
|
|
|
|
|
|
|
|
|
Authorized:
|
|
|
|
|
|
|
|
|
|
100,000,000 voting common shares with a par value of $0.00001 per share
|
|
|
|
|
|
|
|
|
|
100,000,000 preferred shares with a par value of $0.00001 per share; none issued
|
|
|
|
|
|
|
|
|
|
Issued:
|
|
|
|
|
|
|
|
|
|
7,070,000 common shares at September 30, 2017 and June 30, 2017
|
|
|
70
|
|
|
|
70
|
|
|
Additional paid in capital
|
|
|
106,990
|
|
|
|
106,990
|
|
|
Deficit Accumulated During the Exploration Stage
|
|
|
(637,961
|
)
|
|
|
(631,178
|
)
|
|
|
|
|
(530,901
|
)
|
|
|
(524,118
|
)
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL LIABILITIES AND STOCKHOLDERS’ (DEFICIENCY) EQUITY
|
|
$
|
5,001
|
|
|
$
|
2,006
|
|
Nature of operations and going concern (note 1)
The accompanying notes are an integral part of these interim financial
statements
GOLDEN STAR RESOURCE CORP.
INTERIM STATEMENTS OF OPERATIONS AND COMPREHENSIVE
LOSS
(Stated in U.S. Dollars)
(Unaudited)
|
|
|
THREE MONTHS ENDED
|
|
|
|
|
SEPTEMBER 30
|
|
|
|
|
2017
|
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign exchange (gain) loss
|
|
|
1,477
|
|
|
|
(248
|
)
|
|
Bank fees
|
|
|
14
|
|
|
|
18
|
|
|
Professional fees
|
|
|
1,568
|
|
|
|
(3,717
|
)
|
|
Transfer and filing fees
|
|
|
3,724
|
|
|
|
1,958
|
|
|
|
|
|
6,783
|
|
|
|
(1,989
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Net Loss and Comprehensive Loss
|
|
|
(6,783
|
)
|
|
|
1,989
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and fully diluted loss per share
|
|
$
|
(0.00
|
)
|
|
$
|
(0.00
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of common shares outstanding
|
|
|
7,070,000
|
|
|
|
7,070,000
|
|
The accompanying notes are an integral part
of these interim financial statements
GOLDEN STAR RESOURCE CORP.
INTERIM STATEMENTS OF CASH FLOWS
(Stated in U.S. Dollars)
(Unaudited)
|
|
|
THREE MONTHS ENDED
|
|
|
|
|
SEPTEMBER 30
|
|
|
|
|
2017
|
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
Cash flow from operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss for the period
|
|
$
|
(6,783
|
)
|
|
$
|
1,989
|
|
|
Items not affecting cash:
|
|
|
|
|
|
|
|
|
|
Prepaid expense
|
|
|
(3,000
|
)
|
|
|
(5,000
|
)
|
|
Accounts payables and accrued liabilities
|
|
|
(988
|
)
|
|
|
(14,801
|
)
|
|
Due to related parties
|
|
|
10,766
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Cash Used in Operating Activities
|
|
|
(5
|
)
|
|
|
(17,812
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Cash flow from financing activities
|
|
|
|
|
|
|
|
|
|
Loan payable
|
|
|
-
|
|
|
|
17,794
|
|
|
Net Cash Provided by Financing Activities
|
|
|
-
|
|
|
|
17,794
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash increase (decrease) in the period
|
|
|
(5
|
)
|
|
|
(18
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Cash, beginning of period
|
|
|
6
|
|
|
|
65
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash, end of period
|
|
$
|
1
|
|
|
$
|
47
|
|
The accompanying notes are an integral part of these interim financial
statements
GOLDEN STAR RESOURCE CORP.
STATEMENTS OF STOCKHOLDERS’ (DEFICIENCY)
EQUITY
(Stated in U.S. Dollars)
FOR THE PERIOD ENDED SEPTEMBER 30, 2017
(Unaudited)
|
|
|
NUMBER
OF
COMMON SHARES
|
|
|
PAR
VALUE
|
|
|
ADDITIONAL
PAID-IN
CAPITAL
|
|
|
DEFICIT
ACCUMULATED
DURING THE
EXPLORATION STAGE
|
|
|
TOTAL
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, June 30, 2015
|
|
|
7,070,000
|
|
|
|
70
|
|
|
|
106,990
|
|
|
|
(582,193
|
)
|
|
|
(475,133
|
)
|
|
Net loss for the year
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(29,683
|
)
|
|
|
(29,683
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, June 30, 2016
|
|
|
7,070,000
|
|
|
|
70
|
|
|
|
106,990
|
|
|
|
(611,876
|
)
|
|
|
(504,816
|
)
|
|
Net loss for the year
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(19,302
|
)
|
|
|
(19,302
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, June 30, 2017
|
|
|
7,070,000
|
|
|
|
70
|
|
|
|
106,990
|
|
|
|
(631,178
|
)
|
|
|
(524,118
|
)
|
|
Net loss for the period
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(6,783
|
)
|
|
|
(6,783
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, September 30, 2017
|
|
|
7,070,000
|
|
|
|
70
|
|
|
|
106.990
|
|
|
|
(637,961
|
)
|
|
|
(530,901
|
)
|
The accompanying notes are an integral part of these interim financial
statements
GOLDEN STAR RESOURCE CORP.
NOTES TO INTERIM FINANCIAL STATEMENTS
SEPTEMBER 30, 2017
(Stated in U.S. Dollars)
Organization
The Company was incorporated in the State of Nevada,
U.S.A. on April 21, 2006.
Exploration Stage Activities
The Company has been in the exploration
stage since its formation and is primarily engaged in the acquisition and exploration of mining claims. Upon location of a commercial
minable reserve, the Company expects to actively prepare the site for its extraction and enter a development stage. During the
fiscal year 2012, the Company entered into an agreement with Mayan Mineral Ltd. to acquire a resource property in Nevada (Note
4). Currently, the Company is actively looking for other mineral properties for its planned business operation.
Going Concern
These financial statements have
been prepared in accordance with generally accepted accounting principles in the United States of America (“US GAAP”)
applicable to a going concern, which contemplates the realization of assets and the satisfaction of liabilities and commitments
in the normal course of business.
The general business strategy of
the Company is to acquire and explore mineral properties. The continued operations of the Company and the recoverability of mineral
property costs is dependent upon the existence of economically recoverable mineral reserves, the ability of the Company to obtain
necessary financing to complete the development of its properties, and upon future profitable production. The Company has not generated
any revenues or completed development of any properties to date. Further, the Company has a working capital deficit of $530,901
(June 30, 2017 - $524,118), has incurred losses of $637,961 since inception, and further significant losses are expected to be
incurred in the exploration and development of its mineral properties. The Company will require additional funds to meet its obligations
and maintain its operations. There can be no guarantee that the Company will be successful in raising the necessary financing.
Management’s plans in this regard are to raise equity financing as required.
These conditions raise substantial
doubt about the Company’s ability to continue as a going concern. These financial statements do not include any adjustments
that might result from this uncertainty.
|
2.
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
|
The financial statements of the
Company have been prepared in accordance with US GAAP. Because a precise determination of many assets and liabilities is dependent
upon future events, the preparation of financial statements for a period necessarily involves the use of estimates which have been
made using careful judgment. Actual results may vary from these estimates. The financial statements have, in management’s
opinion, been properly prepared within reasonable limits of materiality and within the framework of the significant accounting
policies summarized below.
GOLDEN STAR RESOURCE CORP.
NOTES TO INTERIM FINANCIAL STATEMENTS
SEPTEMBER 30, 2017
(Stated in U.S. Dollars)
|
2.
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
|
|
|
a)
|
Cash
|
|
|
|
|
|
|
|
Cash consist of cash on hand and deposits in banks.
|
|
|
|
|
|
|
b)
|
Mineral Property Acquisition Payments
|
|
|
|
|
|
|
|
The Company expenses all costs incurred on mineral properties to which it has secured exploration rights prior to the establishment of proven and probable reserves. If and when proven and probable reserves are determined for a property and a feasibility study prepared with respect to the property, then subsequent exploration and development costs of the property will be capitalized.
|
|
|
|
|
|
|
|
The Company regularly performs evaluations of any investment in mineral properties to assess the recoverability and/or the residual value of its investments in these assets. All long-lived assets are reviewed for impairment whenever events or circumstances change which indicate the carrying amount of an asset may not be recoverable.
|
|
|
|
|
|
|
c)
|
Exploration Expenditures
|
|
|
|
|
|
|
|
The Company follows a policy of expensing exploration expenditures until a production decision in respect of the project and the Company is reasonably assured that it will receive regulatory approval to permit mining operations, which may include the receipt of a legally binding project approval certificate.
|
|
|
|
|
|
|
d)
|
Asset Retirement Obligations
|
|
|
|
|
|
|
|
The Company has adopted ASC 410, “Accounting for Asset Retirement Obligations”, which requires that an asset retirement obligation (“ARO”) associated with the retirement of a tangible long-lived asset be recognized as a liability in the period which it is incurred and becomes determinable, with an offsetting increase in the carrying amount of the associated asset.
|
|
|
|
|
|
|
|
The cost of the tangible asset, including the initially recognized ARO, is depleted, such that the cost of the ARO is recognized over the useful life of the asset. The ARO is recorded at fair value, and accretion expense is recognized over time as the discounted liability is accreted to its expected settlement value. The fair value of the ARO is measured using expected future cash flow, discounted at the Company’s credit-adjusted risk-free interest rate. To date, no significant asset retirement obligation exists due to the early stage of exploration. Accordingly, no liability has been recorded.
|
GOLDEN STAR RESOURCE CORP.
NOTES TO INTERIM FINANCIAL STATEMENTS
SEPTEMBER 30, 2017
(Stated in U.S. Dollars)
|
2.
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
|
|
|
e)
|
Use of Estimates and Assumptions
|
|
|
|
|
|
|
|
The preparation of financial statements in conformity with United States generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the
|
|
|
|
Date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
|
|
|
|
|
|
|
f)
|
Financial Instruments
|
|
|
|
|
|
|
|
ASC 820, “Fair Value Measurements and Disclosures” requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. ASC 820 prioritizes the inputs into three levels that may be used to measure fair value:
|
|
|
|
|
|
|
|
Level 1 - Quoted prices in active markets for identical assets or liabilities;
|
|
|
|
|
|
|
|
Level 2 - Inputs other than quoted prices included within Level 1 that are either directly or indirectly observable; and
|
|
|
|
|
|
|
|
Level 3 - Unobservable inputs that are supported by little or no market activity, therefore requiring an entity to develop its own assumptions about the assumptions that market participants would use in pricing.
|
The Company’s financial instruments
consist principally of cash, accounts payable and accrued liabilities, loan payable and due to a related party. Pursuant to ASC
820, the fair value of our cash is determined based on “Level 1” inputs, which consist of quoted prices in active markets
for identical assets. The Company believes that the recorded values of all of the other financial instruments approximate their
current fair values because of their nature and respective maturity dates or durations.
The Company’s operations are
in Canada, which results in exposure to market risks from changes in foreign currency rates. The financial risk is the risk to
the Company’s operations that arise from fluctuations in foreign exchange rates and the degree of volatility of these rates.
Currently, the Company does not use derivative instruments to reduce its exposure to foreign currency risk.
GOLDEN STAR RESOURCE CORP.
NOTES TO INTERIM FINANCIAL STATEMENTS
SEPTEMBER 30, 2017
(Stated in U.S. Dollars)
|
2.
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
|
|
|
g)
|
Income Taxes
|
|
|
|
|
|
|
|
The Company accounts for income taxes in accordance with ASC 740, “Accounting for Income Taxes” and ASC 740 —Accounting for Uncertainty in Income Taxes, which require the liability method of accounting for income taxes. The liability method requires the recognition of deferred tax assets and liabilities for future tax consequences of temporary differences between the financial statement basis and the tax basis of assets and liabilities.
|
|
|
|
|
|
|
h)
|
Basic and Diluted Net Loss per Share
|
|
|
|
|
|
|
|
The Company reports basic loss per share in accordance with ASC 260 – “Earnings per Share”. Basic loss per share is computed using the weighted average number of common stock outstanding during the period. Diluted loss per share is computed using the weighted average number of common and potentially dilutive common stock outstanding during the period. Diluted loss per share is equal to basic loss per share because there are no potential dilutive securities.
|
|
|
|
|
|
|
i)
|
Foreign Currency Translation
|
|
|
|
|
|
|
|
The Company’s functional currency is the U.S. dollar. Transactions in foreign currencies are translated into U.S. dollars at the rate of exchange prevailing at the date of the transaction. Monetary assets and liabilities in foreign currencies are translated into U.S. dollars at the rate prevailing at the balance sheet date. Non-monetary items are translated at the historical rate unless such items are carried at market value, in which case they are translated using exchange rates that existed when the value were determined. Any resulting exchange rate differences are recorded in the statement of operations.
|
|
3.
|
RECENT ACCOUNTING PRONOUNCEMENTS
|
In August 2016, the FASB issued
ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. The new guidance is
intended to reduce diversity in practice in how certain transactions are classified in the statement of cash flows. ASU 2016-15
is effective for public business entities for fiscal years beginning after 15 December 2017, and interim periods within those years.
For all other entities, it is effective for fiscal years beginning after 15 December 2018, and interim periods within fiscal years
beginning after 15 December 2019. Early adoption is permitted. Entities will have to apply the guidance retrospectively, but if
it is impracticable to do so for an issue, the amendments related to that issue would be applied prospectively. The Company is
currently evaluating the impact of the adoption of this guidance on its financial statements, if any.
On November 17, 2016, the FASB
issued ASU 2016-18, Restricted Cash. Entities will be required to show the changes in the total of cash, cash equivalents, restricted
cash and restricted cash equivalents in the statement of cash flows. As a result, entities will no longer present transfers between
cash and cash equivalents and restricted cash and restricted cash equivalents in the statement of cash flows. The Company is currently
evaluating the impact of the adoption of this guidance on its financial statements, if any.
GOLDEN STAR RESOURCE CORP.
NOTES TO INTERIM FINANCIAL STATEMENTS
SEPTEMBER 30, 2017
(Stated in U.S. Dollars)
|
3.
|
RECENT ACCOUNTING PRONOUNCEMENTS (Continued)
|
In March 2016, the FASB issued
ASU 2016-02, Leases, which supersedes ASC Topic 840, Leases, and sets forth the principles for the recognition, measurement, presentation,
and disclosure of leases for both lessees and lessors. ASU 2016-02 requires lessees to classify leases as either finance or operating
leases and to record on the balance sheet a right-of-use asset and a lease liability, equal to the present value of the remaining
lease payments, for all leases with a term greater than 12 months regardless of the lease classification. The lease classification
will determine whether the lease expense is recognized based on an effective interest rate method or a straight-line basis over
the term of the lease. ASU 2016-02 will be effective beginning January 1, 2019, with early adoption permitted. Entities are required
to use a modified retrospective transition method for existing leases. The Company currently evaluating the potential impact this
guidance will have on its financial statements, if any.
In January 2016, the FASB issued
ASU 2016-01, Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities.
The amendments to the guidance enhance the reporting model for financial instruments, which includes amendments to address aspects
of recognition, measurement, presentation, and disclosure. The updated guidance is effective beginning January 1, 2018. The Company
does not expect this guidance to have a material impact on its financial statements.
In May 2014, the FASB issued ASU
2014-09, Revenue from Contracts with Customers, as a new Topic, ASC 606. The new revenue recognition standard provides a five-step
analysis of transactions to determine when and how revenue is recognized. The core principle is that a company should recognize
revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which
the entity expects to be entitled in exchange for those goods or services. Companies may apply the new guidance using either the
full retrospective transition method, which requires restating each prior period presented, or the modified retrospective transition
method, under which the new guidance is applied to the current period presented in the financial statements and a cumulative-effect
adjustment is recorded as of the date of adoption. The Company is currently evaluating the potential impact this guidance will
have on its financial statements.
|
4.
|
MINERAL CLAIM INTEREST
|
On August 15, 2013, the Company
entered into a Quitclaim Deed (the “Deed”) with Kee Nez Resources, LLC (“Grantor”), a Utah limited liability
company. Pursuant to the Deed, the Grantor, in consideration of $10 and other valuable consideration, remise, release, and forever
quitclaim unto the Company all of Grantor’s right, title, and interest in and to the GSR group of unpatented lode mining
claims situated in Churchill Country, Nevada. As a result, the Company has obtained title to the GSR claims in August 2013.
The Company did not incur further
expenditures on the property during the year ending September 30, 2017 (June 30, 2017: $nil) due to lack of cash.
GOLDEN STAR RESOURCE CORP.
NOTES TO INTERIM FINANCIAL STATEMENTS
SEPTEMBER 30, 2017
(Stated in U.S. Dollars)
|
|
a)
|
On April 24, 2006, the Company issued 6,000,000 common shares at $0.00001 per share to two founding shareholders.
|
|
|
|
|
|
|
b)
|
On March 28, 2007, the Company closed its public offering and issued additional 1,070,000 common shares at $0.10.
|
|
|
|
|
|
|
c)
|
The Company has not issued any shares during the period ended September 30, 2017 and it has no stock option plan, warrants or other dilutive securities.
|
|
6.
|
DUE TO RELATED PARTIES
|
As of September 30, 2017 due to
related parties balance of $163,392 (June 30, 2017: $152,626) represents the combination of the following:
|
|
a)
|
$54,959 (June 30, 2017: $54,959) owed to a company controlled by a former director and principal shareholder of the Company, for the amount of office, transfer agent and travel expenses paid by the related party on behalf of the Company. The amount is unsecured, non-interest bearing and due on demand;
|
|
|
|
|
|
|
b)
|
$28,000 (June 30, 2017: $28,000) owed to a director of the Company, for the amount of office, travel and telephone expenses paid by the related party on behalf of the Company. The amount is unsecured, non-interest bearing and due on demand.
|
|
|
|
|
|
|
c)
|
$80,433 (June 30, 2017: $69,667) was payable to a principal shareholder’s company, for the operating expenses paid by the related party on behalf of the Company. The loan amount is unsecured, non-interest bearing and due on demand.
|
Loan payable consists of the following:
$143,700 (June 30, 2017: $143,700)
was payable to 0787129 B.C. Ltd. (a non-related party) of which $51,272 and $34,827 were the result of the assignment and transfer
from loan payable to ATP Corporate Services Corp. (a non-related party) and Bobcat Development, respectively. The loan amount is
unsecured, non-interest bearing and due on demand.
$57,858 (June 30, 2017: $57,858)
was payable to Bobcat Development (a non-related party). The loan amount is unsecured, non-interest bearing and due on demand.
GOLDEN STAR RESOURCE
CORPORATION
MANAGEMENT DISCUSSION
& ANALYSIS
For the Period Ended
SEPTEMBER 30, 2017
MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
This section of the quarterly report includes
a number of forward-looking statements that reflect our current views with respect to future events and financial performance.
Forward-looking statements are often identified by words like: believe, expect, estimate, anticipate, intend, project and similar
expressions, or words which, by their nature, refer to future events. You should not place undue certainty on these forward-looking
statements, which apply only as of the date of this prospectus. These forward-looking statements are subject to certain risks and
uncertainties that could cause actual results to differ materially from historical results or our predictions.
Plan of Operation
We are a start-up, exploration Stage Corporation
and have not yet generated or realized any revenues from our business operations.
Our auditors have issued a going concern opinion.
This means there is substantial doubt that we can continue as an on-going business for the next twelve months unless we obtain
additional capital to pay our bills. This is because we have not generated any revenues and do not anticipate generating any revenues
until we begin removing and selling minerals. There is no assurance we will ever achieve these goals. Accordingly, we must raise
cash from sources other than the sale of minerals in order to implement our project and stay in business. Our only other source
for cash at this time is investments by others.
Our exploration target is to find a mineralized
material, specifically, an ore body containing gold. Our success depends upon finding mineralized material. This includes a determination
by our consultant that the property contains reserves. We have not yet selected a consultant. Mineralized material is a mineralized
body which has been delineated by appropriate spaced drilling or underground sampling to support sufficient tonnage and average
grade of metals to justify removal. If we don’t find mineralized material or if it is not economically feasible to remove
it, we will cease operations and you will lose your investment.
In addition, we may not have enough money to
complete the acquisition and exploration of a property. If it turns out that we have not raised enough money to complete our acquisition
we will try to raise additional funds from a second public offering, a private placement or through loans. At the present time,
we have not made any plans to raise additional money and there is no assurance that we would be able to raise additional money
in the future. If we need additional money and cannot raise it, we will have to suspend or cease operations.
Research & Development
As an exploration stage company in the mining
industry we are not involved in any research and development.
Effects of Compliance with Environmental
Laws
As a company in the mining industry we are
subject to numerous environmental laws and regulations. We strive to comply with all applicable environmental, health and safety
laws and regulations are currently taking the steps indicated above. We believe that our operations are in compliance with all
applicable laws and regulations on environmental matters. These laws and regulations, on federal, state and local levels, are evolving
and frequently modified and we cannot predict accurately the effect, if any, they will have on its business in the future. In many
instances, the regulations have not been finalized, or are frequently being modified. Even where regulations have been adopted,
they are subject to varying and contradicting interpretations and implementation. In some cases, compliance can only be achieved
by capital expenditure and we cannot accurately predict what capital expenditures, if any, may be required.
Limited Operating History; Need for Additional
Capital
There is no historical financial information
about us upon which to base an evaluation of our performance. We are an exploration stage corporation and have not generated any
revenues from operations. We cannot guarantee we will be successful in our business operations. Our business is subject to risks
inherent in the establishment of a new business enterprise, including limited capital resources, possible delays in the acquisition
and exploration of our properties, and possible cost overruns due to price increases in services.
To become profitable and competitive, we need
to identify a property and conduct research and explore our property before we start production of any minerals we may find. If
we do find mineralized material, we will need additional funding to move beyond the research and exploration stage. We have no
assurance that future financing will be available to us on acceptable terms. If financing is not available on satisfactory terms,
we may be unable to continue, develop or expand our operations. Equity financing could result in additional dilution to existing
shareholders.
Liquidity and Capital Resources
We have completed our public offering as of
March 28, 2007 and to date have raised $107,060, we will attempt to raise additional money through a subsequent private placement,
public offering or through loans.
Currently, we do not have sufficient funds
for our intended business operation. Ms. Miller, one of our officers and directors, has agreed in financing the related operating
expenditures to maintain the Company. The foregoing agreement is oral; we have nothing in writing. While Ms. Miller has agreed
to advance the funds, the agreement is unenforceable as a matter of law because no consideration was given. At the present time,
we have not made any arrangements to raise additional cash. If we need additional cash and can’t raise it, we will either
have to suspend operations until we do raise the cash, or cease operations entirely. Other than as described in this paragraph,
we have no other financing plans.
Since inception, we have issued 7,070,000 shares
of our common stock and received $107,060.
In April 2006, we issued 3,000,000 shares of
common stock to Kathrine MacDonald, our former secretary/treasurer, in consideration of $30 and we issued 3,000,000 shares of common
stock to Marilyn Miller, one of our officers and directors, in consideration of $30 pursuant to the exemption from registration
contained in Regulation S of the Securities Act of 1993.
We issued 1,070,000 shares of common stock
pursuant to the exemption from registration contained in section 4(2) of the Securities Act of 1933. This was accounted for as
a purchase of shares of common stock.
As of September 30, 2017, due to related parties
balance of $163,392 (June 30, 2017: $152,626) represents the combination of the following:
$54,959 (June 30, 2017: $54,959) owed to a
company controlled by a former director and principal shareholder of the Company, for the amount of office, transfer agent and
travel expenses paid by the related party on behalf of the Company. The amount is unsecured, non-interest bearing and due on demand;
$28,000 (June 30, 2017: $28,000) owed to a
director of the Company, for the amount of office, travel and telephone expenses paid by the related party on behalf of the Company.
The amount is unsecured, non-interest bearing and due on demand. Also see Note 6.
$80,433 (June 30, 2017: $69,667) was payable
to a principal shareholder’s company, for the operating expenses paid by the related party on behalf of the Company. The
loan amount is unsecured, non-interest bearing and due on demand.
Loan payable consists of the following:
$143,700 (June 30, 2017: $143,700) was payable
to 0787129 B.C. Ltd. (a non-related party) of which $51,272 and $34,827 were the result of the assignment and transfer from loan
payable to ATP Corporate Services Corp. (a non-related party) and Bobcat Development (a non-related party), respectively. The loan
amount is unsecured, non-interest bearing and due on demand.
$57,858 (June 30, 2017: $57,858) was payable
to Bobcat Development (a non-related party). The loan amount is unsecured, non-interest bearing and due on demand.
Where you can find more information
You are advised to read this Quarterly Report
on Form 10-Q in conjunction with other reports and documents that we file from time to time with the SEC. In particular, please
read our Quarterly Reports on Form 10-Q, Annual Report on Form 10-K, and Current Reports on Form 8-K that we file from time to
time. You may obtain copies of these reports directly from us or from the SEC at the SEC’s Public Reference Room at 100 F.
Street, N.E. Washington, D.C. 20549, and you may obtain information about obtaining access to the Reference Room by calling the
SEC at 1-800-SEC-0330. In addition, the SEC maintains information for electronic filers at its website
http://www.sec.gov.