[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Indicate by check mark if the registrant is a well-known
seasoned issuer, as defined in Rule 405 of the Securities Act.
YES
[ ]
NO
[X]
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
[X]
Indicate by check mark whether the registrant(1) has filed all
reports required 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 day.
YES
[X]
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 Rule405 of Regulation S-T (§229.405 of this chapter) during the preceding
12 months (or for such shorter period that the registrant was required to submit
and post such files).
YES
[X]
NO
[ ]
Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulations S-K is not contained herein, and will not be
contained, to the best of registrants 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 if the
Exchange Act.
Indicate by check mark whether the registrant is a shell
company (as defined in Rule 12b-2 of the Act).
YES
[
]
NO
[X]
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 sold, or the average bid and asked prices of such common
equity, as of the last business day of the registrants most recently completed
second fiscal quarter: $2,291,081 based on a price of $0.02 per share, being the
average bid and asking price of the registrants common stock as quoted on the
OTC Bulletin Board on September 30, 2013.
Indicate the number of shares outstanding of each of the
registrant's classes of common stock as of the latest practicable date
114,554,067 shares of common stock as of June 30, 2014.
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. The listed documents should be
clearly described for identification purposes (e.g., annual report to security
holders for fiscal year ended December 24, 1980).
Not Applicable
PART I
Forward Looking Statements
This annual report contains forward-looking statements.
Forward-looking statements are projections of events, revenues, income, future
economic performance or managements plans and objectives for our future
operations. In some cases, you can identify forward-looking statements by
terminology such as may, should, expects, plans, anticipates,
believes, estimates, predicts, potential or continue or the negative
of these terms or other comparable terminology. These statements are only
predictions and involve known and unknown risks, uncertainties and other
factors, including the risks in the section entitled Risk Factors and the
risks set out below, any of which may cause our or our industrys actual
results, levels of activity, performance or achievements to be materially
different from any future results, levels of activity, performance or
achievements expressed or implied by these forward-looking statements. These
risks include, by way of example and not in limitation:
-
risks and uncertainties relating to the interpretation of sampling results,
the geology, grade and continuity of mineral deposits;
-
risks and uncertainties that results of initial sampling and mapping will
not be consistent with our expectations;
-
mining and development risks, including risks related to accidents,
equipment breakdowns, labor disputes or other unanticipated difficulties with
or interruptions in production;
-
the potential for delays in exploration activities;
-
risks related to the inherent uncertainty of cost estimates and the
potential for unexpected costs and expenses;
-
risks related to commodity price fluctuations;
-
the uncertainty of profitability based upon our limited history;
-
risks related to failure to obtain adequate financing on a timely basis and
on acceptable terms for our planned exploration projects;
-
risks related to environmental regulation and liability;
-
risks that the amounts reserved or allocated for environmental compliance,
reclamation, post-closure control measures, monitoring and on-going
maintenance may not be sufficient to cover such costs;
-
risks related to tax assessments;
-
political and regulatory risks associated with mining development and
exploration; and
-
other risks and uncertainties related to our mineral property and business
strategy.
This is not an exhaustive list of the factors that may affect
any of our forward-looking statements. These and other factors should be
considered carefully and readers should not place undue reliance on our
forward-looking statements.
Forward looking statements are made based on managements
beliefs, estimates and opinions on the date the statements are made and we
undertake no obligation to update forward-looking statements if these beliefs,
estimates and opinions or other circumstances should change. Although we believe
that the expectations reflected in the forward-looking statements are
reasonable, we cannot guarantee future results, levels of activity, performance
or achievements. Except as required by applicable law, including the securities
laws of the United States and Canada, we do not intend to update any of the
forward-looking statements to have these statements conform to actual results.
5
In this annual report, unless otherwise specified, all dollar
amounts are expressed in United States dollars and all references to common
stock refer to the common shares in our capital stock.
As used in this annual report, the terms we, us, our, the
Company and Lake Victoria mean Lake Victoria Mining Company, Inc., and our
wholly owned subsidiaries Kilimanjaro Mining Company Inc., Lake Victoria
Resources (T) Limited, Chrysos 197 Company Tanzania Ltd and Jin 197 Company
Tanzania Ltd, unless otherwise indicated.
ITEM
1.
BUSINESS.
General
We are an exploration stage corporation focused on acquiring,
exploring and developing gold deposits in Tanzania, East Africa. We hold 7
prospective gold projects, consisting of one mining license, 7 Prospecting
Licenses (PLs) and 43 Primary Mining Licenses (PMLs) (
Table 1
), within
our Tanzania property portfolio, covering approximately 347.23 square kilometers
(85,802 acres).
During the course of the year from 1
st
April 2013 to
31
st
March 2014, we have relinquished 14 Gold and 7 Uranium
Prospecting Licenses. Our main area of interest is acquiring, exploring and
evaluating mineral properties through our ongoing exploration program. Following
exploration, we intend to either advance them to a commercially feasible mining
stage, enter joint ventures to further develop these properties, sell or dispose
of them if the properties do not meet our requirements. Our properties are all
early stage exploration properties. Within our mineral exploration land in
Tanzania our focus is primarily on gold, all uranium prospects in our portfolio
were expired in the last fiscal year.
We have no revenues, we have incurred losses since inception
and we have relied upon the sale of our securities to fund operations. To date,
we have not discovered a NI43-101 compliant commercially viable ore body,
mineral deposit or mineral reserve on any of our properties and we will be
unable to do so until further exploration is done and a comprehensive evaluation
concludes with an economic feasibility study or production is initiated However,
we have achieved environmental (EIA) approval and a Mining License to commence
gold mining on one of our gold projects mineralized target.
Assuming funding is available, we plan to develop and conduct
small-scale gold mining on selected mineral properties within certain areas that
are currently contained within our primary mining licenses and the Mining
License that we have. The production decision or significant development on
these projects will not be based on mineral reserves supported by an NI43-101
compliant technical report. We plan to secure Mining Licenses for each of these
potential mining areas.
Our property portfolio is large, therefore we may interest
other companies in our properties to either participate by means of option or
joint venture agreements in the exploration of them or to finance and establish
production on discovered mineralization.
We maintain our registered agents office at The Corporation
Trust Company of Nevada, 6100 Neil Road, Suite 500, Reno, Nevada 89511 and our
business and administrative office is located at Suite 810 675 West Hastings
Street, Vancouver, British Columbia, V6B 1N2, Canada. Our telephone number is
604.248.5750.
Recent Corporate Developments
During the fiscal year ended on March 31st, 2014, we
experienced the following significant corporate developments:
|
1.
|
Effective February 3, 2014, Ian A. Shaw resigned as a
member of the board of directors and from all committees of the board of
directors of Lake Victoria Mining Company, Inc. (the Company). Mr.
Shaws resignation was not as a result of any disagreement with the
Company or its board on any matter relating to the Companys operations,
policies or practices.
|
|
|
|
|
2.
|
On August 2, 2013, the Company completed and filed
Environmental and Social Impact Assessment report for the Kinyambwiga
mining project with the Tanzanian government. The company received the
approved report from the government on January 7
th
, 2014. See
news release dated January 9
th
, 2014. An application for the
Mining License, covering the amalgamated 39 PMLs, together with the
required Environmental Certificate, was submitted to the Ministry of
Energy and Minerals in January 2014. On April 1, 2014, the Company was
granted an offer of the applied for mining license and officially received
Mining License ML520/2014 by the Tanzanian Government in respect to the
Companys proposed Kinyambwiga open-pit gold project in northern Tanzania.
The term of the Mining License is 10 years.
|
6
Competitive Factors
The gold mining industry is fragmented, that is there are many
gold prospectors and producers, small and large. We are a small exploration
stage mining company and we do not have the financial, personnel or equipment
resources that many competitors possess. Because of our lack of resources we may
not be able to adequately withstand the competitive forces that exist in the
mining industry generally and specifically with respect to gold mining.
Regulations
Mineral rights in the United Republic of Tanzania are governed
by the Mining Act of 1998 and The Mining (Mineral Rights) Regulations, 2010 and
control over minerals is vested in the United Republic of Tanzania. Prospecting
for minerals may only be conducted under authority of a mineral right granted by
the Ministry of Energy and Minerals under this Act.
The three types of mineral rights most often encountered, those
which are applicable to us include: prospecting licenses; retention licenses;
and mining licenses. A prospecting license grants the holder thereof the
exclusive right to prospect in the area covered by the license for all minerals,
other than building and gemstones, for an initial period of four years.
Thereafter, the license is renewable for two further periods of three and two
years consecutively. On each renewal of a prospecting license, 50 percent of the
area covered by the license must be relinquished. The maximum initial area for a
prospecting license is 300 square kilometers. A company applying for a
prospecting license must, inter alia, state the financial and technical
resources available to it. A retention license can also be requested from the
Minister, after the expiry of the 4-3-2-year prospecting license period, for
reasons ranging from funds to technical considerations.
Mining is carried out through either a mining license or a
special mining license or a primary mining license, all three of which confer on
the holder thereof the exclusive right to conduct mining operations in or on the
area covered by the license. A mining license is granted for a period of 10
years and is renewable for a further period of 10 years. A special mining
license is granted for a period of 25 years and is renewable for the estimated
life of the ore body or such period as the applicant may request whichever
period is shorter. If the holder of a prospecting license has identified a
mineral deposit within the prospecting area which is potentially of commercial
significance, but it cannot be developed immediately by reason of technical
constraints, adverse market conditions or other economic factors of a temporary
character, it can apply for a retention license which will entitle the holder
thereof to apply for a special mining license when it sees fit to proceed with
mining operations.
A retention license is valid for a period of five years and is
thereafter renewable for a single period of five years. A mineral right may be
freely transferred by the holder thereof to another person, except for a mining
license, which must have the approval of the Ministry to be assigned.
7
However, this approval requirement for the assignment of a
mining license will not apply if the mining license is assigned to an affiliate
company of the holder or to a financial institution or bank as security for any
loan or guarantee in respect of mining operations.
A holder of a mineral right may enter into a development
agreement with the Ministry to guarantee the fiscal stability of a long-term
mining project and make special provision for the payment of royalties, taxes,
fees and other fiscal imposts.
We have complied with all applicable requirements and the
relevant licenses have been issued.
Environmental Law
We are also subject to Tanzania laws dealing with environmental
matters relating to the exploration and development of mining properties. While
in the exploration stage, on any of our project areas, we are conscious of any
environmental impact we may be having. However, our obligations are very
limited, as our activities cause minimal environmental disturbances and are
limited to mapping, sampling, trenching, geophysical surveying and drilling.
Once project areas reach a point of being commercially feasible for mining then
we will be required to conduct proper environmental impact studies based on
feasibility reports and planned mining operations. We do protect the environment
through any regulations affecting:
|
1.
|
Health and Safety
|
|
|
|
|
2.
|
Archaeological Sites
|
|
|
|
|
3.
|
Exploration Access
|
Subsidiaries
We have four wholly owned subsidiaries. Kilimanjaro Mining
Company Inc., a US corporation, Lake Victoria Resources (T) Limited, Chrysos 197
Company Tanzania Ltd and Jin 179 Company Tanzania Ltd. which are Tanzanian
corporations.
Employees
We have eight full-time employees. On April 26, 2011, we
entered into employment and contract agreements with our officers and directors.
Our president David Kalenuik and secretary Heidi Kalenuik
agreed to
handle our administrative duties. See Item 11. Executive Compensation
Employment Agreements, below.
To the extent possible we intend to use the services of
subcontractors for manual labor and exploration work on our properties. Lake
Victoria Resources (T) Limited, our wholly owned Tanzania subsidiary may hire
subcontractors and employees to complete exploration work. A large skilled and
unskilled workforce is readily available within Tanzania to satisfy any labour
requirements we may have. Through contractors and skilled professional employees
we do provide any necessary on the job training to accomplish our exploration
objectives.
ITEM
1A. RISK
FACTORS.
Much of the information included in this annual report includes
or is based upon estimates, projections or other forward looking statements.
Such forward looking statements include any projections and estimates made by us
and our management in connection with our business operations. While these
forward-looking statements, and any assumptions upon which they are based, are
made in good faith and reflect our current judgment regarding the direction of
our business, actual results will almost always vary, sometimes materially, from
any estimates, predictions, projections, assumptions or other future performance
suggested herein.
Such estimates, projections or other forward looking
statements involve various risks and uncertainties as outlined below. We
caution the reader that important factors in some cases have affected and, in
the future, could materially affect actual results and cause actual results to
differ materially from the results expressed in any such estimates, projections
or other forward looking statements.
8
Risks Associated with Mining
All of our properties are in the exploration stage. There is
no assurance that we can establish the existence of any mineral resource on any
of our properties in commercially exploitable quantities. Until we can do so, we
cannot earn any revenues from operations and if we do not do so we will lose all
of the funds that we expend on exploration. If we do not discover any mineral
resource in a commercially exploitable quantity, our business could
fail.
Despite exploration work on our mineral properties, we have not
established that any of them contain any mineral reserve as defined by NI43-101
regulations and the Securities and Exchange Commission in its Industry Guide 7,
nor can there be any assurance that we will be able to do so. If we do not, our
business could fail.
A mineral reserve is defined by the Securities and Exchange
Commission in its Industry Guide 7 (which can be viewed over the Internet at
http://www.sec.gov/divisions/corpfin/forms/industry.htm#secguide7
) as
that part of a mineral deposit which could be economically and legally extracted
or produced at the time of the reserve determination. The probability of an
individual prospect ever having a reserve that meets the requirements of the
Securities and Exchange Commissions Industry Guide 7 is extremely remote; in
all probability our mineral resource property does not contain any reserve and
any funds that we spend on exploration will probably be lost.
Even if we do eventually discover a mineral reserve on one or
more of our properties, there can be no assurance that we will be able to
develop our properties into producing mines and extract those resources. Both
mineral exploration and development involve a high degree of risk and few
properties which are explored are ultimately developed into producing mines.
The commercial viability of an established mineral deposit will
depend on a number of factors including, by way of example, the size, grade and
other attributes of the mineral deposit, the proximity of the resource to
infrastructure such as a smelter, roads and a point for shipping, government
regulation and market prices. Most of these factors will be beyond our control,
and any of them could increase costs and make extraction of any identified
mineral resource unprofitable.
Mineral operations are subject to applicable law and
government regulation. Even if we discover a mineral resource in a commercially
exploitable quantity, these laws and regulations could restrict or prohibit the
exploitation of that mineral resource. If we cannot exploit any mineral resource
that we might discover on our properties, our business may fail.
We believe that we are in compliance with all material laws and
regulations that currently apply to our activities but there can be no assurance
that we can continue to remain in compliance. Current laws and regulations could
be amended and we might not be able to comply with them, as amended. Further,
there can be no assurance that we will be able to obtain or maintain all permits
necessary for our future operations, or that we will be able to obtain them on
reasonable terms. To the extent such approvals are required and are not
obtained, we may be delayed or prohibited from proceeding with planned
exploration or development of our mineral properties.
Our business activities are conducted in Tanzania.
Our mineral exploration activities in Tanzania may be affected
in varying degrees by political stability and government regulations relating to
the mining industry and foreign investment in that country. The government of
Tanzania may institute regulatory policies that adversely affect the exploration
and development of properties. Any changes in regulations or shifts in political
conditions in this country are beyond our control and may adversely affect our
business. Investors should assess the political and regulatory risks related to
our foreign country investments. Our operations may be affected in varying
degrees by government regulations with respect to restrictions on production,
price controls, export controls, foreign exchange controls, income taxes,
expropriation of property, environmental legislation and mine safety.
We may not have clear title to our properties.
Acquisition of title to mineral properties is a very detailed
and time-consuming process, and titles to our properties may be affected by
prior unregistered agreements or transfers, or undetected defects. Several of
our prospecting licenses are currently subject to renewal by the Ministry of
Energy and Minerals of Tanzania. As a result, there is a risk that we may not
have clear title to all our mineral property interests, or they may be subject
to challenge or impugned in the future.
9
If we establish the existence of a mineral resource on any
of our properties in a commercially exploitable quantity, we will require
additional capital in order to develop the property into a producing mine. If we
cannot raise this additional capital, we will not be able to exploit the
resource, and our business could fail.
If we do discover mineral resources in commercially exploitable
quantities on any of our properties, we will be required to expend substantial
sums of money to establish the extent of the resource, develop processes to
extract it and develop extraction and processing facilities and infrastructure.
Although we may derive substantial benefits from the discovery of a major
deposit, there can be no assurance that such a resource will be large enough to
justify commercial operations, nor can there be any assurance that we will be
able to raise the funds required for development on a timely basis. If we cannot
raise the necessary capital or complete the necessary facilities and
infrastructure, our business may fail.
Mineral exploration and development is subject to
extraordinary operating risks. We do not currently insure against these risks.
In the event of a cave-in or similar occurrence, our liability may exceed our
resources, which would have an adverse impact on our company.
Mineral exploration, development and production involves many
risks, which even a combination of experience, knowledge and careful evaluation
may not be able to overcome. Our operations will be subject to all the hazards
and risks inherent in the exploration for mineral resources and, if we discover
a mineral resource in commercially exploitable quantity, our operations could be
subject to all of the hazards and risks inherent in the development and
production of resources, including liability for pollution, cave-ins or similar
hazards against which we cannot insure or against which we may elect not to
insure. Any such event could result in work stoppages and damage to property,
including damage to the environment. We do not currently maintain any insurance
coverage against these operating hazards nor do we expect to get such insurance
for the foreseeable future. If a hazard were to occur, the costs of rectifying
the hazard may exceed our asset value and cause us to liquidate all of our
assets, resulting in the loss of your entire investment in our company.
Mineral prices are subject to dramatic and unpredictable
fluctuations.
We expect to derive revenues, if any, either from the sale of
our mineral resource properties or from the extraction and sale of precious and
base metals such as gold, silver and copper. The price of those commodities has
fluctuated widely in recent years, and is affected by numerous factors beyond
our control, including international, economic and political trends,
expectations of inflation, currency exchange fluctuations, interest rates,
global or regional consumptive patterns, speculative activities and increased
production due to new extraction developments and improved extraction and
production methods. The effect of these factors on the price of base and
precious metals, and therefore the economic viability of any of our exploration
properties and projects, cannot accurately be predicted.
10
The mining industry is highly competitive and there is no
assurance that we will continue to be successful in acquiring mineral claims. If
we cannot continue to acquire properties to explore for mineral resources, we
may be required to reduce or cease operations.
The mineral exploration, development, and production industry
is largely un-integrated. We compete with other exploration companies looking
for mineral resource properties. While we compete with other exploration
companies in the effort to locate and acquire mineral resource properties, we
will not compete with them for the removal or sales of mineral products from our
properties if we should eventually discover the presence of them in quantities
sufficient to make production economically feasible. Readily available markets
exist worldwide for the sale of mineral products. Therefore, we will likely be
able to sell any mineral products that we identify and produce.
In identifying and acquiring mineral resource properties, we
compete with many companies possessing greater financial resources and technical
facilities. This competition could adversely affect our ability to acquire
suitable prospects for exploration in the future. Accordingly, there can be no
assurance that we will acquire any interest in additional mineral resource
properties that might yield reserves or result in commercial mining operations.
If our costs of exploration are greater than anticipated,
then we may not be able to complete the exploration program for our Tanzanian
properties without additional financing, of which there is no assurance that we
would be able to obtain.
We are proceeding with the initial stages of exploration on our
Tanzanian properties. We are carrying out an exploration program that has been
recommended by a consulting geologist. This exploration program outlines a
budget for completion of the recommended exploration program. However, there is
no assurance that our actual costs will not exceed the budgeted costs. Factors
that could cause actual costs to exceed budgeted costs include increased prices
due to competition for personnel and supplies during the exploration season,
unanticipated problems in completing the exploration program and delays
experienced in completing the exploration program. Increases in exploration
costs could result in our not being able to carry out our exploration program
without additional financing. There is no assurance that we would be able to
obtain additional financing in this event.
Because of the speculative nature of exploration of mining
properties, there is substantial risk that no commercially exploitable minerals
will be found and our business will fail.
We are in the initial stage of exploration of our mineral
property, and thus have no way to evaluate the likelihood that we will be
successful in establishing commercially exploitable reserves of gold, silver or
other valuable minerals on our Tanzanian properties.
The search for valuable minerals as a business is extremely
risky. We may not find commercially exploitable reserves of gold, silver or
other valuable minerals in our mineral property. Exploration for minerals is a
speculative venture necessarily involving substantial risk. The expenditures to
be made by us on our exploration program may not result in the discovery of
commercial quantities of ore. The likelihood of success must be considered in
light of the problems, expenses, difficulties, complications and delays
encountered in connection with the exploration of the mineral properties that we
plan to undertake. Problems such as unusual or unexpected formations and other
conditions are involved in mineral exploration and often result in unsuccessful
exploration efforts. In such a case, we would be unable to complete our business
plan.
11
Risks Relating to Our Common Stock
If we issue additional shares in the future, it will result
in the dilution of our existing shareholders.
Our articles of incorporation authorize the issuance of up to
250,000,000 shares of common stock with a par value of $0.00001 per share. Our
board of directors may choose to issue some or all of such shares to acquire one
or more businesses or to provide additional financing in the future. The
issuance of any such shares will reduce the book value and market price of the
outstanding shares of our common stock. If we issue any such additional shares,
such issuance will reduce the proportionate ownership and voting power of all
current shareholders. Further, such issuance may result in a change of control
of our corporation.
Our common stock is illiquid and shareholders may be unable
to sell their shares.
There is currently a limited market for our common stock and we
can provide no assurance to investors that a market will develop. If a market
for our common stock does not develop, our shareholders may not be able to
re-sell the shares of our common stock that they have purchased and they may
lose all of their investment. Public announcements regarding our company,
changes in government regulations, conditions in our market segment or changes
in earnings estimates by analysts may cause the price of our common shares to
fluctuate substantially. In addition, stock prices for junior mineral
exploration companies fluctuate widely for reasons that may be unrelated to
their operating results. These fluctuations may adversely affect the trading
price of our common shares.
Penny stock rules will limit the ability of our stockholders
to sell their stock.
The Securities and Exchange Commission has adopted regulations
which generally define penny stock to be any equity security that has a market
price (as defined) less than $5.00 per share or an exercise price of less than
$5.00 per share, subject to certain exceptions. Our securities are covered by
the penny stock rules, which impose additional sales practice requirements on
broker-dealers who sell to persons other than established customers and
accredited investors. The term accredited investor refers generally to
institutions with assets in excess of $5,000,000 or individuals with a net worth
in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 jointly
with their spouse. The penny stock rules require a broker-dealer, prior to a
transaction in a penny stock not otherwise exempt from the rules, to deliver a
standardized risk disclosure document in a form prepared by the Securities and
Exchange Commission which provides information about penny stocks and the nature
and level of risks in the penny stock market. The broker-dealer also must
provide the customer with current bid and offer quotations for the penny stock,
the compensation of the broker-dealer and its salesperson in the transaction and
monthly account statements showing the market value of each penny stock held in
the customers account. The bid and offer quotations, and the broker-dealer and
salesperson compensation information, must be given to the customer orally or in
writing prior to effecting the transaction and must be given to the customer in
writing before or with the customers confirmation. In addition, the penny stock
rules require that prior to a transaction in a penny stock not otherwise exempt
from these rules, the broker-dealer must make a special written determination
that the penny stock is a suitable investment for the purchaser and receive the
purchasers written agreement to the transaction. These disclosure requirements
may have the effect of reducing the level of trading activity in the secondary
market for the stock that is subject to these penny stock rules. Consequently,
these penny stock rules may affect the ability of broker-dealers to trade our
securities. We believe that the penny stock rules discourage investor interest
in and limit the marketability of our common stock.
The Financial Industry Regulatory Authority, or FINRA, has
adopted sales practice requirements which may also limit a shareholders ability
to buy and sell our stock.
In addition to the penny stock rules described above, FINRA
has adopted rules that require that in recommending an investment to a customer,
a broker-dealer must have reasonable grounds for believing that the investment
is suitable for that customer. Prior to recommending speculative low priced
securities to their non-institutional customers, broker-dealers must make
reasonable efforts to obtain information about the customers financial status,
tax status, investment objectives and other information. Under interpretations
of these rules, FINRA believes that there is a high probability that speculative low priced
securities will not be suitable for at least some customers. FINRA requirements
make it more difficult for broker-dealers to recommend that their customers buy
our common stock, which may limit your ability to buy and sell our stock and
have an adverse effect on the market for its shares.
12
Because of the early stage of development and the nature of
our business, our securities are considered highly speculative.
Our securities must be considered highly speculative, generally
because of the nature of our business and the early stage of our development. We
are engaged in the business of identifying, acquiring, exploring and developing
commercial reserves of primarily gold. Our properties are in the exploration
stage only although we have achieved environmental (EIA) approval and a Mining
License to commence gold mining on the mineralized target in one of our gold
projects. This project is not a compliant gold reserve as defined by Canadian
NI43-101 regulations nor the Securities and Exchange Commission in its Industry
Guide 7. We have not generated any revenues nor have we realized a profit from
our operations to date. Any profitability in the future from our business will
be dependent upon locating and developing economic reserves of gold, which
itself is subject to numerous risk factors as set forth herein. Since we have
not generated any revenues, we will have to raise additional monies through the
sale of our equity securities or debt in order to continue our business
operations.
We do not intend to pay dividends on any investment in the
shares of stock of our company.
We have never paid any cash dividends and currently do not
intend to pay any dividends for the foreseeable future. To the extent that we
require additional funding currently not provided for in our financing plan, our
funding sources may prohibit the payment of a dividend. Because we do not intend
to declare dividends, any gain on an investment in our company will need to come
through an increase in the stocks price. This may never happen and investors
may lose all of their investment in our company.
Risks Related to Our Company
Our by-laws contain provisions indemnifying our officers and
directors.
Our by-laws provide the indemnification of our directors and
officers to the fullest extent legally permissible under the Nevada corporate
law against all expenses, liability and loss reasonably incurred or suffered by
them in connection with any action, suit or proceeding. Furthermore, our by-laws
provide that our board of directors may cause our company to purchase and
maintain insurance for our directors and officers, and we have implemented
director and officer insurance coverage.
Because most of our directors and officers are residents of
other countries other than the United States, investors may find it difficult to
enforce, within the United States, any judgments obtained against our directors
and officers.
Most of our directors and officers are nationals and/or
residents of countries other than the United States, and all or a substantial
portion of such persons assets are located outside the United States. As a
result, it may be difficult for investors to enforce within the United States
any judgments obtained against our officers or directors, including judgments
predicated upon the civil liability provisions of the securities laws of the
United States or any state thereof.
ITEM
1B. UNRESOLVED
STAFF COMMENTS.
Not applicable.
ITEM
2.
PROPERTIES.
Executive Offices
As of the date of this report, our executive offices are
located at Suite 810, 675 West Hastings Street, Vancouver, British Columbia V6B
1N2, Canada.
13
Mineral Properties
Acquisition of Primary Mining Licenses in Uyowa, Tanzania
On July 19, 2011, Guardian Investment Ltd, a related party, on
behalf of the Company, entered into a mineral properties option agreement to
acquire four primary mining licenses within the northern most prospecting
license of the seven comprising the Uyowa Gold project. The total consideration
is of $490,000, of which $40,000 was paid in 2012 and $50,000 paid in fiscal
year 2013. During the year ended March 31, 2014, the option agreement was
terminated and 4 PMLs were transferred back to their respective owners.
Licenses
The following table is a complete list of gold mining and
prospecting licenses that we own by project name, license number, the area of
location, district of its location and the size in square kilometers. We own no
prospecting property other than the following licenses listed on the chart.
There are no known reserves on these properties and any proposed programs by us
are exploratory in nature.
Table 1: Gold Projects and License List
Project
|
License No
|
Area
|
District
|
Size
(SqKm)
|
Ownership
|
MUSOMA BUNDA
|
|
|
|
|
|
Suguti
|
PL 3966/2006
|
Suguti
|
Musoma
|
20.00
|
Owned
|
Kinyambwiga
|
PL 4653/2007
|
Kinyambwiga
|
Musoma
|
13.47
|
Owned
|
|
ML520/2014
|
Kinyambwiga
|
Musoma
|
5.12
|
Owned
|
|
|
|
|
38.59
|
|
SINGIDA
|
|
|
|
|
|
23 PMLs
|
|
Singida - Londoni
|
Singida
|
(1.55)
|
Owned
|
20 PMLs
|
|
Singida - Londoni
|
Singida
|
(1.94)
|
Optioned
|
|
|
|
|
3.94
|
|
BUHEMBA
|
|
Buhemba
|
Kiabakari
|
14.94
|
Owned
|
|
PL7142/2011
|
|
|
|
|
|
HQ-P23869
|
Buhemba
|
Majimoto
|
19.19
|
In
Process
|
|
|
|
|
34.13
|
|
UYOWA
|
|
|
|
|
|
|
PL7245/2011
|
Uyowa
|
Urambo
|
199.04
|
Owned
|
|
PL
5153/2008
|
Uyowa
|
Uyowa
|
65.07
|
Owned
|
|
|
|
|
264.11
|
|
HANDENI
|
|
|
|
|
|
|
PL7148/2011
|
Manga
|
Handeni
|
12.03
|
Owned
|
7
Prospecting Licenses (PLs) - Total SqKm
|
|
|
343.74
|
|
1 Mining License (ML) Total SqKm
|
|
|
5.12
|
|
43
Primary Mining Licenses (PMLs)- Total SqKm
|
|
|
3.49
|
|
Uranium Projects and License List
All uranium
licenses were expired during the last fiscal year.
14
Prospective Projects and Properties
The following map is a gold project location map
(Map
1).
For a detailed listing see Licenses Gold Projects and License List
(
Table 1
).
Map 1: Gold Project Location Map, March 2014
Prospective Gold Projects
The following is a brief overview of our portfolio of
prospective mineral properties, the exploration developments on them where
applicable and some of the details of the historical option agreements for them.
During the fiscal year ended March 31, 2014, our exploration work was primarily
confined to the Kinyambwiga Gold Project.
Musoma Bunda Murangi Gold Project
The Musoma Bunda Murangi Project is now comprised of 2
Prospecting Licenses covering 33.47 square kilometers. During 2013, the 39 PMLs,
totaling 3.44 square kilometres located on the Kinyambwiga PL PL4653/2007 were
amalgamated and incorporated back within the PL (5 July 2013). This was
undertaken in order to facilitate the application for a Mining Licence (
Map
2
).
On August 2, 2013, The Company completed and filed an
Environmental and Social Impact Assessment report for the Kinyambwiga mining
project covering the amalgamated 39 PMLs with the National Environmental
Management Council (NEMC) on August 2, 2013. The Environmental Certificate was
approved by January 7
th
2014. This was shortly followed by the
submission of the Mining application to the Ministry of Mines.
15
No field exploration was undertaken during this reporting
period on the Kinyambwiga (PL4653/2007) nor Suguti (
PL3966/2006
)
Licenses other than a trial test pit that was dug by excavator at the proposed
Kanunga Mine site on the Kinyambwiga Project to evaluate the upper saprolite
horizon for geotechnical studies.
Exploration Strategy
The Kinyambwiga License has been reduced from 30.90 square
kilometers to 13.47 square kilometers as part of the required Government
relinquishment of 50 percent of the ground holdings on License renewal. The
southern part of the License area, largely covered by dark gray to black, clay
rich soil and underlain by granitic rocks with no known artisanal workings, was
relinquished. The Company maintained the northern part of the License which is
host to the Kanunga 1, 2 and 3 artisanal or small scale mine sites. The
relinquished area is currently under application on account of a soil anomaly in
the NE corner of the License.
The new artisanal or small scale mining site, located 1
kilometer along strike to the east of Kanunga 2, has been abandoned.
Furthermore, the +500 artisanal miners that were mining the surface quartz
rubble at Kanunga 3 in the northern part of the license have ceased operations
and left the site.
Map 2: Plan showing the 24 PMLs plus the 15 additional PMLs
that have now been amalgamated and incorporated within PL 4653/2007.
The Kanunga 1 Prospect has been earmarked for commercial small
scale mining operations that are expected to proceed once necessary funding and
the issuing of a Mining License has been achieved. The ESIA report, completed by
TANSHEQ a local Tanzanian consulting firm specializing in Environmental
Management, has been approved by the National Environmental Management Council
(NEMC) on the 23
rd
December 2013 and the Environmental Certificate
issued to Lake Victoria Resources (T) Ltd on the 7 January 2014. An application
for the Mining License, covering the amalgamated 39 PMLs, together with the
required Environmental Certificate, was submitted to the Ministry of Energy and
Minerals early in 2014. A slight revision of the proposed Mining Licence was
requested by the Ministry of Mines in order to reduce the amount of corner
beacons presented by the current PML layout and which has subsequently increased
the surface area to 5.12 square kilometres
(Map 3).
The Mining License
ML520/2014 was offered by the Ministry of Energy and Minerals of Tanzania (MEM)
on April 1, 2014 and officially received on June 2, 2014.
16
Map 3: Proposed Mining application area (in purple) covering
the Kanunga small scale gold mine site. The outline perimeter of the amalgamated
39 PMLs is shown by the red boundary line.
A scoping study covering metallurgical test work, mine
planning, mine scheduling (details of which were included in the 1st Quarter
Report 2013) and preliminary financial evaluations has been prepared. A capital
investment of US$3M is an estimated requirement for building the project.
Mine Planning
The Kanunga 1 Prospect consists of a small, conceptual gold
target that is based on 40 meter spaced reverse circulation drill sections and
trenches and may contain gold bearing mineralized material of between 600,000
and 1,000,000 tonnes. The estimated gold grades are between 1.50 and 2.00 g/t.
The mineralized area which lies in three vein structures at Kanunga 1, is within
the first 150 and 200 meters of surface. Continuity of the narrow quartz veins
appears to extend along a strike length for about 500 meters.
The potential quantity and grade of these targets are
conceptual in nature. There has been insufficient exploration to define a
mineral resource and that it is uncertain if further exploration will result in
the target being delineated as a mineral resource. The conceptual target has
been determined on the results of trenching, mapping, geophysics and both RC and
RAB drilling.
It is currently proposed to mine the mineralization by open pit
mining methods using an excavator and trucks to transport the ore to an onsite
processing plant. A vertical test pit to a depth of 8 meters was excavated in
granitic saprolite (host rock) at site using a Caterpillar 320 excavator
in a relatively short time of 3 hours. The results of the test pit proved good
retaining rock wall strength, ease of excavation and the lack of ground
water.
17
The proposed site plan showing location of pit, waste dumps and
processing plant is shown in
Map 4.
Map 4: Site plan showing the proposed position of the rock
waste dump tailings dam and the pit. 100 meter and 200 meter buffer zone from
the pit and representing an area of non-inhabitation and limited farming
activities, as per requirement by the Mining Act of Tanzania, is
indicated.
Based on the results of the test pit undertaken in the 1st
Quarter, a pit slope of 55-60 degrees was re-modeled for the open pit, using 10
meter and 7 meter benches (
Map 5 & Map 6
). At this time, the last
bench in the 40m deep pit would be steeper depending upon the reach of the
equipment and rock strength of the pit walls.
The rock dump and tailings dam have been re-designed (Map 7
& 8) to accommodate approximately 1.5M tons and 260,000 tons respectively;
this is the estimated amount of rock to be mined to a depth of 40 meters.
Map
5:
Plan
view
of
the
open
pit
on
the
Kanunga
1
showing
the
access
ramp
and
benches
18
Map
6:
Longitudinal
and
cross
sections
of
the
Kanunga
1
Pit
Map
7:
Plan
and
profile
section
of
the
rock
waste
dump
Map 8: Plan and profile section of the tailings dam
19
The Mining and Mill plan is designed for processing 300 tonnes
per day (
Chart 1
).
Chart 1: Flow sheet diagram showing the conceptual
processing plant
Mining Application
The Environmental Impact Assessment (ESIA) report, completed by
TANSHEQ, a local Tanzanian consulting firm specializing in Environmental
Management, was submitted to the Tanzanian Governments National Environmental
Management Council (NEMC) on the 2
nd
August 2013 and was approved on
the 23
rd
December 2013. The company received the approved report on
January 7
th
, 2014 (see news release dated January 9
th
,
2014). The Company has been awarded the Environmental Certificate of approval,
registration number EC/EIS/1106, issued under the Environmental Management Act
No.20 of 2004 and signed by the Tanzanian Minister of Environment. The EIA
Certificate is valid during the entire life cycle of the project based on the
Companys compliance with the General and Specific Conditions of its issuance.
20
The Company has already completed the Mining and Processing
License Application to cover not only the Kanunga Prospect but also the 39
amalgamated Primary Mining Licenses (PMLs) previously held by the Companys
Tanzanian subsidiary. The area, totalling 5.12 square kilometers also includes
the 2 other known gold occurrences at Kanunga 2 and 3. The Mining application
was submitted to the Ministry of Energy and Minerals in January 2014 and a
Mining License was granted in April 2014.
Future work
With the Mining and Processing application approval and a
Mining License being awarded by the Ministry Energy and Minerals, the Company
will be in a position to proceed with the proposed mine plan.
A prospective exploration area lies to the east of the Kanunga
1 Prospect and is referred to as the Kanunga School Anomaly. With the Mining
License approval, the Company will be in the position to make application for
the area in order to do follow-up investigation of this gold anomaly.
An anomalous stone layer as encountered from previous RAB
(rotary air blast) drilling during 2009 as well as the soil anomaly over the
school zone requires further investigation. A number of auger drill traverses
are planned to test the strike towards the SW where a number of anomalous soil
samples are present (
Map 9
). Since this area was previously relinquished
as part of the governments requirement to reduce the PL area by 50 percent, an
application to renew the area of shed-off was filed with the Ministry of
Mines.
Map
9:
Kanunga
1
East
and
School
soil
anomalies
The recent influx of +500 artisanal miners at the Kanunga 3
Prospect, situated approximately 1 kilometer to the north of Kanunga 1 (
Map
10
), was short lived. After processing some of the surface quartz gravels,
the miners migrated elsewhere and off the license. The prospect consists of
abundant quartz float covering an area of 200 meters x 200 meters which has been
the site for periodic artisanal activity over the years. Trenching and reverse
circulation drilling intersected a number of narrow discontinuous quartz veins
(
Map 11
).
21
Map
10:
Distribution
of
recently
acquired
PMLs
(green
and
purple
blocks)
and
showing
positions
of
Kanunga
1,
2
and
3
prospects
as
well
as
the
Kanunga
School
gold
-
in
-
soil
anomaly
in
the
eastern
part
of
the
Kinyambwiga
licenses.
Map
11:
Kanunga
3
prospect
showing
results
of
trenching
and
drilling
undertaken
across
the
area.
Suguti (PL3966/2006)
22
No exploration work has been undertaken on the Suguti License
during the year from 31
st
March 2013 to 31
st
March
2014.
The Company decided not to place an application bid in for the
northern part of the Suguti License, preferring to reserve the exploration funds
for more advanced projects within the Company portfolio. The current License is
scheduled to be relinquished.
Singida Gold Project
No exploration work was undertaken during the year from
31
st
March 2013 to 31
st
March 2014.
Future exploration
An evaluation of the Reverse Circulation drill results for both
Phase 1 and 2 programs undertaken during 2010 and 2011 has shown that gold
mineralization at the Singida-Londoni project consists of narrow, medium to low
grade and often discontinuous lenses. The shear structures hosting the gold-rich
zones typically pinch and swell along strike, which in places, has resulted in
larger pods of limited size as at Sambaru 3 and Sambaru 4 which indicates that
the gold deposits have limited potential to be developed into a major ore
resource contrary to the Companys vision of discovering substantially larger
and economically viable gold deposits in the short term. In this regard, the
Company believes that the nature and extent of the mineralization revealed thus
far may lend itself towards a small-scale commercial mining operation. The
Company intends to explore the possibilities of undertaking a small scale mining
operation on a number of PMLs once a scoping study has been completed.
Although the Company completed a Technical report in compliance
with Canadian National Instrument 43-101 prior to the September 2010 revised
code, it was not submitted. The report is to be prepared under the revised
guidelines.
Buhemba Gold Projects
The Buhemba Gold projects comprise of the Kiabakari East
(PL7142/2007) and the recently acquired Maji Moto (HQ-P23869) licenses
.
No exploration work was undertaken on either of the Licenses
during the year from 31
st
March 2013 to 31
st
March 2014.
Kiabakari East (PL7142/2011)
The Kiabakari East Project is located approximately 55
kilometers southeast of Musoma town, in the Mara Region. The PL, covering 14.94
square kilometers and lying within the central part of the Musoma-Mara
Greenstone Belt, was granted to Lake Victoria Resources by the Ministry of Mines
in April 2011.
No exploration work was undertaken during the year from
31
st
March 2013 to 31
st
March 2014.
Future exploration
Metallurgical test work is to be undertaken on the oxide rock
material taken from artisanal working and trenches on surface as part of the
scoping study to determine the viability of commencing and open pit/underground
small scale mining operation at BIF Hill. In order to get a better understanding
of the geology and gold mineralisation, the Company is considering developing a
north trending adit from the southern side at the base of the hill at a later
date.
Maji Moto Gold Project (HQ-P23869)
A recent acquisition to the North Mara group of Licenses is the
Maji Moto License that was awarded to the Company by the Ministry of Mines
through application and tender in April 2012. The License is situated in the
North Mara Greenstone Belt (Eastern Musoma Goldfields) approximately 28
kilometers to the SW of African Barricks North Mara Gold Mine (
Map 1
).
23
Map
12:
Location
map
of
Maji
Moto
HQ
-
P23869
Note: HQ-O23869 is the Application number. The License has yet
to be allocated a PL number by the Ministry.
Artisanal workings
:
Three
artisanal sites are present in the northern part of the License (
Map 23
):
|
1.
|
Located at Kitarahota Hill, some 2 kilometres east of
Maji Moto village is actively being mined by a relatively small group of
artisanal miners. The site, located on the lower slope of the Kitarahota
Hill, consists mostly of surface workings.
|
|
2.
|
Nyamarubiti Hill, located in the north-eastern arm of the
License was an active artisanal site in 1980s and is only being worked
sporadically by a handful of artisanal miners.
|
|
3.
|
Kebosi Hill, situated on the north-western arm of the
License and east of the much larger Kitengara Hill. This site does not
appear to be as extensively mined as site 2 and is currently not being
mined by artisanal miners.
|
24
Map
23:
Geology
of
HQ
-
P23869
Other than a reconnaissance visit to the License, exploration
has not yet commenced.
The following exploration strategy (Phase 1) will be followed
as soon as a field camp is established on site:
-
Regional ground Magnetic survey
-
Regional mapping of the License
-
Regional soil sampling on 200 meter x 50 meter sample grid
-
Detailed mapping and soil/rock sampling at and around the artisanal sites
-
Schlumberger profiles across the known artisanal sites.
Phase 2 will be dependant on the results achieved from the
Phase 1 exploration programme.
Uyowa Gold Project
The Uyowa Gold project, located 120 kilometers northwest of
Tabora town, previously consisted of seven (7) Prospecting Licenses (PLs) that
initially covered a total area of 729.73 square kilometers in the west-central
area of Tanzania. Due to increased Ministerial costs of annual renewals coupled
with the Companys objective to focus its exploration efforts on more
potentially viable ground holding, the number of licenses has now been reduced
to 2 PLs amounting to 264.11 square kilometers (
Map 14
).
Four PMLs on PL5153/2008 were optioned to the Company but have
subsequently been returned to their respective owners. No exploration work was
undertaken on any of the Licenses during the year from 31
st
March
2013 to 31
st
March 2014.
25
Map
34:
Current
license
holdings
of
the
Uyowa
Poject
Future exploration
Interpretation of the ground magnetic survey suggests the
presence of a graben structure that coincides with the last of the artisanal
workings on the western side of known mineralized zone. The area, unlike the
artisanal site where laterite is often exposed on surface, is overlain by sand
cover for some 500 meters to the west before lateritic soils are again present
suggesting possible continuation of the mineralized trend further to the west.
Landsat imagery clearly shows areas of laterite and lateritic soil over the
area. Based on the recent soil geochemistry results, follow up specific soil
sampling is planned across the interpolated trend of gold mineralization to both
the west and east of the artisanal workings covering a total strike length of
3.5 kilometers.
Conventional soil sampling is planned across areas of lateritic
soil cover. Initially a RAB program is recommended to test the intervening areas
covered by dark gray to black, clay rich soil. However, prior to embarking on
such a program, an orientation survey using enzyme geochemistry is recommended
as a trial study over a portion of the area to be sampled. Should results be
positive further sampling incorporating this geochemical method will continue to
be used to outline a possible gold anomaly.
Follow-up investigation using possibly both methods of soil
sampling will be undertaken across a number of ground magnetic targets in order
to prioritize targets for later testing by RAB drilling.
Reverse Circulation infill drilling is recommended on 40 meter
spaced N-S sections across the artisanal site in order to undertake a resource
calculation. Furthermore, part of the program will also focus on testing the
soil anomaly along strike.
26
Handeni Gold Project
The Handeni Project, comprising of PL7148/2011 and covering a
total area of 12.03 square kilometers, is located approximately 240 kilometers
by road north-west of Dar es Salaam and some 30 kilometers south of Handeni town
within the Handeni District (
Map 15
).
Map 15: Location map of the Handeni Project showing
PL7148/2011 in red.
Exploration
No exploration was undertaken on the Handeni Project during the
year from 31
st
March 2013 to 31
st
March 2014. A brief
summary of the status of proposed future exploration of PL7148/2011 is given:
Future exploration
An infill soil sampling program on 100 meter x 25 meter grid is
planned across the Mkulima Hill (188 samples) in order to better define the
apparent gold anomalies prior to commencing a trenching program across the main
anomalous zones. Should a trenching program be warranted, further soil sampling
on 100 meter x 50 meter grid is proposed around the hill on 200 meter x 50 meter
grid (623 samples) to increase the area of investigation and strike extent of
the gold anomalies.
Mineral Properties
Uranium Projects
The Company has relinquished all Prospecting Licenses for
Uranium, due to a downturn in global uranium exploration activities.
27
ITEM
3.
LEGAL PROCEEDINGS.
We are not a party to any litigation.
ITEM
4.
MINE SAFETY DISCLOSURES.
Not Applicable.
PART III
ITEM
10.
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.
Directors and Executive Officers
Our directors and executive officers, their ages, positions
held, and duration of such, are as follows:
Name
|
Position Held with the
Company
|
Age
|
Date First Elected
or
Appointed
|
David Kalenuik
|
President, Chief Executive Officer and Director
|
56
|
October 7, 2010
|
Ming Zhu
|
Chief Financial Officer
|
42
|
October 7, 2010
|
Heidi Kalenuik
|
Secretary, Treasurer and Director
|
47
|
June 28, 2008
|
Roger A. Newell
|
Director
|
71
|
June 28, 2008
|
Ahmed A. Magoma
|
Director
|
47
|
June 28, 2008
|
David Ralph Webb
|
Director
|
56
|
March 01, 2013
|
Business Experience
The following is a brief account of the education and business
experience of each director and executive officer during at least the past five
years, indicating each persons principal occupation during the period, and the
name and principal business of the organization by which he was employed.
David Kalenuik, President, Chief Executive Officer, and
Director
Mr. Kalenuik became a director and was appointed President and
Chief Executive Officer on October 7, 2010. Mr. Kalenuik has spent the last 35
years primarily as founder and owner of his own businesses. These businesses
have ranged from product or service oriented to investor relations for publicly
traded companies. Since December 2006, David has been actively involved with
Kilimanjaro Mining Company Inc. and Lake Victoria Mining Company, Inc. in the
identification, negotiation and acquisitions of mineral resource properties in
Tanzania, East Africa. David as an International Businessman has extensive
experience in start up operations, business development, strategic planning and
management of both private and public companies. To date, he has been directly
and indirectly responsible for the financing of each of the companies that he
has been involved with. His previous experience includes being the President and
Co-Founder of Larrearx, Inc./Larrea Biosciences Inc., a patented nutritional and
health care supplements company, and, the President and Founder of Mitropolis
Solutions Inc., a Vancouver based investor relations/investment banking firm
that successfully financed and created public awareness programs for numerous
public companies.
38
We believe Mr. Kalenuik is qualified to serve on our board of
directors because of his knowledge of our current operations, in addition to his
business experiences described above.
Ming Zhu, Chief Financial Officer
Ming Zhu (B.Comm. MA) has worked along side the management team
since 2006. Ming attained a Bachelor's Degree in Accounting and Finance in 1995.
He has more than 10 years experience specializing in corporate finance and
accounting. His portfolio includes working for multinational companies as their
finance manager in New York and China. He worked as a financial controller for
an international trading firm for 2 years before graduating from the University
of Newcastle in the UK with his Master's Degree in 2003 where he majored in
Financial Analysis. He worked with a Canadian CA accounting firm prior to
joining our management team as the Financial Controller and a Director in
Kilimanjaro Mining Company Inc., a gold and uranium exploration company that is
now a wholly owned subsidiary. From August 2009, he has been serving as the
Financial Controller for us and on October 7, 2010 he became the Chief Financial
Officer for us.
Heidi Kalenuik, Secretary, Treasurer and a Director
Heidi Kalenuik, originally from South Africa, was the founder
and President of Kilimanjaro Mining Company Inc., in December, 2006, a private
company concentrating on resource property acquisitions, exploration and joint
ventures in the United Republic of Tanzania. Ms. Kalenuik has been extensively
involved in the precious mineral industry and has worked with over 150 private
and public companies in British Columbia, Canada.
Heidi Kalenuik was appointed as an Officer and Director of Lake
Victoria Mining Company in June 2008 due to her knowledge and working experience
in Africa and her interest in our activities having been the President of
Kilimanjaro Mining Company, now a wholly owned subsidiary. We believe Ms.
Kalenuik is qualified to serve on our board of directors for the same reasons.
Roger Newell, Director
Roger Newell has been a director of our company since June 2008
and was our President, Principal Executive Officer from June 2008 to October 7,
2010. In December 2009 Dr. Newell was appointed an Independent Director of
Midway Gold Corporation a Canadian public corporation that trades on both the
Toronto TSX-V Exchange with symbol MDW and the US NYSE-AMEX also with symbol
MDW. Midway Gold is a mineral exploration and development company with
properties in the western United States.
In October 2007, Dr. Newell joined the management team as
Executive Vice President and Director of Kilimanjaro Mining Company Inc. a
private company involved in the acquisition and exploration of highly
prospective mineral resource properties in Tanzania, East Africa. In June 2008
Dr. Newell was appointed President and Director of Lake Victoria Mining Company
(OTCBB; LVCA) in consideration of his history in gold exploration and mining. We
believe Dr. Newell is qualified to serve on our board of directors for the same
reasons. He holds an MSc in Geology from the Colorado School of Mines and a PhD
in Mineral Exploration from Stanford University. He is a Registered Professional
Geologist.
Dr. Newell served as Vice President-Development and a Board
Member of Capital Gold Corp. (NYSE-AMEX;CGC and Toronto TSX;CGC) from 2000 to
September 2007. As such he was responsible for much of Capital Golds
engineering and business development at El Chanate Gold, Mexico and continued to
serve on Capital Gold Corps Board of Directors until November 2009. He also
served as President (2000 to 2006) of Capital Golds Mexican subsidiary, Minera
Santa Rita.
39
Prior to this time at Capital Gold, he served as Exploration
Manager/Senior Geologist for the Newmont Mining Company; Exploration Manager for
Gold Fields Mining Company; and Vice President-Development, for Western
Exploration Company.
Ahmed Magoma, Director
Ahmed Magoma has a B.Sc. in geology from the University of Dar
es Salaam (1992) and 16 years of experience in the mining industry, wherein he
has held progressively more responsible management and supervisory roles. Mr.
Magoma joined Kilimanjaro Mining Company Inc., in March of 2007, a private
company involved in the acquisition and exploration of highly prospective
resource properties in Tanzania, East Africa. Mr. Magoma has been a director of
Geo Can Resources Company Ltd., a private company, from April 2007 to present.
In addition to being a director with Kilimanjaro, Mr. Magoma is responsible for
all resource property acquisitions, negotiations with property owners and
government relations within Tanzania. His experience encompasses gold projects
from grassroots through to mining production. His field experience included
working with Tanex, a subsidiary of DeBeers and other South African companies as
a field geologist. Mr. Magoma worked with the Ministry of Energy and Minerals in
Tanzania for a period to learn, through study, the techniques of small-scale
miners to enhance their production. Mr. Magoma has worked with major gold
companies Barrick and Randgold as a project geologist and then as senior project
geologist with Tanzanite Africa. From 2005 to December 2007, Mr. Magoma was the
Senior Project Geologist for Tanzanite Africa Ltd., a private African company.
Mr. Magoma was appointed as a Director in Lake Victoria Mining
Company in June 2008. He was considered for this position because of his
familiarity with our projects and operations in Tanzania. His position as a
Director, and his experience with the Mining Law along with his Tanzanian
activities are very important and valuable to our programs. We believe Mr.
Magoma is qualified to serve on our board of directors for the same reasons.
David Ralph Webb, Director
Dr. Webb became a director in Lake Victoria on March
1
st
, 2013. He is a registered Professional Geologist and has spent
the past 25 years as president of DRW Geological Consultants Ltd. providing
technical and operating services to companies in the mining exploration,
development and production industry. In this capacity he has served as a
director and president to three different mining companies and provided
consulting services to dozens of other mid-tier and junior companies, most
recently having been a director and president of Tyhee Gold Corp, leading it to
the discovery and development of its multi-million ounce Yellowknife Gold
Project, currently in phases of production permitting.
Dr. Webb graduated from the University of Toronto with a
B.A.Sc. (engineering), winning scholarships and bursaries for the highest marks
in third and fourth year field courses. He has a M.Sc. from Queens University
and a Ph.D. from the University of Western Ontario in Geological Sciences. He
was a board member for the NWT and the Nunavut Chamber of Mines, a member of the
Education Committee for the Association for Mineral Exploration, B.C., a
Blockwatch Captain in Surrey, B.C., and a member of NAPEGG, CIM, PDAC, AMEBC and
SEG.
We believe Dr. Webb is qualified to serve on our board of
directors because of his knowledge of our current operations, in addition to his
business experiences described above.
Term of Office
Our directors are appointed for a one-year term to hold office
until the next annual general meeting of our shareholders or until removed from
office in accordance with our bylaws. Our officers are appointed by our board of
directors and hold office until removed by the board.
Family Relationships
There are no family relationships among our directors or
officers, other than David Kalenuik and Heidi Kalenuik who are husband and wife.
Involvement in Certain Legal Proceedings
Our directors and executive officers have not been involved in
any of the following events during the past ten years:
40
|
1.
|
any bankruptcy petition filed by or against any business
of which such person was a general partner or executive officer either at
the time of the bankruptcy or within two years prior to that
time;
|
|
|
|
|
2.
|
any conviction in a criminal proceeding or being subject
to a pending criminal proceeding (excluding traffic violations and other
minor offenses);
|
|
|
|
|
3.
|
being subject to any order, judgment, or decree, not
subsequently reversed, suspended or vacated, of any court of competent
jurisdiction, permanently or temporarily enjoining, barring, suspending or
otherwise limiting his involvement in any type of business, securities or
banking activities;
|
|
|
|
|
4.
|
being found by a court of competent jurisdiction (in a
civil action), the Securities and Exchange Commission or the Commodity
Futures Trading Commission to have violated a federal or state securities
or commodities law, and the judgment has not been reversed, suspended, or
vacated;
|
|
|
|
|
5.
|
being 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
|
|
|
|
|
6.
|
being 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
Securities Exchange Act of 1934), any registered entity (as defined in
Section 1(a)(29) of the Commodity Exchange Act), or any equivalent
exchange, association, entity or organization that has disciplinary
authority over its members or persons associated with a
member.
|
Code of Ethics
We adopted a Code of Ethics applicable to all of our directors,
officers, employees and consultants, which is a code of ethics as defined by
applicable rules of the SEC. Our Code of Ethics was attached as an exhibit to
our annual report filed on Form 10-K with the SEC on June 26, 2008.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act requires our executive
officers and directors and persons who own more than 10% of a registered class
of our equity securities to file with the SEC initial statements of beneficial
ownership, reports of changes in ownership and annual reports concerning their
ownership of our common stock and other equity securities, on Forms 3, 4 and 5
respectively. Executive officers, directors and greater than 10% shareholders
are required by the SEC regulations to furnish us with copies of all Section
16(a) reports that they file.
Based solely on our review of the copies of such forms received
by us, or written representations from certain reporting persons, we believe
that, all filing requirements applicable to our
officers, directors and greater than ten percent beneficial owners were complied
with.
41
ITEM
11.
EXECUTIVE COMPENSATION.
The particulars of compensation paid to the following persons:
|
(a)
|
our principal executive officers during the year ended
March 31, 2014;
|
|
|
|
|
(b)
|
each of our two most highly compensated executive
officers other than our principal executive officers who were serving as
executive officers at March 31, 2014; and
|
|
|
|
|
(c)
|
up to two additional individuals for whom disclosure
would have been provided under (b) but for the fact that the individual
was not serving as our executive officer at March 31,
2014,
|
whom we collectively refer to as the named executive
officers, for the fiscal years ended March 31, 2014 and 2013, are set out in
the following summary compensation table:
SUMMARY COMPENSATION TABLE
|
Name
and
Principal
Position
|
Year
|
Salary
($)
|
Bonus
($)
|
Stock
Awards
($)
|
Option
Awards
($)
|
Non-
Equity
Incentive
Plan
Compensa
tion
($)
|
Nonqualified
Deferred
Compensation
Earnings
($)
|
All
Other
Compensa
tion
($)
|
Total
($)
|
David
Kalenuik
(1)
President
and Chief
Executive
Officer
|
2014
2013
|
172,209
(2)
182,233
(2))
|
Nil
Nil
|
Nil
Nil
|
Nil
17,500
(6)
|
Nil
Nil
|
Nil
Nil
|
Nil
Nil
|
172,209
199,733
|
Ming
Zhu
(3)
Chief
Financial
Officer
|
2014
2013
|
84,683
(4)
89,589
(4)
|
Nil
Nil
|
Nil
Nil
|
Nil
21,000
(6)
|
Nil
Nil
|
Nil
Nil
|
Nil
Nil
|
84,683
110,589
|
Heidi
Kalenuik
Secretary
and
Treasurer
|
2014
2013
|
96,449
(5)
101,651
(5)
|
Nil
1,035
(5)
|
Nil
Nil
|
Nil
210,000
(6)
|
Nil
Nil
|
Nil
Nil
|
Nil
Nil
|
96,449
311,651
|
Notes
(1)
|
David Kalenuik was appointed our President and Chief
Executive Officer on October 7, 2010.
|
|
|
(2)
|
During the fiscal year ended March 31, 2014, David
Kalenuik received consulting fees of $78,736 in cash and deferred
compensation of $93,473 to be paid for his services rendered. During the
fiscal year ended March 31, 2013, David Kalenuik received consulting fees
of $106,215 in cash and deferred compensation of $76,018 to be paid for
his services rendered..
|
|
|
(3)
|
Ming Zhu was appointed our Chief Financial Officer on
October 7, 2010.
|
42
(4)
|
During the fiscal year ended March 31, 2014, Ming Zhu
received salary of $45,643 in cash and deferred compensation of $39,040.
During the fiscal year ended March 31, 2013, Ming Zhu received salary of
$59,683 in cash and deferred compensation of $29,906.
|
|
|
(5)
|
During the fiscal year ended March 31, 2014, Heidi
Kalenuik received salary of $43,734 in cash and deferred compensation of
$52,715. During the fiscal year ended March 31, 2013, Heidi Kalenuik
received salary of $59,119 in cash and deferred compensation of
$42,532.
|
|
|
(6)
|
On April 30, 2012, the Company granted 4,800,000 stock
options to seven directors and officers at an exercise price of $0.09 per
share which expired on April 30, 2015. David Kalenuik was granted 500,000
options with a fair value of $35,000, Heidi Kalenuik was granted 3,000,000
options with a fair value of $210,000, Roger Newell was granted 250,000
options with a fair value of $17,500 and Ming Zhu was granted 300,000
options with a fair value of $21,000
1
.
|
Employment Contracts
On April 26, 2011, we entered into an employment letter
agreement with Heidi Kalenuik, pursuant to which we employed Mrs. Kalenuik to,
among other things: carry out the duties and responsibilities of the position of
Secretary, Treasurer and Supervisor of Operations of the Company. As
consideration for the performance of her duties under the employment letter
agreement, we agreed to pay Mrs. Kalenuik CDN$102,000 (approximately US$107,017)
per year commencing April 1, 2011. Mrs. Kalenuik is also entitled to receive a
one-time bonus in the amount of CDN$1,000 (approximately US$1,049).
On April 26, 2011, we entered into a consulting agreement with
David Kalenuik. As consideration for the performance of his consulting services
under the agreement, we agreed to pay Mr. Kalenuik CDN$10,000 (approximately
US$10,492) per month commencing April 1, 2011, plus applicable taxes. The
consulting agreement is for a term of two years and the management renewed the
consulting agreement.
Effective April 26, 2011, we entered into an employment letter
agreement with Ming Zhu, pursuant to which we employed Mr. Zhu to, among other
things: carry out the duties and responsibilities of the position of Chief
Financial Officer. As consideration for the performance of his duties under the
employment letter agreement, we agreed to pay Mr. Zhu CDN$90,000 (approximately
US$94,427) per year commencing April 1, 2011. Mr. Zhu is also entitled to
receive a one-time bonus in the amount of CDN$1,000 (approximately
US$1,049).
On April 26, 2011, we entered into a consulting agreement with
Roger Newell. As consideration for the performance of his consulting services
under the agreement, we agreed to pay Mr. Newell USD$3,500 per month commencing
April 1, 2011, plus applicable taxes. The consulting agreement is for a term of
two years and the agreement expired in April 2013.
Retirement or Similar Benefit Plans
There are no arrangements or plans in which we provide pension,
retirement or similar benefits for directors or executive officers. Our
directors and executive officers may receive stock options at the discretion of
our board of directors in the future. We do not have any material bonus or
profit sharing plans pursuant to which cash or non-cash compensation is or may
be paid to our directors or executive officers, except that stock options may be
granted at the discretion of our board of directors from time to time.
Resignation, Retirement, Other Termination, or Change in
Control Arrangements
We have no plans or arrangements in respect of remuneration
received or that may be received by our directors or executive officers to
compensate such directors or officers in the event of termination of employment
(as a result of resignation, retirement, change of control) or a change of
responsibilities following a change of control.
_________________________________________
1
The
fair value of the options was estimated using the Black-Scholes pricing model
based on the following assumptions: dividend yield of 0%; risk-free interest
rate of 0.38%; expected life of three years; and volatility of 158%
43
Outstanding Equity Awards at Fiscal Year-End
The following table sets forth for each executive officer
certain information concerning the outstanding equity awards as of March 31,
2014.
|
OPTION AWARDS
|
STOCK AWARDS
|
Name
|
Number
of
Securities
Underlying
Unexercised
Options (#)
Exercisable
|
Number
of
Securities
Underlying
Unexercised
Options (#)
Unexercisable
|
Equity
Incentive
Plan
Awards:
Number
of
Securities
Underlying
Unexercised
Unearned
Options
(#)
|
Option
Exercise
Price
($)
|
Option
Expiration
Date
|
Number
of
Shares
or
Units of
Stock
That
Have
Not
Vested
(#)
|
Market
Value of
Shares
or
Units of
Stock
That
Have
Not
Vested
($)
|
Equity
Incentive
Plan
Awards:
Number of
Unearned
Shares,
Units or
Other
Rights
That
Have Not
Vested
(#)
|
Equity
Incentive
Plan
Awards:
Market or
Payout
Value of
Unearned
Shares,
Units or
Other
Rights
That
Have Not
Vested
(#)
|
David
Kalenuik
(1)
President and
Chief
Executive
Officer
|
1,000,000
500,000
|
Nil
|
Nil
|
$0.15
$0.09
|
November
04, 2014,
April 27,
2015
|
Nil
|
Nil
|
Nil
|
Nil
|
Ming Zhu
(2)
Chief
Financial
Officer
|
300,000
300,000
|
Nil
|
Nil
|
$0.15
$0.09
|
November
4, 2014,
April 27,
2015
|
Nil
|
Nil
|
Nil
|
Nil
|
Heidi
Kalenuik
Secretary and
Treasurer
|
840,000
3,000,000
|
Nil
|
Nil
|
$0.15
$0.09
|
November
4, 2014,
April 27,
2015
|
Nil
|
Nil
|
Nil
|
Nil
|
(1)
|
David Kalenuik was appointed our President and Chief
Executive Officer on October 7, 2010.
|
|
|
(2)
|
Ming Zhu was appointed our Chief Financial Officer on
October 7, 2010.
|
Aggregated Options Exercised in the Year Ended March 31,
2014 and Year End Option Values
There were no stock options exercised during
the year ended March 31, 2014.
Repricing of Options/SARS
We did not reprice any options previously granted during the
year ended March 31, 2014.
44
Director Compensation
The following table sets forth the compensation for each
director who is not a named executive officer for the fiscal year ended March
31, 2014.
DIRECTOR COMPENSATION
|
Name
|
Fees
earned or
paid
in
cash
($)
|
Stock
awards
($)
|
Option
awards
($)
|
Non-equity
incentive
plan
compensation
($)
|
Nonqualified
deferred
compensation
earnings
($)
|
All other
compensation
($)
|
Total
($)
|
Ahmed A. Magoma
|
16,500
(1)
|
Nil
|
Nil
|
Nil
|
Nil
|
Nil
|
16,500
|
Ian A. Shaw
(2)
|
Nil
|
Nil
|
Nil
|
Nil
|
Nil
|
Nil
|
Nil
|
David Ralph Webb
(3)
|
Nil
|
Nil
|
Nil
|
Nil
|
Nil
|
Nil
|
Nil
|
Roger Newell
(4)
|
Nil
|
Nil
|
Nil
|
Nil
|
Nil
|
Nil
|
Nil
|
|
(1)
|
Mr. Ahmed Magoma is a director of the Company and a
director of its two subsidiaries, Kilimanjaro Mining Company Inc. and Lake
Victoria Resources (T) Limited and he is an employee of Lake Victoria
Resources (T) Limited. During the fiscal year ended March 31, 2014, he
received total directors fee of $16,500 in cash and deferred compensation
of $19,500. During the fiscal year ended March 31, 2014, Ahmed was earned
deferred compensation of $63,329 from Lake Victoria Resources (T) Limited;
his monthly gross pay was approximately $5,255.
|
|
|
|
|
(2)
|
Mr. Ian A. Shaw was appointed as a director on April 8,
2010 and resigned on February 3, 2014.
|
|
|
|
|
(3)
|
Mr. David Ralph Webb was appointed as a director on March
1, 2013
|
|
|
|
|
(4)
|
Roger Newell resigned as our President, Chief Executive
Officer and Chief Financial Officer on October 7,
2010.
|
We have no formal plan for compensating our directors for their
services in their capacity as directors. Our directors are entitled to
reimbursement for reasonable travel and other out-of-pocket expenses incurred in
connection with attendance at meetings of our board of directors. Our board of
directors may award special remuneration to any director undertaking any special
services on our behalf other than services ordinarily required of a director
ITEM
12.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
STOCKHOLDER MATTERS
As of June 30, 2014, there were 114,554,067 shares of our
common stock outstanding and 10,000,000 shares to be issued. The following table
sets forth certain information known to us with respect to the beneficial
ownership of our common stock as of that date by (i) each of our directors, (ii)
each of our executive officers, and (iii) all of our directors and executive
officers as a group. Except as set forth in the table below, there is no person
known to us who beneficially owns more than 5% of our common stock.
Title of Class
Directors
and Officers:
|
Name and
Address
of Beneficial Owner
|
Number of Shares
Beneficially Owned (1)
|
Percentage of Class
(1),(2)
|
Common Stock
|
David Kalenuik
Suite 810 675 West
Hastings Street
Vancouver, BC V6B 1N2
|
22,261,000
(3)
|
17.14%
|
45
Common Stock
|
Heidi Kalenuik
Suite 810 675 West
Hastings Street
Vancouver, BC V6B 1N2
|
22,261,000
(4)
|
17.14%
|
|
|
|
|
Common Stock
|
Ming Zhu
Suite 810 675 West
Hastings Street
Vancouver, BC V6B 1N2
|
900,000
(5)
|
0.72%
|
|
|
|
|
Common Stock
|
Roger Newell
Suite 810 675 West
Hastings Street
Vancouver, BC V6B 1N2
|
2, 135,000
(6)
|
1.70%
|
|
|
|
|
Common Stock
|
Ahmed Magoma
Suite 810 675 West
Hastings Street
Vancouver, BC V6B 1N2
|
1,423,750
(7)
|
1.14%
|
|
|
|
|
Common Stock
|
David Ralph Webb
|
Nil
|
Nil
|
|
|
|
|
Common Stock
|
Directors and
Officers as
a group (6)
|
26,719,750
(9)
|
20.69%
|
|
|
|
|
|
5% Stockholders
|
|
|
|
|
|
|
Common Stock
|
David Kalenuik
Suite 810 675 West
Hastings Street
Vancouver, BC V6B 1N2
|
22,261,000
(3)
|
17.14%
|
|
|
|
|
Common Stock
|
Heidi Kalenuik
Suite 810 675 West
Hastings Street
Vancouver, BC V6B 1N2
|
22,261,000
(4)
|
17.14%
|
(1)
|
Under Rule 13d-3, a beneficial owner of a security
includes any person who, directly or indirectly, through any contract,
arrangement, understanding, relationship, or otherwise has or shares: (i)
voting power, which includes the power to vote, or to direct the voting of
shares; and (ii) investment power, which includes the power to dispose or
direct the disposition of shares. Certain shares may be deemed to be
beneficially owned by more than one person (if, for example, persons share
the power to vote or the power to dispose of the shares). In addition,
shares are deemed to be beneficially owned by a person if the person has
the right to acquire the shares (for example, upon exercise of an option)
within 60 days of the date as of which the information is provided. In
computing the percentage ownership of any person, the amount of shares
outstanding is deemed to include the amount of shares beneficially owned
by such person (and only such person) by reason of these acquisition
rights.
|
|
|
(2)
|
The percentage of class is based on 114,554,067 shares of
common stock issued and outstanding and as of June 30, 2014.
|
|
|
(3)
|
Includes 720,000 shares held directly, 16,186,000 shares
held by Heidi Kalenuik, the spouse of David Kalenuik and 15,000 shares
held by their children. Also includes 1,500,000 shares acquirable on
exercise of options held directly, 3,840,000 shares acquirable on exercise
of options held indirectly by Heidi Kalenuik on exercises of options
within 60 days of the date hereof.
|
|
|
(4)
|
Includes 16,186,000 shares held directly, 720,000 shares
held by David Kalenuik, the spouse of Heidi Kalenuik and 15,000 shares
held by their children. Also includes 3,840,000 shares acquirable on
exercise of options held directly, 1,500,000 shares acquirable on exercise
of options held indirectly by David Kalenuik on exercises of options
within 60 days of the date hereof.
|
46
(5)
|
Includes 600,000 shares acquirable on exercise of options
within 60 days of the date hereof.
|
|
|
(6)
|
Includes 1,090,000 shares acquirable on exercise of
options and 200,000 shares acquirable on exercise of warrants within 60
days of the date hereof.
|
|
|
(7)
|
Includes 750,000 shares acquirable on exercise of options
within 60 days of the date hereof.
|
|
|
(8)
|
Includes 400,000 shares acquirable on exercise of options
and 400,000 shares acquirable on exercise of warrants within 60 days of
the date hereof.
|
|
|
(9)
|
Includes 8,180,000 shares acquirable on exercise of
options and 600,000 shares acquirable on exercise of warrants within 60
days of the date hereof.
|
Changes in Control
We are unaware of any contract or other arrangement the
operation of which may at a subsequent date result in a change of control of our
company.
Securities Authorized for Issuance under Equity Compensation
Plans
Effective October 7, 2010, we adopted our 2010 Stock Option
Plan. The purpose of our 2010 Stock Option Plan is to retain the services of
directors, officers, valued key employees and consultants and such other persons
as the plan administrator selects, and to encourage such persons to acquire a
greater proprietary interest in our company, thereby strengthening their
incentive to achieve the objectives stockholders, and to serve as an aid and
inducement in the hiring of new employees. Under the plan, the plan
administrator is authorized to grant stock options to acquire up to a total of
10,000,000 shares of our common stock.
The following table provides a summary of the number of stock
options granted under the 2010 Stock Option Plan, the weighted average exercise
price and the number of stock options remaining available for issuance under our
option plan as at March 31, 2013:
Equity Compensation Plan
Information
|
Plan category
|
Number of
securities to
be issued upon exercise
of outstanding
options,
warrants and rights
(a)
|
Weighted-Average
exercise price of
outstanding options,
warrants and rights
(b)
|
Number of
securities
remaining
available for future
issuance under
equity
compensation plan
(excluding
securities
reflected in column
(a))
|
Equity compensation plans not
approved by
security holders (2010
Stock Option Plan)
|
9,520,000
|
$0.12
|
480,000
|
47
ITEM
13.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.
Except as noted below, none of the following parties has, since
commencement of our fiscal year ended March 31, 2014, had any material interest,
direct or indirect, in any transaction with us or in any presently proposed
transaction that has or will materially affect us, in which our company is a
participant and the amount involved exceeds the lesser of $120,000 or 1% of the
average of our companys total assets for the last two completed financial
years:
|
(i)
|
Any of our directors or officers;
|
|
|
|
|
(ii)
|
Any person proposed as a nominee for election as a
director;
|
|
|
|
|
(iii)
|
Any person who beneficially owns, directly or indirectly,
shares carrying more than 5% of the voting rights attached to our
outstanding shares of common stock;
|
|
|
|
|
(iv)
|
Any of our promoters; and
|
|
|
|
|
(v)
|
Any member of the immediate family (including spouse,
parents, children, siblings and in- laws) of any of the foregoing
persons.
|
Related Party Transactions and Balances:
|
a)
|
As at March 31, 2014, the Company owed $403,524 (March
31, 2013 - $144,374) to five directors and officers of the Company. During
the year ended March 31, 2014, the Company incurred $36,000 (2013 -
$36,000) of directors fees, $1,000 (2013 Nil) of agreement signing fees
to a director, and $426,955 (2013 - $456,336) of salaries to directors and
officers.
|
|
|
|
|
b)
|
As at March 31, 2013, the Company held $41,966 in trust
with a company sharing a common director, which has been included in
prepaid expenses and other.
|
Director Independence
Our common stock is quoted on the OTC bulletin board
interdealer quotation system, which does not have director independence
requirements. Under NASDAQ rule 5605(a) (2), a director is not considered to be
independent if he or she is also an executive officer or employee of the
corporation. David Kaleniuk as our president and chief executive officer, Heidi
Kalenuik as our secretary and treasurer and Ahmed Magoma as an employee of a
subsidiary company are therefore are not considered independent. Messrs. Webb
and Newell are considered to be independent as they are not officers or
employees of our company.
Audit Committee and Charter
Our audit committee consists of two directors. One of them,
Roger Newell is independent and he is the designated Chair of the Committee when
it is constituted. Our audit committee is responsible for: (1) selection and
oversight of our independent accountant; (2) establishing procedures for the
receipt, retention and treatment of complaints regarding accounting, internal
controls and auditing matters; (3) establishing procedures for the confidential,
anonymous submission by our employees of concerns regarding accounting and
auditing matters; (4) engaging outside advisors; and, (5) funding for the
outside auditory and any outside advisors engagement by the audit committee. A
copy of our audit committee charter was filed with the Securities and Exchange
Commission on June 26, 2008 with our Form 10-K.
48
Audit Committee Financial Expert
The Board has determined that the Chairman of the Audit
Committee is Roger Newell. Mr. Newell is an independent director and he meets
the additional criteria for independence of Audit Committee members set forth in
Rule 10A-3(b)(l) under the Securities Exchange Act of 1934, as amended (the
Exchange Act).
Disclosure Committee and Charter
We have a disclosure committee and disclosure committee
charter. Our disclosure committee is comprised of all of our officers and
directors. The purpose of the committee is to provide assistance to the Chief
Executive Officer and the Chief Financial Officer in fulfilling their
responsibilities regarding the identification and disclosure of material
information about us and the accuracy, completeness and timeliness of our
financial reports. A copy of the disclosure committee charter was filed with the
Securities and Exchange Commission on June 26, 2008 within our Form 10-K.
National Instrument 58-101
We are a reporting issuer in the Province of British Columbia.
National Instrument 58-101 of the Canadian Securities Administrators requires
our company to disclose annually in our annual report certain information
concerning corporate governance disclosure.
Board of Directors
Our board of directors currently consists of Roger A Newell,
David Kalenuik, Heidi Kalenuik, David Ralph Webb and Ahmed A. Magoma. We have
determined that Mr. Kalenuik, Mrs. Kalenuik and Mr. Magoma are not independent
as that term is defined in National Instrument 52-110 due to the fact that they
are current or former executive officers or employees of our company. Messrs.
Newell and Webb are independent.
Our board of directors facilitates its exercise of independent
supervision over management by endorsing the guidelines for responsibilities of
the board as set out by regulatory authorities on corporate governance in Canada
and the United States. Our boards primary responsibilities are to supervise the
management of our company, to establish an appropriate corporate governance
system, and to set a tone of high professional and ethical standards. The board
is also responsible for:
-
selecting and assessing members of the board;
-
choosing, assessing and compensating the chief executive officer of our
company, approving the compensation of all executive officers and ensuring
that an orderly management succession plan exists;
-
reviewing and approving our companys strategic plan, operating plan,
capital budget and financial goals, and reviewing its performance against
those plans;
-
adopting a code of conduct and a disclosure policy for our company, and
monitoring performance against those policies;
-
ensuring the integrity of our companys internal control and management
information systems;
-
approving any major changes to our companys capital structure, including
significant investments or financing arrangements; and
-
reviewing and approving any other issues which, in the view of the board or
management, may require board scrutiny.
49
Directorships
The following directors are also directors of other reporting
issuers (or the equivalent in a foreign jurisdiction), as identified next to
their name:
Director
|
Reporting Issuers or
Equivalent in a Foreign
Jurisdiction
|
David Kalenuik
|
N/A
|
Heidi Kalenuik
|
N/A
|
Roger Newell
|
Midway Gold, Corp
|
Ahmed A. Magoma
|
N/A
|
David Ralph Webb
|
Metallis Resources Inc.
|
Orientation and Continuing Education
We have an informal process to orient and educate new members
to the board regarding their role on the board, our committees and our
directors, as well as the nature and operations of our business. This process
provides for an orientation with key members of the management staff, and
further provides access to materials necessary to inform them of the information
required to carry out their responsibilities as a board member. This information
includes the most recent board approved budget, the most recent annual report,
the audited financial statements and copies of the interim quarterly financial
statements.
The board does not provide continuing education for its
directors. Each director is responsible to maintain the skills and knowledge
necessary to meet his or her obligations as directors.
Nomination of Directors
The board is responsible for identifying new director nominees.
In identifying candidates for membership on the board, the board takes into
account all factors it considers appropriate, which may include strength of
character, mature judgment, career specialization, relevant technical skills,
diversity and the extent to which the candidate would fill a present need on the
board. As part of the process, the board, together with management, is
responsible for conducting background searches, and is empowered to retain
search firms to assist in the nominations process. Once candidates have gone
through a screening process and met with a number of the existing directors,
they are formally put forward as nominees for approval by the board.
Assessments
The board intends that individual director assessments be
conducted by other directors, taking into account each directors contributions
at board meetings, service on committees, experience base, and their general
ability to contribute to one or more of our companys major needs. However, due
to our stage of development and our need to deal with other urgent priorities,
the board has not yet implemented such a process of assessment.
ITEM
14.
PRINCIPAL ACCOUNTANT FEES AND SERVICES.
The aggregate fees billed for the completed fiscal years ended
March 31, 2013 and 2012 for professional services rendered by Manning Elliott
LLP for the audit of our annual financial statements, quarterly reviews of our
interim financial statements and services normally provided by the
independent accountant in connection with statutory and regulatory filings or
engagements for these fiscal periods were as follows:
50
|
Year Ended
March 31,
2014
|
Year Ended
March 31,
2013
|
Audit Fees and Audit Related Fees
|
$55,163
|
$64,245
|
Tax Fees
|
$4,417
|
$16,072
|
All Other Fees
|
$Nil
|
$Nil
|
Total
|
$59,580
|
$80,317
|
In the above tables, audit fees are fees billed by our
companys external auditors for services provided in auditing our companys
annual financial statements for the subject year. Audit-related fees are fees
not included in audit fees that are billed by the auditors for assurance and
related services that are reasonably related to the performance of the audit
review of our companys financial statements. Tax fees are fees billed by the
auditors for professional services rendered for tax compliance, tax advice and
tax planning. All other fees are fees billed by the auditors for products and
services not included in the foregoing categories.
Policy on Pre-Approval by Audit Committee of Services
Performed by Independent Auditors
The board of directors pre-approves all services provided by
our independent auditors. All of the above services and fees were reviewed and
approved by the board of directors before the respective services were rendered.
The board of directors has considered the nature and amount of
fees billed by Manning Elliott LLP and believes that the provision of services
for activities unrelated to the audit is compatible with maintaining their
respective independence.
PART IV. OTHER INFORMATION