Attached files
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2010
or
o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ______________________ to ______________________
Commission File Number: 000-52043
NT Mining Corporation
(Exact name of registrant as specified in its charter)
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Nevada
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94-3342064
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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Suite 280, 13701 Vanier Place
Richmond, British Columbia, Canada V6V 2J1
(Address of principal executive offices)
(604) 249-5001
(Registrant’s telephone number, including area code)
_____________________________________________________
(Former name, former address and former fiscal year, if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was require to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (of for such shorter period that the registrant was required to submit and post such files). Yes þ No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer o Accelerated filer o Non-accelerated filer o Smaller reporting company þ
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No þ
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Exchange Act subsequent to the distribution of securities under a plan confirmed by a court. Yes No
APPLICABLE ONLY TO CORPORATE ISSUERS:
As of May 17, 2010 the registrant’s outstanding common stock consisted of 47,596,826 shares.
TABLE OF CONTENTS
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1
NT Mining Corporation
(An Exploration Stage Company)
March 31, 2010
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Consolidated Balance Sheets
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F-1
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Consolidated Statements of Operations
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F-2
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Consolidated Statements of Changes in Stockholder’s Equity (Deficit)
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F-3
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Consolidated Statements of Cash Flows
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F-4
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Notes to the Consolidated Financial Statements
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F-5
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2
NT Mining Corporation
(An Exploration Stage Company)
Consolidated Balance Sheets
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Unaudited
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Audited
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|||||||||||
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March 31, 2010
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March 31, 2009
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December 31, 2009
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||||||||||
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Assets
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||||||||||||
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Cash in banks
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813 | 44,469 | 2,124 | |||||||||
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Prepaid expenses
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9,486 | - | 9,220 | |||||||||
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Accounts receivable
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5,025 | 5,121 | 5,044 | |||||||||
| 15,324 | 49,590 | 16,388 | ||||||||||
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Furniture, fixtures, and office equipment less accumulated depreciation
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4,907 | 6,134 | 5,165 | |||||||||
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Mining property
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421,199 | 421,390 | 421,199 | |||||||||
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Total assets
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441,430 | 477,114 | 442,752 | |||||||||
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Liabilities and Stockholders' Deficit
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||||||||||||
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Accounts payable
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92,652 | 115,540 | 96,358 | |||||||||
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Current portion of debenture
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240,624 | 113,050 | 229,023 | |||||||||
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Due to related parties
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181,669 | 17,904 | 127,366 | |||||||||
| 514,945 | 246,494 | 452,747 | ||||||||||
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Debenture payable
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169,113 | 266,724 | 171,948 | |||||||||
| 684,058 | 513,218 | 624,695 | ||||||||||
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Stockholders' equity (deficiency):
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||||||||||||
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Common stock, $.001 par value; authorized 400,000,000 shares, issued and outstanding 47,596,826, 23,536,407 and 23,536,407 shares respectively
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47,596 | 23,536 | 23,646 | |||||||||
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Additional paid-in capital
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7,123,602 | 7,079,162 | 7,109,552 | |||||||||
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Deficit
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(7,416,541 | ) | (7,139,303 | ) | (7,315,141 | ) | ||||||
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Accumulated other comprehensive income (loss)
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2,715 | 501 | - | |||||||||
| (242,628 | ) | (36,104 | ) | (181,943 | ) | |||||||
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Total liabilities and stockholders' equity (deficiency)
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441,430 | 477,114 | 442,752 | |||||||||
See notes to consolidated financial statements.
F-1
NT Mining Corporation
(An Exploration Stage Company)
Consolidated Statements of Operations
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Unaudited
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||||||||||||
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Three months
ended
March 31, 2010
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Three months
ended
March 31, 2009
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February 10, 1997 (inception)
to March 31, 2010
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||||||||||
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Revenue
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- | - | - | |||||||||
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General and administrative expenses
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36,293 | 15,060 | 199,974 | |||||||||
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Exploration and field expense
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12,621 | - | 31,845 | |||||||||
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Royalty expense
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36,000 | - | 72,000 | |||||||||
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Depreciation of furniture, fixtures and office equipment
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258 | 323 | 5,181 | |||||||||
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Total operating expense
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85,172 | 15,383 | 309,000 | |||||||||
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Income (loss) from operations
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(85,172 | ) | (15,383 | ) | (309,000 | ) | ||||||
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Interest expense
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(16,228 | ) | (11,071 | ) | (69,429 | ) | ||||||
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Income (loss) from continuing operations
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(101,400 | ) | (26,454 | ) | (378,429 | ) | ||||||
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Discontinued operations
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- | - | (7,038,112 | ) | ||||||||
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Net loss
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(101,400 | ) | (26,454 | ) | (7,416,541 | ) | ||||||
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Net profit (loss) per share - basic and diluted
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(0.0021 | ) | (0.0011 | ) | ||||||||
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Weighted average number of common shares outstanding - basic and diluted
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47,596,826 | 23,536,407 | ||||||||||
See notes to consolidated financial statements.
F-2
NT Mining Corporation
(An Exploration Stage Company)Statements of Changes in Stockholders' Equity (Deficiency)
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Accumulated
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Total
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Common Stock,
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Additional
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Other
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Stockholders'
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|||||||||||||||||||||
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$0.001 par value
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Paid-in
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Comprehensive
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Equity
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Shares
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Amount
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Capital
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Deficit
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Income
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(Deficiency)
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|||||||||||||||||||
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Balances, December 31, 2004
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28 | $ | - | $ | 6,013,753 | $ | (6,088,963 | ) | $ | - | $ | (75,210 | ) | |||||||||||
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Shares returned for lease
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(7 | ) | - | - | - | - | - | |||||||||||||||||
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Shares issued for services
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427 | - | 8,030 | - | - | 8,030 | ||||||||||||||||||
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Shares issued to settle debt
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1,907 | 2 | 67,757 | - | - | 67,759 | ||||||||||||||||||
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Shares sold for cash
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5,000 | 5 | 9,995 | - | - | 10,000 | ||||||||||||||||||
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Net income (loss)
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- | - | - | (420,703 | ) | - | (420,703 | ) | ||||||||||||||||
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Balances, December 31, 2005
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7,355 | 7 | 6,099,535 | (6,509,666 | ) | - | (410,124 | ) | ||||||||||||||||
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Shares issued to settle debt
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185 | - | 18,500 | - | - | 18,500 | ||||||||||||||||||
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Shares issued for services
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437 | 1 | 8,974 | - | - | 8,975 | ||||||||||||||||||
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Net income (loss)
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- | - | - | (528,446 | ) | - | (528,446 | ) | ||||||||||||||||
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Balances, December 31, 2006
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7,977 | 8 | 6,127,009 | (7,038,112 | ) | - | (911,095 | ) | ||||||||||||||||
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Shares issued to settle debt
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37,584 | 38 | 485,767 | - | - | 485,805 | ||||||||||||||||||
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Net income (loss)
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- | - | - | (16,508 | ) | - | (16,508 | ) | ||||||||||||||||
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Balances, December 31, 2007
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45,561 | 46 | 6,612,776 | (7,054,620 | ) | - | (441,798 | ) | ||||||||||||||||
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Shares issued to settle debt
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20,210,846 | 20,210 | 312,666 | - | - | 332,876 | ||||||||||||||||||
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Shares issued to acquire
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Bullmoose Mines Ltd.
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3,000,000 | 3,000 | - | - | - | 3,000 | ||||||||||||||||||
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Shares sold for cash
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280,000 | 280 | 153,720 | - | - | 154,000 | ||||||||||||||||||
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Net income (loss)
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- | - | - | (57,829 | ) | (72 | ) | (57,829 | ) | |||||||||||||||
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Balances, December 31, 2008
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23,536,407 | 23,536 | 7,079,162 | (7,112,449 | ) | (72 | ) | (9,823 | ) | |||||||||||||||
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Shares issued to round out
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6 | - | ||||||||||||||||||||||
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Shares sold for cash
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10,000 | 10 | 5,490 | 5,500 | ||||||||||||||||||||
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Shares sold for cash
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100,000 | 100 | 24,900 | 25,000 | ||||||||||||||||||||
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Net income (loss)
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(202,692 | ) | 72 | (202,620 | ) | |||||||||||||||||||
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Balances, December 31, 2009
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23,646,413 | 23,646 | 7,109,552 | (7,315,141 | ) | - | (181,943 | ) | ||||||||||||||||
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Shares sold for cash
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152,000 | 152 | 37,848 | 38,000 | ||||||||||||||||||||
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Forward stock split (2 for 1)
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23,798,413 | 23,798 | (23,798 | ) | - | |||||||||||||||||||
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Net income (loss)
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(101,400 | ) | 2,715 | (98,685 | ) | |||||||||||||||||||
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Balances, March 31, 2010
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47,596,826 | $ | 47,596 | $ | 7,123,602 | $ | (7,416,541 | ) | $ | 2,715 | $ | (242,628 | ) | |||||||||||
See notes to consolidated financial statements.
F-3
NT Mining Corporation
(An Exploration Stage Company)
Statements of Cash Flows
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(Unaudited)
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February 10,
1997 (inception) to
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Three months ended
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March 31, 2010
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March 31, 2009
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March 31, 2010
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Cash flows from operating activities:
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Net income (loss)
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$ | (101,400 | ) | $ | (26,454 | ) | $ | (7,416,541 | ) | |||
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Adjustments to reconcile net income (loss) to net
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||||||||||||
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cash provided by (used in) operating activities:
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Depreciation
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258 | 323 | 10,856 | |||||||||
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Imputed interest expense on debenture
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8,566 | 11,071 | 61,767 | |||||||||
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Changes in operating assets and liabilities:
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Accounts receivable
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19 | (5,121 | ) | (5,025 | ) | |||||||
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Prepaid expenses
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(266 | ) | 1,567 | (9,460 | ) | |||||||
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Accounts payable and accrued expenses
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(3,706 | ) | 3,580 | 49,480 | ||||||||
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Net cash provided by (used in) operating activities
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(96,529 | ) | (15,034 | ) | (7,308,923 | ) | ||||||
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Cash flows from investing activities:
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Acquisition of Bullmoose Mines Ltd.- net
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- | - | (11,835 | ) | ||||||||
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Purchases of furniture, fixtures and office equipment
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- | - | (15,763 | ) | ||||||||
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Net cash provided by (used in) investing activities
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- | - | (27,598 | ) | ||||||||
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Cash flows from financing activities:
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Increase (decrease) in due to related party
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54,503 | - | 163,421 | |||||||||
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Sales of shares of common stock
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38,000 | - | 7,171,198 | |||||||||
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Net cash provided by (used in) financing activities
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92,503 | - | 7,334,619 | |||||||||
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Effect of exchange rate changes on cash and
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cash equivalents
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2,715 | - | 2,715 | |||||||||
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Increase (decrease) in cash and cash equivalents
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(1,311 | ) | (15,034 | ) | 813 | |||||||
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Cash and cash equivalents, beginning of period
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2,124 | 59,503 | - | |||||||||
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Cash and cash equivalents, end of period
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$ | 813 | $ | 44,469 | $ | 813 | ||||||
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Supplemental disclosures of cash flow information:
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Interest paid
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$ | - | $ | - | $ | 4,699 | ||||||
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Income taxes paid
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$ | - | $ | - | $ | - | ||||||
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Noncash investing and financing activities:
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Acquisition of Bullmoose Mines Ltd.
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$ | - | $ | - | $ | 421,390 | ||||||
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Shares issued to settle debt
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$ | - | $ | 157,875 | $ | 818,681 | ||||||
See notes to financial statements.
F-4
NT Mining Corporation
(An Exploration Stage Company)
Notes to the Consolidated Financial Statements
(expressed in U.S. dollars)
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Company
NT Mining Corporation (“NTMC”) was incorporated in the state of Nevada on February 10, 1997. Its wholly owned subsidiary Bullmoose Mines Ltd. (“BML”) was incorporated in the Northwest Territories, Canada on February 29, 2000. On October 14, 2008, NTMC acquired BML (see Note 2).
NTMC was formerly named Clear Water Mining, Inc. (to March 11, 1999), E-Casino Gaming Corporation (to June 21, 1999), E-Vegas.com Inc. (to July 20, 2000), 1st Genx.com Inc. (to October 18, 2001), Oasis Information Systems, Inc. (to January 27, 2005), and 777 Sports Entertainment, Corp. (to September 26, 2008). On December 15, 2007, NTMC’s former president died and NTMC discontinued its then business operations.
BML owns Mineral Lease #2775 plus four mineral claims located in the South MacKenzie Mining District, Northwest Territories, Canada (the “Mining Property”). According to a geological report issued on May 6, 2008, from 1985 until it was shutdown in January 1987, a former owner of the Mining Property mined and milled approximately 54,000 tons of ore from the property to produce approximately 20,000 ounces of gold. Subject to the availability of sufficient working capital, through BML the Company intends to erect a portable mill on the site and mill the approximately 10,000 tons of broken material in the coarse “ore” stockpile.
On February 2, 2005, NTMC effected a 1 for 300 reverse stock split. On September 11, 2008, NTMC effected a 1 for 2000 reverse stock split, and in December 2009, NTMC completed a 2 for 1 forward stock split. The consolidated financial statements have been retroactively adjusted to reflect these stock splits.
NTMC and BML are collectively referred to as the “Company”.
Principles of Consolidation
The accompanying consolidated financial statements include the accounts of NTMC and its wholly owned subsidiary BML from the date of its acquisition on October 14, 2008. All significant intercompany balances and transactions have been eliminated in consolidation.
Basis of Presentation
The consolidated financial statements have been prepared on a “going concern” basis, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. However, as of March 31, 2010, the Company had negative working capital of $499,621 and a stockholders’ deficiency of $242,628. Further, for the year ended December 31, 2009, the Company incurred losses totalling $202,692. These factors create substantial doubt as to the Company’s ability to continue as a going concern. The Company plans to improve its financial condition by obtaining new financing. However, there is no assurance that the Company will be successful in accomplishing this objective. The consolidated financial statements do not include any adjustments that might be necessary should the Company be unable to continue as a going concern.
F-5
NT Mining Corporation
(An Exploration Stage Company)
Notes to the Consolidated Financial Statements
(expressed in U.S. dollars)
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.
Mineral Property Costs
Mineral property exploration costs are expensed as incurred. Mineral property acquisition costs are initially capitalized when incurred using the guidance in EITF 04-02, “Whether Mineral Rights Are Tangible or Intangible Assets”. The Company assesses the carrying costs for impairment under the Financial Accounting Standards Board (“FASB”) Statement of Financial Accounting Standard (“SFAS”) No. 144, “Accounting for Impairment or Disposal of Long Lived Assets”, at each fiscal quarter end. When it has been determined that a mineral property can be economically developed as a result of establishing proven and probable reserves, the costs then incurred to develop such property are capitalized. Such costs will be amortized using the units-of-production method over the estimated life of the probable reserve. If mineral properties are subsequently abandoned or impaired, any capitalized costs will be charged to operations.
Long-lived Assets
In accordance with SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets”, the carrying value of intangible assets and other long-lived assets is reviewed on a regular basis for the existence of facts or circumstances that may suggest impairment. The Company recognizes an impairment when the sum of the expected undiscounted future cash flows is less than the carrying amount of the asset. Impairment losses, if any, are measured as the excess of the carrying amount of the asset over its estimated fair value.
The Company is in the exploration stage and is in the process of determining whether the Mining Property contains ore reserves which are economically recoverable.
Fair Value of Financial Instruments
The Company’s financial instruments consist of cash and cash equivalents, debenture payable and accrued expenses, and due to related parties as March 31, 2010. The fair value of these financial instruments approximate their carrying amounts reported in the balance sheets due to the short term maturity of these instruments or based upon market quotations of instruments with similar interest rates and similar maturities.
F-6
NT Mining Corporation
(An Exploration Stage Company)
Notes to the Consolidated Financial Statements
(expressed in U.S. dollars)
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Foreign Currency Translation
The functional currency of NTMC is the United States dollar. The functional currency of BML is the Canadian dollar. The reporting currency of the Company is the United States dollar.
The assets and liabilities of BML are translated into United States dollars at period-end exchange rates. The revenues and expenses are translated into United States dollars at average exchange rates for the period ($0.9877 for the quarter ended March 31, 2010). Resulting translation adjustments are recorded as a component of accumulated other comprehensive income (loss) within stockholders’ equity.
Transaction gains or losses arising from exchange rate fluctuations on balances or transactions denominated in a currency other than the functional currency are included in the consolidated results of operations. There is no material foreign currency transaction gain or loss for the quarters ended March 31, 2010 and 2009.
Cash and Cash Equivalents
The Company considers all liquid investments purchased with an original maturity of three months or less to be cash equivalents.
Furniture, Fixtures, and Office Equipment
Furniture, fixtures, and office equipment are stated at cost less accumulated depreciation. Additions are capitalized and maintenance and repairs are charged to expense as incurred. Depreciation is provided using the straight-line method over the estimated useful lives of the assets.
Long-Lived Assets
Long-lived assets, including the Mining Property, are evaluated for impairment whenever events or conditions indicate that the carrying value of an asset may not be recoverable. If the sum of the expected undiscounted cash flows is less than the carrying value of the related asset or group of assets, a loss is recognized for the difference between the fair value and carrying value of the asset or group of assets.
Revenue Recognition
Revenue from product sales is recognized when all of the following criteria are met: (1) persuasive evidence of an arrangement exists, (2) the price is fixed or determinable, (3) collectability is reasonably assured, and (4) delivery has occurred.
F-7
NT Mining Corporation
(An Exploration Stage Company)
Notes to the Consolidated Financial Statements
(expressed in U.S. dollars)
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Income Taxes
Income taxes are accounted for under the assets and liability method. Current income taxes are provided in accordance with the laws of the respective taxing authorities. Deferred income taxes are provided for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is not more likely than not that some portion or all of the deferred tax assets will be realized.
Net Income (Loss) per Share
Basic net income (loss) per common share is computed on the basis of the weighted average number of common shares outstanding during the period. Diluted net income (loss) per share is computed on the basis of the weighted average number of common shares and dilutive securities (such as stock options and convertible securities) outstanding. Dilutive securities having an anti-dilutive effect on diluted net income (loss) per share are excluded from the calculation.
Recently Issued Accounting Pronouncements
Certain accounting pronouncements have been issued by the FASB and other standard setting organizations which are not yet effective and have not yet been adopted by the Company. The impact on the Company’s financial position and results of operations from adoption of these standards is not expected to be material.
NOTE 2 – ACQUISITION OF BULLMOOSE MINES LTD.
On October 14, 2008, NTMC acquired BML in exchange for $12,000 cash, 3,000,000 shares of NTMC common stock valued at $3,000, a debenture in the face amount of $480,624 valued at fair value of $409,737 (see Note 3), and assumption of accounts payable totalling $47,019, or for total consideration of $421,390. The consideration was allocated $165 to cash and cash equivalents, $26 to prepaid expenses, and $421,199 to the Mining Property. The related Share Purchase Agreement also provides for payment of future royalties to the seller of BML equivalent to 6% of the Net Smelter Returns, as defined, from the Mining Property. The seller of BML was Hughes Maritime Corp. (“HMC”), owner of approximately 12.7% of the issued and outstanding common stock of NTMC at March 31, 2010.
F-8
NT Mining Corporation
(An Exploration Stage Company)
Notes to the Consolidated Financial Statements
(expressed in U.S. dollars)
NOTE 3 – DEBENTURE PAYABLE
Debenture payable at March 31, 2010 consists of:
|
Amount due October 14, 2009
|
$ | 120,624 | ||
|
Amount due October 14, 2010
|
120,000 | |||
|
Amount due October 14, 2011
|
120,000 | |||
|
Amount due October 14, 2012
|
120,000 | |||
|
Total face amount
|
480,624 | |||
|
Initial debt discount of $121,253;
|
||||
|
less accumulated amortization of $50,366
|
(70,877 | ) | ||
|
Net
|
409,737 | |||
|
Current portion
|
(240,624 | ) | ||
|
Non-current portion
|
$ | 169,113 |
The debenture, which was issued to HMC, the seller of BML, on October 14, 2008, did not provide for any interest. Accordingly, the Company recorded the debenture at the $368,704 present value (discounted at a 12% annual interest rate) of the $480,624 total payments due and is amortizing the $121,253 debt discount as interest expense using the interest method over the four year term of the debenture. After October 14, 2012, interest is payable monthly at a 12% annual interest rate. The debenture is secured by the assets of NTMC, including the issued and outstanding shares of BML which were sold to NTMC, and the Mining Property. The debenture is convertible at the option of the holder into units of NTMC at a conversion rate of $0.50 per unit; each unit consists of one share of NTMC common stock and one warrant exercisable into one share of NTMC common stock at a price of $0.60 per share at any time from the exercise of the conversion option to two years thereafter.
NOTE 4 – STOCKHOLDERS’ EQUITY
On February 2, 2005, NTMC effected a 1 for 300 reverse stock split. On September 11, 2008, NTMC effected a 1 for 2000 reverse stock split, and in January 2010, NTMC completed a 2 for 1 forward stock split. The consolidated financial statements have been retroactively adjusted to reflect these stock splits.
In 2007, NTMC issued a total of 37,584 shares of its common stock to settle debt totalling $485,805.
In 2008, NTMC issued a total of 20,210,846 shares of its common stock (including 1,500,000 shares to Capcora Investment Corp., a corporation controlled by Jordan Wangh, NTMC’s President and director, and 1,500,000 shares to Atrypa Gold Corporation, a corporation controlled by Richard Fesiuk, NTMC’s Secretary and director) to settle debt totalling $332,876. On November 26, 2008, NTMC sold a total of 280,000 shares of its common stock to three investors at a price of $0.55 per share or $154,000 total.
At March 31, 2010, the outstanding debenture is convertible into up to 961,248 shares of NTMC common stock and warrants to purchase up to 961,248 additional shares of NTMC common stock at a price of $0.60 per share at any time from the exercise of the conversion option to two years thereafter.
F-9
NT Mining Corporation
(An Exploration Stage Company)
Notes to the Consolidated Financial Statements
(expressed in U.S. dollars)
NOTE 5 – RELATED PARTY TRANSACTIONS
At March 31, 2010, accounts payable and accrued expenses include $5,000 in management fees payable to Jordan Wangh, NTMC’s President and director, $18,948 due to Omnexis Consulting Corp., a corporation controlled by Jordan Wangh, $14,877 due to Richard Fesiuk, NTMC’s Secretary and director, $31,940 in accounting and administrative fees payable to Robert Hughes, the party who controls HMC, and $89,540 due to HMC.
NOTE 6 – INCOME TAXES
For the quarters ended March 31, 2010 and 2009, NTMC and BML recorded no provisions for income taxes as both corporations had negative taxable income for such periods.
Based on management’s present assessment, the Company has not yet determined it to be more likely than not that a deferred tax asset attributable to the future utilization of the net operating loss carryforwards as of March 31, 2010 will be realized. Accordingly, the Company has provided a 100% allowance against the deferred tax asset in the financial statements at March 31, 2010. The Company will continue to review this valuation allowance and make adjustments as appropriate.
Current United States income tax laws limit the amount of loss available to be offset against future taxable income when a substantial change in ownership occurs. Therefore, the amount available to offset future taxable income may be limited.
NOTE 7 – COMMITMENTS AND CONTINGENCIES
Rental agreement – The Company uses office space provided by NTMC’s President and director at no cost to the Company. Subsequent to the period end the company raised the sum of $60,000 by the issue of 200,000 shares of common stock.
F-10
Forward Looking Statements
This quarterly report contains forward-looking statements that involve risks and uncertainties. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology including "could", "may", "will", "should", "expect", "plan", "anticipate", "believe", "estimate", "predict", "potential" and the negative of these terms or other comparable terminology. These statements are only predictions. Actual events or results may differ materially.
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 in this report.
Business Overview
We were incorporated in the State of Nevada on February 10, 1997 and have been known throughout our existence as Clear Water Mining, Inc., E-Casino Gaming Corporation, 1st Genx.com Inc., Oasis Information Systems, Inc. and 777 Sports Entertainment, Corp. On September 26, 2008 we changed our name to NT Mining Corporation.
We currently have one wholly owned subsidiary, Bullmoose Mines Ltd. (“BML”), a company that was incorporated in the Northwest Territories, Canada on February 29, 2000. On October 14, 2008 we acquired 100% of the share capital of BML from Hughes Maritime Corporation pursuant to the terms of a share purchase agreement.
BML owns Mineral Lease #2775 plus four mineral claims located in the South MacKenzie Mining District, Northwest Territories, Canada (the “Mining Property”). According to a geological report issued on May 6, 2008, from 1985 until it was shutdown in January 1987, a former owner of the Mining Property mined and milled approximately 54,000 tons of ore from the property to produce approximately 20,000 ounces of gold.approximately. Subject to the availability of sufficient working capital, we intend, through BML, to erect a portable mill on the site and mill the approximately 10,000 tons of broken material in the coarse “ore” stockpile.
To date, we have completed a limited program on the Mining Property sufficient to maintain the lease and mineral claims in good standing.
Results of Operations
For the Three Months Ended March 31, 2010 and 2009
During the three months ended March 31, 2010 we did not generate any revenues and we incurred a net loss of $101,400, compared to a net loss of $26,454 during the same period in 2009.
Our total operating expenses during the three months ended March 31, 2010 were $85,172, compared to total operating expenses of $15,383 during the same period in 2009, for a net increase of approximately 557%. Our total operating expenses during the three months ended March 31, 2010 consisted of $36,000 in royalty expenses, $12,621 in exploration and field expenses, $258 in depreciation and $36,293 in general and administrative expenses, whereas our expenses for the same period in 2009 consisted of $323 in depreciation and $15,060 in general and administrative expenses. During the three months ended March 31, 2010 we also incurred $16,228 in interest expenses, whereas we incurred $11,071 in interest expenses during the same period in 2009.
Our general and administrative expenses consist primarily of professional fees, consulting and management fees, advertising and promotional expenses, transfer agent fees, travel and auto expenses and general office expenses. Our professional fees include legal, accounting and auditing fees.
For the Period from February 10, 1997 (Date of Inception) to March 31, 2010
From our inception on February 10, 1997 to March 31, 2010 we did not generate any revenues and we incurred a net loss of $7,416,541.
From our inception on February 10, 1997 to March 31, 2010 we incurred total operating expenses of $309,000, including $72,000 in royalty expenses, $31,845 in exploration and field expenses, $5,181 in depreciation and $199,974 in general and administrative expenses. From our inception on February 10, 1997 to March 31, 2010 we also incurred $69,429 in interest expenses and $7,038,112 in expenses associated with discontinued operations.
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Liquidity and Capital Resources
We have limited operational history. As of March 31, 2010 we had $813 in cash, $441,430 in total assets, $684,058 in total liabilities and a working capital deficit of $499,621. As of March 31, 2010 we had an accumulated deficit of $441,430.
We are dependent on funds raised through equity financing and proceeds from related parties. Our net loss of $441,430 from our inception on February 10, 1997 to March 31, 2010 was funded primarily by such financing and proceeds.
During the three months ended March 31, 2010 we spent $96,529 on operating activities, compared to $15,034 during the same period in 2009. From our inception on February 10, 1997 to April 30, 2010 we spent $7,308,923 on operating activities. The increase in our expenditures on operating activities during the three months ended March 31, 2010 was primarily due to an increase in our operating expenses for the period as described above.
During the three months ended March 31, 2010 we did not receive any cash from investing activities, nor did we receive any cash from investing activities during the same period in 2009. From our inception on February 10, 1997 to March 31, 2010 we spent $27,598 on investing activities, including $11,835 on the acquisition of BML.
During the three months ended March 31, 2010 we received $92,503 from financing activities, including $54,403 in proceeds from related parties and $38,000 from the sale of our common stock. During the same period in 2009 we did not receive any cash from financing activities. From our inception on February 10, 1997 to March 31, 2010 we received $7,334,619 from financing activities, including $163,421 in proceeds from related parties and $7,171,198 from the sale of our common stock.
From our inception on February 10, 1997 to March 31, 2010 we also received $2,715 in connection with foreign exchange translation, all of which occurred during the three months ended March 31, 2010.
Our decrease in cash during the three months ended March 31, 2010 was $1,311 due to a combination of our operating and financing activities.
Our plan of operations over the next 12 months is to erect a portable mill on the mining property owned by our wholly owned subsidiary, BML, and mill the approximately 10,000 tons of broken material in the coarse “ore” stockpile that remains on the property as a result of the activities of a former owner. We also plan to continue making payments to Hughes Maritime Corporation as required under the terms of the debenture attached to the share purchase agreement pursuant to which we acquired BML. This debenture is currently in arrears. We expect that we will require approximately $350,000 to pursue our plan of operations over this period.
We intend to raise the additional capital we require from the sale of our equity securities. We do not believe we will be able to raise a material amount of funds from debt financing. There is no assurance that we will be able to raise the necessary financing from the sale of our securities, and if we are unable to raise sufficient funds to finance our operations our business may fail. In addition, if we are unable to raise the funds required to expand our operations, we may be required to significantly scale back our plans and our business could fail.
Going Concern
Our financial statements for the three months ended March 31, 2010 have been prepared on a going concern basis and contain an additional explanatory paragraph in Note 1 which identifies issues that raise substantial doubt about our ability to continue as a going concern. Our financial statements do not include any adjustments that might result from the outcome of this uncertainty.
We have not generated any revenues, have achieved losses since our inception, and rely upon the sale of our common stock to fund our operations. If we are unable to raise equity or secure alternative financing, we may not be able to continue our operations and our business plan may fail.
If our operations and cash flow improve, management believes that we can continue to operate. However, no assurance can be given that management's actions will result in profitable operations or an improvement in our liquidity situation. The threat of our ability to continue as a going concern will cease to exist only when our revenues have reached a level able to sustain our business operations.
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Off-Balance Sheet Arrangements
We have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to stockholders.
Inflation
The amounts presented in our financial statements do not provide for the effect of inflation on our operations or financial position. The net operating losses shown would be greater than reported if the effects of inflation were reflected either by charging operations with amounts that represent replacement costs or by using other inflation adjustments.
Not applicable.
Evaluation of Disclosure Controls and Procedures
We maintain disclosure controls and procedures, as defined in Rule 13a-15(e) and Rule 15d-15(e) promulgated under the Securities Exchange Act of 1934 (the "Exchange Act"), that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.
As of the end of the period covered by this report, our management, with the participation of our Chief Executive Officer and Chief Financial Officer, carried out an evaluation of the effectiveness of our disclosure controls and procedures. Based upon this evaluation, our management concluded that our disclosure controls and procedures were not effective to ensure that information we are required to disclose in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information was not accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.
Changes in Internal Control
During the three months ended March 31, 2010 there were no changes in our internal control over financial reporting (as defined in Rule 13a-15(e) and Rule 15d-15(e) under the Exchange Act) that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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Item 1. Legal Proceedings
We are not aware of any legal proceedings to which we are a party. None of our directors, officers, affiliates, any owner of record or beneficially of more than 5% of our voting securities, or any associate of any such director, officer, affiliate or security holder are (i) a party adverse to us in any legal proceedings, or (ii) have a material interest adverse to us in any legal proceedings. We are not aware of any other legal proceedings that have been threatened against us.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
During the past three years we made the following undisclosed sales of securities that were not registered under the Securities Act:
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on June 2, 2009 we issued 10,000 shares of our common stock to one non-U.S. investor at a price of $0.55 per share in exchange for cash proceeds of $5,500;
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on October 5, 2009 we issued 40,000 shares of our common stock to one non-U.S. investor at a price of $0.25 per share in exchange for cash proceeds of $10,000;
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on November 25, 2009 we issued 40,000 shares of our common stock to one non-U.S. investor at a price of $0.25 per share in exchange for cash proceeds of $10,000;
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on December 22, 2009 we issued 20,000 shares of our common stock to one non-U.S. investor at a price of $0.25 per share in exchange for cash proceeds of $5,000;
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on January 15, 2010 we issued 152,000 shares of our common stock to eight non-U.S. investors at a price of $0.25 per share in exchange for cash proceeds of $38,000.
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These securities were issued without a prospectus pursuant to Regulation S under the Securities Act. Our reliance upon Rule 903 of Regulation S was based on the fact that the sales of the securities were completed in an "offshore transaction", as defined in Rule 902(h) of Regulation S. We did not engage in any directed selling efforts, as defined in Regulation S, in the United States in connection with the sale of the securities. Each investor was not a U.S. person, as defined in Regulation S, and was not acquiring the securities for the account or benefit of a U.S. person.
Item 3. Defaults Upon Senior Securities
As a condition of our share purchase agreement with Hughes Maritime Corporation dated October 14, 2008, we entered into a debenture agreement with Hughes Maritime Corporation pursuant to which we agreed to pay Hughes Maritime Corporation the sum of $120,624 by October 14, 2009. As of the date of this quarterly report, the debenture is in arrears in the amount of $120,624.
None.
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Exhibit Number
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Exhibit Description
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6
SIGNATURES
Pursuant to the requirements of the Exchange Act, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
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NT Mining Corporation
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(Registrant)
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Date: July 15, 2010
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/s/ Jordan Wangh
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Jordan Wangh
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President and Chief Executive Officer
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