Attached files
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 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 November 30, 2010
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from ________ to ________
Commission file # 001-34039
CASTMOR RESOURCES LTD.
(Exact Name of Registrant as Specified in its Charter)
NEVADA
(State or other jurisdiction of incorporation or organization)
98-0471928
(I.R.S. Employer Identification number)
427 Princess Street, Suite 406
Kingston, ON K7L 5S9
(Address of principal executive offices)
Issuer's telephone number: (613) 617-5107
Securities registered under Section 12(b) of the Act: NONE
Securities registered pursuant to Section 12(g) of the Act:
COMMON STOCK, $0.0001 PAR VALUE
Indicate by check mark whether the registrant (1) filed all reports required to
be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12
months (or for such shorter period that the Issuer was required to file such
reports), and (2) has been subject to such filing requirements for the past 90
days. Yes [ x ] No [ ]
Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of "large accelerated filer," "accelerated filer" and "smaller
reporting company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer [ ] Accelerated filer [ ]
Non-accelerated filer [ ] Smaller reporting company [X]
Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). Yes [ ] No [X]
As of January 14, 2011, the registrant had 12,487,000 shares of its Common Stock
outstanding.
PART I -- FINANCIAL INFORMATION
CASTMOR RESOURCES LTD.
(An exploration stage company)
Balance Sheets
November 30, 2010
(Unaudited - Prepared by Management)
(Expressed in U.S. Dollars)
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November 30 August 31
2010 2010
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ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 15,671 $ 29,032
Prepaid expenses 14,649 63,806
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TOTAL ASSETS $ 30,320 $ 92,838
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LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
CURRENT LIABILITIES
Accounts payable and accrued liabilities 9,981 4,934
Promissory note - current (Note 4) 52,014 -
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61,995 4,934
LONG-TERM LIABILITIES
Promissory note (Note 4) - 50,000
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TOTAL LIABILITIES 61,995 54,934
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STOCKHOLDERS' EQUITY
SHARE CAPITAL
Authorized:
100,000,000 preferred shares at a par value of $0.0001 per share
Issued and outstanding: Nil
900,000,000 common shares with a par value of $0.0001 per share
Issued and outstanding: 12,487,000 common shares 1,249 249
(August 31, 2010: 2,487,000)
ADDITIONAL PAID-IN CAPITAL 128,631 79,631
SHARE SUBSCRIPTIONS RECEIVED - 50,000
(DEFICIT) ACCUMULATED DURING THE EXPLORATION STAGE (161,555) (91,976)
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TOTAL STOCKHOLDERS' EQUITY (31,675) 37,904
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 30,320 $ 92,838
======================================================================================================
The accompanying notes are an integral part of these financial statements.
CASTMOR RESOURCES LTD.
(An exploration stage company)
Statements of Stockholders' Equity
For the period from June 27, 2005 (inception) to November 30, 2010
(Unaudited - Prepared by Management)
(Expressed in U.S. Dollars)
------------------------------------------------------------------------------------------------------------------------------------
Deficit
accumulated Total
Additional Share during stockholders'
Preferred Stock Common Stock paid-in subscriptions exploration equity
Shares Amount Shares Amount capital received stage (deficiency)
Issuance of common stock for settlement - $ - 2,060,000 $ 206 $ 824 $ - $ - $ 1,030
of debt July 16, 2005 ($0.0001 per share)
Loss and comprehensive loss for the period - - - - - - (1,914) (1,914)
------------------------------------------------------------------------------------------------------------------------------------
Balance, August 31, 2005 - $ - 2,060,000 $ 206 $ 824 $ - $ (1,914) $ (884)
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Issuance of common stock for cash - $ - 150,000 $ 15 $ 14,985 $ - $ - $ 15,000
October 25, 2005 ($0.02 per share)
Issuance of common stock for settlement - $ - 36,000 $ 4 $ 3,596 $ - $ - $ 3,600
of debt October 31, 2005 ($0.02 per share)
Loss and comprehensive loss for the year - - - - - - (9,537) (9,537)
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Balance, August 31, 2006 - $ - 2,246,000 $ 225 $ 19,405 $ - $ (11,451) $ 8,179
------------------------------------------------------------------------------------------------------------------------------------
Loss and comprehensive loss for the year - - - - - - (5,404) (5,404)
------------------------------------------------------------------------------------------------------------------------------------
Balance, August 31, 2007 - $ - 2,246,000 $ 225 $ 19,405 $ - $ (16,855) $ 2,775
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Issuance of common stock for cash, - $ - 241,000 $ 24 $ 60,226 $ - $ - $ 60,250
November 30, 2007 ($0.05 per share)
Loss and comprehensive loss for the year - - - - - - (19,035) (19,035)
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Balance, August 31, 2008 - $ - 2,487,000 $ 249 $ 79,631 $ - $ (35,890) $ 43,990
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Loss and comprehensive loss for the year - - - - - - (28,906) (28,906)
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Balance, August 31, 2009 - $ - 2,487,000 $ 249 $ 79,631 $ - $ (64,796) $ 15,084
------------------------------------------------------------------------------------------------------------------------------------
Share subscriptions received - $ - - $ - $ - $ 50,000 $ - $ 50,000
Loss and comprehensive loss for the year - - - - - - (27,180) (27,180)
------------------------------------------------------------------------------------------------------------------------------------
Balance, August 31, 2010 - $ - 2,487,000 $ 249 $ 79,631 $ 50,000 $ (91,976) $ 37,904
------------------------------------------------------------------------------------------------------------------------------------
Issuance of common stock for cash, - $ - 10,000,000 $ 1,000 49,000 $ (50,000) $ - $ -
September 22, 2010 ($0.005 per share)
Loss and comprehensive loss for the period - - - - - - (69,579) (69,579)
------------------------------------------------------------------------------------------------------------------------------------
Balance, November 30, 2010 - $ - 12,487,000 $ 1,249 $ 128,631 $ - $ (161,555) $ (31,675)
====================================================================================================================================
The accompanying notes are an integral part of these financial statements
CASTMOR RESOURCES LTD.
(An exploration stage company)
Statements of Operations and Comprehensive Loss
(Unaudited - Prepared by Management)
(Expressed in U.S. Dollars)
-------------------------------------------------------------------------------------------------
Cumulative from
June 27, 2005 Three months ended
(inception) to November 30 November 30
November 30, 2010 2010 2009
-------------------------------------------------------------------------------------------------
EXPENSES
Bank charges $ 524 $ 86 $ 45
Consulting fees 24,847 11,148 -
Interest 4,350 2,014 -
Office expenses 9,915 36 -
Professional fees 96,787 46,515 5,041
Resource property acquisition and exploration costs 14,705 9,705 -
Transfer Expenses 2,358 75 -
Write-off mineral deposit 8,069 - -
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LOSS FROM OPERATIONS 161,555 69,579 5,086
-------------------------------------------------------------------------------------------------
NET LOSS AND COMPREHENSIVE LOSS FOR THE PERIOD $ (161,555) $ (69,579) $ (5,086)
-------------------------------------------------------------------------------------------------
BASIC AND DILUTED LOSS PER SHARE $ (0.01) $ (0.01)
=================================================================================================
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING
- basic and diluted 10,095,696 2,487,000
=================================================================================================
The accompanying notes are an integral part of these financial statements
CASTMOR RESOURCES LTD.
(An exploration stage company)
Statements of Cash Flows
(Unaudited - Prepared by Management)
(Expressed in U.S. Dollars)
---------------------------------------------------------------------------------------------------------
Cumulative from
June 27, 2005
(inception) to Three months ended
November 30, 2010 November 30, 2010 November 30, 2009
---------------------------------------------------------------------------------------------------------
CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES
Net (Loss) for the period $ (161,555) $ (69,579) $ (5,086)
Adjustment for item not involving cash:
- Accrued interest of promissory note 2,014 2,014 -
Changes in operating assets and liabilities
- increase (decrease) in prepaid expenses (14,649) 49,157 -
- accounts payable and accrued liabilities 9,981 5,047 4,925
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NET CASH USED IN OPERATING ACTIVITIES (164,209) (13,361) (161)
---------------------------------------------------------------------------------------------------------
CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES
Proceeds from promissory note 50,000 - -
Proceeds from issuance of common stock 129,880 - -
---------------------------------------------------------------------------------------------------------
NET CASH PROVIDED BY FINANCING ACTIVITIES 179,880 - -
---------------------------------------------------------------------------------------------------------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 15,671 (13,361) (161)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD - 29,032 17,707
---------------------------------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 15,671 $ 15,671 $ 17,546
=========================================================================================================
SUPPLEMENTAL CASH FLOW INFORMATION
=========================================================================================================
Interest paid $ - $ - $ -
=========================================================================================================
Income taxes paid $ - $ - $ -
=========================================================================================================
The accompanying notes are an integral part of these financial statements
NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS
Castmor Resources Ltd. (hereinafter "the Company") was incorporated in the State
of Nevada, U.S.A., on June 27, 2005. The Company's fiscal year end is August
31.
The Company has been in the exploration stage since its formation and has not
yet realized any revenues from its operations. It is primarily engaged in the
acquisition and exploration of mining properties. Upon location of a
commercially minable reserve, the Company expects to actively prepare the site
for its extraction and enter a development stage. In 2005, the Company acquired
mineral interests in two non-contiguous properties located along southeastern
coastal Labrador, approximately 13 kilometers northeast of the community of
Charlottetown, Labrador, Canada. In 2009, the Company's interest in these
mineral properties were forfeited. On September 20, 2010, the Company
reacquired its interest in the mineral properties.
Effective August 19, 2010, the Company effected a five (5) for one (1) share
reverse split of our authorized and issued and outstanding common stock. As a
result of the reverse split, the Company's issued and outstanding common stock
was reduced from 12,435,000 shares to 2,487,000 shares.
These financial statements have been prepared in accordance with generally
accepted accounting principles in the United States of America applicable to a
going concern which assume that the Company will realize its assets and
discharge its liabilities in the normal course of business. The Company has
incurred accumulated losses of $161,555 since inception and has no source of
revenue. The future of the Company is dependent upon its ability to obtain
financing and upon future acquisition. These factors create doubt as to the
ability of the Company to continue as a going concern. Realization values may
be substantially different from the carrying values as shown in these financial
statements should the Company be unable to continue as a going concern.
Management is in the process of identifying sources for additional financing to
fund the ongoing development of the Company's business.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The financial statements of the Company have been prepared in accordance with
the generally accepted accounting principles in the United States of America.
Because a precise determination of many assets and liabilities is dependent upon
future events, the preparation of financial statements for a period necessarily
involves the use of estimates that have been made using careful judgment. The
financial statements have, in management's opinion been properly prepared within
reasonable limits of materiality and within the framework of the significant
accounting policies summarized below:
Accounting Method
The Company's financial statements are prepared using the accrual basis of
accounting in accordance with accounting principles generally accepted in the
United States of America.
Cash and Cash Equivalents
For purposes of the statement of cash flows, the Company considers all highly
liquid investments and short-term debt instruments with original maturities of
three months or less to be cash equivalents. As at November 30, 2010 and
August 31, 2010, there were no cash equivalents.
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities, and disclosure of
contingent assets and liabilities at the date of the financial statements, and
the reported amounts of revenues and expenses for the reporting period. Actual
results could differ from these estimates.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Concentration of Credit Risk
The Company places its cash and cash equivalents with high credit quality
financial institutions. There is no deposit insurance on the Company's
accounts.
Foreign Currency Transactions
The Company is located and operating outside of the United States of America.
The Company's functional currency and reporting currency, is U.S. Dollars. At
the transaction date, each asset, liability, revenue and expense is translated
into U.S. dollars by the use of the exchange rate in effect at that date. At
the period end, monetary assets and liabilities are re-measured by using the
exchange rate in effect at that date. The resulting foreign exchange gains and
losses are included in operations.
Fair Value of Financial Instruments
ASC 820 "Fair Value Measurements and Disclosures" requires an entity to maximize
the use of observable inputs and minimize the use of unobservable inputs when
measuring fair value. ASC 820 establishes a fair value hierarchy based on the
level of independent, objective evidence surrounding the inputs used to measure
fair value. A financial instrument's categorization within the fair value
hierarchy is based upon the lowest level of input that is significant to the
fair value measurement. ASC 820 prioritizes the inputs into three levels that
may be used to measure fair value:
Level 1 - Quoted prices in active markets for identical assets or liabilities;
Level 2 - Inputs other than quoted prices included within Level 1 that are
either directly or indirectly observable; and
Level 3 - Unobservable inputs that are supported by little or no market
activity, therefore requiring an entity to develop its own assumptions about the
assumptions that market participants would use in pricing.
The Company's financial instruments include cash and cash equivalents, accounts
payable and accrued liabilities and promissory notes. Fair values were assumed
to approximate carrying value for these financial instruments, except where
noted. Management is of the opinion that the Company is not exposed to
significant interest or credit risks arising from these financial instruments.
The Company is operating outside the United States of America and has
significant exposure to foreign currency risk due to the fluctuation of currency
in which the Company operates and U.S. dollars.
Mineral Property Payments and Exploration Costs
Mineral property acquisition costs are initially capitalized as tangible assets
when purchased. The Company assesses the carrying costs for impairment when
indicators of impairment exist. If proven and probable reserves are established
for a property and it has been determined that a mineral property can be
economically developed, costs will be amortized using the units-of-production
method over the estimated total recoverable proven and probable reserves..
Mineral property exploration and development costs are expensed as incurred
until the establishment of economically viable reserves.
Long-lived Assets Impairment
Long-lived assets of the Company are reviewed for impairment whenever events or
circumstances indicate that the carrying amount of assets may not be
recoverable, pursuant to guidance established in ASC 360, Property, Plant and
Equipment.
Management considers assets to be impaired if the carrying value exceeds the
future projected cash flows from related operations (undiscounted and without
interest charges). If impairment is deemed to exist, the assets will be written
down to fair value. Fair value is generally determined using a discounted cash
flow analysis.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Assets Retirement Obligations
The Company has adopted ASC 410, Asset Retirement and Environmental Obligations,
which requires that the fair value of a liability for an asset retirement
obligation be recognized in the period in which it is incurred. ASC 410 requires
the Company to record a liability for the present value of the estimated site
restoration costs with corresponding increase to the carrying amount of the
related long-lived assets. The liability will be accreted and the asset will be
depreciated over the life of the related assets. Adjustments for changes
resulting from the passage of time and changes to either the timing or amount of
the original present value estimate underlying the obligation will be made. As
at November 30, 2010 and August 31, 2010, the Company does not have any asset
retirement obligations.
Costs associated with environmental remediation obligations will be accrued when
it is probable that such costs will be incurred and they can be reasonably
estimated.
Stock-Based Compensation
The Company adopted ASC 718, Compensation - Stock-Based Compensation, to account
for its stock options and similar equity instruments issued. Accordingly,
compensation costs attributable to stock options or similar equity instruments
granted are measured at the fair value at the grant date, and expensed over the
expected vesting period.
The Company did not grant any stock options during the periods ended November
30, 2010 and 2009.
Comprehensive Income
The Company adopted ASC 220, Comprehensive Income, which establishes standards
for reporting and display of comprehensive income, its components and
accumulated balances. The Company is disclosing this information on its
Statement of Stockholders' Equity. Comprehensive income comprises equity except
those resulting from investments by owners and distributions to owners. The
Company has no elements of "other comprehensive income" for the periods ended
November 30, 2010 and 2009.
Income Taxes
The Company has adopted ASC 740, Income Taxes, which requires the Company to
recognize deferred tax liabilities and assets for the expected future tax
consequences of events that have been recognized in the Company's financial
statements or tax returns using the liability method. Under this method,
deferred tax liabilities and assets are determined based on the temporary
differences between the financial statement and tax bases of assets and
liabilities using enacted tax rates in effect in the years in which the
differences are expected to reverse.
Basic and Diluted Loss Per Share
In accordance with ASC 260, Earnings Per Share, the basic loss per common share
is computed by dividing net loss available to common stockholders by the
weighted average number of common shares outstanding. Diluted loss per common
share is computed similar to basic loss per common share except that the
denominator is increased to include the number of additional common shares that
would be outstanding if the potential common shares had been issued and if the
additional common shares were dilutive.
New Accounting Pronouncements
In January 2010, the FASB issued an update to the Fair Value topic. This update
requires new disclosures for (1) transfers in and out of levels 1 and 2, and (2)
activity in level 3, by requiring the reconciliation to present separate
information about purchases, sales, issuance, and settlements. Also, this
update clarifies the disclosures related to the fair value of each class of
assets and liabilities and the input and valuation techniques for both recurring
and nonrecurring fair value measurements in levels 2 and 3. the effective date
for the disclosures and clarifications is for the interim and annual reporting
periods beginning after December 15, 2009 except for the disclosures about
purchases, sales, issuances and settlements, which is effective for fiscal years
beginning after December 15, 2010. This update is not expected to have a
material impact on the Company's financial statements.
In February 2010, the FASB issued ASC No. 2010-09, "Amendments to Certain
Recognition and Disclosure Requirements", which eliminates the requirement for
SEC filers to disclose the date through which an entity has evaluated subsequent
events. ASC No. 2010-09 is effective for its fiscal quarter beginning after 15
December 2010. The adoption of ASC No. 2010-09 is not expected to have a
material impact on the Company's financial statements ASU No. 2010-13 was issued
in April 2010, and clarified the classification of an employee share based
payment award with an exercise price denominated in the currency of a market in
which the underlying security trades. This ASU will be effective for the first
fiscal quarter beginning after December 15, 2010, with early adoption permitted.
The adoption of ASU No. 2010-13 is not expected to have a material impact on the
Company's financial statements.
Other accounting standards that have been issued or proposed by the FASB or
other standards-setting bodies that do not require adoption until a future date
are not expected to have a material impact on the Company's financial statements
upon adoption.
NOTE 3 - MINERAL PROPERTY INTEREST
On October 31, 2005 the Company acquired a 100% interest in two non-contiguous
mineral claims located along southeastern coastal Labrador, approximately 13
kilometers northeast of the community of Charlottetown, Labrador, Canada. The
claims were acquired from Mr. Thomas Mills for a consideration of $4,250 CAD
which covered an exploration program security deposit and staking and other
related costs of $401 (CAD$450) and $3,199 (CAD$3,800), respectively. The
Company expensed the staking and other related costs of $3,199 in connection
with the acquisition of the mineral claims.
One of the licenses comprising eight claims, was inadvertently allowed to expire
and was cancelled on January 24, 2007. The Company reacquired a 100% interest
in the same eight claims under a new mineral license by a Transfer of Mineral
Disposition dated July 16, 2007, from Mr. Thomas Mills, for $505 CAD. The
Company expensed the entire cost of reacquiring the mineral claims.
Up to August 31, 2009, the Company has paid $8,069 towards a security deposit on
its exploration program. The Company was required to incur total exploration
expenditures of CAD$13,500 for the above noted mineral claims before July 13,
2009. The Company failed to do so, or to pay any further deposit on exploration
activities with the mining division of Labrador Canada. As a result, the
Company has forfeited its mineral claims and wrote off the prepaid security
deposit in the amount of $8,069 in 2009.
On September 20, 2010, the Company reacquired a 100% interest in the same two
non-contiguous mineral claims that it originally acquired on October 31, 2005
and subsequently forfeited. These two non-contiguous mineral claims located
along southeastern coastal Labrador, approximately 13 kilometers northeast of
the community of Charlottetown, Labrador, Canada. The claims were acquired from
Mr. Thomas Mills for a cash consideration of $10,000. Mr. Mills became a
controlling shareholder of the Company on September 22, 2010.
NOTE 4 - PROMISSORY NOTE
On August 31, 2010, the Company received advances of $50,000 from a third party,
to whom the Company issued a promissory note for the same amount on September
21, 2011. The promissory note is due and payable on September 21, 2011 and
accrues interest from September 21, 2010 at the rate of 20% per annum,
calculated semi-annually, payable on the due date. The Company may redeem the
promissory note in whole or in part at any time prior to the due date. As of
November 31, 2010, the Company has made no repayment in respect of the
promissory note and accrued interest of $2,014.
NOTE 5 - RELATED PARTY TRANSACTIONS
See Note 3 and Note 6.
Included in the prepaid expenses as of November 30, 2010, the amount $2,400 was
prepaid to Moneris Corporate Services Ltd. ("Moneris"), a consulting firm
controlled by mother of the major shareholder (after the private placement on
September 22, 2010).
Included in the accounts payable and accrued liabilities as of November 30,
2010, $1,229 (August 31, 2010 - $1,229) was due to Moneris and $2,000 (August
31, 2010 - $1,852) was due to the major shareholder for the advanced operating
expenses.
Included in the consulting expenses as of November 30, 2010, the amount $7,700
was incurred to Moneris.
NOTE 6 - PREFERRED AND COMMON STOCK
The Company has 100,000,000 shares of preferred stock authorized and none
issued.
The Company has 900,000,000 shares of common stock authorized, of which
12,487,000 shares are issued and outstanding. All shares of common stock are
non-assessable and non-cumulative, with no preemptive rights.
On September 22, 2010, the Company completed a private placement of 10,000,000
shares of the Company's common stock to Thomas Mills at a price of $0.005 per
share for gross proceeds of $50,000.
NOTE 7 - SEGMENT INFORMATION
The Company currently conducts all of its operations in Canada.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS
THE FOLLOWING DISCUSSION AND ANALYSIS OF OUR PLAN OF OPERATION SHOULD BE READ IN
CONJUNCTION WITH THE FINANCIAL STATEMENTS AND THE RELATED NOTES. THIS DISCUSSION
CONTAINS FORWARD-LOOKING STATEMENTS BASED UPON CURRENT EXPECTATIONS THAT INVOLVE
RISKS AND UNCERTAINTIES, SUCH AS OUR PLANS, OBJECTIVES, EXPECTATIONS AND
INTENTIONS. OUR ACTUAL RESULTS AND THE TIMING OF CERTAIN EVENTS COULD DIFFER
MATERIALLY FROM THOSE ANTICIPATED IN THESE FORWARD-LOOKING STATEMENTS.
OVERVIEW
We are an exploration stage company in that we are engaged in the search for
mineral deposits that are not in either the development or production stage,
with a view to exploiting any mineral deposits we discover that demonstrate
economic feasibility. Since we are an exploration stage company, there is no
assurance that commercially exploitable reserves of valuable minerals exist on
our property. We need to do further exploration before a final evaluation of
the economic and legal feasibility of our future exploration is determined.
We have not commenced business operations. To date, our activities have been
limited to organizational matters, acquiring our mineral claims, researching our
claims, raising capital and the preparation of our securities filings. Our
assets are limited to our mineral claims, the acquisition of which have been
recorded as an expense in our financial statements in accordance with our
accounting policy.
Mineral property exploration is typically conducted in phases. Each subsequent
phase of exploration work is recommended by a geologist based on the results
from the most recent phase of exploration. We have not yet commenced the
initial phase of exploration on the White Bear Arm Property. Upon completion of
each phase of exploration, we will make a decision as to whether or not we will
proceed with each successive phase based upon the analysis of the results of
that program. Our Board of Directors will make this decision based upon the
recommendations of an independent geologist who will oversee the program and
record the results.
We presently have no known reserves of any type of mineral. We plan to conduct
appropriate exploration work on the White Bear Arm Property in order to
ascertain whether it possesses commercially exploitable reserves of valuable
minerals. There can be no assurance that commercially exploitable reserves of
valuable minerals exist on the White Bear Arm Property or that we will discover
them, if they exist. If we are unable to find reserves of valuable minerals or
we cannot remove the minerals because we either do not have the capital to do
so, or because it is not economically feasible to do so, then we may cease
operations and our shareholders may lose their investment.
Our business plan is to explore the White Bear Arm Property to determine whether
it contains commercially exploitable reserves of valuable minerals. We intend
to proceed with Phase I of our proposed exploration program. Phase I will
consist of expanded geological mapping, and geochemical sampling that will cover
previously established grid areas, as well as other prospective sites that may
be developed to delineate either base metals or industrial minerals.
Geochemical sampling will include rock, stream sediment and till sampling.
Several airborne electromagnetic anomalies will be re-verified on the ground and
mapped for size and extent. If Phase I develops any high priority targets for
further exploration, then we will proceed with Phase II of the proposed
exploration program, consisting of 800 to 1000 metres of diamond drilling,
mobilized to the nearest road by truck, then helicopter-supported from that
point. We anticipate that Phase I will cost approximately $26,680 while Phase
II would cost approximately $195,500. To date, we have not commenced
exploration on the White Bear Arm Property.
We expect that Phase I of our exploration program will be concluded by July 30,
2011. During Phase I we will retain a consulting geologist to review all past
exploration data relating to the White Bear Arm Property and plot relevant
information on a map. This is known as geological mapping. Based on this
mapping, the geologist will choose property areas that are most likely to host
economic mineralization. He will then conduct a sampling program focusing on
these property areas by gathering rock and soil samples from the identified
areas that appear to contain mineralization. The samples will be sent to a
laboratory for mineral analysis. By August 31, 2011, we should receive the
results of the sample analysis and be able to determine which property areas, if
any, contain significant mineralization.
If the results of Phase I warrant further exploration, we plan to complete Phase
II of the exploration program later in 2011, or during 2012. Phase II will take
approximately three months to complete and will consist of using heavy equipment
to drill up to five holes to a depth of 200 meters. Drilling locations will be
determined by analyzing the results of the Phase I sampling program. Cylinders
of rock will be removed from the drill holes and sent to a laboratory for
mineral analysis. Results will indicate the presence of any minerals below the
property surface.
We have sufficient capital to complete Phase I of our exploration program, but
we have insufficient funds to begin Phase II. If Phase I of our exploration
program identifies high priority targets for further exploration in Phase II,
then we will be required to raise additional financing to fund Phase II.
Subject to financing, we expect to complete Phase II within 12 months of
obtaining our Phase I results.
We anticipate that any additional funding that we require will be in the form of
equity financing from the sale of our common stock. There is no assurance,
however, that we will be able to raise sufficient funding from the sale of our
common stock. The risky nature of this enterprise and lack of tangible assets
places debt financing beyond the credit-worthiness required by most banks or
typical investors of corporate debt until such time as an economically viable
mine can be demonstrated. We do not have any arrangements in place for any
future equity financing. If we are unable to secure additional funding, we may
cease or suspend operations. We have no plans, arrangements or contingencies in
place in the event that we cease operations.
Our sole officer and director has other outside business activities and will
only be devoting approximately six hours per week of his time to our business.
We do not foresee this limited involvement as negatively impacting our Company
over the next 12 months because all exploratory work is being performed by an
outside consultant. If, however, the demands of our business require more time
of our sole officer, such as raising additional capital or addressing unforeseen
issues with regard to our exploration efforts, he is prepared to adjust his
timetable to devote more time to our business. He may, however, not be able to
devote sufficient time to the management of our business, as and when needed.
We do not have any verbal or written agreement regarding the retention of any
qualified engineer or geologist for our exploration program.
We do not have plans to purchase any significant equipment or to hire any
employees during the next 12 months, or until we have proved reserves.
We have not earned revenue since inception and we presently have no proven or
probable mineral reserves. There is no assurance that our mineral claims
contain commercially exploitable reserves of valuable minerals. Since
inception, we have suffered recurring losses and net cash outflows from
operations, and our activities have been financed from the proceeds of share
subscriptions and loans from management and non-affiliated third parties. We
expect to continue to incur substantial losses to implement our business plan.
We have not established any other source of equity or debt financing and there
can be no assurance that we will be able to obtain sufficient funds to implement
our business plan. As a result of the foregoing, our auditors have expressed
substantial doubt about our ability to continue as a going concern. If we
cannot continue as a going concern, then our investors may lose all of their
investment.
RESULTS OF OPERATIONS
Our business is in the early stage of exploration. Since inception on June 27,
2005 we have not earned any revenue and we have not identified any commercially
exploitable reserves of valuable minerals on our property. We do not anticipate
earning revenue until such time as we have entered into commercial production of
the White Bear Arm Property. We are presently in the exploration stage of our
business and we can provide no assurance that we will discover commercially
exploitable reserves of valuable minerals on the White Bear Arm Property, or
that if such resources are discovered that we will commercially produce them.
We posted an operating loss of $69,579 for the three month period ended November
30, 2010, due to professional fees of $46,515, consulting fees of $11,148,
resource acquisition costs of $9,705, interest expenses of $2,014 and other
miscellaneous expenses of $197. This was an increase from the operating loss of
$5,086 for the previous fiscal year.
LIQUIDITY AND CAPITAL RESOURCES
On August 30, 2010, we received a deposit of $50,000 from Thomas Mills with
respect to a private placement of 10,000,000 shares of our common stock to Mr.
Mills at a price of $0.005 per share (the "Private Placement"). The closing of
the Private Placement took place on September 22, 2010 with the execution of a
subscription agreement by Mr. Mills.
On August 31, 2010, we received a deposit of $50,000 with respect to a debt
financing by an unaffiliated third party that closed on September 21, 2010 with
the issuance by Castmor of a promissory note (the "Loan"). The Loan is due and
payable on September 21, 2011 and accrues interest from September 21, 2010 at
the rate of 20% per annum, calculated semi-annually, payable on the due date.
We may repay the Loan in whole or in part at any time prior to the due date. As
of November 30, 2010, the Loan has accrued $2,014 in interest. We have not made
any payment in respect of the Loan.
As of November 30, 2010, we had total assets of $30,320 comprised of $15,671 in
cash and $14,649 in prepaid expenses. This reflects a decrease of the value of
our total assets from $92,838 on August 31, 2010.
As of November 30, 2010, our total liabilities increased to $61,995 from $54,934
as of August 31, 2010. The increase was primarily due to unpaid professional
fees and accrued interest expense on promissory note.
As a result of our recent financing activities, we have sufficient working
capital to maintain our present level of operations for the next 12 months and
to complete Phase I of our proposed exploration program, but not Phase II. We
will be required to seek additional funding in order to complete Phase II of our
exploration program.
We anticipate that any additional funding that we require will be in the form of
equity financing from the sale of our common stock. There is no assurance,
however, that we will be able to raise sufficient funding from the sale of our
common stock. The risky nature of this enterprise and lack of tangible assets
places debt financing beyond the credit-worthiness required by most banks or
typical investors of corporate debt until such time as an economically viable
mine can be demonstrated. We do not have any arrangements in place for any
future equity financing. If we are unable to secure additional funding, we may
cease or suspend operations. We have no plans, arrangements or contingencies in
place in the event that we cease operations.
(i)
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
We are not a party to any material legal proceedings and to its knowledge, no
such proceedings are threatened or contemplated.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
On September 22, 2010, we issued 10,000,000 shares of our common stock at a
price of $0.005 per share to one purchaser for total cash proceeds of $50,000.
The shares were issued without registration in reliance on an exemption provided
by Rule 903(b)(3) of Regulation S promulgated under the Securities Act. No
general solicitation was made in connection with the offer or sale of these
securities.
ITEM 3. DEFAULT UPON SENIOR NOTES
Not applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS
EXHIBIT DESCRIPTION
31.1 Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1 Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
CASTMOR RESOURCES LTD.
Date: January 14, 2011 /s/ Alfonso Quijada
Alfonso Quijada
President, Chief Executive Officer,
Chief Financial Officer, and
Principal Accounting Office
