Attached files
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] Quarterly Report under Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the quarterly period ended November 30, 2010
[ ] Transition report under Section 13 or 15(d) of the Exchange Act
For the transition period from __________ to __________
Commission File Number: 333-135354
OROFINO GOLD CORP.
(Exact name of Registrant as specified in its charter)
Nevada 98-0453936
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
93-B342 Xinliu Street, Zhong Shan District
Dalian 116001, China Telephone: 011-86 411 8272 6933
(Address of principal executive offices) (Registrant's telephone number,
including area code)
Former Name, Address and Fiscal Year, If Changed Since Last Report
Check whether the issuer: (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes [X] No [ ]
We had a total of 70,200,000 shares of common stock issued and outstanding at
January 17, 2011.
Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). Yes [ ] No [X]
Transitional Small Business Disclosure Format: Yes [ ] No [X]
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
The interim financial statements included herein are unaudited but reflect, in
management's opinion, all adjustments, consisting only of normal recurring
adjustments, that are necessary for a fair presentation of our financial
position and the results of our operations for the interim periods presented.
Because of the nature of our business, the results of operations for the
quarterly period ended November 30, 2010 are not necessarily indicative of the
results that may be expected for the full fiscal year.
OROFINO GOLD CORP.
(A Development Stage Company)
INTERIM FINANCIAL STATEMENTS
November 30, 2010
(Stated in US Dollars)
(Unaudited)
2
Orofino Gold Corp.
(A Development Stage Company)
Balance Sheets
(Stated in US Dollars) (unaudited)
November 30, May 31,
2010 2010
---------- ----------
Unaudited Unaudited
Assets
Current Assets
Prepaid expense $ 985 $ 985
---------- ----------
Total Current Assets 985 985
Non-Current Assets
Mineral Properties 5,867 --
Deposits 267 267
---------- ----------
Total Non-Current Assets 6,134 267
---------- ----------
Total Assets $ 7,119 $ 1,252
========== ==========
Liabilities
Current Liabilities
Accounts Payable $ 59,686 $ 139,089
Loans payable 593,419 490,334
---------- ----------
Total Current Liabilities 653,105 629,423
---------- ----------
Total Liabilities 653,105 629,423
---------- ----------
Stockholders' Deficiency
Common Stock, $0.001 par value
75,000,00 Common Shares Authorized
60,000,000 Shares Issued 70,200 60,000
Additional Paid-in capital 174,267 (49,533)
Deficit accumulated during development period (891,289) (639,474)
Translation Adjustments 836 836
---------- ----------
Total Stockholders' Deficit (645,986) (628,171)
---------- ----------
Total Liabilities and Stockholders' Equity $ 7,119 $ 1,252
========== ==========
The accompanying notes are an integral part of these financial statements.
3
Orofino Gold Corp.
(A Development Stage Company)
Income Statements
(Stated in US Dollars)
Unaudited
From inception
(April 12, 2005)
For the three months ended For the six months ended to
November 30, November 30, November 30, November 30, November 30,
2010 2009 2010 2009 2010
------------ ------------ ------------ ------------ ------------
Revenue $ -- $ -- $ -- $ 812 $ 116,326
------------ ------------ ------------ ------------ ------------
Expenses
Advertising and Promotion -- -- -- -- 1,812
Wages and Salary -- -- -- -- 111,952
Consulting fees 69,000 -- 142,000 -- 247,044
Mineral exploration expense 27,324 -- 47,324 -- 453,492
General and Administrative 45,371 19,411 49,491 20,905 157,348
Management fees -- -- 13,000 -- 73,970
Imputed Interest -- 1,082 -- 2,117 1,967
------------ ------------ ------------ ------------ ------------
Total Expenses 141,695 20,493 251,815 23,022 1,007,615
------------ ------------ ------------ ------------ ------------
Provision for income tax -- -- -- -- --
------------ ------------ ------------ ------------ ------------
Net Income (Loss) $ (141,695) $ (20,493) $ (251,815) $ (22,210) $ (1,007,289)
============ ============ ============ ============ ============
Basic & Diluted (Loss) per Common Share $ (0.00) $ (0.00) $ (0.00) $ (0.00)
------------ ------------ ------------ ------------
Weighted Average Number of Common Shares 66,092,308 60,000,000 66,092,308 60,000,000
------------ ------------ ------------ ------------
The accompanying notes are an integral part of these financial statements.
4
OROFINO GOLD CORP.
(A Development Stage Company)
STATEMENTS OF STOCKHOLDER'S EQUITY
As at November 30, 2010
(Stated in US Dollars)
Unaudited
Common Stock Paid in Translation Retained Total
Shares Amount Capital Adjustments Deficit Equity
------ ------ ------- ----------- ------- ------
Shares issued to founders on April 12, 2005
at $0.0001 per share 60,000,000 $60,000 $(59,000) $ -- $ -- $ (59,000)
Net (Loss) for period ending May 31, 2006 -- -- -- -- (800) (800)
---------- ------- -------- ------- --------- ---------
Balance, May 31, 2006 60,000,000 $60,000 $(59,000) $ -- $ (800) $ (59,800)
Net (Loss) for period ending May 31, 2007 -- -- -- -- (200) (200)
---------- ------- -------- ------- --------- ---------
Balance, May 31, 2007 60,000,000 $60,000 $(59,000) $ -- $ (1,000) $ --
Contributed Capital -- -- 7,500 -- -- 7,500
Translation Adjustments for period ending
May 31,2008 -- -- -- (111) -- (111)
Net (Loss) for period ending May 31, 2008 -- -- -- -- (39,779) (39,779)
---------- ------- -------- ------- --------- ---------
Balance, May 31, 2008 60,000,000 $60,000 $(51,500) $ (111) $ (40,779) $ (32,390)
Translation Adjustments for period ending
May 31,2009 -- -- -- 947 -- 947
Net (Loss) for the period ending May 31, 2009 -- -- -- -- (33,887) (33,887)
---------- ------- -------- ------- --------- ---------
Balance, May 31, 2009 60,000,000 $60,000 $(51,500) $ 836 $ (74,666) $ (65,330)
Contributed Capital -- -- 1,967 -- -- 1,967
Net (Loss) for the period ending May 31, 2010 -- -- -- -- (564,808) (564,808)
---------- ------- -------- ------- --------- ---------
Balance, May 31, 2010 60,000,000 $60,000 $(49,533) $ 836 $(639,474) $(628,171)
Shares issued for debt 9,600,000 9,600 164,400 -- -- 174,000
Shares issued for services 600,000 600 59,400 -- -- 60,000
Net (Loss) for the period ending
November 30, 2010 -- -- -- -- (251,815) (251,815)
---------- ------- -------- ------- --------- ---------
Balance, November 30, 2010 70,200,000 $70,200 $174,267 $ 836 $(891,289) $(645,986)
========== ======= ======== ======= ========= =========
The accompanying notes are an integral part of these financial statements.
5
Orofino Gold Corp.
(An Development Stage Company)
Statements of Cash Flows
(Stated in US Dollars)
Unaudited
From inception
(April 12, 2005)
For the three months ended For the six months ended to
November 30, November 30, November 30, November 30, November 30,
2010 2009 2010 2009 2010
---------- --------- ---------- --------- ----------
OPERATING ACTIVITIES
Net income (loss) $ (141,695) $ (20,493) $ (251,815) $ (22,210) $ (891,289)
Adjustments to reconcile net income
to net cash
Imputed interest on related party loan -- 2,117 -- 2,117 1,967
Accounts payable (84,527) 13,013 (79,403) 14,502 60,510
Over Draft -- (3,205) -- (3,507) --
Prepaid expenses -- -- -- -- (985)
Deposits -- -- -- -- (1,091)
---------- --------- ---------- --------- ----------
NET CASH USED IN OPERATING ACTIVITIES (122,222) (8,568) (331,218) (9,098) (830,888)
FINANCING ACTIVITIES
Related party loan -- -- -- -- --
Loans 232,089 9,011 103,085 9,011 593,419
Contributed Capital -- -- 223,800 -- 231,300
Common shares issued -- -- 10,200 -- 11,200
---------- --------- ---------- --------- ----------
NET CASH PROVIDED BY FINANCING ACTIVITIES 232,089 9,011 337,085 9,011 835,919
INVESTING ACTIVITIES
Deposit on acquisition of mineral property (5,867) -- (5,867) -- (5,867)
---------- --------- ---------- --------- ----------
NET CASH USED BY INVESTING ACTIVITIES (5,867) -- (5,867) -- (5,867)
Effect of exchange rate on cash -- 115 -- 87 836
Cash at beginning of period -- (558) -- -- --
---------- --------- ---------- --------- ----------
CASH AT END OF PERIOD $ -- $ -- $ -- $ -- $ --
========== ========= ========== ========= ==========
Cash Paid For:
Interest $ -- $ -- $ -- $ -- $ --
========== ========= ========== ========= ==========
Income Tax $ -- $ -- $ -- $ -- $ --
========== ========= ========== ========= ==========
Non-Cash Activities
Shares issued in Lieu of Payment for Service $ -- $ -- $ -- $ -- $ --
========== ========= ========== ========= ==========
Stock issued for accounts payable $ -- $ -- $ -- $ -- $ --
========== ========= ========== ========= ==========
Stock issued for notes payable and interest $ 174,000 $ -- $ 174,000 $ -- $ --
========== ========= ========== ========= ==========
Stock issued for convertible debentures and
interest $ -- $ -- $ -- $ -- $ --
========== ========= ========== ========= ==========
Convertible debentures issued for services $ -- $ -- $ -- $ -- $ --
========== ========= ========== ========= ==========
Warrants issued $ -- $ -- $ -- $ -- $ --
========== ========= ========== ========= ==========
Stock issued for penalty on default of
convertible debentures $ -- $ -- $ -- $ -- $ --
========== ========= ========== ========= ==========
Note payable issued for finance charges $ -- $ -- $ -- $ -- $ --
========== ========= ========== ========= ==========
Forgiveness of note payable and accrued
interest $ -- $ -- $ -- $ -- $ --
========== ========= ========== ========= ==========
The accompanying notes are an integral part of these financial statements.
6
OROFINO GOLD CORP.
(A Development Stage Company)
Condensed Footnotes to the Financial Statements
From Inception to November 30, 2010
(Stated in US Dollars)
NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS
Orofino Gold Corp. ("Orofino" or the "Company") was organized under the laws of
the State of Nevada on April 12, 2005 as SNT Networks Inc. On April 22, 2008 the
company changed its corporate name to SNT Cleaning Inc. On May 8, 2009, the
Company passed a resolution to forward stock split of its common stock on a
ratio of six shares for every one share of the Company. The record date of the
forward stock split was May 15, 2009 and the payment date of the forward split
was May 19, 2009. The forward split was payable as a dividend, thereby requiring
no action by shareholders, nor any amendment to the articles of incorporation of
the Company.
On December 5, 2009, the Company passed a resolution to change its name from SNT
Cleaning Inc. to Orofino Gold Corp.
NOTE 2 - BASIS OF PRESENTATION
The accompanying unaudited interim financial statements of Orofino have been
prepared in accordance with accounting principles generally accepted in the
United States of America and the rules of the Securities and Exchange
Commission, and should be read in conjunction with Orofino's 2010 annual
financial statements and notes thereto filed with the SEC on form 10-K. In the
opinion of management, all adjustments, consisting of normal recurring
adjustments, necessary for a fair presentation of financial position and the
result of operations for the interim periods presented have been reflected
herein. The results of operations for interim periods are not necessarily
indicative of the results to be expected for the full year. Notes to the
financial statements, which would substantially duplicate the disclosure
required in Orofino's 2010 annual financial statements have been omitted.
DEVELOPMENT STAGE COMPANY
The Company complies with current accounting guidance and the Securities and
Exchange Commission Exchange Act 7 for its characterization of the Company as
development stage.
ESTIMATES
The preparation of these consolidated 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 date of these consolidated financial statements and the reported amounts of
revenue and expenses during the period. Actual results could differ from these
estimates.
RECENTLY ISSUED ACCOUNTING STANDARDS
In January 2010, the Financial Accounting Standards Board (FASB) issued
Accounting Standards Update (ASU) No. 2010-06, IMPROVING DISCLOSURES ABOUT FAIR
VALUE MEASUREMENTS (ASU 2010-06). This update provides amendments to Subtopic
820-10 and requires new disclosures for 1) significant transfers in and out of
Level 1 and Level 2 and the reasons for such transfers and 2) activity in Level
3 fair value measurements to show separate information about purchases, sales,
7
issuances and settlements. In addition, this update amends Subtopic 820-10 to
clarify existing disclosures around the disaggregation level of fair value
measurements and disclosures for the valuation techniques and inputs utilized
(for Level 2 and Level 3 fair value measurements). The provisions in ASU 2010-06
are applicable to interim and annual reporting periods beginning subsequent to
December 15, 2009, with the exception of Level 3 disclosures of purchases,
sales, issuances and settlements, which will be required in reporting periods
beginning after December 15, 2010. The adoption of ASU 2010-06 did not impact
the Company's operating results, financial position or cash flows and related
disclosures.
In February 2010, FASB issued ASU No. 2010-09, AMENDMENTS TO CERTAIN RECOGNITION
AND DISCLOSURE REQUIREMENTS (ASU 2010-09). This update amends Subtopic 855-10
and gives a definition to the Securities and Exchange Commission (the "SEC")
filer, and requires SEC filers to assess for subsequent events through the
issuance date of the financial statements. This amendment states that an SEC
filer is not required to disclose the date through which subsequent events have
been evaluated for a reporting period. ASU 2010-09 becomes effective upon
issuance of the final update. The Company adopted the provisions of ASU 2010-09
for the period ended November 30, 2010.
NOTE 3 - GOING CONCERN
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern, which contemplates the realization of
assets and the liquidation of liabilities in the normal course of business.
However, the Company has accumulated a loss to date. This raises substantial
doubt about the Company's ability to continue as a going concern. The financial
statements do not include any adjustments that might result from this
uncertainty.
As shown in the accompanying financial statements, the Company has incurred a
net loss of $831,289 for the period from April 12, 2005 (inception) to November
30, 2010. The future of the Company is dependent upon its ability to obtain
financing and upon future profitable operations from the development of
acquisitions. Management has plans to seek additional capital through a private
placement and public offering of its common stock. The financial statements do
not include any adjustments relating to the recoverability and classification of
recorded assets, or the amounts of and classification of liabilities that might
be necessary in the event the Company cannot continue in existence.
NOTE 4 - RELATED PARTY TRANSACTIONS
The Company paid $13,000 in management fees to related parties and $15,000 in
consulting fees.
NOTE 5 - SUBSEQUENT EVENTS
There were no reportable subsequent events from November 30, 2010 through the
date this report is filed.
8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
FORWARD LOOKING STATEMENTS
The information in this discussion contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"). These forward-looking statements involve risks and uncertainties,
including statements regarding Orofino Gold Corp. (the "Company") capital needs,
business strategy and expectations. Any statements contained herein that are not
statements of historical facts may be deemed to be forward-looking statements.
In some cases, you can identify forward-looking statements by terminology such
as "may", "will", "should", "expect", "plan", "intend", "anticipate", "believe",
"estimate", "predict", "potential" or "continue", the negative of such terms or
other comparable terminology. Actual events or results may differ materially. In
evaluating these statements, you should consider various factors, including the
risks outlined below, and, from time to time, in other reports the Company files
with the SEC. These factors may cause the Company's actual results to differ
materially from any forward-looking statement. The Company disclaims any
obligation to publicly update these statements, or disclose any difference
between its actual results and those reflected in these statements. The
information constitutes forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995.
As used in this quarterly report, the terms "we," "us," "our," and "our company"
mean Orofino Gold Corp. unless otherwise indicated. All dollar amounts in this
quarterly report are in U.S. dollars unless otherwise stated.
OVERVIEW
Orofino Gold Corp. ("Orofino" or the "Company") was organized under the laws of
the State of Nevada on April 12, 2005. Orofino is a development stage company
and has a limited history of operations. The authorized share capital of the
Company is 250,000,000 common shares.
Orofino Gold Corp. started operations on September 1, 2007 under the "Clean `N
Shine" name. Prior to this, the company had no operations from inception (April
12, 2005) to November 30, 2007. On September 1, 2007, Orofino began operating as
a full service automotive car wash, cleaning, detailing, and polishing business.
The company has generated revenues from cleaning and car care services
specifically, automotive upholstery and leather cleaning and automotive interior
and exterior cleaning and washing.
On May 20, 2009, the Company completed a forward stock split of its common stock
on a ratio of six shares for every one share of the Company. The record date of
the forward stock split was May 15, 2009, the payment date of the forward split
was May 19, 2009, and the ex-dividend date of the forward split was May 20,
2009. The forward split was payable as a dividend, thereby requiring no action
by shareholders, nor any amendment to the articles of incorporation of the
Company. As a result of the forward split, the post forward split number off
issued and outstanding shares was 60,000,000.
There are no preferred shares authorized. The Company has issued no preferred
shares. The Company has no stock option plan, warrants or other dilutive
securities. We are contemplating raising additional capital to finance our
business. No final decisions regarding the financing have been made at this
time.
On December 5, 2009, the Company passed a resolution to change its name from SNT
Cleaning Inc. to Orofino Gold Corp. On December 5, 2009, the Company accepted
the resignation of its President, Secretary and director, Robert Denman, and
appointed John Martin as a Director of the Company, effective as of equal date.
9
On June 6, 2010 John Martin resigned and Shi Long Ning, a resident of China, was
appointed as a director. On November 30, 2010, Ary Pernett, a resident of
Colombia; Alfonso Calderon, also a resident of Colombia and Dr, Hans Bocker, a
resident of Switzerland joined the board. On January 7, 2011, Salvaldor Rivero,
a resident of Germany, was appointed to the board. Presently Ary Pernett is the
president and Shi Long Ning is the chairman.
The Company has offices in China and Colombia.
China: 93-B342 Xinliu Street
Zhong Shan District,
Dalian 116001, China
Colombia: Carrera 40, No.10A-65,
Barrio El Poblado
Medellin - Colombia
INFORMATION ON DIRECTORS AND OFFICERS:
NING SHI LONG
Mr. Long is a Professional Software Engineer who has led an experienced team in
developing and operating specified information and data systems the last 12
years. His company has designed and successfully commissioned over 20 Software
installations at local and national organizations.
At Dalian Runbest Technology Development Co. Ltd. he was responsible for the
entire design and development of key technology and coding for development of
public packaging of a proprietary software technology. The clients of the
company are concerned with the fields of finance, government, sci-tech
education, medical, communication & energy, manufacturing and public utility.
He was responsible for project budgeting and the successful launching of major
projects within financial guidelines as per the corporate policies of the
responsible ministry.
ShanDong University - Information management and information system
Proficient in Chinese, English, French and Japanese languages.
VC++ | proficient | 12 months
Oracle\DB2 | proficient | 48 months
Powerbuilder\Sqlserver\Powerdesigner | expert | 84 months
Java\Asp\Ms Project | average | 6 months
Ning Shi Long is a hands on leader and is relied-upon for Leadership and
financial control and the company's direct link to large Chinese/Japanese
investment companies and high net worth individuals. Ning Long is also
proficient in handling data information systems to provide information to
investors and financial institutions.
10
ARY PERNETT
EDUCATION
1973: Ingeniero de Minas y Metalurgia - Universidad Nacional de Colombia -
Medellin (Mining and Metallurgy Engineer- National University of Colombia)
1977: Course de Reciclage en Geologie - Ecole National Superieur de Geologie -
Nancy, France (Actualization in Geology - National School of Geology - Nancy -
France)
1978: Docteur de L'institute National de Lorraine - Nancy - France (Fluid
Inclusions in Gour Negre - State of Gare in France)
WORK HISTORY
1968 - 1970: Assistant in Petroleum Lab, National University of Colombia,
Medellin-Colombia
1972 - 1976: Ministery of Mines of Colombia, as Engineer in Technical Assistance
for Miners, (Choco State); Director of Marmato Mines, (Maramto, Caldas State)
and Mining Inspecter, (Frontino Gold Mines in Segovia, Antioquia State)
1978 - 1981: National Institute of Geology of Colombia, INGEOMINAS, as field
geologist working in the Mining Map of Antioquia -
1982- 1984: Carbones de Uraba ( Coals of Uraba, a coal Enterprise exploring for
Coal in Uraba area, Antioquia State, Colombia
1985 -1992: Personal activity in mining; explotation in alluvial deposits and
assistance for small miners
1993 - 2000: CDI Gold Company in the Zancudo Mine, Titiribi, Antioquia State,
Colombia , as partner, consultant, and at the ent as resident engineer in the
mine site.
2000 - 2010: Personal Business in wood home construction, Cars, Computers, in
Mexico
PUBLICATIONS
1980: Mining Map of the State of Antioquia - Ingeominas - Medellin - Colombia
1980: Memory of the Mining Map of the Antioquia State - Ingeominas - Medellin
LANGUAGES
Spanish: 100%
French: 70%
English: 50%
11
ALFONSO CALDERON
EDUCATION
BS in Geology and Petroleum Engineering from Escuela de Minas de Medellin,
Universidad Nacional de Colombia.
MSc in Coal Geology / Mining and Geotectonics from University of Illinois.
Credits in Economic Geology and Mineral Exploration for Ph.D. at Indiana
University and Pennsylvania State University.
PROFESSIONAL EXPERIENCE
Organization, evaluation, and technical and statistical analysis of the
Colombian Mining data universe collected in the development of the Technical
Appraisal and Control Process for the Improvement of Mining Activity in
Colombia. Consulting contract with Minercol Ltda.
Design and preparation of CD Package for international promotion of four areas
for the exploration and exploitation of emeralds in the Chivor District, Boyaca,
Colombia. Joint Venture with private parties.
Supervision of the Technical Appraisal and Control Process for the Improvement
of Mining Activity in the Minercol's La Jagua Seccional Area (Atlantico,
Magdalena, Bolivar) and the Minercol's Bogota Seccional (Gran Mineria, Cordoba,
Cesar y Guajira). For Minercol Ltda.
Design and Implementation of the Colombia National Mining Balance. Design
Definition and Implementation of a Computer Model and System. For the Colombian
Mines Ministry - UPME.
Analysis of the National Minerals Market for the Project "MEDC 2000". For
Minercol Ltda.
Definition of Technical, Economical and Environmental Potentialities and
Restrictions for the Development of the Energy - Mining Sector in Colombia. GIS
Tool for this Sector Planning. For the Colombian Mines Ministry - UPME.
Appraisal and technical concept on the Geological Exploration Program Final
Report submitted by Carboandes S.A. to Minercol Ltda. to develop mining
operations at La Victoria and El Tesoro areas within the coal region of La Jagua
de Ibirico, Cesar, Colombia.
Technical supervision of the geoelectrical study to establish the alluvial
covering thickness on top of the multi - seam coal deposit at Similoa and Rincon
Hondo areas within the La Loma coal basin, Chiriguana and La Jagua, Cesar,
Colombia.
Drummond Coal Mining Operations appraisal, for Colombian Government, at the
Pribbenow Mine in La Loma, Cesar, Colombia.
Feasibility study for Fuel Conversion of vehicles to Liquid Petroleum Gas - LPG
- in Bogota.
Identification and Value Estimation of all Mining Related Equipment, Machinery
and Tools of the Colombian Government Property and the Recommendation of their
Use and Final Destination.
Study for appraisement of Potential Demand of Fuel Gases in Colombia.
Technical and Administrative Supervision of the Exploration, Geological
Evaluation and Industrial Characterization of Gypsum
Deposits in the Area of Paez-Miraflores, Boyaca, Colombia.
Advisory to INGWE Coal Corporation Ltd. from South Africa.
12
Study for the Appraisement of Potential Substitution of Firewood for Mineral
Coal in Colombia.
Definition / Preparation of Bid Terms, Contracts Preparation and Negotiations.
Installation of a Plant for Grinding / Treatment of Industrial Minerals.
Commercialization of Industrial Minerals.
Surface and Underground Geology and Mining Development Adviser.
Managing and coordinating Several Matters before Government Entities.
POSITIONS: Covenas Terminal Construction Manager, Executive Assistant to the
Covenas Terminal Operations Manager and Executive Assistant of the Cano Limon
Field General Maintenance/Construction and the Pipeline/Terminal Operations
Manager.
RESPONSIBILITIES: Managing all aspects of construction and installation of the
Covenas Petroleum Terminal facilities. Active participation in the supervision
and coordination of all aspects of the Cano Limon-Covenas pipeline and Covenas
Petroleum Terminal operations and maintenance activities. Participation in
evaluating and reviewing bid documents, materials requisitions, budget control,
cost centers. Direct participation in the Cravo Norte Association Technical
Subcommittee meetings. Coordination of relations with partners. Participation in
negotiations with government entities (Minminas, Ecopetrol, Dimar) on permits,
operations, others.
INTERCOL and INTERCOR (EXXON Subsidiaries)
POSITIONS: Geologist, Field Geological Supervisor, Field Exploration Resident,
Projects Director, Field Operations Director, Senior Engineer, Assistant to
Cerrejon Coal Project Director and Project Administration Manager.
RESPONSIBILITIES: Managed planning and development of the field exploration
program for the Cerrejon Coal Project - North Zone. Drilling, logging, log
interpretation and correlation. Geometry of coal deposit definition, computer
modeling of the Cerrejon Coal Deposit. Volumetric calculations of reserves.
Supervision and administration of Intercor contractors performing engineering
works. Aerial photography and topographic mapping, underwater (offshore)
geotechnical explorations for selection of a main Coal Port. Groundwater Control
design and a river diversion geotechnical studies. Mine facilities foundation
investigations. Quarries investigations. Seismic and geotechnical studies.
Selection of the railroad route.
Active role in the definition and co-ordination of engineering, construction and
procurement of all facilities for the Cerrejon Project. Assist the General
Project Director for the supervision, monitoring and appraisal of the Cerrejon
Project Prime Contractor (Morrison Knudsen). Active role in the office of Prime
Contractor (MK), at Burlingame, California, for definition and coordination of
engineering, design, procurement and construction of all facilities for the
Cerrejon Project. In Barranquilla, managed several specific responsibilities in
the areas of personnel administration, administrative services, government
relations, systems support, and public affairs. Monitor MK (Prime Contractor) in
related activities such as plans for winding down construction activities,
relocation/transfer/termination of personnel and facilities. Disposal of
materials and equipment, etc, others.
CARTER OIL COMPANY (EXXON Subsidiary)
Wellsite Geologist. Training with Exxon
Geological exploration for coal in Texas, Louisiana, Alabama, Arkansas,
Tennessee, West Virginia. Drilling and core description, mapping, log
correlation, and evaluation.
13
ILLINOIS STATE GEOLOGICAL SURVEY.
Training on general coal geology, mapping and underground mine development.
Correlation of electrical logs. Structural geology application for underground
mapping and mine development. Drilling and core description and correlation.
INGEOMINAS(Instituto Nacional de Investigaciones Geologico Mineras de Colombia).
As Field Geologist: Geological mapping along Central and Western cordilleras of
Colombia. Rock and soil geological and geophysical correlation for mapping and
mineral exploration and evaluation. Soil and hard rock drilling / logging
supervision. Log interpretation / correlation. Geochemical mineral exploration
in jungle areas. Geological and Economical Evaluation of mineral deposits.
DR. HANS BOCKER
Prof. Bocker lives in Switzerland. He holds two professorships in business
administration and applies his dual education in technology and
economics/management in many areas. As a cosmopolitan, he works as a consultant,
author, finance and business journalist, columnist and IR specialist. He has for
decades devoted himself to precious metals and the mining industry. His
assignments and interests have taken him to over 60 countries, including many in
the Middle and Far East, Africa, Europe, North and South America.
To date, the number of his publications exceeds the 2000 mark. 150 of which are
academic. The majority of his articles and papers have been published by the
Borsen-Zeitung (11 years of collaboration), the Frankfurter Allgemeine (2
years), Finance and Wirtschaft (over 20 years) and Die Welt (1 year). He can be
found under "B" in all additions of : Who's Who in the World" from 1991 to 2009.
He teaches at two elite business schools, works in public and international
relations, advises a number of commodity and mining companies and is a member of
Rotary International.
SALVADOR RIVERO
Mr. Rivero graduated as a lawyer in Mexico and has over 25 years of diverse
experience in international business and corporate finance. An acquisitions
specialist, he has been responsible for the development of various turn-key
projects in the mining, energy, fertilizer, oil and gas, and shipping sectors.
Mr. Rivero has been involved with all phases of mining exploration and
development in various senior capacities.
Mr. Rivero graduated as a lawyer in Mexico and has over 25 years of extensive
experience in international business and corporate finance. An acquisitions
specialist, he is responsible for the development of various turn-key projects
in the energy, fertilizer, oil and gas, and shipping sectors. Mr. Rivero founded
and directed Constructora y Perforadora Marina, S.A. de C.V., and Kaiser
Internacional, S.A. de C.V., Ultramar Bancorp Inc., Ultramar Capital Plc. and
First Mercantile Bank Ltd. In 1998-2000 Mr. Rivero was responsible for
acquiring, developing and putting into production a silver mine in Sinaloa for
Real de Panuco, S.A. de C.V. and was a member of the Board of Directors of the
Canadian mining company Golden Temple Mining and the Mexican mining company
Minas Kaiser, S.A. de C.V. Until recently, he acted as the President and served
as a Director of Oroco Resource Corp, a mining corporation in Vancouver, Canada
during its start up and pre IPO phase, during which time he was responsible for
the successful acquisition of its mining properties in Mexico.
14
LABOR FORCE
Over the quarter ending November 30, 2010 the company has employed casual
part-time labor, as required.
MINING CONCESSIONS
On April 6, 2010, the Company counter-signed an offer for joint venture-earn-in
to option several mining concessions in the Department of Bolivar, Republic of
Colombia. Pursuant to various stages of due diligence it was determined that the
best way of obtaining title to the various target mineral properties was to
enter into new agreements. On November 15, 2010 the Company entered into four
agreements. The terms of the new agreements allow for the Company to acquire an
80% interest in four mining concessions. A summary of the terms and ongoing
payment obligations are as follows:
Cash payments:
1. $5,000 as an initial option payment;
2. $100,000 on or before January 31, 2011
3. $150,000 on or before February 28, 2011;
4. $800,000 on or before March 31, 2011;
5. $800,000 every six months thereafter starting on June 1, 2011
Share issuances:
1. 24 million shares on or before March 31, 2011
2. 10 million shares on or before March 31, 2012, and
3. 10 million shares on or before December 31, 2012.
The Company paid the sum of $350,000 to third parties for consulting services in
relation to the signing of the option agreements.
The Sur de Bolivar concessions consist of four exploration licenses totaling
4,300 hectares ("ha") (plus or minus) and additional, in process exploration
applications, totaling 6,244.5 ha. The concessions are located approximately 500
km NNW of Bogota (or alternatively 200 km SE of Cartagena), at the northern end
of the Serrania de San Lucas, within the Municipality of Rio Viejo, Department
of Bolivar. Access to the area requires 4 hours of overland travel, from the
nearest national airport, along a reasonably good secondary road system.
Entrance may be facilitated by the reclamation of a presently overgrown, 1000 m
airstrip located within the license area. The strip is suitable for
moderate-sized aircraft, flights taking approximately 50 minutes from Medellin.
GEOLOGY, MINERALIZATION, AND EXPLORATION POTENTIAL
REGIONAL GEOLOGY
The Serrania San Lucas, situated due south of the confluence between the rivers
Cauca and Magdalena, forms an offset, northeaster-most extension of Colombia's
Cordillera Central. Sparse regional geologic studies by the Ministry of Mines
and Energy, through the 1970's and early 1980's have suggested that The Serrania
represents a geologic extension of the northern Cordillera Central, underlain by
a deformed, Paleozoicaged, metamorphic basement, intruded by Upper
Jurassic-Lower Cretaceous aged, batholithic-scale plutons of tonalitic through
granitic (generally dioritic to quartz dioritic) affinity, and overlain by
associated high-level volcanic, pyroclastic, and derived sedimentary rocks of
15
similar through Cretaceous age. The region exhibits offset and subdued
topographic relief relative to the northern Cordillera Central due to uplift and
oblique dextral movement along the Palestina and Magdalena valley fault systems.
Regional lithologic contacts strike broadly north-south paralleling the
Palestina system at this latitude and are of a mixed structural-stratigraphic
nature. A strong north-easterly tectonic element transects the entire region,
reflected by the sub-paralle alignment of numerous drainages and
photogeologically-interpreted faults. A more sporadic set of east-west trending
lineaments is noted to transect at least the northern portion of the Serrana.
The tectonic history of this portion of Colombia is complex, and movement and
reactivation along any one of these sets of structures may have a multiphase
history dating from the late Jurassic through to the late Tertiary (Pliocene)
and recent times.
LOCAL GEOLOGY
Ground-work to date, documents a mixed sequence of predominantly volcanic rocks
of intermediate to felsic composition (including lithic and crystal tuffs of
fine to medium grain-size, and common coarser agglomeratic fragmentals). Fine
grained cherty "sinters", coarse, possible phreatic-style breccias (fine
matrix-supported, very angular clasts), and local occurrences of siliciclastic
sediments, are also present. These rocks overly gneissic basement, and\or are
intruded by plutons of granodioritic composition exhibiting medium to
coarse-grained, equigranular intergrowths of quartz, mixed feldspars, and a
mafic phase (chlorite after amphibole). Local shearing has imposed a
"pseudo-gneissic" appearance to the rock manifesting as a lineation observed
within the mafic phase. The relationship between the intrusive rocks and the
cover sequence is not understood, and is presently under investigation.
Observed structural orientations appear to reflect regional structural trends
with textures in the granitoids and documented fault structures striking,
north-south, and additional faulting striking NE-SW. Notably the volcanic
sequence generally lacks a penetrative fabric, and is characterized by a brittle
fracture and orthogonally jointed style of high-level deformation.
Recent re-thinking of the geology of at least the northern San Lucas area
superimposes an additional Tertiary magmatic even upon the region. Although not
yet strongly evidenced, it attempts to account for the widespread occurrence of
relatively flat-lying and undeformed, highlevel volcanic\pyroclastic lithotypes,
as described above, which may lie directly upon deformed in intrusive\gneissic
basement and lack obvious correlatives in other parts of the northern Cordillera
Central.
MINERALIZATION
MINERO (small-scale miner) activity beginning in the mid-1980's, has outlined a
series of rich gold occurrences, of both INSITU and local alluvial provenance,
in broad N-S belt, extending CA. 50 kilometres from Norosi in the south to San
Martin de Loba, on the bank of the Magdalena River, in the north. GOVERNMENT
RECORDED gold production from the region, between 1987 and 1994 is CA. 1,271,000
ounces of gold, and the region is presently reporting a very high annual gold
production in Colombia, averaging CA. 275,000 ounces per year since 1991.
Virtually no exploration, systematic or otherwise, has been carried out in the
region, by either the governmental or private sectors.
Within the license and solicitude area, numerous INSITU gold occurrences have
been exposed by MINERO activity. Three zones of concentrated workings have been
located within the area. These include, from north to south, 1) La Azul, 2) Culo
Alzado, and 3) Buena Sena.
LA AZUL
Based upon exposures in old workings, mineralization in the La Azul area is
hosted within roughly N-S striking shear structures within both the intrusive
and volcanic rock-types. The majority of the previous subsurface work has
16
excavated a series of shafts and galleries to 20 m depth over a 100 m strike
length within the "pseudo-gneissic" lithology. (2010 records show depths to 37
metres and strike length of 400+ metres) Mineralized material included
argillically and potassically altered and sheared intrusive hosting quartz
flooded zones, and quartz with peripheral cm-scale quartz stringers. These zones
host 1 to 7 percent mixed sulphides, mostly pyrite, but also including galena,
sphalerite and chalcopyrite. Gold analyses reported by the owners from this
material returned values in the 10's to 100's of g Au\t. Current cut-off grades
used by the local miners is around 10 to 20 grams per tonne). The sulphidised
granitoid hosting only minor amounts of veining returned base metal contents in
the 100's of ppm, including 1% Cu. Evidence for the presence of two or three
sub-parallel N-S structures hosting shearing and veining was noted in trenches
to the SW of the main area of workings.
CULO ALZADO
At Culo Alzado, on the north margin of Cerro San Carlos (now Senderos de Oro),
at least two low spurs are underlain by medium grained granodiorite. Broadly N-S
structure is implied by N-S drifting and removal of vein material. Irregular
quartz-sulphide stringers and argillic alteration are observed along the margins
of the adits. Current mining activity, is extracting a 1 m wide quartz vein from
a 20 m deep shaft within sheared granodiorite. The vein material contains up to
20 percent mixed sulphides, including pyrite, galena, sphalerite, and
chalcopyrite. Pyritic sulphidation and argillic bleaching of the wallrocks is
widespread. Laboratory analyses reveal the grade of the vein material is highly
variable, ranging from 3 to 68 g Au\t (reportedly averaging about 20 g Au\t from
past production). Visually the copper content of the materials extracted from
the Culo Alzado adits appears to be increasing at depth, where numerous
fractures filled with quartz and chalcopyrite are appearing within the granitoid
host, at the expense of the lead and zinc-bearing sulphides.
BUENA SENA
Work to date reveals that the largest workings within the concessions are at
Buena Sena, where extensive extraction of alluvials (up to 10, 235-style back
hoes were working at one time) has taken place along the major drainages
(Quebrada San Pedro, Quebrada Aguas Blancas) servicing the south flank of Cerro
San Carlos and the hills immediately to the south. Most, if not all, of these
source regions are within the concessions and solicitudes. Numerous underground
and small open cut workings are also seen at Buena Sena, on Cerro San Carlos,
and on the low hills to the south, across the alluvial workings. Some appear to
be working a series (at least 10) of sub-parallel, or EN ECHELON N50-60E
striking, subvertical structures hosting discrete quartz-pyrite veins to 90 cm
thickness, while others have attempted to exploit clusters of anastomosed,
quartz-pyrite-stringer veining which strike N20 to N45-degrees east, and tend to
dip steeply to the west. An additional series of mm to cm-scale, generally
sub-parallel quartz-pyrite fracture fills, which strike E-W to NW, are of
widespread occurrence, but have not been exploited due to their small size.
Structural considerations based upon filed observations and LandSat image
interpretations suggest the Cerro San Carlos-Buena Sena zone is contained within
an east-west-striking normal (+\-oblique) fault-bound corridor, which transects
the southern portion of the Western solicitude\licencia area. The corridor
measures CA. 15 km E-W by 3 km N-S, and is lithologically dominated by a mixture
of brittley deformed, high level volcanic-volcaniclastic protoliths, including
intermediate to felsic crystal and lithic tuffs and agglomerates (locally
welded), and volcanic (+/- phreatic\hydrothermal) breccias, with lessor clastic
sedimentary rocktypes, which host the mineralized structures described above.
The throw on the northern boundary fault (Falla Piloto) juxtaposes foliated
granitoid basement to the north against the high level volcanics to the south.
The southern boundary fault (Falla Los Delfines) is of some-what lessor
magnitude, with volcanics (and mineralization) being noted in both the hanging
17
wall and the footwall. Additional zones of alteration have been recorded within
this corridor, to the west of the solicitude block, and are presently being
investigated. This corridor is noted to offset, as well as to be offset by the
dominant, locally reactivated, NE trends of the region.
Field investigations suggest that, within the E-W corridor, strong structural
control with respect to mineralization is exerted by a N45E-striking, sinistral
shear zone and associated splays faults. Along this structure, a continuous zone
of alteration and mineralization is observed which measures a minimum of 2 km
along strike by 400 m in width, and is geologically open along strike (both
ends) and broadly to the SE. This structure includes a core zone defined by the
presence of artisanal workings, which measures some 1400 m by up to 300 m.
Within the main corridor argillic +\- sericitic wallrock alteration accompanied
by silicification and pyritic sulphidation are pervasive, with concentrations of
disseminated pyrite reaching 8 to 10%, and quartz vein densities up to 10 to 15%
over 10's of square metres, in the well mineralized zones.
Geochemical sampling and mapping reveal; 1) gold mineralization is widespread,
with virtually every rock type and every structural orientation hosting veining
returning anomalous gold values, 2) increasing gold values exhibit positive
correlation with enhanced quartz veining and pyritic sulphidation, 3) gold
content tends to show positive, although not necessarily linear correlation,
with values in silver, copper, lead, zinc and arsenic +\- antimony, and 4)
disseminated pyritic sulfidation alone does not carry gold grades.
EXPLORATION AND RESOURCE POTENTIAL
Reconnaissance covering the northern San Lucas region, documents very clearly
the dominant structural trends, as outlined above. Additionally, numerous
km-scale features, including circular plutonic clusters, and regional argillic
and Fe-oxide alteration patterns are observed. Ground reconnaissance to date,
implies the potential presence of an as yet poorly recognized metallogenic
domain spanning 1000's of square kilometers, which is only recently surfacing,
from rather spectacular artisanal gold production. The region is virtually
unexplored from a modern metallogenic standpoint, but based upon work to date,
it demonstrates very good potential for the ECONOMIC occurrence of;
1) large-scale high level, volcanic-hosted epithermal gold deposits (E.G.
quartz-sericite-adularia(?)) systems, as suggested at Buena Sena,
2) porphyry-style copper+\- gold systems as seen at Culo Alzado, and
observed in, regional mineralogical and alteration patterns, and,
3) high-grade, mesothermal, "Segovia"-style gold vein systems, as
evidenced at La Azul
Results from recent sampling and assaying will be released when a compilation of
the data is completed.
RESULTS OF OPERATIONS FOR THE SIX MONTHS ENDED NOVEMBER 30, 2010
We incurred operating expenses of $251,815 for the six months ended November 30,
2010. These expenses consisted of general operating expenses incurred in
connection with day to day operation of our business. We have taken on 4 mineral
resource concessions in Colombia. We sent a geological team to Colombia to
examine several properties in Colombia. We had paid the sum of $350,000 in
preparation of the acquisition of the properties starting in the previous year.
We have spent a considerable effort on examining title to the properties and
determining ownership issues. The issue of title opinions has caused a delay in
our planning. We are confident now and we will begin our next phase of
exploration.
18
There is substantial doubt that we can continue as an ongoing business for the
next twelve months unless we obtain additional capital to pay our bills. This is
because we have not generated sufficient revenue attain profitability. There can
be no assurance that we will ever reach profitability. We are still developing
our business.
LIQUIDITY AND FINANCIAL CONDITION
Our cash balance at November 30, 2010 was $nil with outstanding liabilities of
$59,686 and loans payable of $593,419. A total of 9,600,000 shares were issued
at a fair value of $174,000 to reduce debt. A total of 6 million shares have
been returned for cancellation. A further 600,000 shares were issued for
services at a fair value of $60,000.
On December 31, 2010 the Company issued convertible debentures for debt holders
to issue shares at $0.0075 per share. A total of some 90,000,000 shares are
issuable at $0.0075 each to repay debt of some $675,000. Pursuant to the terms
of the convertible notes any shares issued will be restricted shares according
to the following paragraphs included in the terms of the agreement:
"Restricted Securities. This Note is, and the shares of Common Stock issuable
upon conversion hereof shall be, "restricted securities" within the meaning of
SEC Rule 144 promulgated under the Securities Act of 1933 (the "1933 Act").
Holder acknowledges and agrees that it is acquiring this Note and, upon
conversion, the shares of Common Stock, without a view to the public
distribution or resale of the Note or such shares in violation of applicable
federal or state securities laws.
No Registration. This Note has not been, and the shares of Common Stock issuable
upon conversion hereof will not be, registered under the 1933 Act or under the
securities laws of any other jurisdiction; and therefore, Holder must be able to
hold the Note or the shares indefinitely without any transfer, sale or other
disposition, unless they are subsequently registered under the 1933 Act and
under the securities laws of other applicable jurisdictions or, in the opinion
of counsel to the Company, registration is not required under such Act or laws
as the result of an available exemption from registration."
Based on our current operating plan, we do not expect to generate revenue that
is sufficient to cover our expenses for at least the next year. In addition, we
do not have sufficient cash and cash equivalents to execute our operations for
the next year. We will need to obtain additional financing to operate our
business for the next twelve months. We will raise the capital necessary to fund
our business through a private placement and public offering of our common
stock. Additional financing, whether through public or private equity or debt
financing, arrangements with shareholders or other sources to fund operations,
may not be available, or if available, may be on terms unacceptable to us. Our
ability to maintain sufficient liquidity is dependent on our ability to raise
additional capital. If we issue additional equity securities to raise funds, the
ownership percentage of our existing shareholders would be reduced. New
investors may demand rights, preferences or privileges senior to those of
existing holders of our common stock. Debt incurred by us would be senior to
equity in the ability of debt holders to make claims on our assets. The terms of
any debt issued could impose restrictions on our operations. If adequate funds
are not available to satisfy either short or long-term capital requirements, our
operations and liquidity could be materially adversely affected and we could be
forced to cease operations.
OFF-BALANCE SHEET ARRANGEMENTS
We have no off-balance sheet arrangements that have or are reasonably likely to
have a current or future effect on our financial condition, changes in financial
condition, revenues or expenses, results of operations, liquidity, capital
expenditures or capital resources that is material to stockholders.
19
INFLATION
In the opinion of management, inflation has not had a material effect on our
operations.
STOCK OPTIONS
The Company currently has no stock option plan.
RESEARCH AND DEVELOPMENT EXPENDITURES
We have not incurred any research or development expenditures since our
incorporation.
PATENTS AND TRADEMARKS
We do not own, either legally or beneficially, any patent or trademark.
HOLDERS OF OUR COMMON STOCK
As of November 30, 2010, we had approximately 270 stockholder(s) of record
holding 70,200,000 shares of our common stock.
DIVIDENDS
There are no restrictions in our articles of incorporation or bylaws that
prevent us from declaring dividends. The Nevada Revised Statutes, however, do
prohibit us from declaring dividends where, after giving effect to the
distribution of the dividend:
1. We would not be able to pay our debts as they become due in the usual
course of business; or
2. Our total assets would be less than the sum of our total liabilities
plus the amount that would be needed to satisfy the rights of
shareholders who have preferential rights superior to those receiving
the distribution.
We have not declared any dividends and we do not plan to declare any dividends
in the foreseeable future.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company is not exposed to market risk related to interest rates or foreign
currencies.
CONTROLS AND PROCEDURES
ITEM 4. CONTROLS AND PROCEDURES
EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES
As required by Rule 13a-15 under the Securities Exchange Act of 1934 (the "1934
Act"), as of November 30, 2010, we carried out an evaluation of the
effectiveness of the design and operation of our disclosure controls and
20
procedures. This evaluation was carried out under the supervision and with the
participation of our Chief Executive Officer (our principal executive officer)
and our Chief Financial Officer (our principal financial officer), who
concluded, that because of the material weakness in our internal control over
financial reporting ("ICFR") described below, our disclosure controls and
procedures were not effective as of November 30, 2010.
Disclosure controls and procedures are controls and other procedures that are
designed to ensure that information required to be disclosed in our reports
filed or submitted under the Securities Exchange Act is recorded, processed,
summarized and reported within the time periods specified in the Securities and
Exchange Commission's rules and forms. Disclosure controls and procedures
include, without limitation, controls and procedures designed to ensure that
information required to be disclosed in our reports filed under the Exchange Act
is accumulated and communicated to our management, including our principal
executive officer and our principal financial officer, as appropriate, to allow
timely decisions regarding required disclosure.
INTERNAL CONTROL OVER FINANCIAL REPORTING
Our management is also responsible for establishing ICFR as defined in Rules
13a-15(f) and 15(d)-15(f) under the 1934 Act. Our ICFR are intended to be
designed to provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external purposes in
accordance with U.S. generally accepted accounting principles. Our ICFR are
expected to include those policies and procedures that management believes are
necessary that:
(i) pertain to the maintenance of records that, in reasonable detail,
accurately and fairly reflect the transactions and dispositions of the
assets of the Company;
(ii) provide reasonable assurance that transactions are recorded as
necessary to permit preparation of financial statements in accordance
with generally accepted accounting principles, and that receipts and
expenditures of the Company are being made only in accordance with
authorizations of management and our directors; and
(iii)provide reasonable assurance regarding prevention or timely detection
of unauthorized acquisition, use or disposition of the Company's
assets that could have a material effect on the financial statements.
Management recognizes that there are inherent limitations in the effectiveness
of any system of internal control, and accordingly, even effective internal
control can provide only reasonable assurance with respect of financial
statement preparation and may not prevent or detect misstatements. In addition,
effective internal control at a point in time may become ineffective in future
periods because of changes in conditions or due to deterioration in the degree
of compliance with our established policies and procedures.
As of November 30, 2010, management assessed the effectiveness of our ICFR based
on the criteria for effective ICFR established in Internal Control--Integrated
Framework issued by the Committee of Sponsoring Organizations of the Treadway
Commission (COSO) and SEC guidance on conducting such assessments by smaller
reporting companies and non-accelerated filers.
Based on that assessment, management concluded that, during the period covered
by this report, such internal controls and procedures were not effective as of
November 30, 2010 and that material weaknesses in ICFR existed as more fully
described below.
As defined by Auditing Standard No. 5, "An Audit of Internal Control Over
Financial Reporting that is Integrated with an Audit of Financial Statements and
Related Independence Rule and Conforming Amendments," established by the Public
Company Accounting Oversight Board ("PCAOB"), a material weakness is a
21
deficiency or combination of deficiencies that results more than a remote
likelihood that a material misstatement of annual or interim financial
statements will not be prevented or detected. In connection with the assessment
described above, management identified the following control deficiencies that
represent material weaknesses as of November 30, 2010:
(i) Lack of an independent audit committee. Although we have an audit
committee it is not comprised solely of independent directors. We may
establish an audit committee comprised solely of independent directors
when we have sufficient capital resources and working capital to
attract qualified independent directors and to maintain such a
committee.
(ii) Inadequate staffing and supervision within our bookkeeping operations.
The relatively small number of people who are responsible for
bookkeeping functions prevents us from segregating duties within our
internal control system. The inadequate segregation of duties is a
weakness because it could lead to the ultimate identification and
resolution of accounting and disclosure matters or could lead to a
failure to perform timely and effective reviews which may result in a
failure to detect errors in spreadsheets, calculations, or assumptions
used to compile the financial statements and related disclosures as
filed with the Securities and Exchange Commission.
(iii)Ineffective controls over period end financial disclosure and
reporting processes.
Our management determined that these deficiencies constituted material
weaknesses. Due to a lack of financial and personnel resources, we are not able
to, and do not intend to, immediately take any action to remediate these
material weaknesses. We will not be able to do so until we acquire sufficient
financing and staff to do so. We will implement further controls as
circumstances, cash flow, and working capital permit. Notwithstanding the
assessment that our ICFR was not effective and that there were material
weaknesses as identified in this report, we believe that our consolidated
financial statements contained in our Quarterly Report on form 10-Q for the
quarter ended November 30, 2010, fairly present our financial position, results
of operations and cash flows for the years covered thereby in all material
respects.
There were no changes in our internal control over financial reporting during
the quarter ended November 30, 2010, that have materially affected, or are
reasonably likely to materially affect, our internal control over financial
reporting.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
We are not a party to any material legal proceedings and to our knowledge, no
such proceedings are threatened or contemplated.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
Not applicable.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to our security holders for a vote during the period
ending November 30, 2010.
ITEM 5. OTHER INFORMATION
None.
22
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
Exhibit Number Description of Exhibit
-------------- ----------------------
31.1 Certification by Chief Executive Officer required by Rule
13a-14(a) or Rule 15d-14(a) of the Exchange Act, promulgated
pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, filed
herewith
31.2 Certification by Chief Financial Officer required by Rule
13a-14(a) or Rule 15d-14(a) of the Exchange Act, promulgated
pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, filed
herewith
32.1 Certification by Chief Executive Officer and Chief Financial
Officer, required by Rule 13a-14(b) or Rule 15d-14(b) of the
Exchange Act and Section 1350 of Chapter 63 of Title 18 of the
United States Code, promulgated pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002 filed herewith
SIGNATURES
Pursuant to the requirements of Section 13(a) or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
January 17, 2011 Orofino Gold Corp.
By: /s/ Ary Pernett
--------------------------------------------------
Ary Pernett, President and Chief Executive Officer
In accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
January 17, 2011 Orofino Gold Corp.
By: /s/ Ary Pernett
--------------------------------------------------
Ary Pernett, President, Treasurer and Chief
Financial Officer (Principal Executive Officer and
Principal Accounting Officer)
2
