Attached files
file | filename |
---|---|
EX-32.2 - GOLD HILLS MINING, LTD. | v211135_ex32-2.htm |
EX-10.9 - GOLD HILLS MINING, LTD. | v211135_ex10-9.htm |
EX-32.1 - GOLD HILLS MINING, LTD. | v211135_ex32-1.htm |
EX-31.2 - GOLD HILLS MINING, LTD. | v211135_ex31-2.htm |
EX-31.1 - GOLD HILLS MINING, LTD. | v211135_ex31-1.htm |
EX-10.11 - GOLD HILLS MINING, LTD. | v211135_ex10-11.htm |
EX-10.10 - GOLD HILLS MINING, LTD. | v211135_ex10-10.htm |
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
DC 20549
FORM
10-Q
x
|
Quarterly
Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934
|
For the
quarterly period ended: December 31, 2010
o
|
Transition
Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934
|
For the
transition period from ________ to _________
Commission
File Number: 000-50423
ARDENT
MINES LIMITED
(Exact
Name of Registrant as Specified in its Charter)
Nevada
|
88-0471870
|
(State
or Other Jurisdiction of
|
(IRS
Employer Identification
|
Incorporation
or Organization)
|
Number)
|
100
Wall Street, 21st
Floor
New
York, New York 10005
(Address of principal
executive offices)
(561)
989-3200
(Registrant's
telephone number, including area code)
N/A
(Former
Name, Former Address and Former Fiscal Year,
If
Changed Since Last Report)
Indicate
by check mark whether the registrant: (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days. Yes x No o
Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this
chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such
files). Yes o No o
Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of “large accelerated filer,” “accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
Large
Accelerated Filer
|
o
|
Accelerated
Filer
|
o
|
Accelerated
Filer
|
o
|
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 x No o
Indicate
the number of shares outstanding of each of the issuer’s classes of common
stock, as of the latest practicable date: The Issuer had 14,957,650 shares of
Common Stock, par value $0.00001, outstanding as of February 14,
2011.
ARDENT
MINES LIMITED
FORM
10-Q
December
31, 2010
INDEX
PART I— FINANCIAL
INFORMATION
|
|
||
Item
1.
|
Financial
Statements (unaudited)
|
|
4
|
Item
2.
|
Management’s
Discussion and Analysis of Financial Condition and Results of
Operations
|
4
|
|
Item
3.
|
Quantitative
and Qualitative Disclosures About Market Risk
|
8
|
|
Item
4.
|
Control
and Procedures
|
9
|
|
PART II— OTHER
INFORMATION
|
|
||
Item
1.
|
Legal
Proceedings
|
10
|
|
Item
1A.
|
Risk
Factors
|
|
10
|
Item
2.
|
Unregistered
Sales of Equity Securities and Use of Proceeds
|
10
|
|
Item
3.
|
Defaults
Upon Senior Securities
|
10
|
|
Item
4.
|
Reserved
|
10
|
|
Item
5.
|
Other
Information
|
10
|
|
Item
6.
|
Exhibits
and Reports on Form 8-K
|
10
|
|
11
|
|||
SIGNATURE PAGE
|
2
PART I – FINANCIAL
INFORMATION
ITEM
1. FINANCIAL
STATEMENTS
Ardent
Mines Limited
(An
Exploration Stage Company)
December
31, 2010
FINANCIAL
STATEMENTS
|
|
Balance
Sheets (unaudited)
|
F-1
|
Statements
of Expenses (unaudited)
|
F-2
|
Statements
of Cash Flows(unaudited)
|
F-3
|
Notes
to (Unaudited) Financial Statements
|
F-4
|
3
ARDENT
MINES LIMITED
|
||||||||
(An
Exploration Stage Company)
|
||||||||
(Unaudited)
|
||||||||
December
31,
|
June
30,
|
|||||||
2010
|
2010
|
|||||||
ASSETS
|
||||||||
Current
Assets
|
||||||||
Cash
|
$ | 2,933 | $ | 4,736 | ||||
TOTAL
ASSETS
|
$ | 2,933 | $ | 4,736 | ||||
LIABILITIES
AND STOCKHOLDERS’DEFICIT
|
||||||||
Current
Liabilities
|
||||||||
Accounts
payable
|
$ | 7,550 | $ | 6,060 | ||||
Loan
Payable
|
250,000 | - | ||||||
Related
party advances
|
43,554 | 38,490 | ||||||
301,104 | 44,550 | |||||||
Accrued
Liabilities
|
||||||||
Accrued
expenses
|
203,439 | - | ||||||
Accrued
director compensation
|
62,500 | - | ||||||
TOTAL
LIABILITIES
|
567,043 | 44,550 | ||||||
Stockholders’
Deficit
|
||||||||
Preferred
Stock, $0.00001 par value, 100,000,000 shares
authorized, 0 shares issued and outstanding
|
- | - | ||||||
Common
Stock, $0.00001 par value, 100,000,000 shares
authorized, 14,957,650 shares issued
and outstanding
|
150 | 149 | ||||||
Additional
paid in capital
|
551,517 | 467,018 | ||||||
Deficit
accumulated during the exploration stage
|
(1,075,777 | ) | (506,981 | ) | ||||
Total
Stockholders’ Deficit
|
(524,110 | ) | (39,814 | ) | ||||
TOTAL
LIABILITIES AND STOCKHOLDERS’ DEFICIT
|
$ | 2,933 | $ | 4,736 |
The
accompanying notes are an integral part of these interim unaudited financial
statements.
F-1
ARDENT
MINES LIMITED
|
||||||||||||||||||||
(An
Exploration Stage Company)
|
||||||||||||||||||||
(unaudited)
|
||||||||||||||||||||
Inception
|
||||||||||||||||||||
(July
27, 2000)
|
||||||||||||||||||||
Three
Months Ended
|
Six
Months Ended
|
Through
|
||||||||||||||||||
December
31, 2010
|
December
31, 2009
|
December
31, 2010
|
December
31, 2009
|
December
31,
2010
|
||||||||||||||||
Operating
Expenses:
|
||||||||||||||||||||
Consulting
Expense
|
$ | 1,500 | $ | 2,930 | $ | 6,500 | $ | 7,315 | $ | 320,746 | ||||||||||
Rent
|
1,976 | - | 1,976 | - | 1,976 | |||||||||||||||
Director
Compensation
|
22,500 | - | 22,500 | - | 22,500 | |||||||||||||||
Executive
Compensation
|
79,000 | - | 198,500 | - | 158,500 | |||||||||||||||
Filing
and Incorporation Fees
|
4,697 | - | 4,901 | - | 8,364 | |||||||||||||||
Other
General & Administrative
|
8,502 | 35 | 8,862 | 339 | 46,925 | |||||||||||||||
Legal
& Accounting
|
54,985 | 5,000 | 93,492 | 10,000 | 256,997 | |||||||||||||||
Mining
Exploration
|
- | - | 10,000 | - | 24,588 | |||||||||||||||
Advisory
Services
|
200,000 | - | 200,000 | - | 200,000 | |||||||||||||||
Travel
|
37,778 | - | 58,627 | - | 68,166 | |||||||||||||||
|
||||||||||||||||||||
Total
Operating Expenses
|
410,938 | 7,965 | 605,358 | 17,654 | 1,108,763 | |||||||||||||||
Interest
expense
|
3,438 | - | 3,438 | - | 4,728 | |||||||||||||||
OTHER
INCOME
|
||||||||||||||||||||
Debt
Forgiveness
|
- | - | - | - | 37,714 | |||||||||||||||
Net
loss
|
$ | (414,376 | ) | $ | (7,965 | ) | $ | (608,796 | ) | $ | (17,654 | ) | $ | (1,075,777 | ) | |||||
Net
loss per share
|
||||||||||||||||||||
Basic
and diluted
|
$ | (0.03 | ) | $ | (0.00 | ) | $ | (0.04 | ) | $ | (0.00 | ) | N/A | |||||||
Weighted
average
|
||||||||||||||||||||
shares
outstanding- Basic and diluted
|
14,957,650 | 14,257,650 | 14,957,650 | 14,257,650 | N/A |
The
accompanying notes are an integral part of these interim unaudited financial
statements.
F-2
(An
Exploration Stage Company)
|
||||||||||||
STATEMENTS
OF CASH FLOWS
|
||||||||||||
(unaudited)
|
||||||||||||
Inception
|
||||||||||||
(July
27, 2000)
|
||||||||||||
Six
Months Ended
|
Through
|
|||||||||||
December
31,
|
December
31,
|
December
31,
|
||||||||||
2010
|
2009
|
2010
|
||||||||||
CASH
FLOWS FROM OPERATING ACTIVITIES
|
||||||||||||
Net
loss
|
$ | (608,796 | ) | $ | (17,654 | ) | $ | (1,115,777 | ) | |||
Adjustments
to reconcile net loss to
cash
used in operating activities:
|
||||||||||||
Debt
forgiveness
|
- | (37,714 | ) | |||||||||
Imputed
interest on related party payable
|
- | 1,290 | ||||||||||
Stock
issued for services
|
84,500 | 359,500 | ||||||||||
Change
in:
|
||||||||||||
Accounts
payable & accrued liabilities
|
204,929 | 9,310 | 232,574 | |||||||||
Accrued
director compensation
|
62,500 | - | 62,500 | |||||||||
NET
CASH USED IN OPERATING ACTIVITIES
|
(256,867 | ) | (8,344 | ) | (497,627 | ) | ||||||
CASH
FLOWS FROM FINANCING ACTIVITIES
|
||||||||||||
Proceeds
from sales of common stock
|
- | - | 190,877 | |||||||||
Advances
from related party
|
5,064 | 7,990 | 59,683 | |||||||||
Proceeds
from loan payable
|
250,000 | - | 250,000 | |||||||||
NET
CASH PROVIDED BY FINANCING
|
||||||||||||
ACTIVITIES
|
255,064 | 7,990 | 500,560 | |||||||||
NET
CHANGE IN CASH
|
(1,803 | ) | (354 | ) | 2,933 | |||||||
CASH
AT BEGINNING OF PERIOD
|
4,736 | 494 | - | |||||||||
CASH
AT END OF PERIOD
|
$ | 2,933 | $ | 140 | $ | 2,933 | ||||||
Supplemental
Disclosures
|
||||||||||||
Interest
Paid
|
$ | - | $ | - | $ | - | ||||||
Income
tax Paid
|
$ | - | $ | - | $ | - |
The
accompanying notes are an integral part of these interim unaudited financial
statements.
F-3
ARDENT
MINES LIMITED
(An
Exploration Stage Company)
NOTES
TO UNAUDITED FINANCIAL STATEMENTS
NOTE
1 - BASIS OF PRESENTATION
The
accompanying unaudited interim financial statements of Ardent Mines Limited 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 the audited financial statements and
notes thereto contained in Ardent Mines' Annual Report filed with the SEC on
Form 10−K for the fiscal year ended June 30, 2010. In the opinion of management,
all adjustments, necessary for a fair presentation of financial position and the
results 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 substantially duplicate the disclosure contained in
the audited financial statements for the fiscal year ended June 30, 2010 as
reported in the Form 10−K have been omitted.
NOTE
2 - GOING CONCERN
From July
27, 2000 (date of inception) to December 31, 2010, Ardent Mines Limited has
incurred an accumulated deficit and has a working capital deficit at December
31, 2010. The ability of Ardent Mines to emerge from the exploration stage with
respect to any planned principal business activity is dependent upon its
successful efforts to raise additional equity financing and/or attain profitable
mining operations. Management has plans to seek additional capital through a
private placement and public offering of its common stock. There is no guarantee
that Ardent Mines will be able to complete any of the above objectives. These
factors raise substantial doubt regarding the Ardent Mines’ ability to continue
as a going concern.
NOTE
3 - LOANS
As of
December 31, 2010, we have borrowed a total of $250,000 from CRG
Finance AG at a rate of 7.5% per annum. This unsecured loan, plus any interest
accumulated, is due upon demand after the first anniversary of the agreement
date within thirty calendar days upon delivery to the Borrower a written demand
by the Lender. As of December 31, 2010, $3,438 in interest has
accrued.
NOTE
4 - ADVANCES
As of
December 31, 2010, Ardent Mines owes Urmas Turu, the Company’s former president
and a current board member, $43,554 that was used for payment of Company
expenses. The amount has no terms of repayment, is unsecured, and
bears no interest.
NOTE
5- RELATED PARTY TRANSACTIONS
Pursuant
to his Employment Agreement, Leonardo Riera was granted the right to receive
fifty thousand (50,000) restricted shares of the Company’s common stock valued
at $84,500. In consideration for services rendered to the Company,
Mr. Riera was paid a monthly salary of Twenty Thousand U.S. Dollars ($20,000)
per month, retroactive to August 15, 2010. As of December 31, 2010, $50,000 was
accrued and unpaid.
F-4
ARDENT
MINES LIMITED
(An
Exploration Stage Company)
NOTES
TO UNAUDITED FINANCIAL STATEMENTS
NOTE
6 – DIRECTOR COMPENSATION
On
November 1, 2010, Gabriel Margent was appointed to the Company’s board of
directors and to the position of financial expert on its Audit Committee. Mr.
Margent is compensated at a rate of Five Thousand U.S. Dollars ($5,000) per
month. Two Thousand Five Hundred U.S. Dollars ($2,500) of this amount shall be
payable incrementally on a monthly basis and pro-rated for any partial month of
service. The remainder of his compensation shall accrue until such time as the
Company shall have received capital investments in the amount of Ten Million
U.S. Dollars ($10,000,000), at which time all accrued and unpaid amounts shall
be due and payable.
On
November 30, 2010, James Ladner was appointed as a member of the board of
directors and also the Audit Committee. Mr. Ladner is compensated at a rate of
Five Thousand U.S. Dollars ($5,000) per month. Two Thousand Five Hundred U.S.
Dollars ($2,500) of this amount shall be payable incrementally on a monthly
basis and pro-rated for any partial month of service. The remainder of his
compensation shall accrue until such time as the Company shall have received
capital investments in the amount of Ten Million U.S. Dollars ($10,000,000), at
which time all accrued and unpaid amounts shall be due and payable.
On
December 9, 2010, Luciano de Freitas Borges was appointed as a member of the
board of directors. Mr. Borges is compensated at a rate of Five Thousand U.S.
Dollars ($5,000) per month. Two Thousand Five Hundred U.S. Dollars ($2,500) of
this amount shall be payable incrementally on a monthly basis and pro-rated for
any partial month of service. The remainder of his compensation shall accrue
until such time as the Company shall have received capital investments in the
amount of Ten Million U.S. Dollars ($10,000,000), at which time all accrued and
unpaid amounts shall be due and payable.
NOTE
7 – CORPORATE DEVELOPMENT SERVICES AGREEMENT
On
September 27, 2010, the Company entered into a Corporate Development Services
Agreement (the “Services Agreement”) with CRG Finance AG (“CRG”). The
Company has agreed to pay to CRG the following amounts for the Advisory
Services: (i) an inception fee (the “Inception Fee”) of One Hundred Thousand
U.S. Dollars ($100,000); and (ii) a monthly services fee (the “Advisory Services
Fees”) of Twenty Five Thousand U.S. Dollars ($25,000) per month, payable each
month for the period commencing as of September 1, 2010. CRG shall be
paid Ten Thousand U.S. Dollars ($10,000) per month of the Advisory Services Fee
beginning September 1, 2010, with the balance of Fifteen Thousand U.S. Dollars
($15,000) per month of the Advisory Services Fees together with the Inception
Payment accruing until completion of the first Company financing following the
date of the Services Agreement when such accruals shall be fully due and
payable. As of December 31, 2010, Two Hundred Thousand U.S. Dollars
($200,000) has been accrued.
NOTE
8 – SUBSEQUENT EVENTS
On
February 4, 2011, the Company’s Board of Directors granted Leonardo Riera
options to purchase fifty thousand (50,000) shares of the Company’s common stock
at a purchase price of one cent ($.01) per share. This option was
granted in lieu of fifty thousand (50,000) restricted shares he was entitled to
receive pursuant to Section 3(b) his Employment Agreement with the Company,
dated as of September 27, 2010.
F-5
Item
2. Management’s
Discussion and Analysis of Financial Condition and Results of
Operations
The
following discussion of the financial condition and results of operations of the
Company should be read in conjunction with the financial statements and the
related notes thereto included elsewhere in this Quarterly Report on Form 10-Q
(this “Report”). This Report contains certain forward-looking statements and the
Company's future operating results could differ materially from those discussed
herein. Certain statements contained in this Report, including, without
limitation, statements containing the words “believes”, “anticipates,” “expects”
and the like, constitute “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”). However, as
the Company intends to issue “penny stock,” as such term is defined in Rule
3a51-1 promulgated under the Exchange Act, the Company is ineligible to rely on
these safe harbor provisions. Such forward-looking statements involve known and
unknown risks, uncertainties and other factors which may cause the actual
results, performance or achievements of the Company to be materially different
from any future results, performance or achievements expressed or implied by
such forward-looking statements. Given these uncertainties, readers are
cautioned not to place undue reliance on such forward-looking statements. The
Company disclaims any obligation to update any such factors or to announce
publicly the results of any revisions of the forward-looking statements
contained or incorporated by reference herein to reflect future events or
developments, except as required by the Exchange Act.
Unless
otherwise provided in this Report, references to the “Company,” the
“Registrant,” the “Issuer,” “we,” “us,” and “our” refer to Ardent Mines
Limited.
Introduction
We were
incorporated in Nevada on July 27, 2000. We are presently engaged in the
acquisition of mining properties. The Company’s address is 100 Wall
Street, 21st Floor, New York, NY 10005. The Company’s telephone number is (561)
989-3200.
In August
2000, we acquired the right to prospect one mineral property containing eight
mining claims located on Copperkettle Creek in British Columbia,
Canada. We have allowed these claims to lapse. From August
26, 2006 to December 11, 2006, we did not conduct any
operations. During that period, we intended to identify an
acquisition or merger candidate with ongoing operations in any
field. However in December 2006 we decided to acquire the right to
explore a new property in British Columbia and returned to the business of
mineral exploration. On April 30, 2009, the Company decided not to renew certain
claims due to a lack of capital. To date we have not performed any work on
developing claims in Canada, and we no longer plan to pursue such
development. The Company determined to pursue other mining
development opportunities.
During
the period covered by this Report, the Company has expanded its Board of
Directors, appointed new officers, and entered into a Letter of Intent for the
acquisition of a Brazilian mining company. The Company is continuing
to negotiate, and perform due diligence related to the acquisition of the
Brazilian company, and is exploring other potential
acquisitions.
4
The
Company’s Current Business Operations
Change
of Officers and Directors
On August
25, 2010, Mr. Urmas Turu resigned as the President of the Company. He
shall remain a member of the Company’s Board of Directors and as the Company’s
Secretary and Treasurer until qualified replacements are
appointed. On August 25, 2010, Mr. Leonardo Alberto Riera was
appointed as a member of the Company’s Board of Directors and as the President
and Chief Executive Officer of the Company. On September 2, 2010, Mr.
Luis Feliu was appointed as the Chief Financial Officer of the
Company. Mr. Riera and Mr. Feliu will both devote the majority of
their time to the Company’s operations.
Letter
of Intent to Acquire Rio Sao Pedro Mineracao LTDA
On
September 25, 2010, the Company entered into a letter of intent (the “Letter of
Intent”) with Rio Sao Pedro Mineracao LTDA (“Rio Sao Pedro”), a Brazilian mining
company. Rio Sao Pedro owns a prospective gold mine, the “Fazenda
Lavras,” which is near the Morro do Ouro mine of Kinross Gold Corporation in the
city of Paracatu, located in the State of Minas Gerais, Brazil. The
Rio Sao Pedro Fazenda Lavras property covers approximately 211 hectares
(approximately 521 acres), with gold mining rights and other mineral rights on a
total of 828 hectares (approximately 2,046 acres). Subject to the
closing of the transaction, Rio Sao Pedro will become a wholly owned subsidiary
of the Company.
The
closing of the transaction is subject to customary closing conditions, including
the completion of an independent geology survey, completion of audited financial
statements, acquisition of all necessary government approvals to commence gold
mining on the property, completion of due diligence satisfactory to the Company
in its sole discretion, and execution of detailed final agreements supplementing
the terms and conditions of the Letter of Intent, including, without limitation,
representations regarding the validity of the assessments of all gold ore
reserves, the status of all government licenses and related
matters.
Negotiations
between the Company and Rio Sao Pedro and the Sellers have
continued amicably. The Company is presently engaged in due diligence
concerning the prospective acquisition of Rio Sao Pedro. As
a condition to closing of the acquisition of Rio Sao Pedro by the
Company, certain outstanding issues among the Sellers must be
resolved. In addition, certain disputes between the Sellers
and third parties are also being reviewed. The
Company has been advised that the Sellers intend to resolve all internal
issues and disputes with third parties during the foreseeable future, however,
as of the date of this report no assurances or guarantees can be given
in respect of closing the acquisition of Rio Sao Pedro by the
Company.
Exploration
and Acquisition Agreement to Acquire Capri General Trading Co. Ltd.
On
December 12, 2010, the Company entered into an Exploration and Acquisition
Agreement (the “Capri Agreement”) with Afrocan Resources Ltd. (“Afrocan”), a
company incorporated in British Columbia, Canada. Afrocan owns 100%
of all issued and outstanding shares of Capri General Trading Co. Ltd.
(“Capri”), which is the legal and beneficial owner of 100% of all mineral rights
as per Tanzanian License No. PL 1761/2001 (the “Shenda License”). The Shenda
License is the mineral rights for a property situated approximately 53
kilometers West North West of Kahama in the Bukombe District, in the Shinyanga
Region of Tanzania. Subject to the closing of the transaction, Capri will become
a wholly owned subsidiary of the Company.
Pursuant
to the Capri Agreement, the Company intends to conduct exploration activities at
the property covered by the Shenda license (the “Shenda Property”) over the
following twelve months (such costs, the “Exploration Costs”). In the
event that the Company shall ascertain commercially available and commercially
exploitable reserves of not less than Four Hundred Thousand (400,000) ounces of
gold at the Shenda Property, the Company shall acquire all of the issued and
outstanding equity interests in Capri (the “Capri Shares”) from
Afrocan. In exchange for the acquisition of the Capri Shares, the
Company shall issue to Afrocan shares of the Company having an aggregate value
of Nine Million U.S. Dollars ($9,000,000) (the “Ardent Shares”). The
price per share shall be determined at the lower of Five U.S. Dollars ($5.00)
per share or the average closing price of the publicly traded common stock of
the Company on the five (5) consecutive days prior to the closing. In
the event that the Exploration Costs exceed Three Million U.S. Dollars
($3,000,000), the number of Ardent Shares to be delivered shall be reduced
accordingly, so that the total value of the purchase price shall not exceed
Twelve Million U.S. Dollars ($12,000,000).
5
The
closing of the Capri Agreement transaction is subject to final due diligence
satisfactory to the Company and the completion and execution of detailed long
form agreements supplementing the terms and conditions of the Capri Agreement,
including, without limitation, representations regarding the validity of the
assessments of all gold ore reserves, the status of all government licenses and
related matters. The Company and Afrocan have agreed to exclusivity and not to
solicit or negotiate any alternative transactions.
Following
the closing, the Company shall undertake to raise such funds as are necessary
for the development of mining operations at the property covered by the Shenda
License and the general operating expenses of the Company.
Compensation
of Officers and Directors
Pursuant
his employment agreement, the Company’s President and Chief Executive Officer,
Leonardo Riera, was to be granted fifty thousand (50,000) restricted shares of
the Company’s common stock (the “Restricted Shares”). On February 4,
2011, the Company’s Board of Directors granted Leonardo Riera options to
purchase fifty thousand (50,000) shares of the Company’s common stock at a
purchase price of one cent ($.01) per share. This option was granted
in lieu of the Restricted Shares.
On
November 1, 2010, Gabriel Margent was appointed to our board and to the position
financial expert on our Audit Committee. The Company and Mr. Margent have agreed
that his compensation shall initially be five thousand U.S. Dollars ($5,000) per
month. Two thousand five hundred U.S. Dollars ($2,500) of this amount
shall be payable incrementally on a monthly basis and pro-rated for any partial
month of service, less any applicable statutory and regulatory deductions, which
shall be payable in accordance with the Company’s regular payroll practices, as
the same may be modified from time to time. The remainder of this
compensation shall accrue until such time as the Company shall have received
capital investments in the amount of ten million U.S. Dollars ($10,000,000), at
which time all accrued and unpaid amounts shall be due and
payable. The Company and Mr. Margent have agreed that an option grant
from the Company to Mr. Margent shall be set at a future date.
On
November 30, 2010, James Ladner was appointed as a member of our board of
directors and also the Audit Committee. The Company and Mr. Ladner have agreed
that his compensation shall initially be five thousand U.S. Dollars ($5,000) per
month. Two thousand five hundred U.S. Dollars ($2,500) of this amount shall be
payable incrementally on a monthly basis and pro-rated for any partial month of
service, less any applicable statutory and regulatory deductions, which shall be
payable in accordance with the Company’s regular payroll practices, as the same
may be modified from time to time. The remainder of this compensation shall
accrue until such time as the Company shall have received capital investments in
the amount of ten million U.S. Dollars ($10,000,000), at which time all accrued
and unpaid amounts shall be due and payable. The Company and Mr. Ladner have
agreed that an option grant from the Company to Mr. Ladner shall be set at a
future date.
On
December 9, 2010, Luciano de Freitas Borges was appointed as a member of our
board of directors. The Company and Mr. Borges have agreed that his
compensation shall initially be five thousand U.S. Dollars ($5,000) per
month. Two thousand five hundred U.S. Dollars ($2,500) of this amount
shall be paid on a monthly basis and the remainder of this compensation shall
accrue until such time as the Company shall have received capital investments in
the amount of ten million U.S. Dollars ($10,000,000), at which time all accrued
and unpaid amounts shall be paid. In addition, Mr. Borges shall be
eligible to receive a future grant of options to purchase 200,000 shares of the
Company’s common stock. In addition to Mr. Borges’ service as a
Member of the Board, he shall provide consulting services to the Company
through Ad Hoc Associated Advisors Inc. (the “Technical Advisor”), a Company of
which he is the Chief Executive Officer. Such consulting services
shall relate to the Company’s mining activities, and shall be governed by
the Technical Advisory Services Agreement dated as of December 9, 2010 (the
“Ad Hoc Agreement”), by and between the Company and the Technical
Advisor. The Company shall compensate the Technical Advisor as
follows: (i) The Technical Advisor shall be paid at a rate of Two thousand five
hundred U.S. Dollars ($2,500) per month; and (ii) be eligible to receive a bonus
of restricted common stock. Either party may terminate the Ad Hoc
Agreement on thirty (30) days written notice.
6
Results
of Operations
Revenues
During
the period ended December 31, 2010 we did not earn any revenues and incurred a
net loss of $608,796. During the period ended December 31, 2009 we did not earn
any revenues and incurred a net loss of $17,654.
Expenses
During
the three months ended December 31, 2010 we incurred total expenses of $414,376
which included $1,500 in consulting fees, $54,985 in legal and accounting fees,
$4,697 in filing and incorporation fees, $8,502 in other general and
administrative fees, $101,500 in officer and director compensation, $1,976 in
rent, $0 in mining and exploration, $3,438 in interest, $200,000 in advisory
services and $37,778 for travel expenses. Comparatively, during the same period
in 2009, we incurred total expenses of $7,965 which included $2,930 in
consulting fees, $5,000 in legal and accounting fees, $35 in other general and
administrative fees and $0 for travel expenses.
Liquidity
and Capital Resources
As of the
date of this Report, we have yet to generate any revenues from our business
operations. The Company has raised funds through the sale of equity and
borrowing. The Company will need to raise additional capital to
commence operations. The amount of capital required will be
determined by the size and nature of the mining projects which the Company may
commence in the future. We have no assurance that financing will be
available to us on acceptable terms. If financing is not available on
satisfactory terms, we may be unable to continue, develop or expand our
operations. Any equity financing we may pursue will result in additional
dilution to existing shareholders.
The
Company will require significant additional funding in order to conduct proposed
operations for the next year. The amount of funding required will be
determined by the number of acquisitions of mining properties the Company
engages in during such time.
On July
27, 2007 we completed our private placement. We raised $82,432 by
selling 8,243,200 shares of common stock at a price of $0.01 per share to twelve
investors. The proceeds of the offering have been used to sustain
operations through the date of this Report.
On May
11, 2010, we entered into a stock purchase agreement with CRG Finance AG whereby
CRG Finance AG purchased 700,000 shares of common stock at $0.01 per share for a
total of $7,000.
On
October 19, 2010, the Company entered into a Convertible Promissory Note with
CRG Finance AG. CRG Finance AG has agreed to loan the Company an aggregate of up
to One Million U.S. Dollars ($1,000,000) which may be drawn down by the Company
in tranches at an interest rate of seven and one half percent (7.5%), calculated
based on a year of 365 days and actual days elapsed. After the first anniversary
thereof, the loan shall be due thirty (30) days after a demand is made by CRG
Finance AG. In lieu of payment in cash, the CRG Finance AG may request that the
Company repay any or all of the principal and/or interest in the form of
restricted common stock of the Company at a price per share equal to eighty
percent (80%) of the average closing price of the Company’s common stock over
the thirty (30) days immediately preceding the closing of the planned
acquisition of Rio Sao Pedro Mineracao LTDA (“RSPM”) or such other third-party
assets or shares of a strategic acquisition company which may be acquired
earlier than such RSPM closing. As of December 31, 2010, we have borrowed a
total of $250,000 from CRG Finance AG.
7
As of
December 31, 2010 we had current assets of $2,933, current liabilities of
$567,043 and a working capital of deficit $564,110. As of December
31, 2010 we had total assets of $2,933 comprised entirely of cash.
During
the period ended December 31, 2010 we spent net cash of $256,867 on operating
activities, compared to net cash spending of $8,344 on operating activities
during the same period in 2009.
Cash
provided by financing activities totaled $255,064 for the period ended December
31, 2010 compared to net cash used in financing activities of $7,990 during the
same period in 2009.
Subsequent
Events
On
January 18, 2011, the Company announced that it agreed upon binding and
exclusive terms to acquire Gold Hills Mining Ltda (“Gold Hills”), a Brazilian
corporation which owns mineral rights on four properties located in Northeastern
Brazil, comprising a total area of approximately 3,500 Hectares, collectively to
be known as the “Serra do Ouro” project.
The Gold
Hills properties are in a gold bearing shear zone, which hosts a 14 km trend of
highly mineralized veins, with areas of gold grades in the 10 gr/MT range,
underground galleries (built by the CPRM, an agency of Brazil's Ministry of
Mines), shafts, and gold-bearing tailings with average grades in the 1 – 3 gr/MT
range, yet to be fully evaluated. Gold Hills has secured all mineral rights, and
has conducted preliminary geochemical and geophysical work on this
area.
The Gold
Hills properties are located in Teixeira County, State of Paraiba, and
Itapetim County, State of Pernambuco. As per the arrangement with Gold
Hills Mining Ltda., the Company will engage in a new survey drilling
program during the first 12 to 15 months after the closing of the
acquisition, which is expected to occur in March of 2011. The closing of
this transaction is subject to the completion of due diligence and other
conditions, including the execution of mutually acceptable detailed
agreements.
Recent
accounting pronouncements
Certain
accounting pronouncements have been issued by the FASB and other standard
setting organizations which are not yet effective and have not yet been adopted
by the Company. The impact on the Company’s financial position and results of
operations from the adoption of these standards is not expected to be
material.
Off
Balance Sheet Arrangements
The
Company does not have any off balance sheet arrangements that have or are
reasonably likely to have a current or future effect on the Company's financial
condition, changes in financial condition, revenues or expenses, results of
operations, liquidity, capital expenditures or capital resources.
Item
3. Quantitative
and Qualitative Disclosure About Market Risk.
Not
Applicable.
8
Item
4. Controls
and Procedures.
Evaluation
of Disclosure Controls and Procedures
We
maintain “disclosure controls and procedures,” as such term is defined in Rule
13a-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”), that
are designed to ensure that information required to be disclosed in our Exchange
Act reports is recorded, processed, summarized and reported within the time
periods specified in the Securities and Exchange Commission rules and forms, and
that such information is accumulated and communicated to our management,
including our Principal Executive Officer and Principal Financial Officer, as
appropriate, to allow timely decisions regarding required disclosure. As of the
end of the period covered by this Report, the Company carried out, under the
supervision and with the participation of the Company’s management, including
its Chief Executive Officer and Chief Financial Officer, an evaluation of the
effectiveness of the design and operation of the Company’s disclosure controls
and procedures in ensuring that information required to be disclosed by the
Company in its reports is recorded, processed, summarized and reported within
the required time periods. Based on their evaluation of the Company’s
disclosure controls and procedures as of December 31, 2010, the Company’s Chief
Executive Officer and Chief Financial Officer have concluded that, as of that
date, the Company’s controls and procedures were effective for the purposes
described above.
Changes
in Internal Control over Financial Reporting
There was
no change in the Company’s internal control over financial reporting (as defined
in Rule 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934)
during the quarter ended December 31, 2010 that has materially affected or is
reasonably likely to materially affect the Company’s internal control over
financial reporting.
9
PART
II. OTHER
INFORMATION
Item
1. Legal
Proceedings.
Currently
we are not aware of any litigation pending or threatened by or against the
Company.
Item
1A. Risk
Factors.
Not
Applicable.
Item
2. Unregistered
Sales of Equity Securities and Use of Proceeds.
Not
Applicable.
Item
3. Defaults
Upon Senior Securities.
Not
Applicable.
Item
4. (Removed
and Reserved)
Item
5. Other
Information.
Not
Applicable.
10
Item
6. Exhibits.
(a)
Exhibits
Exhibit No.
|
Description of Exhibits
|
|
Exhibit
10.8
|
Convertible
Promissory Note, by and between the Company and CRG Finance AG, dated as
of October 19, 2010, incorporated by reference to Exhibit 10.8 to the
Company’s Quarterly Report on Form 10-Q, filed with the Securities and
Exchange Commission on November 15, 2010.
|
|
Exhibit
10.9
|
Agreement,
by and between the Company and Luciano de Freitas Borges, dated as of
December 9, 2010.
|
|
Exhibit
10.10
|
Technical
Advisory Services Agreement, by and between the Company and Ad Hoc
Associated Advisors Inc., dated as of December 9, 2010.
|
|
Exhibit
10.11
|
Exploration
and Acquisition Agreement, by and between the Company and Afrocan
Resources Ltd., dated as of December 12, 2010.
|
|
Exhibit 31.1
|
Certification
of Principal Executive Officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.
|
|
Exhibit 31.2
|
Certification
of Principal Financial Officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.
|
|
Exhibit 32.1
|
Certification
of the Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.
|
|
Exhibit
32.2
|
Certification
of the Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.
|
11
SIGNATURES
Pursuant
to the requirements 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.
ARDENT
MINES LIMITED
|
|||
(Registrant)
|
|||
Dated:
February 14, 2011
|
|||
By:
|
/s/ Leonardo Riera
|
||
Name:
|
Leonardo
Riera
|
||
Title:
|
Principal
Executive Officer
|
||
Dated:
February 14, 2011
|
|||
By:
|
/s/ Luis Feliu
|
||
Name:
|
Luis
Feliu
|
||
Title:
|
Principal
Financial Officer and
Chief
Accounting Officer
|
12