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EX-31 - CERTIFICATION - Amazing Energy Oil & Gas, Co.exhibit311.htm
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EX-31 - CERTIFICATION - Amazing Energy Oil & Gas, Co.exhibit312.htm


UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC  20549


FORM 10-Q


(Mark one)

[X]

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934


For the quarterly period ended June 30, 2011


[  ]

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934


For the transition period from ______ to ______


GOLD CREST MINES, INC.

(Exact name of registrant as specified in its charter)


Nevada

000-52392

82-0290112

(State or other jurisdiction of incorporation or organization)

Commission file number

(IRS Employer Identification Number)


724 E Metler Lane

 Spokane, WA

 


99218

(Address of principal executive offices)

 

(Zip Code)


Registrant's telephone number, including area code: (509) 893-0171


Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Sections 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  ¨


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  ¨    No  x


Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company.  


Large accelerated filer

¨

 

Accelerated filer

¨

Non-accelerated filer

¨

(Do not check if a smaller reporting company)

Smaller reporting company

x


Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes ¨  No x


Indicate the number of shares outstanding of each of the issuers classes of common stock, as of the latest practical date:  


At August 10, 2011, 89,205,828 shares of the registrant’s common stock were outstanding.



1







GOLD CREST MINES, INC.

FORM 10-Q

For the Quarter Ended June 30, 2011


TABLE OF CONTENTS

 

 

Page #

PART I - Financial Information

 

 

 

 

 

Item 1

Financial Statements (Unaudited)

3

 

 

 

 

 

 

Consolidated Balance Sheets

3

 

 

 

 

 

 

Consolidated Statements of Operations

4

 

 

 

 

 

 

Consolidated Statements of Cash Flows

5

 

 

 

 

 

 

Notes to Consolidated Financial Statements

6

 

 

 

 

 

Item 2

Management’s Discussion and Analysis of Financial Condition and Results of Operations

10

 

 

 

 

 

Item 3

Quantitative and Qualitative Disclosures About Market Risk

13

 

 

 

 

 

Item 4

Controls and Procedures

13

 

 

 

 

PART II - Other Information

 

 

 

 

 

Item 2

Unregistered Sales of Equity Securities and Use of Proceeds

13

 

 

 

 

 

Item 6

Exhibits

13

 

 

 

 

Signatures

14

 

 

 

 







2







GOLD CREST MINES, INC.

(An Exploration Stage Company)

Consolidated Balance Sheets

 

 

 

 

 

 

June 30,

 

December 31,

 

 

 

 

 

 

2011

 

2010

ASSETS

 

(Unaudited)

 

 

 

CURRENT ASSETS

 

 

 

 

 

 

Cash and cash equivalents

$

1,963

$

10,814

 

 

 

 

Total Current Assets

 

1,963

 

10,814

 

Equipment, net of accumulated depreciation

 

 

 

 

 

 

of $2,913 and $2,572, respectively

 

500

 

841

 

Mineral properties

 

11,373

 

11,373

 

 

TOTAL ASSETS

$

13,836

$

23,028

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' DEFICIT

 

 

 

 

 

CURRENT LIABILITIES

 

 

 

 

 

 

Accounts payable

$

33,901

$

27,890

 

 

Accounts payable – related party

 

36,000

 

36,000

 

 

Accrued liabilities

 

10,603

 

6,298

 

 

 

 

Total Current Liabilities

 

80,504

 

70,188

 

 

 

 

 

 

 

 

 

 

 

Total Liabilities

 

80,504

 

70,188

 

 

 

 

 

 

 

 

 

 

Commitments and contingencies (Note 6)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

STOCKHOLDERS' DEFICIT

 

 

 

 

 

 

Preferred stock; no par value; 10,000,000 shares

 

 

 

 

 

 

 

authorized, none issued or outstanding

 

-

 

-

 

 

Common stock; $0.001 par value; 500,000,000 shares

 

 

 

 

 

 

 

authorized; 89,205,828 and 88,205,828 shares issued

 

 

 

 

 

 

 

and outstanding, respectively

 

89,206

 

88,206

 

 

Additional paid-in capital

 

9,426,503

 

9,416,503

 

 

Accumulated deficit during exploration stage

 

(9,582,377)

 

(9,551,869)

 

 

 

 

Total Stockholders' Deficit

 

(66,668)

 

(47,160)

 

 

 

 

 

 

 

 

 

 

 

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT

$

13,836

$

23,028

 


The accompanying notes are an integral part of these consolidated financial statements.




3





GOLD CREST MINES, INC.

(AN EXPLORATION STAGE COMPANY)

Consolidated Statements of Operations

(Unaudited)

 

 

 

Three Months Ended

 

Six Months Ended

 

From Inception

 

 

 

June 30,

 

June 30,

 

June 30,

 

June 30,

 

January 11, 2005

 

 

 

2011

 

2010

 

2011

 

2010

 

to June 30, 2011

REVENUES

$

-

$

-

$

-

$

-

$

-

 

 

 

 

 

 

 

 

 

 

 

 

OPERATING EXPENSES:

 

 

 

 

 

 

 

 

 

 

 

 Exploration expenditures

 

-

 

4,866

 

-

 

12,205

 

4,352,387

 

 Settlement of drilling contract

 

-

 

-

 

-

 

-

 

161,813

 

 Abandonment of mineral lease

 

-

 

-

 

-

 

-

 

83,600

 

 Gain on sale of mineral lease

 

-

 

-

 

-

 

-

 

(16,875)

 

 Mineral lease option income

 

-

 

-

 

-

 

-

 

(30,000)

 

 Impairment of mineral properties

 

 

 

 

 

 

 

 

 

 

 

    and royalty interest

 

-

 

-

 

-

 

-

 

616,875

 

 Impairment of investment in Golden Lynx LCC

 

-

 

-

 

-

 

-

 

43,202

 

 Loss on disposal of equipment

 

-

 

-

 

-

 

-

 

16,738

 

 Legal and accounting expenses

 

1,948

 

2,683

 

11,370

 

13,909

 

537,520

 

 Directors' fees

 

2,000

 

-

 

2,000

 

-

 

846,000

 

 General and administrative

 

7,450

 

7,490

 

17,138

 

16,580

 

3,027,739

 

    TOTAL OPERATING EXPENSES

 

11,398

 

15,039

 

30,508

 

42,694

 

9,638,999

 

 

 

 

 

 

 

 

 

 

 

 

 LOSS FROM OPERATIONS

 

(11,398)

 

(15,039)

 

(30,508)

 

(42,694)

 

(9,638,999)

 

 

 

 

 

 

 

 

 

 

 

 

 OTHER INCOME (EXPENSE):

 

 

 

 

 

 

 

 

 

 

 

 Interest income

 

-

 

-

 

-

 

-

 

79,182

 

 Interest expense

 

-

 

-

 

-

 

-

 

(22,560)

 

    TOTAL OTHER INCOME (EXPENSE)

 

-

 

-

 

-

 

-

 

56,622

 

 

 

 

 

 

 

 

 

 

 

 

 LOSS BEFORE TAXES

 

(11,398)

 

(15,093)

 

(30,508)

 

(42,694)

 

(9,582,377)

 INCOME TAXES

 

-

 

-

 

-

 

-

 

-

 NET LOSS

 

$        (11,398)

 

$        (15,093)

$

(30,508)

$

(42,694)

 

$                (9,582,377)

 

 

 

 

 

 

 

 

 

 

 

 

NET LOSS PER COMMON SHARE - BASIC

 

 

 

 

 

 

 

 

 

 

 

AND DILUTED

$

Nil

$

Nil

$

Nil

$

Nil

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 WEIGHTED AVERAGE NUMBER

 

 

OF SHARES OUTSTANDING, BASIC

 

 

 

 

 

 

 

 

 

 

 

 AND DILUTED

 

       88,764,524

 

       85,705,828

 

          88,504,723

 

          85,705,828

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The accompanying notes are an integral part of these consolidated financial statements.

 

 

 

 



4






GOLD CREST MINES, INC.

(An Exploration Stage Company)

Consolidated Statements of Cash Flows

(Unaudited)

 

 

 

 

Six Months

 

Six Months

 

From Inception

 

 

 

 

Ended

 

Ended

 

January 11, 2005 to

 

 

 

 

June 30, 2011

 

June 30, 2010

 

June 30, 2011

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

 

 

 

 

 Net loss

$

(30,508)

$

(42,694)

$

(9,582,377)

 

 Adjustments to reconcile net loss to net cash used

 

 

 

 

 

 

 

     by operating activities:

 

 

 

 

 

 

 

 

Depreciation

 

341

 

341

 

52,693

 

 

Common stock and options issued for services

 

-

 

-

 

1,368,976

 

 

Equity compensation for management and directors

 

2,000

 

-

 

1,216,241

 

 

Interest paid with common shares

 

-

 

-

 

12,500

 

 

Settlement of drilling contract

 

-

 

-

 

161,813

 

 

Gain recognized on equipment exchanged in settlement

 

 

 

 

 

 

 

 

     of accounts payable

 

-

 

-

 

(3,421)

 

 

Loss on disposal of equipment

 

-

 

-

 

16,738

 

 

Abandonment of mineral lease

 

-

 

-

 

83,600

 

 

Impairment of mineral properties and royalty interest

 

-

 

-

 

616,875

 

 

Impairment of investment in Golden Lynx LLC

 

-

 

-

 

43,202

 

 

Gain on sale of mineral properties

 

-

 

-

 

(16,875)

 

 Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Interest receivable

 

-

 

-

 

(6,266)

 

 

Prepaid expenses and deposits

 

-

 

9,731

 

57,999

 

 

Miscellaneous receivable

 

-

 

-

 

3,000

 

 

Accounts payable and accrued liabilities

 

10,316

 

1,164

 

110,333

 

 

       Net cash used by operating activities

 

(17,851)

 

(31,458)

 

(5,864,969)

 

 

 

 

 

 

 

 

 

 CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

 

 

 

 

 

 Cash received in reverse merger  

 

-

 

-

 

7,456

 

 Note receivable issued

 

-

 

-

 

(200,000)

 

 Purchase of royalty interest in mineral property

 

-

 

-

 

(400,000)

 

 Purchase of mineral properties

 

-

 

-

 

(388,175)

 

 Proceeds from the sale of equipment

 

-

 

-

 

22,979

 

 Proceeds from the sale of mineral properties

 

-

 

-

 

50,000

 

 Proceeds from deposit on option agreement

 

-

 

20,000

 

-

 

 Purchase of equipment

 

-

 

-

 

(134,971)

 

 

       Net cash provided (used) by investing activities

 

-

 

20,000

 

(1,042,711)

 

 

 

 

 

 

 

 

 

 CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

 

 

 

 

 Borrowings under line of credit

 

-

 

-

 

250,000

 

 Payments on line of credit

 

-

 

-

 

(250,000)

 

 Proceeds from the issuance of stock on the exercise of warrants

 

-

 

-

 

201,300

 

 Sale of common stock, net of issuance costs

 

9,000

 

-

 

6,708,343

 

 

       Net cash provided by financing activities

 

9,000

 

-

 

6,909,643

 

 

 

 

 

 

 

 

 

 

 Net change in cash and cash equivalents

 

(8,851)

 

(11,458)

 

1,963

 

 Cash and cash equivalents, beginning of period

 

10,814

 

12,931

 

-

 

 Cash and cash equivalents, end of period

$

1,963

$

1,473

$

1,963

 

 

 

 

 

 

 

 

 

 NON-CASH INVESTING AND FINANCING ACTIVITIES

 

 

 

 

 

 

 

 Land contributed in exchange for investment in Golden Lynx LLC

$

-

$

-

$

54,575

 

 Land held in Golden Lynx LLC returned as mineral properties

 

-

 

11,373

 

11,373

 

 Note receivable forgiven in connection with settlement agreement

 

-

 

-

 

120,000

 

 Equipment relinquished in connection with settlement agreement

 

-

 

-

 

12,654

 

 Equipment exchanged for settlement of accounts payable  

 

-

 

-

 

29,828

 

 

The accompanying notes are an integral part of these consolidated financial statements.

 

 




5





Gold Crest Mines, Inc.

(An Exploration Stage Company)

Notes to Unaudited Consolidated Financial Statements


NOTE 1.  Basis of Presentation


Gold Crest Mines, Inc. and its subsidiaries (“Gold Crest” and “the Company”) is a Nevada corporation originally incorporated on August 20, 1968, as Silver Crest Mines, Inc., an Idaho corporation.  


On August 1, 2006, Gold Crest acquired 100% of the issued and outstanding shares of Niagara Mining and Development Co., (“Niagara”), an Idaho corporation formed on January 11, 2005, and its wholly-owned subsidiary, Kisa Gold Mining, Inc. (“Kisa”), an Alaskan corporation formed on July 28, 2006.  Gold Crest’s sole asset on the merger date was cash of $7,456, which was accounted for as being acquired by Niagara in exchange for 14,600,100 common shares of Niagara.    Niagara’s sole asset on the merger date was cash of $150,000.   Neither company had liabilities on the date of the merger.  This transaction has been treated as a reverse merger, effectively as if Niagara had issued shares for consideration equal to the net monetary assets of Gold Crest. Under reverse acquisition accounting, the consolidated financial statements of the entity are considered a continuation of the financial statements of Niagara, the accounting acquirer.  On June 20, 2008, 100% of the issued and outstanding shares of Kisa were transferred from Niagara to the Company.


The Company is in the business of exploration, development, and if warranted the mining of properties containing valuable mineral deposits. The focus of the Company’s exploration programs is directed at precious metals, primarily gold.


The interim Consolidated Financial Statements of the Company and its subsidiaries are unaudited.  In the opinion of management, all adjustments and disclosures necessary for a fair presentation of these interim statements have been included.  All such adjustments are, in the opinion of management, of a normal recurring nature.  The results reported in these interim Consolidated Financial Statements are not necessarily indicative of the results that may be reported for the entire year and that the results at June 30, 2011 may not be indicative of December 31, 2011.  These interim Consolidated Financial Statements should be read in conjunction with the Company’s Consolidated Financial Statements included in its Annual Report on Form 10-K for the year ended December 31, 2010.


NOTE 2.  Summary of Significant Accounting Policies


This summary of significant accounting policies is presented to assist in understanding the financial statements. The financial statements and notes are representations of the Company’s management, which is responsible for their integrity and objectivity. These accounting policies conform to accounting principles generally accepted in the United States of America and have been consistently applied in the preparation of the financial statements.


Consolidation of Subsidiaries


The consolidated financial statements include the Company’s accounts and the accounts of wholly-owned subsidiaries.  All significant intercompany balances and transactions have been eliminated in consolidation.


Fair Values of Financial Instruments


The carrying amounts of financial instruments including cash and cash equivalents approximated their fair values as of

June 30, 2011 and December 31, 2010.


Basic and Diluted Net Loss Per Share


Net loss per share was computed by dividing the net loss by the weighted average number of common shares outstanding during the period.  The weighted average number of shares was calculated by taking the number of shares outstanding and weighting them by the amount of time that they were outstanding.  Diluted net loss per share for the Company is the same as basic net loss per share, as the inclusion of common stock equivalents would be anti-dilutive.  At June 30, 2011 and 2010, the common stock equivalents consisted of 5,280,000 options exercisable at prices ranging from $0.28 to $0.53 per share.







6






NOTE 3. Going Concern


As shown in the accompanying financial statements, the Company has had no revenues and incurred an accumulated deficit of $9,582,377 through June 30, 2011.  Another factor is that the Company has a negative current ratio of 0.02: 1 at June 30, 2011.  The current ratio is a measurement of the degree to which current assets cover current liabilities (current assets/ current liabilities).  A high ratio indicates a good probability the enterprise can retire current debts.  These factors raise substantial doubt about the Company’s ability to continue as a going concern.  Management intends to seek additional capital from new equity securities offerings that will provide funds needed to increase liquidity, fund internal growth and fully implement its business plan.


The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classification of liabilities that might be necessary in the event the Company cannot continue in existence.


Should the Company be unable to raise capital through future private placements, its business, and, as a result, its financial position, results of operations and cash flow will likely be materially adversely impacted.  As such, substantial doubt as to the Company’s ability to continue as a going concern remains as of the date of these financial statements.


The Company drastically reduced its overhead expenses in 2009 and 2010 such as reducing staff on payroll to one part time employee and eliminating its office space.  With these reductions in overhead, the Company believes it will only need an estimated $50,000 to $100,000 to continue operations through the next twelve months.


On February 22, 2011 the Company began a private placement offering up to a maximum of 2,500,000 shares at $0.01 per share for a maximum of $25,000 in proceeds.  As of June 30 and the date of this report, the Company had sold 900,000 shares for $9,000.  The shares were being offered and sold by officers and directors of the Company who received no remuneration for the sale of the shares.


NOTE 4.  Mineral Properties


The following is a summary of the Company’s mineral properties in Alaska.


Alaska Mineral Properties

 

Number of Claims

 

Acres

Southwest Kuskokwim Project

 

 

 

 

    AKO

 

45

 

7,200

    Luna

 

50

 

8,000

    Kisa

 

38

 

5,840

    Gold Lake

 

69

 

9,720

    Gold Creek

 

12

 

1,920

    Little Swift

 

14

 

2,240

    Gosson Valley

 

2

 

   320

TOTAL Southwest Kuskokwim Project

 

230

 

       35,240

 

 

 

 

 

Buckstock Project

 

 

 

 

    Chilly

 

44

 

7,040

 TOTAL Buckstock Project

 

44

 

7,040

 

 

 

 

 



The Company is required to perform certain work commitments and pay annual assessments to the State of Alaska to hold these claims in good standing.  See “Note 6. Commitments and Contingencies”.


In Alaska, the lands are held under and are subject to the State’s mining laws and regulations.  


North Fork Master Earn-in Agreement


On March 28, 2011 the Company, through its wholly owned subsidiary, Kisa Gold Mining, Inc. (“Kisa”), executed a Master Earn-In agreement (“the Agreement”) with North Fork LLC, (“North Fork”) an Alaska limited liability company.  




7






This agreement will call for North Fork to explore for gold deposits on Kisa’s claim blocks in the Southwest Kuskokwim Project area and the Buckstock project area (“Projects”).  The Projects consist of exploration properties in southwest Alaska approximately 90 miles east of the village of Bethel covering approximately 42,280 acres of State of Alaska-owned lands in claim groups known as the Kisa, Luna, AKO, GL, Chilly, Little Swift, Gold Creek and Gossan Valley within the Kuskokwim Mineral Belt.


The following is a breakdown of the proposed earn-in terms:


1.

The initial interest at the time North Fork exercises its option to earn into the “Projects” will be as follows:

a.

Gold Crest Mines, Inc. – 100%

b.

North Fork – 0%

2.

North Fork can acquire a 51% interest in one or more “Projects” by making an aggregate of $3,000,000 of Exploration Expenditures on or for the benefit of the claims on or before October 31, 2013.

3.

If North Fork withdraws from the Joint Venture prior to earning a 51% interest in the “Projects”, it will have no further interest in the “Projects”.

4.

North Fork can earn an additional 24% interest in the “Projects”, taking its total interest to 75% by the expenditure of an additional $3,000,000 by October 31, 2016.

5.

North Fork can earn a total interest of 90% in any of the “Projects” claim blocks by the completion of a Bankable Feasibility Study.

6.

Gold Crest Mines, Inc. will retain a free carried 10% interest in the “Projects” up to a Decision to Mine at which point it can elect to contribute at 10% or dilute to a 2% Net Smelter Royalty.

7.

North Fork is obliged to keep the Projects in “good standing”.

8.

North Fork will be the sole manager of the “Projects” and will make all decisions in regards to the exploration programs.

NOTE 5.  Common Stock and Common Stock Warrants


Common Stock


The Company is authorized to issue 500,000,000 shares of its common stock.  All shares of common stock are equal to each other with respect to voting, liquidation, dividend, and other rights.  Owners of shares are entitled to one vote for each share owned at any Shareholders’ meeting.  The common stock of the Company does not have cumulative voting rights, which means that the holders of more than fifty percent (50%) of the shares voting in an election of directors may elect all of the directors if they choose to do so.


During the six months ending June 30, 2011 the Company had the following issuances of common stock:


On February 22, 2011 the Company began a private placement offering up to a maximum of 2,500,000 shares at $0.01 per share for a maximum of $25,000 in proceeds.  As of June 30 and the date of this report, the Company has issued 900,000 shares raising a total of $9,000.  The shares were being offered and sold by officers and directors of the Company who received no remuneration for the sale of the shares.

On April 22, 2011 the Company issued 100,000 shares of common stock to one newly appointed director valued at $2,000.


During the six months ending June 30, 2010 the Company did not have any issuances of common stock.









8






NOTE 6.  Commitments and Contingencies


Alaska Mineral Property Rent and Assessment Work Commitments


In Alaska, land holdings consist of state mining claims and prospecting sites totaling 42,280 acres of land.  Annual rental payments in the amount of $46,375 for these claims are due by November 30, 2011. If these rental payments are not paid by the due date, the claims will be considered abandoned.


The Alaska Department of Natural Resources, Division of Mining, Land & Water requires that upon the prospecting, and the discovery of a locatable mineral and the staking of mineral location, annual labor must be performed on the location each labor year in further development of the locatable mineral so that it can be mined.  The labor year for the claims begins on September 1 and ends the following September 1.  The Company or its joint venture partner, if applicable, will be required to perform qualified labor in the amount of $105,700 by September 1, 2011 except we have qualified carry-over amounts that can be applied to the labor year ending September 1, 2011 in the amount of $83,134 leaving only $22,566 to be performed by the September 1, 2011 deadline.  If these labor requirements are not met by the due date, the claims will be considered abandoned.


Environmental Matters


A predecessor entity to the Company owned mineral property interests on certain public and private lands in Idaho and Montana.  Holdings included lands in mining districts designated as “Superfund” sites pursuant to the Comprehensive Environmental Response, Compensation, and Liability Act ("CERCLA"). The properties were, and are, subject to a variety of federal and state regulations governing land use and environmental matters. A consultant reviewed the potential environmental impact of the prior mineral exploration and development activities, and believes there was substantial compliance with all such regulations, and is unaware of any pending action or proceedings relating to regulatory matters that would affect the financial position of the Company. Management acknowledges, however, that the possibility exists that the Company may be subject to environmental liabilities associated with its prior activities in the unforeseeable future, although the likelihood of such is deemed remote and the amount and nature of the liabilities is impossible to estimate.





9








ITEM 2.  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.


This Form 10-Q, including in “Management’s Discussion and Analysis of Financial Condition and Results of Operations”, includes forward-looking statements. Our forward-looking statements include our current expectations and projections about future results, performance, results of litigation, prospects and opportunities. We have tried to identify these forward-looking statements by using words such as “may,” “will,” “expect,” “anticipate,” “believe,” “intend,” “feel,” “plan,” “estimate,” “project,” “forecast” and similar expressions. These forward-looking statements are based on information currently available to us and are expressed in good faith and believed to have a reasonable basis. However, our forward-looking statements are subject to a number of risks, uncertainties and other factors that could cause our actual results, performance, prospects or opportunities to differ materially from those expressed in, or implied by, these forward-looking statements.

Given these risks and uncertainties, readers are cautioned not to place undue reliance on our forward-looking statements. All subsequent written and oral forward-looking statements attributable to Gold Crest Mines, Inc. or to persons acting on our behalf are expressly qualified in their entirety by these cautionary statements.  Except as required by federal securities laws, we do not intend to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

The safe harbors of forward-looking statements provided by Section 21E of the Exchange Act are unavailable to issuers of penny stock.  As we issued securities at a price below $5.00 per share, our shares are considered penny stock and such safe harbors set forth under Section 21E are unavailable to us.

The following discussion should be read in conjunction with the unaudited consolidated financial statements included elsewhere in this report, as well as the audited consolidated financial statements and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” contained in our Annual Report on Form 10-K for the year ended December 31, 2010.


Overview and Plan of Operation


As discussed in “Note 3. Going Concern” to our consolidated financial statements, the Company has had no revenues and incurred an accumulated deficit of $9,582,377 through June 30, 2011.  Another factor is that the Company has a negative current ratio of 0.02: 1 at June 30, 2011.  The current ratio is a measurement of the degree to which current assets cover current liabilities (current assets/ current liabilities).  A high ratio indicates a good probability the enterprise can retire current debts.  These factors raise substantial doubt about the Company’s ability to continue as a going concern.  Management intends to seek additional capital from new equity securities offerings that will provide funds needed to increase liquidity, fund internal growth and fully implement its business plan.


We are in the business of exploration, development, and if warranted the mining of properties containing valuable mineral deposits. We are traded on the over the counter market in the United States and, as is typical with such companies, losses are incurred in the stages of exploration and development, which typically need to be funded through equity or debt financing.  


In the Kisaralik Lake area of southwest Alaska, the Company’s wholly owned subsidiary Kisa Gold Mining, Inc. (KGMI) controls or has interests in claim blocks consisting of 274 State of Alaska mining claims covering approximately 42,280 acres.  The Company calls the claim blocks the Southwest Kuskokwim Project and the Buckstock Project and the individual names of each claim block are Kisa, Gold Lake, Luna, AKO, Chilly, Gold Creek, Gossan Valley and Little Swift.  


On March 28, 2011 the Company, through its wholly owned subsidiary, Kisa Gold Mining, Inc. (“Kisa”), executed a Master Earn-In agreement (“the Agreement”) with North Fork LLC, (“North Fork”) an Alaska limited liability company.  


This agreement will call for North Fork to explore for gold deposits on Kisa’s claim blocks in the Southwest Kuskokwim Project area and Buckstock Project area (“Projects”).  The Projects consist of exploration properties in southwest Alaska approximately 90 miles east of the village of Bethel covering approximately 42,280 acres of State of Alaska-owned lands in claim groups known as Kisa, Gold Lake, Luna, AKO, Chilly, Gold Creek, Gossan Valley and Little Swift within the Kuskokwim Mineral Belt.  See “Note 4. Mineral Properties – North Fork Master Earn-in Agreement” to our consolidated financial statements for further details.




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On February 22, 2011 the Company began a private placement offering up to a maximum of 2,500,000 shares at $0.01 per share for a maximum of $25,000 in proceeds.  As of June 30 and the date of this report, the Company has issued 900,000 shares raising a total of $9,000.  The shares were being offered and sold by officers and directors of the Company who received no remuneration for the sale of the shares.


Board of Directors


On April 22, 2011, the Board of Directors appointed Matt J. Colbert, CFO, as a director of the Company. The Company also awarded Mr. Colbert 100,000 shares of the Company’s common stock under our 2007 Stock Plan for accepting the appointment as a director.  Management estimated the fair value of the shares to be $2,000.

Liquidity and Capital Resources

We have limited capital resources and thus have had to rely upon the sale of equity securities for the cash required for exploration and development purposes, for acquisitions and to fund our administration.  Since we do not expect to generate any revenues in the near future, we must continue to rely upon the sale of our equity securities to raise capital.  There can be no assurance that financing, whether debt or equity, will always be available to us in the amount required at any particular time or for any period or, if available, that it can be obtained on terms satisfactory to us.


Our cash balance at June 30, 2011 was $1,963 versus $10,814 at December 31, 2010.  This slight decrease is primarily due to the fact that during the six months ended June 30, 2011, we received only $9,000 on our current private placement offering in which we issued 900,000 at $0.01 per share.  The amount received was less than the amount of money spent on our daily operations for the same time period, most notably our audit fees for the annual audit and wages.  


Future Outlook


Based on the current market environment and our low share price it is not likely we will be able to raise enough money through a private placement of our common stock to fully implement our business plan. We have cut our operating costs down to the bare minimum by reducing our employee base down to only one employee with reduced time and pay and we currently intend to rely on the use of outside consultants to provide certain services to the Company.


On March 28, 2011 the Company, through its wholly owned subsidiary, Kisa Gold Mining, Inc. (“Kisa”), executed a Master Earn-In agreement (“the Agreement”) with North Fork LLC, (“North Fork”) an Alaska limited liability company.  


This agreement will call for North Fork to explore for gold deposits on Kisa’s claim blocks in the Southwest Kuskokwim Project area and Buckstock Project area (“Projects”).  The Projects consist of exploration properties in southwest Alaska approximately 90 miles east of the village of Bethel covering approximately 42,280 acres of State of Alaska-owned lands in claim groups known as Kisa, Gold Lake, Luna, AKO, Chilly, Gold Creek, Gossan Valley and Little Swift within the Kuskokwim Mineral Belt.  See “Note 4. Mineral Properties – North Fork Master Earn-in Agreement” to our consolidated financial statements for further details.


Results of Operations


Comparison of the Three and Six Months Ended June 30, 2011 and June 30, 2010:


The following table sets forth certain information regarding the components of our Consolidated Statements of Operations for the three and six months ended June 30, 2011 compared with the three and six months ended June 30, 2010. The table is provided to assist in assessing differences in our overall performance:










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The Three Months Ended

 

 

 

 

 

 

 

June 30,

 

June 30,

 

 

 

 

 

 

 

2011

 

2010

 

$ Change

 

% Change

REVENUES

$

-

$

-

$

-

$

-

OPERATING EXPENSES:

 

 

 

 

 

 

 

 

 

 Exploration expenditures

 

-

 

4,866

 

(4,866)

 

-100.0%

 

 Legal and accounting expenses

 

1,948

 

2,683

 

(735)

 

-27.4%

 

 Directors’ fees

 

2,000

 

-

 

2,000

 

100.0%

 

 General and administrative

 

7,450

 

7,490

 

(40)

 

-0.5%

 

    TOTAL OPERATING EXPENSES

 

11,398

 

15,039

 

(3,641)

 

-24.2%

 LOSS FROM OPERATIONS

 

(11,398)

 

(15,039)

 

3,641

 

-24.2%

 

 Interest income

 

-

 

-

 

-

 

-

 

 Interest expense

 

-

 

-

 

-

 

-

 

     TOTAL OTHER INCOME (EXPENSE)

 

-

 

-

 

-

 

-

 LOSS BEFORE TAXES

$

(11,398)

$

(15,039)

$

3,641

$

-24.2%


 

 

 

The Six Months Ended

 

 

 

 

 

 

 

June 30,

 

June 30,

 

 

 

 

 

 

 

2011

 

2010

 

$ Change

 

% Change

REVENUES

$

-

$

-

$

-

$

-

OPERATING EXPENSES:

 

 

 

 

 

 

 

 

 

 Exploration expenditures

 

-

 

12,205

 

(12,205)

 

-100.0%

 

 Legal and accounting expenses

 

11,370

 

13,909

 

(2,539)

 

-18.3%

 

 Directors’ fees

 

2,000

 

-

 

2,000

 

100.0%

 

 General and administrative

 

17,138

 

16,580

 

558

 

3.4%

 

    TOTAL OPERATING EXPENSES

 

30,508

 

42,694

 

(12,186)

 

-28.5%

 LOSS FROM OPERATIONS

 

(30,508)

 

(42,694)

 

12,186

 

-28.5%

 

 Interest income

 

-

 

-

 

-

 

-

 

 Interest expense

 

-

 

-

 

-

 

-

 

     TOTAL OTHER INCOME (EXPENSE)

 

-

 

-

 

-

 

-

 LOSS BEFORE TAXES

$

(30,508)

$

(42,694)

$

12,186

$

-28.5%


Overview of Operating Results

Operating Expenses


The decrease of $12,186 in operating expenses during the six months ended June 30, 2011 compared to the six months ended June 30, 2010 was primarily the result of decreased exploration activity during the three months ended March 31, 2011


Legal and Accounting Expenses


Legal and accounting expenses were $11,370 for the six months ended June 30, 2011 versus $13,909 for the six months ended June 30, 2010 for a decrease of $2,539.  The decrease was entirely due to $2,070 in legal fees in the six months ended June 30, 2010 versus only $400 in 2011.  


Directors’ Fees


Directors’ fees were $2,000 for the six months ended June 30, 2011 versus zero for the six months ended June 30, 2010 for an increase of $2,000.  On April 22, 2011 the Company issued 100,000 shares of common stock to one newly appointed director valued at $2,000.






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Overview of Financial Position


At June 30, 2011, Gold Crest had cash of $1,963 and total liabilities of $80,504.  During the six months ended June 30, 2011, we received $9,000 on a non-brokered private placement offering in which we issued 900,000 at $0.01 per share.

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK.

Not Applicable

ITEM 4.  CONTROLS AND PROCEDURES


Evaluation of Disclosure Controls and Procedures


An evaluation was performed under the supervision and with the participation of our management, including the Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), of the effectiveness of the design and operation of our disclosure controls and procedures as required by Exchange Act Rules 13a-15(e) and 15d-15(e) as of the end of the period covered by this report.  Based on that evaluation, our CEO and CFO concluded that our disclosure controls and procedures, including controls and procedures designed to ensure that information required to be disclosed by us is accumulated and communicated to our management (including our CEO and CFO), were effective as of June 30, 2011, in ensuring them in a timely manner that material information required to be disclosed in this report has been properly recorded, processed, summarized and reported.


Changes in Internal Control Over Financial Reporting


There were no changes in our internal control over financial reporting during the quarter ended June 30, 2011, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.


PART II – OTHER INFORMATION


ITEM 2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS


On February 22, 2011 the Company began a private placement offering up to a maximum of 2,500,000 shares at $0.01 per share for a maximum of $25,000 in proceeds for general corporate purposes.  As of June 30 and the date of this report, the Company has issued 900,000 shares raising a total of $9,000.  The shares were being offered and sold by officers and directors of the Company who received no remuneration for the sale of the shares.


The shares above were issued without registration under the Securities Act by reason of the exemption from registration afforded by the provisions of Section 4(2), and Rule 506 promulgated by the SEC, and Section 4(6) thereof, as a transaction by an issuer not involving any public offering.  Each participant was an accredited investor at the time of the issuance.  They delivered appropriate investment representations with respect to the issuance of the shares and consented to the imposition of a restrictive legend upon the certificate representing their shares.  They represented that they had not entered into the transaction with us as a result of or subsequent to any advertisement, article, notice, or other communication published in any newspaper, magazine, or similar media or broadcast on television or radio, or presented at any seminar or meeting.  They represented that they had been afforded the opportunity to ask questions of our management and to receive answers concerning the terms and conditions of the share purchase.  No underwriting discounts or commissions were paid in connection with these transactions.


ITEM 6.  EXHIBITS


Exhibit Number

Description of Document

10.1

Master Earn-In Agreement dated March 28, 2011, between Kisa Gold Mining, Inc. and North Fork LLC.  Filed as Exhibit 10.1 with the Company’s 10-Q on May 18, 2011.                

31.1

Certification of CEO pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act

31.2

Certification of CFO pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act

32.1

Certification of CEO pursuant to 18 U.S.C. Section 1350

32.2

Certification of CFO pursuant to 18 U.S.C. Section 1350





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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.

GOLD CREST MINES, INC.



Date:  August 12, 2011

By:  /s/ John P. Ryan

John P. Ryan

CEO

(Principal Executive Officer)



Date:  August 12, 2011

By:  /s/ Matt J. Colbert

Matt J. Colbert

CFO

(Principal Financial Officer)



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