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EX-32.1 - EXHIBIT 32.1 - WHITE MOUNTAIN TITANIUM CORPv230518_ex32-1.htm
EX-31.2 - EXHIBIT 31.2 - WHITE MOUNTAIN TITANIUM CORPv230518_ex31-2.htm
EX-31.1 - EXHIBIT 31.1 - WHITE MOUNTAIN TITANIUM CORPv230518_ex31-1.htm
EX-32.2 - EXHIBIT 32.2 - WHITE MOUNTAIN TITANIUM CORPv230518_ex32-2.htm

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended June 30, 2011

¨ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT

For the transition period from_____________to________________                                

Commission File Number 333-129347

WHITE MOUNTAIN TITANIUM CORPORATION
(Name of small business issuer in its charter)

NEVADA
 
87-0577390
(State of incorporation or organization)
 
(IRS Identification No.)

Augusto Leguia 100, Oficina 812
Las Condes, Santiago
Chile
(Address of principal executive offices)

(56 2) 657-1800
(Issuer’s telephone number)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed under 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 ¨
 
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  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.  See the definitions of “large accelerated filer”, “accelerated filer”, and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large Accelerate 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

57,765,941 shares of the issuer’s common stock, $.001 par value, were outstanding at July 22, 2011.
 
 
 

 
 
TABLE OF CONTENTS
 
 
Page
PART I. FINANCIAL INFORMATION
3
   
Item 1.  Financial Statements
3
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
15
Item 3.  Quantitative and Qualitative Disclosures About Market Risk
20
Item 4.  Controls and Procedures
20
   
PART II.  OTHER INFORMATION
21
   
Item 6. Exhibits
21
   
SIGNATURES
21
 
 
2

 

PART I. FINANCIAL INFORMATION

Item 1.  Financial Statements

WHITE MOUNTAIN TITANIUM CORPORATION
(An Exploration Stage Company)
Consolidated Balance Sheets
(US Funds)
 
   
June 30, 2011
   
December 31, 2010
 
   
(Unaudited)
       
             
Assets
           
Current
           
Cash and cash equivalents
  $ 3,473,364     $ 3,766,959  
Prepaid expenses
    57,893       64,209  
Receivables
    25,747       47,342  
Total Current Assets
    3,557,004       3,878,510  
Property and Equipment (Note 2)
    68,362       56,383  
Mineral Properties
    651,950       651,950  
Technology Rights (Note 3)
    2,566,666       2,722,222  
                 
Total Assets
  $ 6,843,982     $ 7,309,065  
                 
Liabilities
               
Current
               
Accounts payable and accrued liabilities
  $ 18,144     $ 493,814  
Total Current Liabilities
    18,144       493,814  
Other Liabilities – Warrants (Note 4(d))
    -       2,006,850  
                 
Total Liabilities
    18,144       2,500,664  
                 
Stockholders’ Equity
               
Common Stock and Paid-in Capital in Excess of $0.001 Par Value (Note 4(a))
               
100,000,000  shares authorized
               
56,760,941 (December 31, 2010 – 49,766,636) shares issued and outstanding
    37,578,698       30,834,680  
Subscription Receivable
    -       (32,500 )
Deficit Accumulated During the Exploration Stage
    (30,752,860 )     (25,993,779 )
                 
Total Stockholders’ Equity
    6,825,838       4,808,401  
                 
Total Liabilities and Stockholders’ Equity
  $ 6,843,982     $ 7,309,065  
 
See notes to unaudited consolidated condensed financial statements.
 
 
3

 
 
WHITE MOUNTAIN TITANIUM CORPORATION
(An Exploration Stage Company)
Consolidated Statements of Operations
(US Funds)
(Unaudited)

                            
Cumulative
from Inception
 
   
Three Months Ended
   
Six Months Ended
   
November 13,
 
   
June 30,
   
June 30,
   
2001 through
 
   
2011
   
2010
   
2011
   
2010
   
June 30, 2011
 
                               
Expenses
                             
Advertising and promotion
  $ 3,594     $ 27,253     $ 43,293     $ 31,840     $ 361,540  
Amortization
    87,728       6,907       173,899       13,803       421,898  
Bank charges and interest
    7,688       2,743       17,066       5,211       55,442  
Consulting fees (Note 4(c))
    55,700       50,965       186,584       153,794       2,374,874  
Consulting fees – directors and officers (Note 4(c))
    100,610       86,430       763,040       607,560       5,678,879  
Engineering consulting
    (507 )     -       (27,113 )     -       710,522  
Exploration
    532,775       60,796       1,523,388       136,084       6,855,561  
Filing fees
    3,278       17,344       4,805       22,236       80,127  
Insurance
    8,214       12,472       32,954       22,949       331,116  
Investor relations, net
    30,118       -       62,298       -       832,622  
Licenses, taxes and filing fees, net
    3,911       (4,726 )     -       (7,141 )     379,947  
Management fees (Note 4(c))
    94,567       131,696       632,043       461,516       2,788,322  
Office (Note 4(c))
    7,948       6,367       81,813       54,585       389,524  
Professional fees
    41,572       60,174       107,089       85,145       1,868,833  
Research and development
    88,433       -       176,504       -       343,306  
Rent
    21,235       19,719       40,430       40,435       508,193  
Telephone
    6,885       3,524       12,200       6,938       120,,027  
Transfer agent fees
    1,407       1,007       3,998       1,928       24,564  
Travel and vehicle
    61,407       24,135       117,229       47,827       1,258,784  
                                         
Loss before other items
    (1,156,562 )     (506,806 )     (3,951,519 )     (1,684,710 )     (25,384,080 )
                                         
Gain on sale of marketable securities
    -       -       -       -       87,217  
Loss on sale of assets
    -       -       -       -       (19,176 )
Adjustment to market for marketable securities
    -       -       -       -       (67,922 )
Foreign exchange loss
    (77,212 )     (17,493 )     (266,382 )     (26,682 )     (501,749 )
Dividend income
    -       -       -       -       4,597  
Interest income
    1,040       2,975       1,970       5,989       350,361  
Change in fair value of warrants (Note 4(d))
    -       254,150       (543,150 )     1,224,850       (2,748,999 )
Change in fair value of preferred stock
    -       -       -       -       (240,000 )
Financing agreement penalty
    -       -       -       -       (330,000 )
                                         
Net loss and comprehensive loss for the period
    (1,232,734 )     (267,174 )     (4,759,081 )     (480,553 )     (28,849,751 )
Preferred stock dividends
    -       -       -       -       (1,537,500 )
                                         
                                         
Net Loss Available for Distribution
  $ (1,232,734 )   $ (267,174 )   $ (4,759,081 )   $ (480,553 )   $ (30,387,251 )
                                         
Basic and Diluted Loss Per Share
  $ (0.02 )   $ (0.007 )   $ (0.09 )   $ (0.01 )        
                                         
Weighted Average Number of Common Shares Outstanding
    56,036,757       37,120,972       53,719,349       36,937,989          
 
See notes to unaudited consolidated condensed financial statements.
 
 
4

 
 
WHITE MOUNTAIN TITANIUM CORPORATION
(An Exploration Stage Company)
Consolidated Statements of Cash Flows
(US Funds)
(Unaudited)
 
               
Cumulative Period
 
               
from Inception
 
               
on November 13,
2001 Through
 
   
Six Months Ended June 30,
   
June 30,
 
   
2011
   
2010
   
2011
 
                   
Operating Activities
                 
Net loss for period
  $ (4,759,081 )   $ (480,553 )   $ (28,849,751 )
Items not involving cash
                       
Amortization
    173,899       13,803       421,898  
Stock-based compensation
    106,684       91,676       3,415,304  
Loss on sale of assets
    -       -       19,176  
Fair value of common stock issued for services
    1,161,000       828,000       4,665,030  
Change in fair value of warrants
    543,150       (1,224,850 )     2,748,999  
Change in fair value of preferred stock
    -       -       240,000  
Financing agreement penalty
    -       -       330,000  
Adjustment to market on marketable securities
    -       -       67,922  
Gain on sale of marketable securities
    -       -       (87,217 )
Non-cash resource property expenditures
    -       -       600,000  
Changes in non-cash working capital
                       
Prepaid expenses
    6,316       (24,009 )     (67,194 )
Receivables
    21,595       26,052       (18,465 )
Marketable securities
    -       -       19,295  
Accounts payable and accrued liabilities
    (475,670 )     (169,012 )     (47,702 )
                         
Cash Used in Operating Activities
    (3,222,107 )     (938,893 )     (16,542,705 )
                         
Investing Activities
                       
Additions to property and equipment, net
    30,320       (1,464 )     (198,488 )
Additions to mineral property
    -       -       (651,950 )
                         
Cash Used in Investing Activities
    30,320       (1,464 )     (850,438 )
                         
Financing Activities
                       
Repayment of long-term debt
    -       -       (100,000 )
Issuance of preferred stock for cash
    -       -       5,000,000  
Issuance of common stock for cash
    2,862,500       660,000       15,230,171  
Stock subscriptions received
    32,500       -       32,500  
Working capital acquired on acquisition
    -       -       171  
                         
Cash Provided by Financing Activities
    2,895,000       660,000       20,876,342  
                         
Foreign Exchange Effect on Cash
    -       -       (9,835 )
                         
Inflow (Outflow) of Cash and Cash Equivalents
    (293,595 )     (280,357 )     3,473,364  
Cash and Cash Equivalents,
                       
Beginning of Period
    3,766,959       1,343,994       -  
                         
Cash and Cash Equivalents, End of Period
  $ 3,473,364     $ 1,063,637     $ 3,473,364  
                         
Supplemental Cash Flow Information
                       
Income tax paid
  $ -     $ -     $ -  
Interest paid
  $ -     $ -     $ -  
                         
Shares Issued for
                       
Settlement of debt
  $ -     $ -     $ 830,000  
Services
  $ 1,161,000     $ 828,000     $ 2,785,630  
Mineral properties
  $ -     $ -     $ 600,000  
 
See notes to unaudited consolidated condensed financial statements.
 
 
5

 
 
WHITE MOUNTAIN TITANIUM CORPORATION
(An Exploration Stage Company)
Consolidated Statements of Stockholders’ Equity (Deficit)
(US Funds)
 
    
Shares of
Common
Stock
   
Common Stock
and Paid-In
Capital in
Excess of
Par Value
   
Shares of
Preferred Stock
   
Preferred Stock
and Paid-in
Capital in
Excess of
Par Value
   
Share Subscriptions
Received/ Obligation to
Issue Shares
   
Accumulated
Deficit
   
 
 
Total
Stockholders’
Equity (Deficit)
 
                                           
Balance, December 31, 2009
    36,400,972     $ 21,660,100       625,000     $ -     $ -     $ (23,747,499 )   $ (2,087,399 )
Stock-based compensation (Note 4(c))
    -       120,409       -       -       -       -       120,409  
Obligation to issue shares
    -       -       -       -       (32,500 )     -       (32,500 )
Warrants exercised (Note 4(d))
    2,193,040       1,315,824       -       -       -       -       1,315,824  
Options exercised (Note 4(b))
    50,000       25,000       -       -       -       -       25,000  
Private placement (Note 4(b))
    5,384,624       3,186,947       -       -       -       -       3,186,947  
Shares issued for services
    738,000       986,400       -       -       -       -       986,400  
Shares issued for technology
    4,000,000       2,800,000       -       -       -       -       2,800,000  
Shares issued upon conversion of preferred shares
    1,000,000       740,000       (625,000 )     -       -       -       740,000  
Net loss for the year
    -       -       -       -       -       (2,246,280 )     (2,246,280 )
Balance, December 31, 2010
    49,766,636       30,834,680       -       -       (32,500 )     (25,993,779 )     4,808,401  
Stock-based compensation (Note 4(c))
    -       106,684       -       -       -       -       106,684  
Obligation to issue shares
    -       -       -       -       32,500       -       32,500  
Common stock issued for services (Note 4(c))
    1,290,000       1,161,000       -       -       -       -       1,161,000  
Additional paid in capital recognized on warrant conversion (Note 4(d))
    -       2,550,000       -       -       -       -       2,550,000  
Warrants exercised (Note 4(d))
    4,494,306       2,321,334       -       -       -       -       2,321,334  
Options exercised (Note 4(b))
    1,209,999       605,000       -       -       -       -       605,000  
Net loss for the period
    -       -       -       -       -       (4,759,081 )     (4,759,081 )
Balance, June 30, 2011 (Unaudited)
    56,760,941     $ 37,578,698       -     $ -     $ -     $ (30,752,860 )   $ 6,825,838  
 
See notes to unaudited consolidated condensed financial statements.
 
 
6

 
 
WHITE MOUNTAIN TITANIUM CORPORATION
(An Exploration Stage Company)
Notes to Consolidated Financial Statements
Six Months Ended June 30, 2011 and 2010
(Unaudited)
(US Funds)

1.
NATURE OF BUSINESS AND BASIS OF PRESENTATION

White Mountain Titanium Corporation (the “Company”) is in the business of exploring for titanium deposits or reserves on its Cerro Blanco mining concessions. Its principal business is to advance exploration and development activities on the Cerro Blanco rutile (titanium dioxide) Property (“Cerro Blanco”) located in Region III of northern Chile.  The Company is considered an exploration stage company, as defined by Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 915, Development Stage Entities.

The accompanying financial statements have been prepared by the Company without audit.  In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations and cash flows at June 30, 2011 and for the period then ended have been made.  Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted.  It is suggested that these consolidated condensed financial statements be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s December 31, 2010 audited consolidated financial statements included in the Company’s 2010 annual report on Form 10-K filed with the United States Securities and Exchange Commission (“SEC”).  The results of operations for the period ended June 30, 2011 are not necessarily indicative of the operating results for the full year.

2.
PROPERTY AND EQUIPMENT

   
June 30, 2011
 
   
 
   
Accumulated
   
 
 
    Cost    
Amortization
    Net  
                         
Vehicles
  $ 83,738     $ 50,561     $ 33,177  
Office furniture
    18,859       8,106       10,753  
Office equipment
    11,903       7,484       4,419  
Computer equipment
    8,197       7,666       531  
Computer software
    1,541       1,086       455  
Field equipment
    70,430       51,406       19,024  
                         
    $ 194,669     $ 126,310     $ 68,359  

   
December 31, 2010
 
   
 
   
Accumulated
   
 
 
    Cost    
Amortization
    Net  
                   
Vehicles
  $ 54,153     $ 45,080     $ 9,073  
Office furniture
    18,268       5,689       12,579  
Office equipment
    11,903       6,168       5,735  
Computer equipment
    8,197       6,842       1,355  
Computer software
    1,541       933       608  
Field equipment
    70,287       43,254       27,033  
                         
    $ 164,349     $ 107,966     $ 56,383  
 
 
7

 
 
WHITE MOUNTAIN TITANIUM CORPORATION
(An Exploration Stage Company)
Notes to Consolidated Financial Statements
Six Months Ended June 30, 2011 and 2010
(Unaudited)
(US Funds)

3.
TECHNOLOGY RIGHTS

   
June 30, 2011
 
   
 
   
Accumulated
       
     Cost    
Amortization
    Net  
                   
Technology Rights
    2,800,000       233,334       2,566,666  
                         
    $ 2,800,000     $ 233,334     $ 2,566,666  

   
December 31, 2010
 
         
Accumulated
       
    Cost    
Amortization
     Net  
                   
Technology Rights
    2,800,000       77,778       2,722,222  
                         
    $ 2,800,000     $ 77,778     $ 2,722,222  
 
4.
CAPITAL STOCK

 
(a)
Common stock

During the six months ended June 30, 2011:

 
·
1,290,000 shares of common stock were issued for services with a fair value of $1,161,000 Note 4(c));
 
·
4,494,306 shares of common stock were issued upon the exercise of warrants (Note 4(d)) and a further 10,479 warrants expired unexercised; and
 
·
1,209,999 shares of common stock were issued upon the exercise of stock options (Note 4(b)).

 
(b)
Stock options

The Company has a stock option plan adopted in 2005 and a Stock Option/Stock Issuance Pan adopted in 2010 (individually the “2005 Plan” and the “2010 Plan” and, collectively, the “Plans”). Under the Plans, the Company is authorized to grant options to executive officers and directors, employees and consultants of the Company.  The 2005 Plan was originally authorized to grant 3,140,000 shares; the 2010 Plan was originally authorized to issue 4,901,740 shares, which amount is increased at the end of each year to represent 10% of the total outstanding shares at year-end.  The Company has also adopted a Management Compensation Pool for the benefit of officers, directors and employees of the Company.  The pool will consist of 1% of the outstanding shares at the end of each year.  The terms of any stock option granted under the 2005 Plan may not exceed five years and ten years under the 2010 plan.
 
 
8

 
 
WHITE MOUNTAIN TITANIUM CORPORATION
(An Exploration Stage Company)
Notes to Consolidated Financial Statements
Six Months Ended June 30, 2011 and 2010
(Unaudited)
(US Funds)

During the year ended December 31, 2010, no stock options were granted. Options totaling 50,000 shares were exercised for gross proceeds of $25,000.

During the six months ended June 30, 2011, no stock options were granted. Options for 1,209,999 (Note 4(a)) shares exercisable at $0.50 per share were exercised.
 
 
9

 
 
WHITE MOUNTAIN TITANIUM CORPORATION
(An Exploration Stage Company)
Notes to Consolidated Financial Statements
Six Months Ended June 30, 2011 and 2010
(Unaudited)
(US Funds)
 
4.
CAPITAL STOCK (continued)

 
(b)
Stock options (continued)

The following table represents service based stock option activity during the six months ended June 30, 2011 and the year ended December 31, 2010.

   
June 30, 2011
   
December 31, 2010
 
   
Number of
Shares
   
Weighted
Average
Exercise
Price
   
Number of
Shares
   
Weighted
Average
Exercise
Price
 
                                 
Outstanding - beginning of period
    2,740,000     $ 0.53       2,790,000     $ 0.53  
Expired
    (1 )   $ 0.50       -       -  
Exercised
    (1,209,999 )   $ 0.50       (50,000 )   $ 0.50  
                                 
Outstanding – end of period
    1,530,000     $ 0.93       2,740,000     $ 0.53  
Exercisable – end of period
    1,530,000     $ 0.55       2,740,000     $ 0.53  

As at June 30, 2011 and December 31, 2010, the following stock options were outstanding:

   
Exercise
   
June 30,
   
December 31,
 
Expiry Date
 
Price
   
2011
   
2010
 
                   
January 31, 2011
  $ 0.50       -       400,000  
May 31, 2011
  $ 0.50       -       600,000  
August 1, 2011(Note 6)
  $ 0.50       200,000       200,000  
August 31, 2011
  $ 0.50       150,000       300,000  
August 31, 2012
  $ 0.50       1,015,000       1,075,000  
June 23, 2013
  $ 1.00       165,000       165,000  
                         
              1,530,000       2,740,000  

The shares under option at June 30, 2011 were in the following exercise price ranges:

 Weighted Average
 Exercise Price
 
Number of Shares
under Option
   
Aggregate Intrinsic
Value
   
Weighted Average
Remaining Contractual
Life in Years
 
                     
 0.50
    1,365,000     $ 1,460,550       0.90  
 1.00
    165,000       94,050       1.98  
                           
 0.55
    1,530,000     $ 1,554,600       1.02  
 
10

 
 
WHITE MOUNTAIN TITANIUM CORPORATION
(An Exploration Stage Company)
Notes to Consolidated Financial Statements
Six Months Ended June 30, 2011 and 2010
(Unaudited)
(US Funds)
 
4.
CAPITAL STOCK (continued)

 
(c)
Stock-based compensation

During the year ended December 31, 2010, the total stock-based compensation for the 2,000,000 warrants issued to directors and officers recognized under the fair value method charged to management fees was $120,409. The maximum stock-based compensation to be recognized is $944,959.  The remaining unamortized balance of $824,550 will be amortized through December 31, 2015.  In the six month period ended June 30, 2011, $106,684 was expensed.  These warrants were fair valued using a trinomial barrier pricing model with the following weighted average assumptions:  exercise price of $1.50, risk-free interest rate of 1.89%, expected life of 3.4 years, an expected volatility factor of 75.90%, a dividend yield of 0.00% and a probability of 11%. The Company estimated the exercisability of these warrants using a Monte Carlo probability calculator. The weighted average probability of exercisability of these warrants is 11%.

During the six month period ended June 30, 2011, the Company issued 1,290,000 shares of common stock (Note 4(a)) at a fair value of $1,161,000 valued at the market value at the time of issuance, to management, employees and consultants, under the Management Compensation Pool.  During the six months ended June 30, 2010, the total stock-based compensation recognized under the fair value method was $919,676.

The total stock-based compensation recognized for shares issued, warrants granted and options granted for services was as follows:

   
June 30,
   
June 30,
 
   
2011
   
2010
 
             
Consulting fees
  $ 90,000     $ 62,100  
Consulting fees - directors and officers
    576,000       434,700  
Management fees
    497,456       381,476  
Office
    63,000       41,400  
                 
    $ 1,291,912     $ 919,676  
 
 
11

 
 
WHITE MOUNTAIN TITANIUM CORPORATION
(An Exploration Stage Company)
Notes to Consolidated Financial Statements
Six Months Ended June 30, 2011 and 2010
(Unaudited)
(US Funds)
 
4.
CAPITAL STOCK (continued)

 
(d)
Warrants

Details of stock purchase warrant activity is as follows:

   
June 30, 2011
   
December 31, 2010
 
   
Number
of Warrants
   
Weighted
Average
Exercise
Price
   
Number
of Warrants
   
Weighted
Average
Exercise
Price
 
                         
Outstanding - beginning of period
    8,515,111     $ 0.78       10,587,385     $ 0.56  
Issued
    -       -       3,775,326     $ 1.10  
Exercised
    (4,494,306 )   $ 0.50       (2,193,040 )   $ 0.60  
Expired
    (10,479 )     0.90       (3,654,560 )   $ 0.60  
                                 
Outstanding - end of period
    4,010,326     $ 1.09       8,515,111     $ 0.78  

As at June 30, 2011 and December 31, 2010, the following share purchase warrants were outstanding:

Expiry Date
 
Exercise Price
   
June 30, 2011
   
December 31,
2010
 
                   
April 1, 2011
  $ 0.50       -       4,250,000  
April 15, 2011
  $ 0.90       -       104,785  
June 30, 2011
  $ 0.75       -       150,000  
June 30, 2012 (Note 6)
  $ 0.50       235,000       235,000  
June 30, 2012
  $ 0.65       1,775,326       1,775,326  
December 31, 2015
  $ 1.50       2,000,000       2,000,000  
                         
              4,010,326       8,515,111  

During the year ended December 31, 2010, 2,000,000 warrants were issued to two officers and directors of the Company as compensation, as approved by the Board in January 2010.  These warrants are exercisable at $1.50 per share expiring December 31, 2015 (Note 4(c)). These warrants vest only upon occurrence of one of the following events and are exercisable in full upon the first of the following events:

 
(i)
If on or before June 30, 2011, the closing price of the common stock of the Company is at least $2.00 per share for five consecutive trading days; (This condition has not been met as at June 30, 2011);

 
(ii)
If on or before December 31, 2012, the closing price of the common stock of the Company is at least $2.50 per share for five consecutive trading days; and

 
(iii)
If on or before December 31, 2015, the closing price of the common stock of the Company is at least $3.00 per share for five consecutive trading days.

These prices shall be subject to reasonable adjustment upon occurrence of certain conditions.

 
12

 
 
WHITE MOUNTAIN TITANIUM CORPORATION
(An Exploration Stage Company)
Notes to Consolidated Financial Statements
Six Months Ended June 30, 2011 and 2010
(Unaudited)
(US Funds)
 
4. 
CAPITAL STOCK (continued)

 
(d)
Warrants (continued)

Effective January 1, 2009, the Company adopted the provisions of Emerging Issues Task Force (“EITF”) 07-05, Determining Whether an Instrument (or Embedded Feature) is Indexed to an Entity’s Own Stock, which was primarily codified into ASC Topic 815, Derivatives and Hedging.  ASC 815 applies to any freestanding financial instrument or embedded feature that has the characteristics of a derivative and to any freestanding financial instruments that is potentially settled in an entity’s own common stock.

As a result of adopting ASC 815, warrants to purchase 6,875,000 shares of common stock previously treated as equity pursuant to the derivative treatment exemption were no longer afforded equity treatment. The warrants had an exercise price of $0.50 per warrant and expire in July and September 2009, of which 4,250,000 warrants were extended to April 2011.  Effective January 1, 2009, the Company reclassified the fair value of these 4,250,000 warrants to purchase common stock, which had exercise price reset features, from equity to liability status as if these warrants were treated as a derivative liability since their date of issue.   On January 1, 2009, the Company reclassified $1,084,375 to beginning deficit and $1,084,375 to other liabilities - warrants to recognize the fair value of such warrants on such date.

As of June 30, 2011, the remaining 4,250,000 warrants were fair valued using the Black-Scholes option pricing model with the following weighted average assumptions:  risk-free interest rate of 1.63%, expected life of 1 year, an expected volatility factor of 53.19% and a dividend yield of 0.0%. The fair value of these warrants to purchase common stock decreased to $1,986,025 as of March 31, 2010. As such, the Company recognized a $970,700 non-cash income from the change in fair value of these warrants for the period ended March 31, 2010.

As of June 30, 2011, the 4,250,000 warrants had been exercised (Note 4(a)). Accordingly, the Company recognized a $543,150 non-cash loss from the change in fair value of these warrants, and $2,550,000 was added to paid-in capital on the common stock issued upon conversion.
 
 
13

 
 
WHITE MOUNTAIN TITANIUM CORPORATION
(An Exploration Stage Company)
Notes to Consolidated Financial Statements
Six Months Ended June 30, 2011 and 2010
(Unaudited)
(US Funds)
 
5.
FAIR VALUE MEASUREMENTS

The Company’s financial instruments consist of cash and cash equivalents, receivables, and accounts payable and accrued liabilities.  The carrying amounts of these instruments approximate their respective fair values due to the short maturities of those instruments.

The three levels of the fair value hierarchy are described below:
 
(i)   Level 1 -
quoted prices (unadjusted) in active markets for identical assets or liabilities;
(ii)  Level 2 -
inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices); and
(iii) Level 3 -
inputs for the asset or liability that are not based on observable market data (unobservable inputs).
 
The following table summarizes fair value measurement by level at June 30, 2011 and December 31, 2010 for assets and liabilities measured at fair value on a recurring basis.

June 30, 2011
 
Level 1
   
Level 2
   
Level 3
   
Total
 
Cash and cash equivalents
  $ 3,473,364     $ -     $ -     $ 3,473,364  

December 31, 2010
 
Level 1
   
Level 2
   
Level 3
   
Total
 
Cash and cash equivalents
  $ 3,766,959     $ -     $ -     $ 3,766,959  
Other liabilities – warrants
  $ -     $ 2,006,850     $ -     $ 2,006,850  

6.
SUBSEQUENT EVENT

The Company has evaluated its activities subsequent to June 30, 2011 and has concluded that no subsequent events have occurred that would require recognition or disclosure in the consolidated condensed financial statements, except as follows:

On July 15, 2011:

 
·
200,000 options were exercised at a price of  $0.50 for proceeds of $100,000; and
 
·
5,000 warrants were exercised at a price of $0.50 per share for proceeds of $2,500.

On July 18, 2011, the Board of Directors approved a Compensation Committee recommendation to issue 800,000 shares to directors for past services over the prior forty-eight months pursuant to our 2010 Stock Option/Stock Issuance Plan.

Also on July 18, 2011, the Committee and the Board established the following milestones for additional stock grants to management and consultants:

 
·
200,000 shares each to two officers upon the signing of the first definitive off-take agreements;
 
·
300,000 shares each to two officers upon the signing of the first definitive strategic alliance agreement(s) and/or arrangement of project capital;
 
·
100,000 shares to the Chilean Project Manager upon the completion of a Final Feasibility Study; and
 
·
75,000 shares to a marketing consultant upon the signing of the first definitive off-take agreements.
 
 
14

 

WHITE MOUNTAIN TITANIUM CORPORATION
(An Exploration Stage Company)
Notes to Consolidated Financial Statements
Six Months Ended June 30, 2011 and 2010
(Unaudited)
(US Funds)

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion should be read in conjunction with our unaudited consolidated financial statements and related notes thereto as filed with this report.

Forward Looking Statements

The statements contained in this report that are not historical facts are forward-looking statements that represent management’s beliefs and assumptions based on currently available information.  Forward-looking statements include the information concerning our possible or assumed future results of operations, business strategies, need for financing, competitive position, potential growth opportunities, potential operating performance improvements, ability to retain and recruit personnel, the effects of competition and the effects of future legislation or regulations.  Forward-looking statements include all statements that are not historical facts and can be identified by the use of forward-looking terminology such as the words “believes,” “intends,” “may,” “will,” “should,” “anticipates,” “expects,” “could,” “plans,” or comparable terminology or by discussions of strategy or trends.  Although we believe that the expectations reflected in such forward-looking statements are reasonable, we cannot give any assurances that these expectations will prove to be correct.  Such statements by their nature involve risks and uncertainties that could significantly affect expected results, and actual future results could differ materially from those described in such forward-looking statements.

Among the factors that could cause actual future results to differ materially are the risks and uncertainties discussed in this report.  While it is not possible to identify all factors, we continue to face many risks and uncertainties including, but not limited to, the cyclicality of the titanium dioxide industry, global economic and political conditions, global productive capacity, customer inventory levels, changes in product pricing, changes in product costing, changes in foreign currency exchange rates, competitive technology positions and operating interruptions (including, but not limited to, labor disputes, leaks, fires, explosions, unscheduled downtime, transportation interruptions, war and terrorist activities).  Mining operations are subject to a variety of existing laws and regulations relating to exploration and development, permitting procedures, safety precautions, property reclamation, employee health and safety, air and water quality standards, pollution and other environmental protection controls, all of which are subject to change and are becoming more stringent and costly to comply with.  Should one or more of these risks materialize (or the consequences of such a development worsen), or should the underlying assumptions prove incorrect, actual results could differ materially from those expected.  We disclaim any intention or obligation to update publicly or revise such statements whether as a result of new information, future events or otherwise.

There may also be other risks and uncertainties that we are unable to predict at this time or that we do not now expect to have a material adverse impact on our business.

Background

We are a mineral exploration company.  We hold mining concessions composed of 33 registered mining exploitation concessions, and 5 exploration concessions, over approximately 8,225 hectares located approximately 39 kilometers west of the City of Vallenar in the Atacama, or Region III, geographic region of northern Chile (hereinafter referred to as “Cerro Blanco”).  We are in the exploration stage, which means we are engaged in the search for mineral deposits or reserves which could be economically and legally extracted or recovered.  Our primary expenditures at this stage consist of acquisition and exploration costs and general and administration expenses.  We have produced no revenues, have achieved losses since inception, have no operations, and currently rely upon the sale of our securities to fund our operations.

 
15

 

WHITE MOUNTAIN TITANIUM CORPORATION
(An Exploration Stage Company)
Notes to Consolidated Financial Statements
Six Months Ended June 30, 2011 and 2010
(Unaudited)
(US Funds)

Plan of Operation and Financial Condition

We completed the acquisition of an undivided interest in Cerro Blanco in September 2005.  Exploration drilling by us and the previous owner has defined rutile mineralization.  Metallurgical test work performed by Lakefield Research has demonstrated that this mineralization can be concentrated to a level meeting buyer specifications and can be produced using a conventional milling and flotation process.

As reported in a news release of April 6, 2011, assay data from a completed in-fill drill program at the Las Carolinas prospect consisting of 54 diamond drill holes totaling 7,047 meters has been received. Geological staff and outside technical consultants are updating a new resource model and undertaking Whittle pit design work for mine planning purposes. In addition, the Company’s environmental consultant was contracted to begin the final phase of winter baseline field monitoring at the Las Carolinas prospect. Data from this and past monitoring studies will form the basis of an environmental impact study for the Cerro Blanco project.

Management is now beginning to evaluate technical proposals from qualified engineering firms for final engineering and process design work. Depending on results from test work currently underway, the final process design may include a sodium feldspar recovery circuit. Management visited SGS in Lakefield, Ontario where test work to produce a commercial grade sodium feldspar concentrate for glass and ceramics application is nearing completion. The sodium feldspar concentrate would be produced as a by-product from rutile flotation tailings. If this test work and follow on marketing are successful, the sale of sodium feldspar could have a significant positive impact on overall project economics.

 
Over the next year we intend to advance the project towards a final engineering feasibility level.

 
We now have a considerable body of engineering design and process engineering work completed, both by us and previous owners, for the development of a large open pit mine and milling operation.  The extent to which this engineering work could be incorporated into a feasibility study will depend on factors such as optimal plant sizing and configuration based on product volumes and specifications set out in off-take contracts and process design, the latter to be determined by refinements coming out of the metallurgical test work and pilot scale testing completed last year.  With commencement of our marketing plan to seek suitable off-take contracts, we intend to undertake a program of drilling to provide data for mine planning and design, for an environmental impact assessment and permitting program, and to commission a feasibility study.  As some of these activities would be undertaken in tandem, we believe a feasibility study could be completed by the end of 2011, subject to the availability of funds, personnel and equipment.  We estimate the cost to take the project to the point of completing a final engineering feasibility study at approximately $3,810,000, including general and administrative and marketing expenses.  As of July 15, 2011, our cash position was approximately $3,500,000. We believe we have sufficient capital to complete this plan; however we may acquire additional financing to do so.

On October 1, 2010 the Company issued 4,000,000 shares of common stock pursuant to the terms of the non-exclusive, sublicensing agreement of the titanium metal technology developed by Chinuka Limited plc (“Chinuka” or the “Chinuka Process”).  The Company now has access to the Chinuka Process for the Cerro Blanco project.  La Serena Technologies Ltd. (“La Serena”) executed the sublicensing agreement as holder of the Chinuka Process master license.  As consideration for the sublicense, the terms of the agreement between the Company and La Serena are:

 
·
4,000,000 restricted shares of common stock were issued to Chinuka and La Serena (800,000 to Chinuka and 3,200,000 to La Serena).  These shares are to be released from escrow over 24 months with 500,000 shares released to each Chinuka and La Serena on closing and the balance released from escrow at the end of each subsequent fiscal quarter on the basis of 37,500 to Chinuka and 337,500 to La Serena.  The Company may cancel the sublicense agreement (and related escrow share releases) at any time following the initial release of shares;

 
16

 

WHITE MOUNTAIN TITANIUM CORPORATION
(An Exploration Stage Company)
Notes to Consolidated Financial Statements
Six Months Ended June 30, 2011 and 2010
(Unaudited)
(US Funds)

 
·
The expenditure of $5,000,000 by the Company within five years of closing to advance development of the Chinuka Process towards commercialization;

 
·
A 2% gross royalty payment to La Serena on any revenue generated by the Cerro Blanco project, which is attributable to the Chinuka Process, and to make advance minimum royalty payments to La Serena of $200,000 per year commencing 5 years after closing; and

 
·
Commercial production of titanium metal using the Chinuka Process and feed stock derived from the Cerro Blanco project within nine years after closing.
 
The Chinuka Process was developed under the direction of Dr. Derek Fray, Professor and Director of Research, Materials Science and Metallurgy, University of Cambridge, UK.  Unlike the industry-standard, multi-step Kroll batch process which uses titanium pigment as a feed stock to produce titanium sponge metal, the Chinuka Process is essentially a one-step process and uses titanium ores and concentrates as a feed stock.  By replacing a multi-step process with a process in which refining and electro-deposition take place simultaneously and substituting ores and concentrates as a feed stock, the Chinuka Process holds forth potentially significant cost and production time saving over the Kroll process.
 
We anticipate the sublicensing of the Chinuka Process will create an opportunity to add value to the Cerro Blanco project, particularly with respect to the planned minus 53 micron titanium concentrate product.
 
In the first quarterly progress report since licensing a new titanium metal technology in September, 2010, we were advised that lab scale test work continued at the University of Cambridge in the UK under the direction of Professor Derek Fray into the refining and electrolytic deposition of pure titanium from lower grade concentrate. Small quantities of sponge were successfully produced using Ultra-fine concentrate feedstock sourced from the Company’s
Cerro Blanco project in Chile.

The second quarterly progress report advised that research continued to examine the refining and electrolytic deposition of pure titanium metal from Ultra-fine rutile concentrate feedstock sourced from the Company's Cerro Blanco project in Chile, the improvement of overall process recovery and the optimization of cell voltage and current density. Preliminary results from this test work indicate that the residual oxygen content in titanium sponge metal deposited from molten salts using the Chinuka Process is approximately 1 wt%. This reported weight per cent figure represents an average for several test runs completed during the second quarter. Based on these results, an examination of the potential use of final acid leaching to lower oxygen content further to approximately 0.5 wt% (a commercial weight per cent specification for sheet rolled titanium metal) was initiated and continued into the current quarter.

In addition to examining acid leaching of titanium sponge metal, research during the quarter started to focus on the adaptability of the Chinuka Process. The first test work will examine the possible production of titanium metal powder (a higher value product than titanium sponge metal). This will be followed by an examination into the possible utilization of lower grade rutile and ilmenite concentrates as the process feedstock. Ilmenite is the most common form of titanium concentrate, however many ilmenites have impurities which preclude their use in paint and pigment applications.

We are very encouraged by the results to date of the new metal technology. Should we continue to have success with this technology at a lab scale, we may consider building a pilot plant to scale up the test work.

 
17

 
 
WHITE MOUNTAIN TITANIUM CORPORATION
(An Exploration Stage Company)
Notes to Consolidated Financial Statements
Six Months Ended June 30, 2011 and 2010
(Unaudited)
(US Funds)
 
Since October, 2010 the Company has announced that it has signed four Letters of Intent for off-take agreements with pigment producers for the supply of standard grade rutile concentrate.   The Letters of Intent, which at this stage are non-binding on the parties and subject to the successful completion of a bankable feasibility study, are covered by a non-disclosure agreement.
 
Both the titanium pigment and feedstock markets remain very robust. DuPont, already the world’s largest producer of titanium dioxide pigments, has announced double-digit price increases and an expansion plan that will add approximately 771 million pounds of global capacity. Expansion amongst pigment producers comes at a time when the supply of the various forms of titanium feedstock used to make pigment is in deficit. Industry observers expect that the supply of titanium feedstock to remain in deficit for several years and that prices will continue to increase. By way of example, several websites have reported that spot prices for ilmenite and titanium slag in China have more than doubled in 2011. One website,”asiametal.com”, has reported May 2011 spot prices for 92% TiO2 titanium slag feedstock of US$ 1385 – 1400 per tonne equivalent, nearly twice the US$ 747 they were quoting in January 2011.

The Company has been advised by its titanium marketing consultant that as titanium slag would normally be considered an inferior feedstock compared to rutile, recent spot price increases for slag suggest that medium-term contract prices for rutile - which would comprise all of White Mountain’s proposed production - could approach or possibly exceed US$ 1000 per tonne. Given these price developments for rutile and the fact that the Cerro Blanco project is being advanced towards final engineering feasibility, the Company is increasingly being approached by parties interested in supplying services to and financing development of the project, securing rutile concentrate under long-term contract and collaborating on the Chinuka titanium metal technology.

On July 6, 2011, the Company appointed Dr. Antonio Luraschi as Project Manager, effective August 1, 2011. Reporting to the President of White Mountain, Dr. Luraschi will be responsible for over-seeing all disciplines necessary to take the project to the final feasibility stage. Dr. Luraschi obtained degrees in Metallurgical and Chemical Engineering from the University of Concepcion, Chile in 1970, and a Ph.D. in Metallurgy from Massachusetts Institute of Technology in 1976. A fluent speaker of Spanish and English, Dr. Luraschi also has a working knowledge of French and Italian.

Most recently, Dr. Luraschi was employed by AMEC International Ltd. in Chile as Metallurgical Consulting Manager. Previously he was a partner with CADE-IDEPE (a Chilean engineering firm acquired by AMEC in 2007) where he was responsible for the metallurgical process aspects of numerous mining projects, including projects for such companies as Anglo American, Codelco and Xstrata. Over his career, Dr. Luraschi has developed more than sixty applied research and development project engineering solutions. These solutions fall within the fields of copper pyrometallurgy and electrometallurgy as well as extractive metallurgy of gold and silver and specialty metals such as molybdenum, titanium, vanadium and germanium.

Results of Operations

The Company recorded a loss of $1,232,734 for the three months ended June 30, 2011 (Year to date: $4,759,081) ($0.02 and $0.09 respectively per weighted average common share outstanding) compared to a loss of $267,174 (YTD: $480,553) ($0.007 and $0.01 per share) for the comparable interim periods in 2010.

The loss in the six month periods ended June 30, 2011 and 2010 are both materially affected by the adoption of Emerging Issues Task Force (“EITF”) 07-05, Determining Whether an Instrument (or Embedded Feature) Is Indexed to an Entity’s Own Stock, which was primarily codified into ASC Topic 815, Derivatives and Hedging.  ASC 815 applies to any freestanding financial instruments or embedded features that have the characteristics of a derivative and to any freestanding financial instruments that are potentially settled in an entity’s own common stock.

ASC Topic 815 was effective January 1, 2009 resulted in a cumulative adjustment of $1,084,375 to accumulated deficit as of January 1, 2009.  For the six months ended June 30, 2011 the Company recorded a fair value change (loss) of $543,150 on the warrants.  For the six months ended June 30, 2010, the Company recorded a gain of $1,224,850.

 
18

 

WHITE MOUNTAIN TITANIUM CORPORATION
(An Exploration Stage Company)
Notes to Consolidated Financial Statements
Six Months Ended June 30, 2011 and 2010
(Unaudited)
(US Funds)

The Company foreign exchange loss of $77,212 (YTD: $266,382) for the three and six months ended June 30, 2011 compared to a loss of $17,493 (YTD: $26,682) in 2010.  This is a direct result of the weakening of the US dollar compared to the Chilean Peso.

Excluding the above, our loss from operations was $1,180,790 (YTD: $3,975,747) in 2011, compared to a loss of $506,806 (YTD: $1,684,710) in the three and six month periods ending June 30, 2010.

The most significant difference was that in the three month period ended June 30, 2011 we expended $532,775 (YTD: $1,523,388) on exploration programs in the field, including drilling, compared to $60,796 (YTD: $136,084) for the comparable period of 2010.

Otherwise, many expenses continue to be comparable this quarter to the comparable quarter of 2010, except for the following material items:

 
·
During the six months ended June 30, 2011 and 2010, stock-based compensation of $1,226,456 (2010: $828,000) was recognized;
 
·
Advertising and Promotion of $3,594 (YTD: $43,293 (2010: 27,253 and 31,840), Investor relations of $30,118 (YTD: $62,298) (2010: $nil), and Travel of $61,407 (YTD: $117,229) (2010: $24,135 and $47,827) were all up significantly as the Company engaged outside advisors to provide market awareness and information dissemination services, and traveled significantly to meet with investors and with consultants;
 
·
Amortization of $87,728 (YTD: $173,899) (2010: $6,907 and $13,803) reflects normal amortization of  fixed assets and the amortization of the technology rights which commenced in late 2010;
 
·
Engineering consulting reflects a significant recovery of expenditures  received in the quarter from a supplier in the first quarter of 2011; and
 
·
Research and development of $88,433 (YTD: $176,504) (2010: $nil) reflects payments made to further our technology;

Recent Accounting Pronouncements

In January 2010, the FASB issued an update to the Fair Value topic.  This update requires new disclosures for (1) transfers in and out of levels 1 and 2; and (2) activity in level 3, by requiring the reconciliation to present separate information about purchases, sales, issuance and settlements.  Also, this update clarifies the disclosures related to the fair value of each class of assets and liabilities, and the input and valuation techniques for both recurring and non-recurring fair value measurements in levels 2 and 3.  The effective date for the disclosures and clarifications is for interim and annual reporting periods beginning after December 15, 2009, except for disclosures about purchases, sales, issuances and settlements, which is effective for fiscal years beginning after December 15, 2010.  The Company’s adoption of this standard did not have a material effect on the Company’s consolidated financial statements.

 
19

 

WHITE MOUNTAIN TITANIUM CORPORATION
(An Exploration Stage Company)
Notes to Consolidated Financial Statements
Six Months Ended June 30, 2011 and 2010
(Unaudited)
(US Funds)

In April 2010, the FASB issued ASU 2010-13, Compensation—Stock Compensation (Topic 718): Effect of Denominating the Exercise Price of a Share-Based Payment Award in the Currency of the Market in Which the Underlying Equity Security Trades. ASU 2010-13 provides amendments to Topic 718 to clarify that an employee share-based payment award with an exercise price denominated in currency of a market in which a substantial portion of the entity’s equity securities trades should not be considered to contain a condition that is not a market, performance or service condition. Therefore, an entity would not classify such an award as liability if it otherwise qualifies as equity. The amendments in this update are effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2010. The Company’s adoption of this standard did not have a material effect on the Company’s consolidated financial statements.

Item 3.  Quantitative and Qualitative Disclosures About Market Risk

As a smaller reporting company, we have elected not to provide the disclosure required by this item.

Item 4.  Controls and Procedures

Disclosure Controls and Procedures

Our President and our CFO, after evaluating the effectiveness of our “disclosure controls and procedures” (as defined in the Rule 15d-15 (e) under the Exchange Act) as of the end of the period covered by this Quarterly Report on Form 10-Q (the “Evaluation Date”), have concluded that as of the Evaluation Date, our disclosure controls and procedures were effective to provide assurance that information we are required to disclose in reports that we file or submit under the Exchange Act 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 and financial officers, as appropriate, to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting (as defined in Rule 15d-15(f) under the Exchange Act) that occurred during our most recent quarter ended June 30, 2011, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

It should be noted that any system of controls, however well designed and operated, can provide only reasonable and not absolute assurance that the objectives of the system will be met. In addition, the design of any control system is based in part upon certain assumptions about the likelihood of future events.  Because of these and other inherent limitations of control systems, there is only reasonable assurance that our controls will succeed in achieving their stated goals under all potential future conditions.

 
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WHITE MOUNTAIN TITANIUM CORPORATION
(An Exploration Stage Company)
Notes to Consolidated Financial Statements
Six Months Ended June 30, 2011 and 2010
(Unaudited)
(US Funds)

PART II.  OTHER INFORMATION

Item 6. Exhibits

The following exhibits are furnished with this report:

 
31.1
Rule 15d-14(a) Certification by Principal Executive Officer
 
31.2
Rule 15d-14(a) Certification by Chief Financial Officer
 
32.1
Section 1350 Certification of Principal Executive Officer
 
32.2
Section 1350 Certification of Chief Financial Officer

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

   
White Mountain Titanium Corporation
       
Date:
August 15, 2011
By
/s/ M. P. Kurtanjek
     
Michael P. Kurtanjek, President
     
(Principal Executive Officer)
       
Date:
August 15, 2011
By
/s/  C.E. Jenkins
     
Charles E. Jenkins, Chief Financial Officer
     
(Principal Financial Officer)

 
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