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 September 30, 2013

[  ]

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 issuer’s classes of common stock, as of the latest practical date:  

At November 10, 2013, 91,805,828 shares of the registrant’s common stock were outstanding.

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GOLD CREST MINES, INC.

FORM 10-Q

For the Quarter Ended September 30, 2013

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	13
	Item 3		Quantitative and Qualitative Disclosures About Market Risk	16
	Item 4		Controls and Procedures	16
PART II - Other Information
	Item 1		Legal Proceedings	16
	Item 1A		Risk Factors	16
	Item 2		Unregistered Sale of Equity Securities and Use of Proceeds	16
	Item 3		Defaults upon Senior Securities	16
	Item 4		Mine Safety Disclosures	17
	Item 5		Other Information	17
	Item 6		Exhibits	17
Signatures				18

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PART I -  FINANCIAL INFORMATION

Item 1.  Financial Information and Footnotes.

GOLD CREST MINES, INC.
(AN EXPLORATION STAGE COMPANY)
Consolidated Balance Sheets
						September 30,		December 31,
						2013		2012
						(unaudited)
ASSETS
	CURRENT ASSETS
		Cash and cash equivalents			$	2,518	$	1,552
				Total Current Assets		2,518		1,552
	Equipment, net of accumulated depreciation
		of $3,413 and $3,413, respectively				-		-
	Mineral properties					11,373		11,373
		TOTAL ASSETS			$	13,891	$	12,925
LIABILITIES AND STOCKHOLDERS' DEFICIT
	CURRENT LIABILITIES
		Accounts payable			$	22,956	$	26,713
		Accrued liabilities				63,245		47,366
		Loan from Afranex (Note 4)				80,213		25,213
				Total Current Liabilities		166,414		99,292
		Total Liabilities				166,414		99,292
	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; 91,805,828 and 89,205,828 shares issued
			and outstanding, respectively			91,806		89,206
		Additional paid-in capital				9,475,703		9,426,503
		Accumulated deficit during exploration stage				(9,720,032)		(9,602,076)
				Total Stockholders' Deficit		(152,523)		(86,367)
		TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT			$	13,891	$	12,925
	The accompanying notes are an integral part of these consolidated financial statements.

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GOLD CREST MINES, INC.
(AN EXPLORATION STAGE COMPANY)
Consolidated Statements of Operations
(Unaudited)
			Three Months Ended				Nine Months Ended				From Inception
			September 30,		September 30,		September 30,		September 30,		January 11, 2005
			2013		2012		2013		2012		to September 30, 2013
REVENUES		$	-	$	-	$	-	$	-	$	-
OPERATING EXPENSES:
	Exploration expenditures		-		-		-		-		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		17,889		2,355		31,372		33,816		647,952
	Directors' fees		-		-		-		-		846,000
	General and administrative		45,041		16,113		86,584		46,365		3,222,140
	TOTAL OPERATING EXPENSES		62,930		18,468		117,956		80,181		9,943,832
LOSS FROM OPERATIONS			(62,930)		(18,468)		(117,956)		(80,181)		(9,943,832)
OTHER INCOME (EXPENSE):
	Interest income		-		-		-		-		79,182
	Gain realized from advances from Gold Crown		-		117,659		-		117,659		117,659
	Interest expense		-		-		-		-		(22,560)
	Gain on settlement of accounts payable		-		-		-		-		49,519
	TOTAL OTHER INCOME		-		117,659		-		117,659		223,800
INCOME (LOSS) BEFORE INCOME TAXES			(62,930)		99,191		(117,956)		37,478		(9,720,032)
INCOME TAXES			-		-		-		-		-
NET INCOME (LOSS)			$        (62,930)		$          99,191	$	(117,956)	$	37,478		$                (9,720,032)
NET INCOME (LOSS) PER COMMON SHARE
	BASIC AND DILUTED	$	(Nil)	$	Nil	$	(Nil)	$	Nil
WEIGHTED AVERAGE NUMBER
	OF SHARES OUTSTANDING, BASIC
	AND DILUTED		90,854,741		89,205,828		89,805,095		89,205,828
	The accompanying notes are an integral part of these consolidated financial statements.

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GOLD CREST MINES, INC.
(An Exploration Stage Company)
Consolidated Statements of Cash Flows
(Unaudited)
				Nine Months		Nine Months		From Inception
				Ended		Ended		January 11, 2005 to
				September 30, 2013		September 30, 2012		September 30, 2013
CASH FLOWS FROM OPERATING ACTIVITIES:
	Net income (loss)		$	(117,956)	$	37,478	$	(9,720,032)
	Adjustments to reconcile net income (loss) to net cash used
	by operating activities:
		Depreciation		-		159		53,193
		Common stock and options issued for services		-		-		1,368,976
		Equity compensation for management and directors		1,800		-		1,218,041
		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
		Gain realized from advances from Gold Crown		-		(117,659)		(117,659)
		Impairment of investment in Golden Lynx LLC		-		-		43,202
		Gain on sale of mineral properties		-		-		(16,875)
		Gain on settlement of accounts payable		-		-		(49,519)
	Changes in operating assets and liabilities:
		Interest receivable		-		-		(6,266)
		Prepaid expenses and deposits		-		-		57,999
		Miscellaneous receivable		-		-		3,000
		Accounts payable and accrued liabilities		12,122		42,845		165,549
		Advances from Gold Crown		-		-		117,659
		Net cash used by operating activities		(104,034)		(37,177)		(5,994,627)
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
	Purchase of equipment			-		-		(134,971)
		Net cash used by investing activities		-		-		(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			50,000		-		6,758,343
	Loan from Afranex (Note 4)			55,000		15,278-		80,213
		Net cash provided by financing activities		105,000		15,278		7,039,856
	Net change in cash and cash equivalents			966		(21,899)		2,518
	Cash and cash equivalents, beginning of period			1,552		24,167		-
	Cash and cash equivalents, end of period		$	2,518	$	2,268	$	2,518
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
	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.

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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 and its wholly owned subsidiary Kisa. 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 September 30, 2013 may not be indicative of December 31, 2013.  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, 2012.

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.

Cash and Cash Equivalents

Highly liquid short-term investments with a remaining maturity when purchased of three months or less are classified as cash equivalents. The Company deposits its cash and cash equivalents in high quality financial institutions.

Fair Values of Financial Instruments

The carrying amounts of financial instruments including cash and cash equivalents and the loan from Afranex approximated their fair values as of September 30, 2013 and December 31, 2012.

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Fair Value Accounting

Accounting guidance has established a hierarchy of assets that are measured at fair value on a recurring basis. The three levels included in the hierarchy are:

·

Level 1: quoted prices in active markets for identical assets or liabilities

·

Level 2: significant other observable inputs

·

Level 3: significant unobservable inputs

At September 30, 2013 and December 31, 2012, the Company has no assets or liabilities that are recorded at fair value on a recurring basis.

Basic and Diluted Net Loss Per Share

Net loss per share was computed by dividing the net income (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 income (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 September 30, 2013 and September 30, 2012, there were zero common stock equivalents exercisable.

NOTE 3. Going Concern

As shown in the accompanying financial statements, the Company has had no revenues and incurred an accumulated deficit of $9,720,032 through September 30, 2013. Another factor is that the Company has a negative current ratio of 0.02: 1 at September 30, 2013. 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 and joint venture agreements 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 believes it will only need an estimated $150,000 to $200,000 to continue operations through the next twelve months. The timing and amount of capital requirements will depend on a number of factors, including the Company’s ability to successfully maintain a joint venture on our Alaska properties and the Company’s future personnel requirements.

NOTE 4.  Mineral Properties

In Alaska, the Company’s wholly owned subsidiary Kisa controls or has interests in five claim blocks consisting of 274 State of Alaska mining claims covering 42,280 acres. Four of the claim blocks making up 35,240 acres comprise the Company’s Southwest Kuskokwim Project and the remaining claim group consisting of 7,040 acres is the Company’s Buckstock Project. The Southwest Kuskokwim claim blocks are located in southwest Alaska approximately 90 miles east of the village of Bethel on State of Alaska-owned lands. The Buckstock claim group is located approximately 30-80 miles south of the Donlin Creek deposit and north of the Company’s Southwest Kuskokwim claim groups.

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

Alaska Mineral Properties		Number of Claims		Acres		Carrying Value at       June 30, 2013		Carrying Value at December 31,    2012
Southwest Kuskokwim Project
AKO		73		11,680		$               2,543		$           2,543
Luna		50		8,000		-		-
Kisa		38		5,840		3,314		3,314
Gold Lake		69		9,720		5,516		5,516
TOTAL Southwest Kuskokwim Project		230		35,240		$             11,373		$         11,373
Buckstock Project
Chilly		44		7,040		-		-
TOTAL Buckstock Project		44		7,040		$                      -		$                   -
OVERALL TOTAL		274		42,280		$           11,373		$         11,373

In Alaska, the lands are held under and are subject to the State’s mining laws and regulations. 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. The commitments and annual assessments for 2013 will be due no later than November 30, 2013. See “Note 6. Commitments and Contingencies”.

North Fork Option Master Earn-in Agreement

On January 27, 2010, the Company, through its wholly owned subsidiary, Kisa signed an option agreement with North Fork Resources Pty Ltd (“North Fork”), a company related to Afranex Gold Limited (“Afranex”) in that they are managed by key executives and directors of each company.  See “Afranex Terms Sheet”.   The agreement grants North Fork an exclusive option to purchase and/or earn an interest in the Company’s Southwest Kuskokwim Project area (“The Projects”).

Under the terms of the option, North Fork made a payment to the Company in the amount of $20,000 which was received on February 16, 2010 which was recorded as a deposit on option agreement, for the exclusive right to explore the claims up until October 31, 2010. On August 18, 2010, the Company amended the option agreement to include an additional claim group known as our Chilly claims, which became part of The Projects. As consideration for this new claim group, North Fork made an additional payment to the Company of $10,000 on August 24, 2010 which was also recorded as a deposit on option agreement. On October 18, 2010 North Fork formally notified the Company of their intent to exercise the option over the Alaska properties.

The total of the two payments of $30,000 received from North Fork was recognized as income during the year ended December 31, 2010.

On March 28, 2011 the Master Earn-In agreement (“the Agreement”) with North Fork was executed which maintained the same terms as the originals terms.

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

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%

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b.

North Fork – 0%

2.

North Fork can earn a 51% interest in The Projects by the expenditure of $3,000,000 on The Projects by 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 is the sole manager of The Projects and will make all decisions in regards to the exploration programs.

Afranex Terms Sheet

On June 5, 2012, and later amended on August 28, 2012 and February 13, 2013, the Company signed a Terms Sheet with Afranex, a company related to the Company’s joint venture partner North Fork. On February 26, 2013, and later amended on March 26, 2013 and again on June 5, 2013,  the Company executed a new version of the Terms Sheet with Afranex wherein Afranex proposed to purchase up to 100% of Kisa, Gold Crest’s wholly owned subsidiary, in one of two proposed options.  Afranex is an Australian corporation with principal executive offices located at Suite 8, 7 The Esplanade, Mount Pleasant W. Australia.  The Kisa common shares represent 100% ownership of the capital stock of Kisa.  

Kisa’s only assets include the Company’s Southwest Kuskokwim Project and the Buckstock Project areas which consist of exploration properties in southwest Alaska comprised of 42,280 acres of State of Alaska-owned lands.

One option is if the Company sells 100% of its ownership interest in Kisa to Afranex, Afranex would pay Gold Crest 12,500,000 shares of Afranex stock valued at AUD$0.20 per share and grant Gold Crest an Afranex ordinary share 4-year option to purchase 3,125,000 shares exercisable at AUD$0.25 per share.

Alternatively, if the Company sells 80% of its Kisa shares to Afranex, Afranex would pay Gold Crest 10,000,000 ordinary shares of Afranex stock valued at AUD$0.20 per share and grant Afranex an option to purchase the remaining 20% of the Kisa shares in consideration for Afranex ordinary shares valued at $500,000, on or before June 30, 2015.  Gold Crest would be granted a 4-year option to purchase 2,500,000 ordinary Afranex shares at a price of AUD$0.25 per share.

The following is a breakdown of the main details of the Terms Sheet, which incorporates the final amendments to the terms sheet:

1.

Consideration:

a.

Afranex agrees to pay Gold Crest the sum of $100,000 (of which $25,000 was advanced to Gold Crest from Afranex as of December 31, 2012 and a total of $80,000 as of September 30, 2013, and

b.

One option is if the Company sells 80% of its ownership interest in Kisa to Afranex, Afranex would issue Gold Crest 10,000,000 fully paid ordinary shares in the capital of Afranex at an issue price of AUD$0.20 per share, or that number of shares depending on the way Afranex decides to become an ASX-listed company (Consideration Shares) and grant Gold Crest 2,500,000 unlisted options to be issued fully paid, ordinary shares in Afranex, exercisable at AUD$0.25 per option and expiring four years from the date of grant.

c.

The alternative option would be if the Company sells 100% of its ownership interest in Kisa to Afranex, Afranex would pay Gold Crest 12,500,000 shares of Afranex stock valued at AUD$0.20 per share and grant Gold Crest an Afranex ordinary share 4-year option to purchase 3,125,000 shares exercisable at AUD$0.25 per share.

2.

Completion of the Acquisition is conditional on the satisfaction (or waiver by the parties) of the certain conditions precedent such as due diligence by Afranex on Kisa, the approval of the board of Afranex as well as the approval of the shareholders of Gold Crest among other conditions.  If these conditions are not satisfied or waived by January 31, 2014, this term sheet agreement will expire.

3.

Settlement of the Acquisition will occur on that date which is five business days of satisfaction (or waiver) of the conditions precedent.  At settlement of (b) or (c), Afranex will settle the consideration set forth above and Gold

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Crest will deliver the respective number of Kisa shares.  In the event the Company only sells Afranex 80% of the Kisa shares, Gold Crest agrees that an incorporated joint venture is created between Afranex or Parent and Gold Crest in relation to Kisa on the terms and conditions of the joint venture, which, upon the commencement date, the initial shareholding interests in Kisa will be 80% Afranex and 20% Gold Crest.

4.

If Gold Crest sells 80% of Kisa to Afranex, Afranex may, by written notice to Gold Crest at any time up to June 30, 2015, elect to acquire all (and not part) of Gold Crest’s remaining fully paid Kisa shares in return for the issue of AUD$500,000 worth of Afranex fully paid, ordinary shares if by IPO, or parent shares if Backdoor Listing, which is a corporate finance term that has the same meaning as reverse merger, reverse listing or reverse IPO (Option Shares).

5.

Notwithstanding the fact that this Terms Sheet is legally binding on the Parties, Afranex and Gold Crest agree to enter into a formal share sale and purchase agreement to more fully document the terms of the Acquisition (to be prepared by Afranex’s solicitors) which shall be on terms acceptable to Kisa and Afranex (acting reasonably) and which shall be consistent with the terms set out in this Terms Sheet.

Afranex Loan Facility Agreement

On July 26, 2012, the Company signed a Loan Facility Agreement (“Loan”) in the amount of $15,000 with Afranex which entitled the Company to make individual draw downs in $5,000 increments of the Loan until the Loan has been exhausted to provide the Company with immediate working capital requirements.   On October 26, 2012, the Company signed a first deed of variation to the Loan which increased the Loan amount from $15,000 to $25,000.   

Per the terms of the original Loan, the Company agrees to repay the loan in full within six (6) months, extended to January 31, 2013 per the first variation to the Loan, or agrees that the funds will be deducted from the $100,000 cash payment that forms part of the agreed consideration to purchase the Company’s wholly owned subsidiary, Kisa. The Company received the entire proceeds of the Loans in the third and fourth quarters and recorded the funds as a current liability.

On February 13, 2013, the Company signed a second deed of variation to the Loan which increased the Loan amount from $25,000 to $80,000.   The due date was also extended out to June 30, 2013.  As of September 30, 2013, the Company had received the entire $80,000 and recorded the funds as a current liability.  The funds are intended to be deducted from the $100,000 consideration per the Afranex terms sheet which subsequently was extended out to January 31, 2014 and on July 26, 2013, per the Third deed of variation to the loan facility agreement, the current liability of $80,000 has been extended out to January 31, 2014 also. See “Afranex Terms sheet” above for further details.

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 nine months ended September 30, 2013, the Company had the following issuances of common stock:

On March 1, 2013, the Company issued 100,000 shares of common stock to a director valued at $1,800.  

On July 22, 2013 the Company began a private placement offering up to a maximum of 2,500,000 shares at $0.02 per share for a maximum of $50,000 in proceeds.  The offering scheduled ended on August 15, 2013 and as of that date the Company had issued the full 2,500,000 shares raising a total of $50,000.  The shares were being offered and sold by officers and directors of the Company who received no remuneration for the sale of the shares.

There were no issuances of common stock during the nine months ended September 30, 2012.

Common Stock Warrants

There was no warrant activity during the three months ended September 30, 2013 and no warrants were outstanding at September 30, 2013 or December 31, 2012.

Stock Options

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During the nine months ended September 30, 2013, the Company did not issue any new options under the 2007 Stock Plan. During the year ended December 31, 2012, the Company had 5,280,000 stock options expire with exercise prices ranging from $0.28 to $0.53.  These options had been granted between June 19, 2007 and September 12, 2007 to members of the board of directors, employees and to consultants of the Company.

The following is a summary of stock option activity from January 1, 2012 to June 30, 2013:

		Number of Shares Under Options		Weighted Average  Exercise Price
Outstanding January 1, 2012		5,280,000		$                       0.52
Granted		—		—
Exercised		—		—
Expired		(5,280,000)		0.52
Outstanding and exercisable at December 31, 2012		—		$                          —
Options outstanding and exercisable at September 30, 2013		—		$                          —

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 $73,710 for these claims are due by November 30, 2013. 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, 2013 with the possibility, depending on any qualified carry-over amounts that can be applied to the labor year ending September 1, 2013 on certain claim groups, will need to be performed by the September 1, 2013 deadline. If these labor requirements are not met by the due date, the claims will be considered abandoned. The commitments and annual assessments for 2013 will be due no later than November 30, 2013.  

Per verbal discussions with the Company’s joint venture partner, North Fork, it is their intention to make all payments necessary to keep the claims in good standing.  The Master Earn-In Agreement requires that notice would have to be given by August 1, 2013 if their intent were not to pay the rental fees or perform the required labor.

NOTE 7.  Subsequent Events

North Fork Option Extension

On October 31, 2013 a verbal agreement was reached between North Fork and the Company whereas North Fork agreed to pay Gold Crest an extension fee of $30,000 to extend the date where the first $3,000,000 earn-in is to be expended out until October 31, 2014 from the original date of October 31, 2013.  Per the terms of the agreement North Fork can earn a 51% interest in The Projects by the expenditure of $3,000,000 by the new due date of October 31, 2014.  All other terms of the agreement remain unchanged.  A written amendment is forthcoming.

On November 5, 2013 the Company received the extension fee of $30,000 from North Fork and it will be recognized as income during the year ended December 31, 2013.

Board of Directors

Effective as of November 6, 2013, the Company received a letter of resignation from Robert W. O’Brien as a Director of the Company.

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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, 2012.

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 $9,720,032 through September 30, 2013. Another factor is that the Company has a negative current ratio of 0.02: 1 at September 30, 2013.  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.  The Company feels that 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 and joint venture agreements 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 southwest Alaska, the Company’s wholly owned subsidiary Kisa Gold Mining, Inc. ("Kisa") controls or has interests in nine claim blocks consisting of 274 State of Alaska mining claims covering 42,280 acres.

On March 28, 2011 the Company, through its wholly owned subsidiary, Kisa, executed a Master Earn-In agreement (“the Agreement”) with North Fork LLC, (“North Fork”) an Alaska limited liability company. This agreement calls 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 the Company’s exploration properties mentioned above. See “Note 4. Mineral Properties – North Fork Option Master Earn-in Agreement” to our consolidated financial statements for further details.

On June 5, 2012, the Company, through its wholly owned subsidiary, Kisa signed a Terms Sheet with Afranex Gold Limited (“Afranex”), a company related to our joint venture partners North Fork, which sets out the terms on which Afranex agrees to acquire up to 100% of the shares in Kisa. On February 13, 2013 an amendment was signed changing certain terms, most notably, changing the initial acquisition of only 80% of the shares of Kisa with an option to acquire the remaining 20% at any time up to June 30, 2015 for additional consideration.  See “Note 4. Mineral Properties – Afranex Term Sheet” to our consolidated financial statements for further details.

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On July 26, 2012, the Company signed a Loan Facility Agreement (“Loan”) with Afranex for $15,000, and amendment on October 26, 2012 for an additional $10,000 all received before December 31, 2012. On February 13, 2013 another amendment was signed increasing the loan amount from $25,000 to $80,000.  The $80,000 is due and payable on, or before January 31, 2014.  As of the date of this filing, the Company has received the entire $80,000. See “Note 4. Mineral Properties – Afranex Loan Facility Agreement” to our consolidated financial statements for further details.

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 September 30, 2013 was $2,518 versus $1,552 at December 31, 2012. This increase is primarily due the Company receiving $55,000 under the Afranex Loan Facility Agreement and the raising $50,000 in a private placement during the first nine months of 2013 to cover operating expenses.

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 continue to proceed with our joint venture partner, North Fork, who continues to expend funds under the master earn-in agreement and just completed another season of exploration in the Company’s Southwest Kuskokwim Project area.  On October 31, 2013 a verbal agreement was reached whereas North Fork agreed to pay Gold Crest an extension fee of $30,000, which was received on November 5, 2013, to extend the date where the first $3,000,000 earn-in is to be expended out until October 31, 2014.  See “Note 7. Subsequent Events – North Fork Option Extension” to our consolidated financial statements for further details.

We are currently also working towards an agreement with Afranex for them to acquire up to 100% of the shares in Kisa which will bring in capital related to the transaction, of which we are currently receiving advances on.  See “Note 4. Mineral Properties – Afranex Term Sheet and Afranex Loan Facility Agreement” to our consolidated financial statements for further details.

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Results of Operations

Comparison of the Three and Nine Months Ended September 30, 2013 and September 30, 2012:

The following tables set forth certain information regarding the components of our Consolidated Statements of Operations for the three and nine months ended September 30, 2013 compared with the three and nine months ended September 30, 2012. The tables are provided to assist in assessing differences in our overall performance:

			The Three Months Ended
			September 30,		September 30,
			2013		2012		$ Change		% Change
REVENUES		$	-	$	-	$	-		-
OPERATING EXPENSES:
	Legal and accounting expenses		17,889		2,355		15,534		659.6%
	General and administrative		45,041		16,113		28,928		179.5%
	TOTAL OPERATING EXPENSES		62,930		18,468		44,462		240.8%
LOSS FROM OPERATIONS			(62,930)		(18,468)		(44,462)		240.8%
	Interest income		-		-		-		-
	Gain realized from advances from Gold Crown		-		117,659		(117,659)		(100.0)%
	Interest expense		-		-		-		-
	TOTAL OTHER INCOME (EXPENSE)		-		117,659		(117,659)		(100.0)%
LOSS BEFORE TAXES		$	(62,930)	$	99,191	$	(162,121)		(163.4)%

			The Nine Months Ended
			September 30,		September 30,
			2013		2012		$ Change		% Change
REVENUES		$	-	$	-	$	-	$	-
OPERATING EXPENSES:
	Legal and accounting expenses		31,372		33,816		(2,444)		(7.2)%
	General and administrative		86,584		46,365		40,219		86.7%
	TOTAL OPERATING EXPENSES		117,956		80,181		37,775		47.1%
LOSS FROM OPERATIONS			(117,956)		(80,181)		(37,775)		47.1%
	Interest income		-		-		-		-
	Gain realized from advances from Gold Crown		-		117,659		(117,659)		(100.0)%
	Interest expense		-		-		-		-
	TOTAL OTHER INCOME (EXPENSE)		-		117,659		(117,659)		(100.0)%
LOSS BEFORE TAXES		$	(117,956)	$	37,478	$	(155,434)	$	(414.7)%

Overview of Operating Results

Operating Expenses

The increase of $37,775 in operating expenses during the nine months ended September 30, 2013 compared to the nine months ended September 30, 2012 was primarily a result in financing fees being approximately $33,000 higher in the nine months ending September 30, 2013 due to increased efforts to raise funds to pursue new projects, approximately $9,800 in legal fees incurred in the third quarter of 2013, and to a lesser extent, a result of increased payroll expenses for increased work load for the nine months ended September 30, 2013.  This increase was partially offset by approximately $12,500 lower audit fees in 2013 compared to the same time period in 2012 because in 2012 there was extra due diligence associated with the possible business combination transaction with Gold Crown, Inc.

Legal and Accounting Expenses

There was a slight decrease of $2,444 in legal and accounting expenses during the nine months ended September 30, 2013 compared to the nine months ended September 30, 2012 primarily as a result of approximately $12,500 in lower audit fees in 2013 due to the due diligence associated with the possible business combination transaction with Gold Crown, Inc. in the first quarter of 2012.   The decrease was offset by approximately $9,800 due to higher legal fees in the third quarter of 2013 versus zero in 2012.

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General and Administrative Expenses

The increase of $40,219 in general and administrative expenses during the nine months ended September 30, 2013 compared to the nine months ended September 30, 2012 was primarily due to financing fees being approximately $33,000 higher in the nine months ending September 30, 2013 due to increased efforts to raise funds to pursue new projects, approximately $9,800 higher legal fees incurred in the third quarter of 2013, and to a lesser extent, a result of increased payroll expenses for increased work load for the nine months ended September 30, 2013.  

 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 September 30, 2013, 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 September 30, 2013, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II – OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS.

None.

ITEM 1A.  RISK FACTORS.

Not Applicable to Smaller Reporting Companies

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

During the period July 22, 2013 through August 15, 2013 the Company sold 2,500,000 common shares to two accredited investors for a total of $50,000 or $0.02 per share.  The shares were sold pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended (the "Act"),  in a private non-public transaction and deemed restricted securities which may not be publicly resold absent registration under the Act or an exemption from registration.

ITEM 3.  Defaults upon Senior Securities

None

ITEM 4.  Mine Safety Disclosures.

None.

ITEM 5.  OTHER INFORMATION.

Afranex Loan Facility Agreement:

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On July 26, 2013 we executed the third deed of variation to the Agreement.  This variation extended the Afranex term sheet closing date for the  proposed Kisa sale transaction to January 31, 2014 and provided that the $80,000 loan would be deducted from the $100,000 down payment due from Afranex at the proposed closing.   

Summary Agreement Prior Variations

 

On February 13, 2013, a second deed of variation to the Agreement was executed increasing the loan amount from $25,000 to  $80,000 with the due date extended to June 30, 2013.   

On October 26, 2012, we executed a first deed of variation to the Agreement and increased the loan amount from $15,000  to $25,000 and extended the repayment date to January 31, 2013.   

On July 26, 2012, we entered into Loan Facility Agreement (the "Agreement") with Afranex Gold Limited.  This provided the Company with a $15,000 loan repayable within six months.

Afranex Term Sheet

On June 5, 2013, we amended Clause 4 of the Term Sheet with Afranex Gold Limited extending the dated from June 30, 2013 to January 31, 2014.  Clause 4 states that the closing of their proposed acquisition of Kisa Gold was subject to the completion of Afranex's "due diligence".    This closing is also subject to future Gold Crest Mining shareholder approval.

ITEM 6.  EXHIBITS

Exhibit Number	Description of Document
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
10.1	Amendment to Terms Sheet and Loan Agreement between Kisa Gold Mining, Inc. and Afranex Gold Limited originally filed with the registrant’s Form 10K on April 16, 2013.  Filed as exhibit 10.1 with the Company’s 10-Q on August 14, 2013.
101.INS(1)	XBRL Instance Document
101.SCH(1)	XBRL Taxonomy Extension Schema Document
101.CAL(1)	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF(1)	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB(1)	XBRL Taxonomy Extension Label Linkbase Document
101.PRE(1)	XBRL Taxonomy Extension Presentation Linkbase Document

(1)

Pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933 or Section 18 of the Securities Act of 1934 and otherwise are not subject to liability.

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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:  November 13, 2013

By:  /s/ Terrence J. Dunne

Terrence J. Dunne

CEO

(Principal Executive Officer)

Date:  November 13, 2013

By:  /s/ Matt J. Colbert

Matt J. Colbert

CFO

(Principal Financial Officer)

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