Attached files
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
(Mark One)
þ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended October 31, 2013
or
o | TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from___________________to____________________
Commission File Number 000-30230
GENERAL METALS CORPORATION | ||
(Exact name of registrant as specified in its charter) |
Delaware | 65-0488983 | |
(State or other jurisdiction of incorporation or organization) | (IRS Employer Identification No.) |
1155 W 4TH St Ste 210, Reno, NV 89503 | 89511 | |
(Address of principal executive offices) | (Zip Code) |
775.583.4636 | ||
(Registrant’s telephone number, including area code) |
N/A | ||
(Former name, former address and former fiscal year, if changed since last report) |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. þ YES o NO
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a small reporting company. See the definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer | o | Accelerated filer | o | |
Non-accelerated filer (Do not check if a smaller reporting company) |
o | Smaller reporting company | þ |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act. o YES þ NO
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Check whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Exchange Act after the distribution of securities under a plan confirmed by a court.
APPLICABLE ONLY TO CORPORATE ISSUERS
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
361,124,345 common shares issued and outstanding as of December 13, 2013
PART 1 – FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
General Metals Corporation
(An Exploration Stage Company)
Unaudited Condensed Consolidated Balance Sheet
October 31, | April 30, | |||||||
2013 | 2013 | |||||||
ASSETS | ||||||||
Current assets | ||||||||
Cash and cash equivalents | 245 | $ | 4,717 | |||||
Prepaid expenses | 1,498 | 13,555 | ||||||
Total current assets | 1,743 | 18,272 | ||||||
Other assets | ||||||||
Land | 67,742 | 67,742 | ||||||
Mineral property | 613,941 | 613,941 | ||||||
Property and equipment, net | 397 | 647 | ||||||
Other assets | 35,238 | 35,238 | ||||||
Total other assets | 717,318 | 717,568 | ||||||
Total assets | $ | 719,061 | $ | 735,840 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY/(DEFICIT) | ||||||||
Current Liabilities | ||||||||
Accounts payable | $ | 632,876 | $ | 472,331 | ||||
Notes payable, current portion | 5,695 | 5,421 | ||||||
Accrued liabilities | 205,092 | 148,417 | ||||||
Accounts payable to related parties | 64,786 | 58,186 | ||||||
Loan from related parties | 10,150 | — | ||||||
Total current liabilities | 918,599 | 684,355 | ||||||
Long-term liabilities | ||||||||
Notes payable, net of current portion | 26,809 | 29,105 | ||||||
Total long-term liabilities | 26,809 | 29,105 | ||||||
Total liabilities | 945,408 | 713,460 | ||||||
Commitments and Contingencies | ||||||||
Stockholders' equity/(deficit) | ||||||||
Preferred stock, authorized 50,000,000 shares, par value $0.001, zero issued and outstanding | — | — | ||||||
Common stock, authorized 500,000,000 shares, par value $0.001, issued and outstanding on October 31, 2013 and April 30, 2013 is 358,321,328 and 348,796,328 respectively | 358,321 | 348,796 | ||||||
Additional paid-in capital | 11,968,488 | 11,825,763 | ||||||
Accumulated deficit during exploration stage | (12,553,156 | ) | (12,152,179 | ) | ||||
Total stockholders' equity/(deficit) | (226,347 | ) | 22,380 | |||||
Total liabilities and stockholders' equity/(deficit) | $ | 719,061 | $ | 735,840 |
The accompanying notes are an integral part of these statements
General Metals Corporation
(An Exploration Stage Company)
Unaudited Condensed Consolidated Statements of Operations
March 15, 2006 | ||||||||||||||||||||
(Inception) | ||||||||||||||||||||
Three months ended October 31, | Six months ended October 31, | to October 31, | ||||||||||||||||||
2013 | 2012 | 2013 | 2012 | 2013 | ||||||||||||||||
Revenue | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||
Operating expenses | ||||||||||||||||||||
Depreciation and amortization | 125 | 1,280 | 250 | 2,618 | 40,468 | |||||||||||||||
General and administrative | 12,547 | 21,960 | 23,882 | 29,686 | 1,551,604 | |||||||||||||||
Management and consulting | 156,008 | 291,731 | 215,517 | 356,190 | 6,668,729 | |||||||||||||||
Exploration and development | 91,693 | 40,883 | 92,814 | 55,554 | 3,262,519 | |||||||||||||||
Professional fees | 38,010 | 22,724 | 63,451 | 69,328 | 944,917 | |||||||||||||||
Total expenses | 298,383 | 378,578 | 395,914 | 513,376 | 12,468,237 | |||||||||||||||
(Loss) from operations | (298,383 | ) | (378,578 | ) | (395,914 | ) | (513,376 | ) | (12,468,237 | ) | ||||||||||
Other income (expenses) | ||||||||||||||||||||
Interest expense | (2,320 | ) | (2,863 | ) | (5,063 | ) | (4,741 | ) | (50,937 | ) | ||||||||||
Other income | — | 100 | — | 100 | 47,002 | |||||||||||||||
Gain on sale of mineral properties | — | — | — | — | 1,249,072 | |||||||||||||||
Realized gain/(loss) on sale of investments | — | — | — | — | (112,204 | ) | ||||||||||||||
Other than temporary impairment of investments | — | — | — | — | (1,224,302 | ) | ||||||||||||||
Gain/(loss) on foreign currency exchange | — | — | — | — | 6,450 | |||||||||||||||
(Loss) before income taxes | (300,703 | ) | (381,341 | ) | (400,977 | ) | (518,017 | ) | (12,553,156 | ) | ||||||||||
Provision for income taxes | — | — | — | — | — | |||||||||||||||
Net (loss) | $ | (300,703 | ) | $ | (381,341 | ) | $ | (400,977 | ) | $ | (518,017 | ) | $ | (12,553,156 | ) | |||||
Loss per common share: | ||||||||||||||||||||
Basic & Diluted | $ | (0.00 | ) | $ | (0.00 | ) | $ | (0.00 | ) | $ | (0.00 | ) | ||||||||
Weighted average shares outstanding: | ||||||||||||||||||||
Basic & Diluted | 353,574,045 | 316,659,230 | 352,974,181 | 306,792,192 |
The accompanying notes are an integral part of these statements
General Metals Corporation
(An Exploration Stage Company)
Unaudited Condensed Consolidated Statements of Cash Flows
March 15, 2006 | ||||||||||||
Six months ended October 31, | (Inception) | |||||||||||
to October 31, | ||||||||||||
2013 | 2012 | 2013 | ||||||||||
Operating activities | ||||||||||||
Net loss | $ | (400,977 | ) | $ | (518,017 | ) | $ | (12,553,156 | ) | |||
Adjustments to reconcile net loss | ||||||||||||
Stock issued for services | 78,493 | 233,853 | 3,386,663 | |||||||||
Stock issued for payment of interest on debt | — | — | 12,750 | |||||||||
Non-cash financing costs | — | — | 46,234 | |||||||||
Realized loss on sale of investments | — | — | 112,204 | |||||||||
Gain on sale of mineral property | — | — | (1,249,072 | ) | ||||||||
Depreciation and amortization | 250 | 2,618 | 40,468 | |||||||||
Stock-based compensation | — | 105,600 | 1,886,771 | |||||||||
Other-than-temporary impairment of investments | — | — | 1,224,302 | |||||||||
Impairment of long-lived assets | — | — | 17,500 | |||||||||
Bad debt expense | — | — | 22,387 | |||||||||
Gain on sale of fixed asset | — | — | (1,250 | ) | ||||||||
Change in assets and liabilities | ||||||||||||
(Increase)/decrease in other current assets | — | — | (22,387 | ) | ||||||||
(Increase)/decrease in prepaid expenses | 8,564 | 2,125 | (13,325 | ) | ||||||||
Increase/(decrease) in accounts payable | 167,145 | (67,581 | ) | 772,562 | ||||||||
Increase/(decrease) in accrued liabilities | 56,675 | 23,352 | 449,801 | |||||||||
Net cash used by operating activities | (89,850 | ) | (218,050 | ) | (5,867,548 | ) | ||||||
Investment activities | ||||||||||||
Investments: | ||||||||||||
Purchases | — | — | (1,357 | ) | ||||||||
Proceeds from sales | — | — | 154,914 | |||||||||
Acquisition of mineral property | — | — | (78,091 | ) | ||||||||
Investment in General Copper | — | — | (17,500 | ) | ||||||||
Investment in Lahontan | — | — | (2,563 | ) | ||||||||
Deposit on water rights | — | — | (800 | ) | ||||||||
Deposit on reclamation bond | — | — | (34,438 | ) | ||||||||
Proceeds from sale of mineral property | — | — | 12,500 | |||||||||
Proceeds from sale of fixed asset | — | — | 8,000 | |||||||||
Purchase of land | — | — | (67,742 | ) | ||||||||
Purchase of equipment | — | — | (17,616 | ) | ||||||||
Net cash provided/(used) by investment activities | — | — | (44,693 | ) | ||||||||
Financing activities | ||||||||||||
Proceeds from loans from related parties | 15,150 | — | 137,014 | |||||||||
Repayments of loans from related parties | (5,000 | ) | — | (48,064 | ) | |||||||
Proceeds from issuance of debt | — | — | 149,841 | |||||||||
Repayments of debt | (2,022 | ) | (1,618 | ) | (14,538 | ) | ||||||
Proceeds from the sale of stock | 77,250 | 224,584 | 5,688,233 | |||||||||
Net cash provided by financing activities | 85,378 | 222,966 | 5,912,486 | |||||||||
Net increase / (decrease) in cash | (4,472 | ) | 4,916 | 245 | ||||||||
Cash, beginning of period | 4,717 | 4,954 | — | |||||||||
Cash (Cash overdraft), end of period | $ | 245 | $ | 9,870 | $ | 245 | ||||||
Supplemental Information: | ||||||||||||
Interest paid | $ | 2,320 | $ | 4,741 | $ | 28,521 | ||||||
Income taxes paid | $ | — | $ | — | $ | — | ||||||
Non-cash activities: | ||||||||||||
Stock issued for service as prepaid expenses | $ | — | $ | — | $ | 3,493 | ||||||
Stock issued to acquire mineral property lease | $ | — | $ | — | $ | 783,687 | ||||||
Stock issued for payment of interest on debt | $ | — | $ | — | $ | 12,750 | ||||||
Stock issued as reduction of accrued expenses | $ | — | $ | — | $ | 353,539 | ||||||
Stock issued as reduction of contingent liability | $ | — | $ | — | $ | 50,000 | ||||||
Stock issued as reduction of related party loans | $ | — | $ | — | $ | 26,800 | ||||||
Stock issued as reduction of short-term note payable | $ | — | $ | — | $ | 100,000 |
The accompanying notes are an integral part of these statements
General Metals Corporation
(An Exploration Stage Company)
Notes to Consolidated Financial Statements
NOTE 1 - CONDENSED FINANCIAL STATEMENTS
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 October 31, 2013, and for all periods presented herein, have been made.
In accordance with Article 8-03 of Regulation S-X 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 condensed financial statements be read in conjunction with the financial statements and notes thereto included in the Company's April 30, 2013 audited financial statements. The results of operations for the period ended October 31, 2013 are not necessarily indicative of the operating results for the full year.
The accompanying condensed consolidated financial statements include the accounts of General Metals Corporation and its wholly owned subsidiary, General Gold Corporation. Collectively, they are referred herein as the Company. All inter-company balances and transactions have been eliminated on consolidation.
The Company is considered a development (exploration) stage entity for financial reporting purposes by United States generally accepted accounting principles (US GAAP) since it has not generated material revenue from its principal business activities.
Use of estimates
The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the period. Actual results could differ from those estimates.
Recently Issued Accounting Pronouncements
No new accounting pronouncements have been issued since the filing of the Company’s Form 10-K on August 13, 2013 for the fiscal year ended April 30, 2013 that are likely to have a material impact on the Company’s financial position, results of operations, or cash flows.
NOTE 2 - GOING CONCERN
The Company's financial statements are prepared using generally accepted accounting principles in the United States of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not yet established an ongoing source of revenues sufficient to cover its operating costs and allow it to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations.
In order to continue as a going concern, the Company will need, among other things, additional capital resources. Management's plan is to obtain such resources for the Company by obtaining capital from management and significant shareholders sufficient to meet its minimal operating expenses and seeking equity and/or debt financing. However, management cannot provide any assurances that the Company will be successful in accomplishing any of its plans.
The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and attain profitable operations. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
NOTE 3 – STOCKHOLDERS’ EQUITY
The following provides additional information for certain stock transactions that occurred during the six months ended October 31, 2013. For additional details for all stock transaction please see the consolidated statement of changes in stockholders’ equity as reported in the Company’s 10-K for the period ended April 30, 2013 and filed with the Securities Exchange Commission on August 13, 2013.
During the three months ended July 31, 2013, we issued a total of 1,525,000 shares; 300,000 shares were issued for services valued at $6,000 to vendors; and 1,225,000 shares were issued for cash to investors in private placement at $0.010 per share for receipt of cash totaling $12,250.
During the three months ended October 31, 2013, we issued a total of 8,000,000 shares; 3,000,000 shares were issued for services valued at $69,000 to vendors; 3,000,000 shares were issued for cash to investors in private placement at $0.015 per share for receipt of cash totaling $45,000; and 2,000,000 shares were issued for cash to investors in private placement at $0.010 per share for receipt of cash totaling $20,000.
NOTE 4 – SUBSEQUENT EVENTS
On November 27, 2013, the Company entered in a secured convertible note agreement wherein the Company received $25,000. The note may be converted at anytime by the holder of the note at a 60% discount to the average of the lowest three closing prices in the previous 10 trading days immediately prior to conversion. The Company may prepay the note anytime up until the maturity date for 125% of the principal amount. The note carries a 12% per annum rate and is due and payable on May 19, 2014
NOTE 5 – RELATED PARTY
Forbush and Associates, of which Dan Forbush, CEO, President, and CFO, is the Principal, provides accounting support and bookkeeping services to the Company on a billed by hour incurred basis. Forbush and Associates is owed $30,122 and $23,522 relating to hours incurred at October 31, 2013 and April 30, 2013, respectively. In the six months ended October 31, 2013, Forbush and Associates charged $15,000 for consulting services. In the six months ended October 31, 2012, Forbush and Associates charged $15,620 for consulting services. Services rendered are in relation to preparation of the 10-K for the periods ended April 30, 2012 and 2013 respectively and preparation of all other regulatory filings.
Dyer Engineering Consultants, an entity controlled by one of our Directors, provides mine permitting, engineering and leach pad design services at the Independence project. As of October 31, 2013 and April 30, 2013, Dyer Engineering Consultants is owed $34,663 for services rendered.
ITEM 2. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Forward-Looking Statements
This quarterly report contains forward-looking statements. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as "may", "should", "expects", "plans", "anticipates", "believes", "estimates", "predicts", "potential" or "continue" or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks in the section entitled "Risk Factors", that may cause our or our industry's actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.
Our unaudited condensed financial statements are stated in United States Dollars (US$) and are prepared in accordance with United States Generally Accepted Accounting Principles and Article 8-03 of Regulation S-X. The following discussion should be read in conjunction with our financial statements and the related notes that appear elsewhere in this quarterly report. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward looking statements.
In this quarterly report, unless otherwise specified, all dollar amounts are expressed in United States dollars. All references to "common shares" refer to the common shares in our capital stock.
As used in this quarterly report, the terms "we", "us" and "our" mean General Metals Corporation and our wholly owned subsidiary General Gold Corporation, unless otherwise indicated.
OVERVIEW
We are an exploration stage company engaged in the acquisition, exploration and development of mineral properties currently with an emphasis on gold and silver mineralization, presently focused on our Independence Project located in Battle Mountain, Nevada.
The continuation of our company is dependent upon us attaining and maintaining profitable operations and raising additional capital as needed. In this regard we have raised additional capital through equity offerings and loan transactions. We have been successful in structuring deals in which expenses are paid through the issuances of common shares. In addition, we have raised additional funds and expect to continue to raise additional funds through private placement equity offerings sufficient to fund our current plan of operations.
The Independence Mine Property
We currently control a 100% undivided leasehold interest in the Independence Mine, situated in the Battle Mountain Mining District, Lander County, Nevada. The property consists of 14 whole and fractional mining claims encompassing 240 acres. Our Due diligence shows that all claims are valid and in good standing through and for the assessment year ending August 31, 2014. |
The Wilson-Independence project is wholly owned by General Metals through its subsidiary company General Gold Corporation under a mining lease/option agreement with Independence Gold Silver Mines, Inc. of Seattle, Washington.
Accomplishments
During the quarter ended October 31, 2013, our Company focused its efforts on securing funding to complete all due diligence tasks required necessary logistics to carry out the acceleration of the Independence project toward production.
Other Accomplishments include:
1. | Announced that a bottle roll test at McClelland Laboratories, Inc evaluating a different reagent mix increased silver recoveries by almost 20%. |
2. | Initiated a new round of analytical work on drill core samples from its Independence Gold and Silver Project located near Battle Mountain, Nevada. Jeffrey A. Rassuchine, the Company’s Senior Consulting Geologist, oversaw the project which, in the end, will involve approximately 80 samples from 300 feet of drill core from three zones - two located southeast of the old head frame and the third in the Hill Zone. The core cutting, fire assaying and atomic absorption work was conducted under Mr. Rassuchine’s supervision at American Assay Laboratories in Sparks, Nevada. This work was undertaken to check that the reverse circulation drill hole sampling and assaying was consistent with the rock in the ground. This provides a higher level of confidence in the amount of mineralization in our modeling. |
3. | Completed analytical work on drill core samples from its Independence Gold and Silver Project which yielded results that were fully consistent with resource values set forth in the Company’s Independent Technical Report. |
4. | The Office of the State Engineer, Department of Conservation and Natural Resources, Division of Water Resources of the state of Nevada approved the right to extract water from the aquifer in Buffalo Valley at our 480 acres thereby ensuring that we have enough water to process the mineralized material at that site for gold recovery. |
Plan of Operations- Permitting and Development Program
During the next twelve months, our company, subject to receipt of additional funding will accelerate the Independence project into full permitting processes. We anticipate securing necessary studies and permits to allow us to proceed to production.
The following budget outline presents the anticipated and necessary expenditures for the next twelve month period to accomplish the stated objective
Direct exploration and development costs | ||||
Deep Core Relog, Sample and Assay | 250,000 | |||
Preliminary Pit Infill Drilling Program | 400,000 | |||
Sunshine Drill Program | 1,100,000 | |||
BLM Plan of Operations Review and Permitting | 100,000 | |||
Mining, Metallurgical and Process Engineering and Design | 150,000 | |||
State and County Permits | 45,000 | |||
Water Well | 35,000 | |||
Update Independent Technical Report | 100,000 | |||
Land Payments | 250,000 | |||
Contingency | 70,000 | |||
Total direct exploration and development costs | $ | 2,500,000 | ||
Indirect costs | ||||
Office rent and other operating expenses | 20,000 | |||
Wages and salaries and payroll related expenses | 140,000 | |||
Insurance expenses | 40,000 | |||
Investor Awareness Consultants | 100,000 | |||
Other general and administrative expenses | 150,000 | |||
Legal expenses | 50,000 | |||
Total indirect costs | 500,000 | |||
Total budget for the next twelve months | $ | 3,000,000 |
Liquidity and Capital Requirements
We anticipate that to proceed with our plan of operations we will require additional funds of approximately $3.0 million over the next twelve months. As we do not have the funds necessary to cover our projected operating expenses for the next twelve month period, we will be required to raise additional funds through the issuance of equity securities, through loans or through debt financing. There can be no assurance that we will be successful in raising the required capital or that actual cash requirements will not exceed our estimates. We intend to fulfill any additional cash requirement through the sale of our equity securities.
The investment markets have become very restrictive for junior mineral companies. Nevertheless, we continue to identify parties interested in investing in mineral projects, including the Independence Project, and have hosted several at our offices and onsite.
If we are not able to obtain the additional financing on a timely basis, if and when it is needed, we will be forced to scale down or perhaps even cease the operation of our business.
The issuance of additional equity securities by us could result in a significant dilution in the equity interests of our current stockholders. Obtaining commercial loans, assuming those loans would be available, will increase our liabilities and future cash commitments. There are no assurances that we will be able to obtain further funds required for our continued operations. As noted herein, we are pursuing various financing alternatives to meet our immediate and long-term financial requirements.
Since October 31, 2013, we have received $25,000 from one investor in a private placement for the purchase of our common shares. We have obtained additional commitments for funding to be received within the next 30 days from this filing. We continue to explore opportunities for the receipt of funding in either equity or financing transactions. As we receive these funds, the Board of Directors and Management evaluate the best use of the funding received.
Capital Expenditures
We do not intend to invest in capital expenditures during the twelve-month period ending October 31, 2014.
General and Administrative/Management and Consulting Expenses
We expect to spend up to $500,000 during the twelve-month period ending October 31, 2014 on general and administrative and investor relations expenses including legal and auditing fees, rent, office equipment and other administrative related expenses.
Exploration and Development
With the receipt of the funding discussed in the budget above, the Company anticipates executing an exploration and development program that should be able to complete the following objectives within the next twelve calendar months including:
1. | Drill the remaining 50% of the project that remains undrilled to expand the shallow resource. |
2. | Complete the permitting process and all relevant testing. |
3. | Assay the core on the deep holes to identify additional zones of mineralization between the shallow and the deep known mineralization, if any. |
4. | Infill drilling in the area of the hill zone anticipated to be included in the phase 1 pit with the goal of decreasing stripping and increasing contained ounces within the potential pit area. |
5. | Complete the water well required for production. | |
6. | Update the Independent Technical Report in the 43-101 format. |
Corporate Offices
Our principal business offices are located at 1155 West Fourth Street, Suite 210, Reno, NV 89503. We currently obtain our space rent free. We believe that our current arrangements provide adequate space for our foreseeable future needs.
We also own a 480 acre parcel of land in Lander County Nevada which will be used for mineral processing, equipment storage and maintenance.
Employees
We do not expect any material changes in the number of employees over the next 12 month period (although we may enter into employment or consulting agreements with our officers or directors). We do and will continue to outsource services as needed. As at October 31, 2013, our only employee was our President, CEO, and CFO.
Critical Accounting Estimates
There have been no material changes to our critical accounting estimates since the end of our 2013 fiscal year. For detailed information on our critical accounting policies and estimates, see our Annual Report on Form 10-K for the fiscal year ended April 30, 2013.
Results of Operations – Three Months Ended October 31, 2013 and 2012
The following summary of our results of operations should be read in conjunction with our financial statements for the period ended October 31, 2013 which are included herein.
Our operating results for the three months ended October 31, 2013 and 2012 and the changes between those periods for the respective items are summarized as follows:
Three Months Ended October 31, |
||||||||||||
2013 | 2012 | Change | ||||||||||
Revenue | $ | Nil | $ | Nil | $ | Nil | ||||||
Operating expenses | $ | 298,383 | $ | 378,578 | $ | 80,195 | ||||||
Net (loss) | $ | (300,703 | ) | $ | (381,341 | ) | $ | 80,638 |
Revenues
We have not earned any revenues from our primary activities since our inception and we do not anticipate earning revenues in the near future.
Net Loss
The decrease in net loss from the period ended October 31, 2012 to October 31, 2013 relates primarily to decrease in funding available to the Company to further permitting and production work on the Independent Project. We anticipate net losses in future periods as we continue to work toward our goal of near term production at the Independence Project.
Operating Expenses
Our operating expenses for the three months ended October 31, 2013 and 2012 are outlined in the table below:
Three
Months Ended October 31, | ||||||||||||
2013 | 2012 | Change | ||||||||||
Depreciation and amortization | $ | 125 | $ | 1,280 | $ | 1,155 | ||||||
General and administrative | $ | 12,547 | $ | 21,960 | $ | 9,413 | ||||||
Management and consulting | $ | 156,008 | $ | 291,731 | $ | 135,723 | ||||||
Exploration and development | $ | 91,693 | $ | 40,883 | $ | (50,810 | ) | |||||
Professional fees | $ | 38,010 | $ | 22,724 | $ | (15,286 | ) |
The decrease in operating expenses for the three months ended October 31, 2013, compared to the same period in fiscal 2013, was mainly due to a decrease in Management and consulting expenses of $135,723 due to the stock grants issued to our Board of Directors during the three months ended October 31, 2012 and fees paid to consultants. Board of Directors and other vendors continue to receive stock for services. Decreased general and administrative expenses for the three months in fiscal 2013 was due to decrease in relation to fees we paid to the Canadian TSX listing during fiscal year 2013 in anticipation of a listing on the Canadian exchange. Exploration and development activities increased due to the increased advanced minimum royalty claim fee payments and resources expended with our geologic team in preparing information for an updated 43-101 report and fees paid for certain water right permits. Professional fees increased during the three months ended October 31, 2013 as compared to same period in fiscal 2013 due to increase legal fees in review and anticipated closing of the Open Gold Transaction that has since been canceled.
Results of Operations – Six Months Ended October 31, 2013 and 2012
The following summary of our results of operations should be read in conjunction with our financial statements six months ended October 31, 2013 which are included herein.
Our operating results for the six months ended October 31, 2013 and 2012 and the changes between those periods for the respective items are summarized as follows:
Six Months Ended October 31, |
||||||||||||
2013 | 2012 | Change | ||||||||||
Revenue | $ | Nil | $ | Nil | $ | Nil | ||||||
Operating expenses | $ | 395,914 | $ | 513,376 | $ | 117,462 | ||||||
Net (loss) | $ | (400,977 | ) | $ | (518,017 | ) | $ | 117,040 |
Revenues
We have not earned any revenues from our primary activities since our inception and we do not anticipate earning revenues in the near future.
Net Loss
The decrease in net loss from the period ended October 31, 2012 to October 31, 2013 relates primarily to the stock grants issued to our officers and Board of Directors during the six months ended October 31, 2012 and fees paid to investor relation consultants and fundraising expenses during the same period. We anticipate net losses in future periods as we continue to work toward our goal of near term production at the Independence Project.
Operating Expenses
Our operating expenses for the six months ended October 31, 2013 and 2012 are outlined in the table below:
Six
Months Ended October 31, | ||||||||||||
2013 | 2012 | Change | ||||||||||
Depreciation and amortization | $ | 250 | $ | 2,618 | $ | 2,368 | ||||||
General and administrative | $ | 23,882 | $ | 29,686 | $ | 5,804 | ||||||
Management and consulting | $ | 215,517 | $ | 356,190 | $ | 140,673 | ||||||
Exploration and development | $ | 92,814 | $ | 55,554 | $ | (37,260 | ) | |||||
Professional fees | $ | 63,451 | $ | 69,328 | $ | 5,877 |
The decrease in operating expenses for the six months ended October 31, 2013, compared to the same period in fiscal 2013, was mainly due to a decrease in management and consulting of $140,673 which related to $105,600 of stock grants issued to our officer and the Board of Directors during the six months ended October 31, 2012. Exploration costs increased by $37,260 from the six months ended October 31, 2012 compared to the six months ended October 31, 2013 as the advanced minimum royalty payment due to Independent Gold-Silver Mines, Inc., increased to approximately $65,000 per quarter of which $30,000 has been deferred for payment until 2014. Additionally, professional fees were relatively stable in the comparative periods.
We have focused our energy during this quarter securing other potential financing sources and preparing for increased activity related to the permitting process with all charges being classified as development.
Liquidity and Financial Condition
Working Capital
October 31, 2013 | April 30, 2013 | Change | ||||||||||
Current assets | $ | 1,743 | $ | 18,272 | $ | (16,529 | ) | |||||
Current liabilities | $ | 918,599 | $ | 684,355 | $ | 234,244 | ||||||
Working Capital | $ | (916,856 | ) | $ | (666,083 | ) | $ | (250,773 | ) |
Cashflow
Six
Months Ended October 31 | ||||||||||||
2013 | 2012 | Change | ||||||||||
Net cash used in operating activities | $ | (89,850 | ) | $ | (218,050 | ) | $ | 128,200 | ||||
Net cash provided/(used) in investing activities | $ | — | $ | — | $ | — | ||||||
Net cash provided/(used) by financing activities | $ | 85,378 | $ | 222,966 | $ | (137,588 | ) | |||||
Net increase/(decrease) in cash during period | $ | (4,472 | ) | $ | 4,916 | $ | (9,388 | ) |
Our total assets at October 31, 2013 were $719,061. Our financial statements report a net loss of $400,977 for the six months ended October 31, 2013 and a net loss of $12,553,156 for the period from March 15, 2006 (date of inception) to October 31, 2013. We had a cash balance of $245 as of October 31, 2013.
We have suffered recurring losses from operations. The continuation of our company is dependent upon our company attaining and maintaining profitable operations and raising additional capital as needed. In this regard we have raised additional capital through equity offerings and loan transactions. We have been successful in structuring deals in which expenses are paid for through the issuances of common shares. In addition, we have raised additional funds and expect to continue to raise additional funds through private placement equity offerings sufficient to fund our current plan of operations.
Contractual Obligations
As a “smaller reporting company”, we are not required to provide tabular disclosure obligations.
Off-Balance Sheet Arrangements
We have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to stockholders.
ITEM 4. CONTROLS AND PROCEDURES
Management’s Report on Disclosure Controls and Procedures
We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms, and that such information is accumulated and communicated to our management, including our president (also our principal executive officer) and our chief financial officer (also our principal financial officer and principal accounting officer) to allow for timely decisions regarding required disclosure.
As of October 31, 2013, the end of our quarter covered by this report, we carried out an evaluation, under the supervision and with the participation of our president (also our principal executive officer) and our chief financial officer (also our principal financial and accounting officer), of the effectiveness of the design and operation of our disclosure controls and procedures. Based on the foregoing, our President (who is acting as our principal executive officer) and our Chief Financial Officer (who is acting as our principal financial officer and principle accounting officer) concluded that our disclosure controls and procedures were effective as of the end of the period covered by this quarterly report.
Changes in Internal Control over Financial Reporting
There have been no changes in our internal controls over financial reporting that occurred during our quarter ended October 31, 2013 that have materially or are reasonably likely to materially affect, our internal controls over financial reporting.
PART II
OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Our company is not a party to any pending legal proceeding and no legal proceeding is contemplated or threatened as of the date of this quarterly report.
ITEM 1A. RISK FACTORS
We have had no material changes in our risk factors as disclosed in our Form 10-K for the year ended April 30, 2013 filed on August 13, 2013.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
During the three months ended October 31, 2013, we issued a total of 8,000,000 shares; 3,000,000 shares were issued for services valued at $69,000 to vendors; 3,000,000 shares were issued for cash to investors in private placement at $0.015 per share for receipt of cash totaling $45,000; and 2,000,000 shares were issued for cash to investors in private placement at $0.010 per share for receipt of cash totaling $20,000.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. [REMOVED AND RESERVED]
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS
Item | Description | |
(3) | Articles of Incorporation and By-laws | |
3.1 | Certificate of Incorporation (incorporated by reference from our Registration Statement on Form 10-SB12G filed on August 24, 1999) | |
3.2 | By-Laws (incorporated by reference from our Registration Statement on Form 10-SB12G filed on August 24, 1999) | |
3.3 | Amendment to Certificate of Incorporation (incorporated by reference from our Annual Report on Form 10-KSB filed on August 15, 2006) | |
(10) | Material Contracts | |
10.1 | Letter of Intent between General Gold Corporation and Gold Range, LLC dated November 14, 2004 (incorporated by reference from our Annual Report on Form 10-KSB filed on August 15, 2006) | |
10.2 | Amendment to Letter of Intent between General Gold Corporation and Gold Range, LLC dated December 31, 2004 (incorporated by reference from our Annual Report on Form 10-KSB filed on August 15, 2006).= | |
10.3 | Assignment of Lease Agreement between General Gold Corporation and Gold Range Company, LLC dated April 29, 2005 (incorporated by reference from our Annual Report on Form 10-KSB filed on August 15, 2006) | |
10.4 | Assignment of Lease and Consent Agreement between Independence Gold-Silver Mines Inc., Gold Range Company, LLC and General Gold Corporation dated June 29, 2005 (incorporated by reference from our Annual Report on Form 10-KSB filed on August 15, 2006) | |
10.5 | Lease Agreement between Independence Gold-Silver Mines Inc. and Gold Range Company, LLC dated July 13, 2005 (incorporated by reference from our Annual Report on Form 10-KSB filed on August 15, 2006) | |
10.6 | Share Purchase Agreement dated July 20, 2006 among General Gold Corporation, Recov Energy Corp. and the selling shareholders of General Gold Corporation (incorporated by reference from our Annual Report on Form 10-KSB filed on August 15, 2006) | |
10.7 | Share Purchase Agreement dated March 15, 2007 between our company and Sanibel Investments Ltd. (incorporated by reference from our Current Report on Form 8-K filed on March 22, 2007). | |
(14) | Code of Ethics | |
14.1 | Code of Ethics (incorporated by reference from our Annual Report on Form 10-KSB filed on August 15, 2006) | |
(21) | Subsidiaries | |
General Gold Corporation, a Nevada company (filed with this report) |
(31) | Section 302 Certification | |
31.1 | Section 302 Certification of the Sarbanes-Oxley Act of 2002 (filed herewith) | |
31.2 | Section 302 Certification of the Sarbanes-Oxley Act of 2002 (filed herewith) | |
(32) | Section 906 Certification | |
32.1 | Section 906 Certification of the Sarbanes-Oxley Act of 2002 (filed herewith) | |
32.2 | Section 906 Certification of the Sarbanes-Oxley Act of 2002 (filed herewith) |
101.INS | XBRL Instance Document | |
101.SCH | XBRL Taxonomy Extension Schema Document | |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document | |
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document | |
101.LAB | XBRL Taxonomy Extension Label Linkbase Document | |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document |
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
GENERAL METALS CORPORATION | ||
(Registrant) | ||
Dated: December 23, 2013 | /s/ Daniel J. Forbush | |
Daniel J. Forbush | ||
Chief Executive Officer/Chief Financial Officer | ||
(Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer) | ||