WHITE FOX VENTURES, INC. - FORM 10-Q

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EXCEL - IDEA: XBRL DOCUMENT - WHITE FOX VENTURES, INC.	Financial_Report.xls
EX-31.2 - EXHIBIT 31.2 - WHITE FOX VENTURES, INC.	ex31_2.htm
EX-32.2 - EXHIBIT 32.2 - WHITE FOX VENTURES, INC.	ex32_2.htm
EX-31.1 - EXHIBIT 31.1 - WHITE FOX VENTURES, INC.	ex31_1.htm
EX-32.1 - EXHIBIT 32.1 - WHITE FOX VENTURES, INC.	ex32_1.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended June 30, 2014

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

For the transition period from: _____________ to _____________

Commission file number: 333-178624

DNA PRECIOUS METALS, INC.

(Exact name of Registrant as Specified in its Charter)

Nevada		37-1640902

(State or other jurisdiction		(I.R.S. Employer
of Incorporation)		Identification No.)

9125 rue Pascal Gagnon, Suite 204, Saint Leonard, Quebec, Canada HIP IZ4

(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)

(514) 852-2111

(REGISTRANT’S TELEPHONE NUMBER)

Not Applicable

(FORMER NAME OR FORMER ADDRESS, IF CHANGES SINCE LAST REPORT)

All correspondence to:

Tony J. Giuliano, CPA

Chief Financial Officer

DNA Precious Metals, Inc.

9125 Pascal Gagnon, Suite 204

Saint Leonard, Quebec, Canada H1P 1Z4

Office: (514) 852-2111

Email: tony.giuliano@dnapreciousmetals.com

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.

x Yes ¨ 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).

x Yes ¨ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer ¨	Accelerated Filer ¨

Non-accelerated Filer ¨	Smaller Reporting Company x

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

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY

PROCEEDINGS DURING THE PRECEDING FIVE YEARS

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act ¨ Yes ¨ No

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: 95,026,000 of common stock, $0.001 par value, as of August 12, 2014.

DNA Precious Metals, Inc.

(An Exploration Stage Company)

TABLE OF CONTENTS

PART I - FINANCIAL INFORMATION		Page
Item 1 – Condensed Consolidated Financial Statements (Unaudited)		5
Condensed Consolidated Balance Sheets as of June 30, 2014 (Unaudited) and December 31, 2013		6
Condensed Consolidated Statements of Operations and Comprehensive Loss for the six and three months ended June 30, 2014 and 2013 (Unaudited)		7
Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2014 and 2013 (Unaudited)		8
Notes to Condensed Consolidated Financial Statements (Unaudited)		9
Item 2 - Management’s Discussion and Analysis of Financial Condition and Results of Operations		30
Item 3 – Quantitative and Qualitative Disclosure About Market Risk		51
Item 4 - Controls and Procedures		52

PART II - OTHER INFORMATION
Item 1 - Legal Proceedings		52
Item 1A – Risk Factors		52
Item 1B – Unresolved Staff Comments		52
Item 2 - Unregistered Sales of Equity Securities and Use of Proceeds		52
Item 3 – Defaults Upon Senior Securities		54
Item 4 – Mine Safety Disclosures		54
Item 5 – Corporate Officers		55
Item 6 – Market for Registrant’s Common Equity, Related Stockholder Matters
And Issuer Purchase of Equity Securities		55

The consolidated financial statements are unaudited. However, management of registrant believes that all necessary adjustments, including normal recurring adjustments, have been reflected to present fairly the financial position of registrant as at June 30, 2014 and the results of its operations for the six and three months ended June 30, 2014 and 2013 and changes in its cash position for the six months ended June 30, 2014 and 2013.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

Certain statements in this quarterly report on Form 10-Q contain or may contain forward-looking statements that are subject to known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Generally, the words “believes”, “anticipates,” “may,” “will,” “should,” “expect,” “intend,” “estimate,” “continue,” and similar expressions or comparable terminology are intended to identify forward-looking statements which include, but are not limited to, statements concerning the our expectations regarding our working capital requirements, financing requirements, business prospects, and other statements of expectations, beliefs, future plans and strategies, anticipated events or trends, and similar expressions concerning matters that are not historical facts. These forward-looking statements were based on various factors and were derived utilizing numerous assumptions and other factors that could cause our actual results to differ materially from those in the forward-looking statements. These factors include, but are not limited to, economic, political and market conditions and fluctuations, government and industry regulation, interest rate risk, U.S. and global competition, and other factors. Most of these factors are difficult to predict accurately and are generally beyond our control. You should consider all of the material risks in connection with any forward-looking statements that may be made herein.

Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this report. Readers should carefully review this quarterly report in its entirety, including but not limited to our financial statements and the notes thereto. Except for our ongoing obligations to disclose material information under the federal securities laws, we undertake no obligation to release publicly any revisions to any forward-looking statements, to report events or to report the occurrence of unanticipated events.

PART 1 - FINANCIAL INFORMATION

DNA PRECIOUS METALS, INC.

INDEX TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

ITEM 1 - FINANCIAL STATEMENTS

Condensed Consolidated Financial Statements:
Condensed Consolidated Balance Sheets as of June 30, 2014 (Unaudited) and December 31, 2013	6
Condensed Consolidated Statements of Operations and Comprehensive Loss For the Six and Three Months Ended June 30, 2014 and 2013 (Unaudited)	7
Condensed Consolidated Statements of Cash Flows For the Six Months Ended June 30, 2014 and 2013 (Unaudited)	8
Notes to Condensed Consolidated Financial Statements (Unaudited)	9

DNA PRECIOUS METALS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

JUNE 30, 2014 AND DECEMBER 31, 2013

(in United States dollars)


	(Unaudited)
	JUNE 30,			DECEMBER 31,
	2014			2013

ASSETS
CURRENT ASSETS
Cash	$	35,779		$	535,934
Prepaid deposits		-			612,431
Prepaid expenses		252,283			190,514
Sales tax receivable		51,824			35,427
Investor notes receivable		254,444			-
Total current assets		594,330			1,374,306

Fixed assets, net		1,391,642			1,276,304

OTHER ASSETS
Deferred financing fees, net		18,723			25,081
Mining rights		1,035,818			15,000
Proprietary software		10,000			-
Total other assets		1,064,541			40,081

TOTAL ASSETS	$	3,050,513		$	2,690,691


LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
Accounts payable and accrued expenses	$	164,083		$	186,729
Convertible notes - carrying value		86,214			-
Derivative liabilities		366,398			-
Total current liabilities		616,695			186,729

OTHER LIABILITIES
Non-convertible notes - carrying value		148,908			-
Asset retirement obligation		117,151			-
Total other liabilities		266,059			-

TOTAL LIABILITIES		882,754			186,729

STOCKHOLDERS' EQUITY
Preferred stock, $0.001 par value, 10,000,000 shares authorized
Nil shares issued and outstanding		-			-
Common stock, $0.001 par value, 500,000,000 shares authorized
95,026,000 and 95,076,000 shares issued and outstanding, respectively		95,026			95,076
Additional paid in capital		7,874,271			7,313,888
Deferred compensation		-			(187,500	)
Accumulated deficit		(5,789,058	)		(4,710,522	)
Accumulated other comprehensive loss		(17,380	)		(6,980	)
Total stockholders' equity - DNA Precious Metals, Inc.		2,162,859			2,503,962

Non-controlling interest in subsidiary		4,900			-

Total stockholders' equity		2,167,759			2,503,962

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	3,050,513		$	2,690,691

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

DNA PRECIOUS METALS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

FOR THE SIX MONTHS ENDED JUNE 30, 2014 AND 2013

(in United States dollars)

(Unaudited)

	SIX MONTHS ENDED						THREE MONTHS ENDED
	JUNE 30,						JUNE 30,
	2014			2013			2014			2013

REVENUE	$	-		$	-		$	-		$	-

COST OF REVENUES		-			-			-			-

GROSS PROFIT		-			-			-			-

OPERATING EXPENSES
Exploration costs		133,633			41,951			20,951			14,369
Salaries and related expenses (including stock-based compensation)		401,077			936,188			95,723			325,410
Professional fees		143,872			193,969			96,556			110,907
Rent		18,885			20,964			9,556			15,812
Depreciation and amortization		12,155			4,343			5,320			2,951
General and administrative		242,915			101,633			129,042			69,562
Total operating expenses		952,537			1,299,048			357,148			539,011

OTHER (INCOME) EXPENSE
Interest expense, net		37,151			1,170			36,444			1,368
Fair value adjustment in derivative liabilities		88,848			-			88,848			-
Loss on conversion of promissory note		-			125,000			-			-
Exploration tax credits		-			-			-			-
Total other (income) expense		125,999			126,170			125,292			1,368

Net loss before provision for income taxes		(1,078,536	)		(1,425,218	)		(482,440	)		(540,379	)

Provision for income taxes		-			-			-			-

Net loss before non-controlling interest		(1,078,536	)		(1,425,218	)		(482,440	)		(540,379	)

Net loss attributable to non-controlling interest		-			-			-			-

NET LOSS	$	(1,078,536	)	$	(1,425,218	)	$	(482,440	)	$	(540,379	)


WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING		95,051,967			88,480,800			94,749,077			91,488,508

NET LOSS PER SHARE	$	(0.01	)	$	(0.02	)	$	(0.01	)	$	(0.01	)

COMPREHENSIVE LOSS
Net loss	$	(1,078,536	)	$	(1,425,218	)	$	(482,440	)	$	(540,379	)
Currency translation adjustment		(10,400	)		(22,048	)		5,548			(20,216	)
Total comprehensive loss	$	(1,088,936	)	$	(1,447,266	)	$	(476,892	)	$	(560,595	)

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

DNA PRECIOUS METALS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW

FOR THE SIX MONTHS ENDED JUNE 30, 2014 AND 2013

(in United States dollars)

(Unaudited)

	SIX MONTHS ENDED
	JUNE 30,
	2014			2013
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss for the period	$	(1,078,536	)	$	(1,425,218	)

Adjustments to reconcile net (loss)
to net cash (used in) operating activities:
Depreciation and amortization		12,155			4,343
Non-cash interest charges		35,728			-
Fair value adjustment in derivative liabilities		88,848			-
Shares and options issued for compensation		239,990			687,500
Loss on conversion of promissory note		-			125,000
Common shares and warrants issued for services		83,948			50,000

Change in assets and liabilities
(Increase) decrease in prepaid expenses and deposits		41,441			(41,056	)
(Increase) decrease in sales tax receivable		(16,358	)		36,683
(Decrease) in accounts payable and accrued expenses		(60,796	)		(48,730	)
Total adjustments		424,956			813,740
Net cash (used in) operating activities		(653,580	)		(611,478	)

CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of fixed assets		(2,613	)		(49,235	)
Acquisition of mining rights		(68,387	)		-
Net cash (used in) investing activities		(71,000	)		(49,235	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds received from convertible notes		222,500			-
Cash received for common stock and liability for stock to be issued		12,500			394,000
Net cash provided by financing activities		235,000			394,000

Effect of foreign currency		(10,575	)		6,603

NET INCREASE (DECREASE) IN CASH		(500,155	)		(260,110	)

CASH - BEGINNING OF PERIOD		535,934			598,938

CASH - END OF PERIOD	$	35,779		$	338,828


SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid during the period for:
Interest		1,423			1,170
Income taxes		-			-

SUPPLEMENTAL NON-CASH ACTIVITY:
Common stock issued for mining rights		340,000			-
Conversion of promissory note to common stock		-			627,550
Deferred compensation for common stock		187,500			687,500
Deferred financing fees through the issuance of warrants		-			-
Issuance of common stock and warrants for prepaid expenses		103,743			-

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

NOTE 1-

ORGANIZATION AND BASIS OF PRESENTATION

The unaudited consolidated financial statements included herein have been prepared, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). 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 pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading. It is suggested that these condensed consolidated financial statements be read in conjunction with the December 31, 2013 audited financial statements and the accompanying notes thereto. While management believes the procedures followed in preparing these condensed consolidated financial statements are reasonable, the accuracy of the amounts are in some respects dependent upon the facts that will exist, and procedures that will be accomplished by the Company later in the year.

On June 2, 2006, Celtic Capital, Inc. was incorporated in the State of Nevada. On October 20, 2008, Celtic Capital, Inc. changed its name to Entertainment Educational Arts Inc. On May 12, 2010, the Company changed its name to DNA Precious Metals, Inc. (the “Company”). On October 29, 2010, the Company formed DNA Canada Inc., a Canadian (Province of Quebec) incorporated company, as a wholly-owned subsidiary. The Company will operate all of its exploration operations through this Canadian entity. On June 3, 2014, the Company incorporated DNA Crypto Corp., under the laws of the State of Nevada, initially as a wholly-owned subsidiary of DNA Precious Metals, Inc.

The Company is an exploration stage company that is in the business of identifying mineral claim rights in Canada and the United States. The Company has conducted minimal business to date.

The Company’s primary goal is to identify and acquire premium gold (Au) and silver (Ag) properties to create an international mining company. The mineralized properties that the Company will focus on acquiring, will have easy accessibility, transportation infrastructures in place on the property and most importantly, will have the potential to be brought into production quickly.

Going Concern

The consolidated financial statements have been prepared on a going concern basis. The going concern basis of presentation assumes that the Company will continue in operation for the foreseeable future and be able to realize its assets and discharge its liabilities and commitments in the normal course of business. The Company has not generated revenues since inception and has generated losses totaling $1,078,536 and $1,425,218 for the six months ended June 30, 2014 and 2013, respectively.

The Company’s continuation as a going concern is dependent upon, amongst other things, continued financial support from its shareholders, attaining a satisfactory revenue level, attainment of profitable operations and the generation of cash from operations and the ability to secure new financing arrangements and new capital to carry out its business plan. These matters are dependent on a number of items outside of the Company’s control and there exists material uncertainties that may cast significant doubt about the Company’s ability to continue as a going concern.

The Company can give no assurance that it will achieve profitability or be capable of sustaining profitable operations. These consolidated financial statements do not include any adjustments relating to the recoverability and classification of the carrying amounts of assets or the amount and classification of liabilities that might result if the Company is unable to continue as a going concern. These factors raise substantial doubt regarding the ability of the Company to continue as a going concern.

From January 2014 to June 2014, the Company raised $235,000 from the issuance of a convertible note and the exercise of stock options. The Company raised $523,564 (CDN$552,000) from the sale of 2,208,000 shares of common stock in August, September and October 2013 and $472,217 (CDN$500,000) from flow-through financing through the issuance of 1,000,000 shares of common stock and 500,000 warrants in December 2013.

From September 2012 to January 2013, the Company raised $2,357,000 of capital through the subscription of 9,428,000 shares in an S-1 registration statement. The Company also raised, from June to December 2011, $670,000 of capital through the subscription of 3,350,000 private placement shares. The funds raised from the private and public offerings were used to further the Company’s business plan while the most recent public raise was used for the construction of a processing mill and build-out of the infrastructure.

NOTE 2-

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Accounting

These consolidated financial statements are prepared in conformity with United States generally accepted accounting principles (“U.S. GAAP”) and are presented in U.S. dollars.

Exploration Stage Company

The Company is an exploration stage company as defined in ASC 915. The Company has made significant capital investments on a processing mill and related infrastructure pertaining to a mining site described earlier. The construction of the processing mill structure was commenced in the fourth quarter of fiscal 2012 and completed in the first quarter of fiscal 2013. Also, significant infrastructure work related to the processing mill has been completed.

Presently, the infrastructure construction includes the foundation, a 16,000 sq./ft. steel structure building and water and power supply installations. The Company has completed all the access infrastructural work to the future site where the milling facilities will be located.

On September 14, 2012, the Company received a Certificate of Authorization, from the Quebec Provincial Government, with respect to operating a gravitimetric circuit to process the mining residues, or tailings, located on the Montauban Mine Property. On March 13, 2014, the Company received another Certificate of Authorization, also from the Quebec Provincial Government, with respect to operating a cyanization circuit to process the mining residues located on the Montauban Mine Property. Previously, on February 28, 2014, the Company received approval, from the Quebec Provincial Government, for the Restoration Plan on the Montauban Mine Property which will be implemented subsequent to the Company’s processing of the mining residues (tailings) on the site. The two (2) Certificates of Authorization issued to the Company will allow for the construction and installation of equipment facilities to recuperate mica (muscovite) and precious metals (gold and silver) from the mining residues (tailings) located on the Montauban Mine Property.

Consequently, the primary objective will be to recuperate the mica and precious metals (gold and silver) from the mining residues. The recuperation of the precious metals from the mining residues will be less expensive than traditional mining operations primarily because the mining residues have already been crushed and grinded by prior mining companies.

In accordance with ASU 2014-10 (see Recent Accounting Pronouncements), the Company has elected early adoption whereby, amounts and disclosures of the Company’s exploration stage activities commencing with the period June 30, 2014 are no longer required to be presented. As a result, the Company removed this information.

Use of Estimates

The preparation of financial statements in conformity with U.S. generally accepted accounting principles 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 revenue and expenses during the reporting period. Actual results could differ from those estimates. Estimates include but are not limited to stock-based compensation and tax valuation allowances.

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, DNA Canada Inc. All intercompany transactions and accounts have been eliminated in consolidation.

Currency Translation

The Company’s functional currency is the Canadian dollar and its reporting currency is the United States dollar. Transactions denominated in the functional currency are converted into United States dollars using the exchange rate in effect at the date of the transaction or the average rate for the period in the case of revenue and expense transactions. Monetary assets and liabilities are re-valued into the reporting currency at each balance sheet date using the exchange rate in effect at the balance sheet date, with any resulting exchange gains or losses being credited or charged to accumulated other comprehensive income (loss). Non-monetary assets and liabilities are recorded in the reporting currency using the exchange rate in effect at the date of the transaction and are not revalued for subsequent changes in exchange rates.

Stock Options-Based Compensation

The Company estimates the fair value of stock options-based payment awards made to officers and directors related to the Company’s stock incentive plan, on the date of grant using an option-pricing model. The value of the portion of the award that is ultimately expected to vest is recognized as an expense ratably over the requisite service periods. The Company uses the Black-Scholes option pricing model to determine the fair value of the stock-based compensation that it grants to officers and directors. The Company is required to make certain assumptions in connection with this determination, the most important of which involves the calculation of volatility with respect to the price of its common stock. The computation of volatility is intended to produce a volatility value that is representative of the Company’s expectations about the future volatility of the price of its common stock over an expected term. The Company used an estimate of its future share price to determine volatility and cannot predict how the price of its common shares of common stock will react on the open market in the future. Shares of the Company commenced trading on August 22, 2013. As a result, the volatility value that the Company calculated may differ from the future volatility of the price of its shares of common stock.

Upon the exercise of stock options, any consideration received and the amounts previously recorded under stock-based compensation are credited to share capital. Upon the issuance of shares resulting from share awards, amounts previously recorded under stock options-based compensation are credited to share capital.

Comprehensive Income (Loss)

The Company adopted ASC 220-10, “Reporting Comprehensive Income,” (formerly SFAS No. 130). ASC 220-10 requires the reporting of comprehensive income in addition to net income from operations.

Comprehensive income is a more inclusive financial reporting methodology that includes disclosure of information that historically has not been recognized in the calculation of net income.

Cash and Cash Equivalents

The Company considers all highly liquid debt instruments and other short-term investments with maturity of three months or less, when purchased, to be cash equivalents.

The Company maintains cash and cash equivalent balances at one major Canadian bank.

Exploration Tax Credits

The Company is entitled to certain exploration tax credits for the exploration expenditures they have incurred from the Canadian federal government and the government of the Province of Quebec. Some of the tax credits available from the Province of Quebec are in the form of cash. Qualifying expenditures include exploration costs and salaries to conduct the activities of the Company. During the year ended December 31, 2012, the Company received $108,284 in tax credits for qualifying expenditures. During the year ended December 31, 2013, the Company received $111,095 in tax credits for qualifying expenditures. During the six months ended June 30, 2014, the Company received no tax credits for qualifying expenditures. The Company’s policy is to record the tax credits when received rather than when applied for. Research tax credits must be reviewed and approved by the appropriate tax authorities when applied and it is possible that the amounts granted may differ from the amounts applied for.

Fixed Assets

Fixed assets are stated at cost, less accumulated depreciation. Depreciation will be provided using the straight-line method over the estimated useful lives of the related assets when those assets are placed into service. Costs of maintenance and repairs will be charged to expense as incurred.

Trade and Other Payables

Trade and other payables and accrued liabilities are obligations to pay for goods or services that have been acquired in the normal course of business. Trade and other payables and accrued liabilities are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities.

Asset Retirement Obligations

The Company is subject to environmental laws and regulations enacted by Canadian federal and provincial authorities. As of the reporting date, management believes that the Company’s operations are in compliance with current laws and regulations. To take account of estimated cash flows required to settle the obligations arising from environmentally acceptable closure plans (such as dismantling and demolition of infrastructures, removal of residual matter and site restoration), provisions are recognized in the year that the harm to the environment occurs, that is when the Company has an actual obligation resulting from harm to the environment, it is likely that an outflow will be required in settlement of the obligation and the obligation is reasonably determinable. These provisions are determined on the basis of the best estimates of future costs, based on information available on the reporting date. Best estimates of future costs are the amount the Company would reasonably pay to settle its obligation on the closing date or to transfer it to a third party on the same date. Future costs are discounted using pre-tax rates that reflect current market assessments of the time value of money and the risks specific to the liability. A corresponding asset is recognized in property, plant and equipment when establishing the provision.

The asset retirement obligation is reviewed quarterly to reflect changes in the estimated outflow of resources as a result of changes in obligations or legislation, changes in the current market-based discount rate or an increase that reflects the passage of time. The accretion expense is recognized in net earnings as a finance expense as incurred. The cost of the related asset is adjusted to reflect changes (other than accretion) in the reporting period.

Recoverability of Long-Lived Assets

The Company reviews the recoverability of long-lived assets on a periodic basis whenever events and changes in circumstances have occurred which may indicate a possible impairment. The assessment for potential impairment will be based primarily on the Company’s ability to recover the carrying value of its long-lived assets from expected future cash flows from its operations on an undiscounted basis. If such assets are determined to be impaired, the impairment recognized is the amount by which the carrying value of the assets exceeds the fair value of the assets. Fixed assets to be disposed of by sale will be carried at the lower of the then current carrying value or fair value less estimated costs to sell.

Fair Value of Financial Instruments

The carrying amount reported in the consolidated balance sheets for cash and cash equivalents, accounts payable, and accrued expenses approximate fair value because of the immediate or short-term maturity of these financial instruments. The Company does not utilize derivative instruments.

Derivative Financial Instruments

The Company does not use derivative instruments to hedge exposures to cash flow, market or foreign currency risks. The Company evaluates all of its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the statements of operations. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period.

The accounting treatment of derivative financial instruments requires that the Company record the conversion option and related warrants at their fair values as of the inception date of the agreements, and at fair value as of each subsequent balance sheet date. As a result of entering into the convertible notes, the Company is required to classify certain non-employee warrants as derivative liabilities and record them at their fair values at each balance sheet date. Any change in fair value was recorded as a change in the fair value of derivative liabilities for each reporting period at each balance sheet date. The Company reassesses the classification at each balance sheet date. If the classification changes as a result of events during the period, the contract is reclassified as of the date of the event that caused the reclassification.

The fair value of conversion options at a fixed number of shares are recorded using the intrinsic value method. Conversion options at variable rates and any options and warrants with ratchet provisions are deemed to contain a “down-round protection”. Accordingly, they do not meet the scope exception for treatment as a derivative under ASC 815 since “down-round protection” is not an input into the calculation of the fair value of the equity instruments and cannot be considered “indexed to the Company’s own stock”, which is a requirement for the scope exception as outlined under ASC 815.

The Company signed convertible notes and warrants and has determined that a conversion option is embedded in the note and it is required to bifurcate the conversion option from the host contract under ASC 815 and account for the derivatives at fair value. The estimated fair value of the conversion option was determined using the binomial model. The fair value of the conversion option will be classified as a liability until the debt is converted by the note holders or paid back by the Company. The fair value will be affected by changes in inputs to that model including our stock price, expected stock price volatility, the contractual term, and the risk-free interest rate. The Company will continue to classify the fair value of the conversion option as a liability until the conversion option is exercised, expires or is amended in a way that would no longer require these conversion options to be classified as a liability, whichever comes first. The Company has adopted a sequencing policy that reclassifies contracts (from equity to assets or liabilities) with the most recent inception date first. Thus any available shares are allocated first to contracts with the most recent inception dates.

For the binomial lattice options pricing model, the Company used the following assumptions and weighted average fair value ranges as at the transaction date, April 28, 2014, and for the period ended June 30, 2014:

Convertible Notes:	April 28, 2014	June 30, 2014

Risk free interest rate	.0577%	.0498%
Dividend yield	N/A	N96.02%/A
Volatility	86.31%

Warrants:	April 28, 2014	June 30, 2014

Risk free interest rate	.1442%	.1392%
Dividend yield	N/A	N/A
Volatility	97.33%	105.24%

Income Taxes

The Company uses the liability method of accounting for income taxes under which deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted or substantially enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized as part of the provision for income taxes in the period that includes the enactment date. Deferred tax liabilities are always provided for in full. Deferred tax assets are recognized to the extent that it is probable that they will be able to be utilized against future taxable income. Deferred tax assets and liabilities are offset only when the Company has a right and intention to set off current tax assets and liabilities from the same taxation authority. Valuation allowances are established, when necessary, to reduce deferred tax assets to amounts that are expected to be realized.

The Company accounts for income taxes pursuant to the provision of ASC 740-10, “Accounting for Income Taxes” (“ASC 740-10”) which requires, among other things, an asset and liability approach to calculating deferred income taxes. The asset and liability approach requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities. A valuation allowance is provided to offset any net deferred tax assets for which management believes it is more likely than not that the net deferred asset will not be realized.

The Company follows the provision of ASC 740-10 related to Accounting for Uncertain Income Tax Position. When tax returns are filed, there may be uncertainty about the merits of positions taken or the amount of the position that would be ultimately sustained. In accordance with the guidance of ASC 740-10, the benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions.

Tax positions that meet the more likely than not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above should be reflected as a liability for uncertain tax benefits in the accompanying balance sheet along with any associated interest and penalties that would be payable to the taxing authorities upon examination. The Company believes its tax positions are all highly certain of being upheld upon examination. As such, the Company has not recorded a liability for uncertain tax benefits.

The Company has adopted ASC 740-10-25, “Definition of Settlement”, which provides guidance on how an entity should determine whether a tax position is effectively settled for the purposes of recognizing previously unrecognized tax benefits and provides that a tax position can be effectively settled upon the completion and examination by a taxing authority without being legally extinguished. For tax positions considered effectively settled, an entity would recognize the full amount of tax benefit, even if the tax position is not considered more likely than not to be sustained based solely on the basis of its technical merits and the statute of limitations remains open. The federal and state income tax returns of the Company are subject to examination by the IRS and state taxing authorities generally for three years after they were filed.

Revenue Recognition

The Company will generate revenues from the sale of precious metals mined from its Property. Revenue from the sale of precious metals, namely gold, silver and mica, will be recognized upon delivery of the precious metals, collection is probable, the fee is fixed or determinable and the Company has transferred to the buyer the significant risks and rewards of ownership of the precious metals supplied. Significant risks and rewards are generally considered to be transferred to the buyer when the customer has taken undisputed delivery of the precious metals.

Loss Per Share of Common Stock

Basic net loss per share (“Basic EPS”) is computed by dividing net loss available to common shareholders by the weighted average number of common shares outstanding for the period.

Diluted earnings per share is computed by dividing adjusted net income available to common shareholders by the weighted average number of common shares outstanding adjusted for the effects of all dilutive common share issuances. Dilutive common share issuances shall be deemed to have been converted into ordinary shares at the beginning of the period.

For the purpose of calculating diluted earnings per share, the Company shall assume the exercise of dilutive stock options and warrants. The assumed proceeds from these instruments shall be regarded as having been received from the issue of common shares at the average market price of common shares during the period. Dilutive common share issuances are not included in the computation of diluted earnings per share when the Company reports a loss because to do so would be anti-dilutive for the periods presented.

The following is a reconciliation of the computation for basic and diluted EPS:

	Six Months Ended
	June 30,			June 30,
	2014			2013

Net loss	$	(1,078,536	)	$	(1,425,218	)

Weighted-average common shares
outstanding (Basic)		95,051,967			88,480,800


Weighted-average common shares
Equivalent
Convertible notes		693,750			-
Stock options		633,000			-
Warrants		1,540,625			-


Weighted-average common shares
outstanding (Diluted)		97,919,342			88,480,800

Recent Issued Accounting Standards

During June 2014, the FASB issued an Accounting Standards Update No. 2014-10, "Development Stage Entities (Topic 915) - Elimination of Certain Financial Reporting Requirements, Including an Amendment to Variable Interest Entities Guidance in Topic 810, Consolidation ("ASU 2014-10")". The objective of ASU 2014-10 is to improve financial reporting by reducing the cost and complexity associated with the incremental reporting requirements for development stage entities. ASU 2014-10 is effective for annual reporting periods beginning after December 15, 2014, and interim periods therein. The Company has elected early implementation, as permitted by the standard, for the interim period ending June 30, 2014. All exploration stage language disclosures and amounts have been removed as a result of the adoption of ASU 2014-10.

During July 2013, the FASB issued an Accounting Standards Update No. 2013-11, “Income Taxes (Topic 740) - Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists (“ASU 2013-11”)”. The objective of ASU 2013-11 is to clarify the financial presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists. The assessment of whether a deferred tax asset is available is based on the unrecognized tax benefit and deferred tax asset that exist at the reporting date and should be made presuming disallowance of the tax position at the reporting date. ASU 2013-11 is effective for fiscal years, and interim periods within those years beginning after December 15, 2013. The Company does not expect that the adoption of ASU 2013-11 will have a significant impact on the presentation of its financial statements.

In July 2012, the FASB issued ASU 2012-02, Intangibles – Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment, on testing for indefinite-lived intangible assets for impairment. The new guidance provides an entity to simplify the testing for a drop in value of intangible assets such as trademarks, patents, and distribution rights. The amended standard reduces the cost of accounting for indefinite-lived intangible assets, especially in cases where the likelihood of impairment is low. The changes permit businesses and other organizations to first use subjective criteria to determine if an intangible asset has lost value. The amendments to U.S. GAAP will be effective for fiscal years starting after September 15, 2012. The Company’s adoption of this accounting guidance does not have a material impact on the consolidated financial statements and related disclosures.

There were other updates recently issued, most of which represented technical corrections to the accounting literature or application to specific industries and are not expected to have a material impact on the Company’s financial position, results of operations or cash flows.

NOTE 3-

MINING RIGHTS

The Company acquired ten (10) mining claims, which became fifteen (15) mining claims under new government regulations, on June 9, 2011 through the issuance of 5,000,000 common shares with a valuation of $15,000. The mining claims are located in the Montauban and Chavigny townships near Grondines-West in the Portneuf County of Quebec, Canada (“Montauban Mine Property” or “Property”).

On October 30, 2013 and November 27, 2013, the Company entered into binding agreements for the asset acquisitions of an undivided one hundred percent (100%) interest in certain mineral claims and mining assets located in the Province of Quebec’s Montauban and Chavigny townships near Grondines West, in the county of Portneuf, specifically Mining Lease BM 748 and Mining Concession CM 410. The purchase price was CDN$75,000 together with the issuance of 1,050,000 common shares of the Company. The common shares for the acquisition were valued at their fair market value on the day they were issued which totaled $496,860. In connection with the asset purchase, the Company also issued 40,000 shares of common stock to a former supplier of the vendor for mining related information of the assets purchased valued at $20,000 along with cash consideration of CDN$20,000. The total cost of the acquisition amounted to $612,431. The Company had been awaiting confirmation of the contemplated transaction from a bankruptcy court in Montreal, Quebec overviewing the financial restructuring of the vendor. The bankruptcy court approved the transaction on April 17, 2014 and has been included in mining rights on the consolidated balance sheet as at June 30, 2014.

On January 10, 2014, the Company entered into an asset purchase agreement for an undivided one hundred percent (100%) interest in certain mineral claims located in the Province of Quebec’s Montauban and Chavigny townships near Grondines West, in the county of Portneuf, including claims, rights, concessions and leases. The purchase price was CDN$70,000, 1,000,000 common shares of the Company and a one percent (1%) net smelter return (“NSR”). The Company paid CDN$10,000 upon the signing of the asset purchase agreement with the cash balance due, along with the common shares, upon the closing of the asset purchase agreement and transfer of the mineral claims in the name of the Company. The transfer of the mineral claims was completed in February 2014 whereby the remaining cash balance due and the common shares were released to the vendor. The common shares for the acquisition will be valued at their fair market value on the day they were issued which totaled $340,000. The total cost of the acquisition amounted to $403,840.

On April 14, 2014, the Company entered into an asset purchase agreement for an undivided one hundred percent (100%) interest in fifty seven (57) mining claims located in the Province of Quebec’s Montauban and Chavigny townships near Grondines West, in the county of Portneuf. The purchase price was CDN$5,000 (U.S.$4,547). The transfer of the mining claims has been completed by the Province of Quebec in the name of the Company.

Total mining rights as of June 30, 2014 and December 31, 2013 were as follows:

	June 30,		December 31,
	2014		2013

Mining rights		1,035,818		15,000

NOTE 4-

ACQUISITION

On June 20, 2014, DNA Crypto Corp. (“DNAC”), a wholly-owned subsidiary of DNA Precious Metals, Inc., signed a definitive asset purchase agreement with Lynx Mining LLC, a Texas limited liability company (“Lynx”), whereby DNAC acquired the assets of Lynx, being its intellectual property rights. As part of the asset purchase agreement, DNAC issued 4.9 million shares of its common stock to Lynx Mining LLC. Following the issuance of the DNAC common stock, DNA Precious Metals, Inc. owns 5.1 million shares (51%) of the outstanding shares of common stock of DNAC and Lynx owns 4.9 million shares (49%) of DNAC common stock. The issuance of the 10 million shares represents 100% of DNAC’s authorized common stock. Lynx’s contribution of all of its intellectual property rights is in connection with the design of proprietary software to mine bitcoins. Lynx has developed formulas for how much hashing power must be added to negate the decreased Bitcoin generation.

The intellectual property rights acquired from Lynx did not have significant value as Lynx itself was a start-up entity and there had not been any significant amounts expensed by Lynx to design the proprietary software. The 4.9 million shares of DNAC issued to Lynx was for the proprietary software and has been valued at $10,000 as of the acquisition date which represents the approximate cost the individual owners of Lynx expended to develop the software.

From June 3, 2014 to June 30, 2014, aside from the asset purchase agreement, there have been no transactions in DNAC as operations have not yet commenced. As a result, there is no non-controlling interest shown on the consolidated statement of operations.

On August 1, 2014, DNAC entered into an updated Asset Purchase Agreement (“Agreement”) with Lynx Mining LLC. The Agreement rescinds the prior Asset Purchase Agreement entered into between DNAC and Lynx dated June 20, 2014. The updated Agreement takes into account funding obligations by DNA Precious Metals, Inc. into DNAC. The accounting for DNAC as at and for the period ended June 30, 2014 remains the same as stipulated in the original Asset Purchase Agreement dated June 20, 2014.

NOTE 5-

CONVERTIBLE NOTES AND DERIVATIVE LIABILITIES

On April 28, 2014, the Company entered into a Securities Purchase Agreement (“SPA”), with a U.S.-based private equity fund, under which the Company issued a Secured Convertible Promissory Note (the “Convertible Note”) in the amount of $552,500. The Convertible Note includes an original issue discount of $50,000 (“OID”), calculated at 10% of the principal amount ($500,000), plus an additional $2,500 (“Transaction Expense Amount”) to cover the investor’s due diligence and legal fees in connection therewith. The principal amount will be paid to the investor in six (6) tranches of an initial amount under the Convertible Note of $250,000 and five (5) additional amounts of $50,000, with each of the additional amounts represented by Investor Notes (the Convertible Note and the Investor Notes are collectively referred to herein as the “Notes”). The initial $250,000 in cash was paid to the Company on April 29, 2014. Payment of the Notes will be made on a monthly basis, beginning six months after the issue date when the Company received the initial $250,000, in the amount of $34,531 per month plus all accrued but unpaid interest and other costs, fees or charges payable, for sixteen (16) months until the balance is paid in full. The Notes are convertible into common stock, at the option of the investor, at a price of $0.40 per share subject to adjustment in the case of a default, reorganization or recapitalization. In the event the Company elects to prepay all or any portion of the Notes, the Company is required to pay to the investor an amount in cash equal to 125% of the outstanding balance of the Notes, plus accrued interest and any other amounts owing. Interest accrues at the rate of 10% per annum. If the Company fails to repay the Notes when due, or if other events of default thereunder apply, a default interest rate of 22% per annum will apply. In addition, if the Company fails to issue stock to the investor within three trading days of receipt of a notice of conversion, the Company must pay a penalty equal to the greater of greater of $500 per day and 2% of the applicable conversion amount or installment amount, as applicable (but, in any event, the cumulative amount of such late fees shall not exceed the applicable conversion amount or installment amount). The Notes are secured by an interest in all right, title, interest, claims and demands of the Company in and to the property described in the Security Agreement, and all replacements, proceeds, products, and accessions thereof. The Notes are convertible into shares of our common stock in six tranches, consisting of (i) an initial tranche in an amount equal to $277,500 and any interest, costs, fees or charges accrued thereon or added thereto under the terms of this Note and the other Transaction Documents (as defined in the Securities Purchase Agreement), and (ii) five (5) additional tranches, each in the amount of $55,000, plus any interest, costs, fees or charges accrued thereon or added thereto under the terms of this Note and the other Transaction Documents. Except in the case of a Company default, the Notes are convertible by the investor at a price of $.40 per share. Concurrently with the Securities Purchase Agreement, the Company also issued to the investor warrants (the "Warrants") to purchase 690,625 shares of the Company’s common stock at an exercise price of $.75 per share subject to adjustment as more fully set forth in the warrant agreement. The Warrants also contains a cashless exercise provision. The Warrants are for a term of two (2) years.

In accordance with Financial Accounting Standards Board (“FASB”) ASC 815, Derivatives and Hedging, the embedded conversion option in the Convertible Note, as well as the Warrants issued by the Company, are required to be accounted for as derivative instrument liabilities. Such liabilities are initially and continuously carried at fair value with changes in their fair value reported in income in each reporting period. Accounting for the conversion option in the Convertible Note and for the Warrants as derivative instruments is required because both the Convertible Note and the Warrants have down-round anti-dilution protection, or ratchet exercise prices, whereby the conversion or exercise price is reduced if the Company subsequently issues common stock, convertible securities or stock options or stock warrants at a lower price or with a lower exercise or conversion price. Such a provision is inconsistent with the “fixed for fixed” nature of an equity option and therefore the instruments do not meet one of the required tests for equity classification. In addition, because the Convertible Note and the Warrants are denominated in a currency (U.S. dollars) that is different from the Company’s functional currency (Canadian dollars), they do not meet the test of being indexed only to the Company’s common stock. When one or more instruments are accounted for as derivative liabilities at fair value, the proceeds received are first allocated to the initial fair value of those derivative instruments, with any remaining proceeds allocated to the initial carrying value of the Convertible Note, which is accounted for at amortized cost. Interest is accrued on the initial carrying value of the Convertible Note at whatever effective interest rate is required in order to equate the present value of the expected future cash flows associated with the Convertible Note with their initial carrying value. Stated interest on the Note (10% per annum) is not accrued separately but is included in the effective interest rate on the Convertible Note.

The fair value of the embedded conversion option in the Note and the fair value of the Warrants have been calculated using the call option value output from a binomial Lattice model. A binomial Lattice model assumes that the price of the stock that underlies an option follows a probability distribution in which the underlying event only has one of two possible outcomes - the market price of the stock can either go up or go down in the future. The Lattice valuation model takes into account all of the assumptions that market participants would likely consider in negotiating the transfer of the embedded conversion option and the Warrants, namely, stock price, exercise price, time to expiration, volatility, risk-free rate and dividends.

On April 28, 2014, the Convertible Note was issued as follows:

Total Convertible Note	$	552,500
Legal fees		( 2,500	)
Original Issue Discount		( 50,000	)

Net Convertible Note	$	500,000

Of the $500,000, the Company received net proceeds of $222,500 (after payment of legal fees of $2,500 and consideration of the original issue discount of $25,000). A total of $250,000 has yet to be funded as of June 30, 2014.

As at April 28, 2014, the allocation of the debt facility was as follows:

Cash	$	222,500
Investor notes receivable		250,000
Assets recorded		472,500

Derivative Liabilities –
Convertible notes – Investors		76,835
Warrants – Investors		200,715
		277,550

Convertible notes – Carrying value		58,541
Non-convertible notes – Carrying value		136,409
		194,950

Liabilities recorded	$	472,500

The Company remains obligated, as at June 30, 2014, for the contractual balance of the Convertible Note of $277,500.

The effective interest expense for the Convertible Note for the period ended June 30, 2014 was $40,172 and the interest earned on the Investor Note for the period ended June 30, 2014 was $4,444.

NOTE 6-

STOCKHOLDERS’ EQUITY

Preferred Stock

The Company was established on June 2, 2006 with 10,000,000 shares of preferred stock authorized with a par value of $0.001. The Company has not issued any preferred stock.

Common Stock

The Company was established on June 2, 2006 with 100,000,000 shares of common stock authorized with a par value of $0.001. On December 8, 2011, the Company amended the authorized stock to 150,000,000 shares.

At incorporation, the Company issued 40,000,000 shares of common stock to the Company’s founders at par value of $40,000 for services rendered by the founders.

In November 2010, the Company issued 20,000,000 shares of common stock for $60,000 to investors ($0.003 per share – 33 investors).

In 2011, the Company issued:

5,000,000 shares of common stock on June 9, 2011 to acquire mining rights at a value of $15,000 which represented a per share value of $0.003 which was the price used in the November 2010 private placement. There was no change in the valuation of the Company from November 2010 to June 2011, therefore the same price was used;

5,000,000 shares of common stock on June 13, 2011 to board members for services at a value of $15,000 which represented a per share value of $0.003 which was the price used in the November 2010 private placement. There was no change in the valuation of the Company from November 2010 to June 2011, therefore the same price was used;

1,000,000 shares of common stock on June 13, 2011 for payment of interest on the promissory note of $3,000 which represented a per share value of $0.003 which was the price used in the November 2010 private placement. There was no change in the valuation of the Company from November 2010 to June 2011, therefore the same price was used;

3,350,000 shares of common stock from June 27, 2011 through October 20, 2011 for cash under a private placement. The Company issued the private placement at $0.20 per share to reflect the recent activity. There was no independent valuation report. The Company raised $670,000 for the shares of common stock.

1,500,000 shares of common stock on September 19, 2011 under employment agreements for a value of $300,000. The $0.20 value is the same value the Company used in raising funds under their private placement, and there were no changes to that value; and

250,000 shares of common stock on October 20, 2011 to a consultant who assisted on the engineering of the building for a value of $0.20 per share amounting to $50,000. The $0.20 value is the same value the Company used in raising funds under their private placement, and there were no changes to that value

The methodologies, approaches and assumptions that the Company used are consistent with the American Institute of Certified Public Accountants, “Practice Guide on Valuation of Privately-Held Company Equity Securities Issued as Compensation”, considering numerous objective and subjective factors to determine common stock fair market value at each issuance date, including but not limited to the following factors: (a) arm’s length private transactions; (b) shares issued for cash as a basis to determine the value for shares issued for services to non-related third parties; and (c) fair value of service provided to non-related third parties as a basis to determine value per share. With respect to the sale of the securities identified above, the Company has relied on the exemption provisions of Section 4(2), Regulation S or Section 3(a) 10 of the Securities Act of 1933, as amended. The sale was made to a sophisticated or accredited investor, as defined in Rule 502, or were issued pursuant to a specific exemption.

In 2012, the Company issued:

6,924,000 shares of common stock from September 1, 2012 to December 31, 2012 for $1,731,000 through an S-1 registration statement at $0.25 per share.

In 2013, the Company issued:

1,576,000 shares of common stock from January 1, 2013 to February 28, 2013 for $394,000 through an S-1 registration statement at $0.25 per share. The shares were issued to thirteen different shareholders.

928,000 shares of common stock to nine different shareholders who purchased $232,000 through an S-1 registration statement at $0.25 per share at the end of December 2012. These shares were reflected as a liability for stock to be issued at December 31, 2012. The balance as of March 31, 2013 is $0.

2,500,000 shares of common stock on March 4, 2013 pursuant to an executed agreement with 754 2542 Canada Inc. to convert all amounts owing them, CDN$500,000 face value of the promissory note at $0.20 per share. The original promissory note executed between the parties was dated May 13, 2011. This exchange resulted in a loss on conversion of $125,000 and this is reflected in the consolidated statements of operations and comprehensive loss for the year ended December 31, 2013.

5,000,000 shares of common stock on March 15, 2013 to new Officers of the Company, pursuant to employment agreements, for value at $0.25 per share representing a total compensation expense of $1,250,000. 2,000,000 shares, valued at $500,000, vest immediately and 3,000,000 shares, valued at $750,000, vest quarterly over one year and are reflected as deferred compensation. As of December 31, 2013, $187,500 is reflected as deferred compensation on the consolidated balance sheet.

1,500,000 shares of common stock were cancelled on March 28, 2013.

200,000 shares of common stock pursuant to legal services rendered and 200,000 shares of common stock for investor relations valued at $126,000.

1,700,000 shares of common stock were cancelled on June 11, 2013.

2,208,000 shares of common stock from August 30, 2013 through October 16, 2013 for cash consideration of $523,564 (CDN$552,000) under a private placement. The Company issued the private placement at $0.25 per share.

In connection with the asset purchase, the Company also issued 40,000 shares of common stock to a former supplier of the vendor for mining related information of the assets purchased valued at $20,000 along with cash consideration of CDN$20,000.

On November 26, 2013, the Company issued 500,000 common stock shares for investor relations. The common shares were valued at $224,900 representing their fair value on November 26, 2013.

On December 9, 2013, 50,000 options were exercised by a Director of the Company, at an exercise price of $0.25, for total proceeds of $12,500. The $0.25 exercise price was in accordance with the Company’s Stock Incentive Plan.

On December 23, 2013, the Company closed a flow-through financing transaction for $472,217 (CDN$500,000) from investors in exchange for 1,000,000 common stock shares and 500,000 warrants. The warrants are exercisable at $0.75 and expire in 2 years. Under Canadian law, the Company also paid finders’ fees of $50,000 in cash and 100,000 warrants that are exercisable at $0.50 and expire in 2 years. The flow-through financing requires the Company to spend substantially all of the funds raised on specific mining exploration activities.

In 2014, the Company issued:

On February 19, 2014, Ronald K. Mann, the Company’s Chief Executive Officer and President, resigned his position. In connection with the departure, 1,500,000 vested common shares that he received as compensation were returned to the Company.

On March 4, 2014, 50,000 stock options were exercised by a Director of the Company, at an exercise price of $0.25, for total proceeds of $12,500. The $0.25 exercise price was in accordance with the Company’s Stock Incentive Plan.

On June 3, 2014, the Company issued 400,000 shares for investor relations. The common shares were valued at $121,500 representing their fair value on June 3, 2014.

On March 17, 2014, the Company increased the authorized amount of common stock from 150,000,000 common shares to 500,000,000 common shares. There were no changes to the authorized amount of preferred stock.

As of June 30, 2014, the Company has 95,026,000 shares of common stock issued and outstanding.

Stock Options

On August 12, 2013, the Company approved and enacted the 2013 Stock Incentive Plan (the “Plan”). Under the 2013 Stock Incentive Plan, the Company may grant options or share awards to its full-time employees, executive officers, directors and consultants up to a maximum of 8,000,000 common shares. Under the Plan, the exercise price of each option has been established at $0.25. Stock options vest as stipulated in the stock option agreement and their maximum term is 8 years.

The following table summarizes information about the Company’s stock options as of June 30, 2014 and December 31, 2013:

	June 30, 2014						December 31, 2013
				Weigthed						Weigthed
				average						average
	Number of			exercise			Number of			exercise
	options			price			options			price

Options outstanding, beginning of period		1,283,000		$	0.25			-		$	-
Granted		-			-			1,333,000			0.25
Exercised		(50,000	)		(0.25	)		(50,000	)		(0.25	)
Forfeited		(600,000	)		(0.25	)		-			-
Expired		-			-			-			-

		633,000			0.25			1,283,000			0.25

The following table summarizes the ranges of exercise prices of outstanding and exercisable options held by officers and directors as of June 30, 2014:

June 30, 2014

Options Outstanding

Options Exercisable

Weigthed

average

Number of

remaining

exercise

Number of

remaining

exercise

options

life (years)

price

options

life (years)

price

$ 0.25

633,000

7.13

0.25

558,000

7.13

0.25

There were no stock options granted during the six months ended June 30, 2014. The fair value of the stock options granted during the year ended December 31, 2013 amounted to $239,930 and was determined using the Black-Scholes option–pricing model using the following weighted-average assumptions:

Risk-free interest rate		.32%
Dividend yield		-
Volatility		152.5%
Expected life in years	2 years
Exercise price	$	0.25

Stock options-based compensation expense included in the condensed consolidated statements of operations and comprehensive loss for the six and three months ended June 30, 2014 and 2013 was $52,490 and $0, respectively, and $22,499 and $0, respectively.

Warrants

The following table summarizes the Company’s share warrants outstanding as of June 30, 2014 and December 31, 2013:

	June 30, 2014						December 31, 2013
			Weighted		Weigthed				Weighted		Weigthed
			average		average				average		average
	Number of		remaining		exercise		Number of		remaining		exercise
	warrants		life (years)		price		warrants		life (years)		price

Warrants outstanding, beginning of period		600,000		2.0	$	0.71		-		-	$	-
Granted		940,625		1.8		0.63		600,000		2.0		0.71
Exercised		-		-				-		-
Expired		-		-		-		-		-		-

Warrants outstanding, end of period		1,540,625		1.7	$	0.66		600,000		2.0	$	0.71

The following table summarizes the ranges of exercise prices of outstanding warrants as of June 30, 2014:

	June 30, 2014
	Warrants Outstanding
			Weighted		Weigthed
			average		average
	Number of		remaining		exercise
	options		life (years)		price

$ 0.30		250,000		0.9		0.30
$ 0.50		100,000		1.5	$	0.50
$ 0.75		1,190,625		1.8		0.75

		1,540,625		1.7	$	0.66

NOTE 7-

FIXED ASSETS

Fixed assets consist of the following as of June 30, 2014 and December 31, 2013:

	Estimated Useful Lives	June 30,			December 31,
	(Years)	2014			2013
Building	15	$	1,089,415		$	1,089,415
Land			111,587			108,974
Computers	5		5,867			4,424
Office Equipment	5		14,711			14,711
Mill Equipment	5		43,115			43,115
Vehicle	5		25,127			25,127
Asset related to retirement obligations	-		117,151			-
			1,406,973			1,285,766
Less: accumulated depreciation			(15,331	)		(9,462	)
Fixed assets, net		$	1,391,642		$	1,276,304

As of June 30, 2014 and 2013, only the computers, office equipment and vehicle have been placed into service. Depreciation for the six and three months ended June 30, 2014 and 2013 was $5,797 and $4,343, respectively, and $2,141 and $2,952, respectively.

NOTE 8-

DEFERRED FINANCING FEES

Deferred finance fees result from the issuance of share warrants as finders’ fees in connection with flow-through financing completed on December 23, 2013 and described in Note 4. The fair value of the warrants amounted to $25,431 and was determined using the Black-Scholes option–pricing model. The deferred financing fees are being amortized over the life of the warrants which is 2 years. Amortization of deferred financing fees for the six and three months ended June 30, 2014 and 2013 was $6,358 and $0, respectively, and $3,179 and $0, respectively.

NOTE 9-

PROVISION FOR INCOME TAXES

As of June 30, 2014, there is no provision for income taxes, current or deferred.

At December 31, 2013, the Company had a net operating loss carry forward in the approximate amount of $4,200,000 available to offset future taxable income through 2034. The Company has established a valuation allowance equal to the full amount of the deferred tax assets due to the uncertainty of the utilization of the operating losses in future periods.

NOTE 10- PROMISSORY NOTE

The Company entered into a promissory note with an investor on May 13, 2011 in the amount of CDN$500,000 that matures on May 31, 2014. The note had a default interest rate of 5% per annum should repayment not occur by the maturity date and the Company be in default of the promissory note agreement. In connection with the promissory note, the Company issued 1,000,000 shares of stock valued at CDN$3,000 in June 2011 for prepaid interest.

On March 4, 2013, 754 2542 Canada Inc. executed an agreement with the Company whereby 754 2542 Canada Inc. agreed to accept 2,500,000 shares of common stock in satisfaction of all amounts due and owing 754 2542 Canada Inc. pursuant to the promissory note executed between the parties on May 13, 2011. As a result, the promissory note has been converted, and the Company recorded a loss on conversion of this note of $125,000 in the consolidated statement of operations in 2013.

NOTE 11- COMMITMENTS

The Company had the following financial commitments, represented by rental lease agreements, as of June 30, 2014:

	Year ending December 31,
2014	$	16,520
2015		22,493
2016		22,493
2017		22,493
2018		22,493
	$	106,492

Rent expense under the lease agreements for the six and three months ended June 30, 2014 and 2013 were $18,885 and $20,964, respectively, and $9,556 and $15,812, respectively.

NOTE 12-

FAIR VALUE MEASUREMENTS

The Company adopted certain provisions of ASC Topic 820. ASC 820 defines fair value, provides a consistent framework for measuring fair value under generally accepted accounting principles and expands fair value financial statement disclosure requirements. ASC 820’s valuation techniques are based on observable and unobservable inputs. Observable inputs reflect readily obtainable data from independent sources, while unobservable inputs reflect our market assumptions. ASC 820 classifies these inputs into the following hierarchy:

Level 1 inputs: Quoted prices for identical instruments in active markets.

Level 2 inputs: Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable.

Level 3 inputs: Instruments with primarily unobservable value drivers.

The following table represents the fair value hierarchy for those financial assets and liabilities measured at fair value on a recurring basis as of June 30, 2014:

	Level 1		Level 2		Level 3		Total
Cash	$	35,779		-		-	$	35,779
Investor note receivable		-		-		254,444		254,444
Convertible notes payable		-		-		86,214		86,214
Non-convertible notes payable		-		-		148,908		148,908
Derivative liabilities		-		-		366,398		366,398

The derivative liabilities are measured at fair value using the binomial lattice options pricing model, and are classified within Level 3 of the valuation hierarchy. The following table sets forth a summary of the changes in the fair value of the Company’s Level 3 financial liabilities that are measured at fair value on a recurring basis:

	Six months Ended June 30, 2014		Six Months Ended June 30, 2013
Fair value, beginning of period	$	-	$	-
Derivative liabilities recorded during the period		277,550		-
Reclassification to equity upon conversion of note		-		-
Reclassification to equity upon amendment of notes and warrants		-		-
Net unrealized (gain) loss on derivative financial instruments		88,848		-
Fair value, end of period	$	366,398	$	-

NOTE 13-

SUBSEQUENT EVENTS

On August 6, 2014, the Company entered into an agreement with a U.S.-based private equity fund (“Investor”) under which the Company issued an unsecured Convertible Note (“Convertible Note”) in the principal amount of $250,000. The funds to be issued under the Convertible Note is $225,000 (“Consideration”). The Convertible Note includes an original issue discount of $25,000 (“OID”), calculated at 10% of the principal amount ($250,000). The initial Consideration paid to the Company on August 6, 2014 was $60,000. The Investor may pay additional Consideration to the Company in such amounts and at such dates as the Investor may choose in its sole discretion. The principal sum due to the Investor shall be prorated based on the Consideration actually paid by the Investor plus a 10% OID, as well as any other interest or fees, such that the Company is only required to repay the amounts funded and the Company is not required to repay any unfunded portions of the Convertible Note. The Company may repay the Convertible Note at any time on or before 90 days from the transaction date after which the Company may not make further payments on the Convertible Note prior to the Maturity Date without written approval from the Investor. If the Company makes a payment of Consideration on or before 90 days from the transaction date, the interest rate on that payment of Consideration shall be zero percent (0%). If the Company does not repay a payment of Consideration on or before 90 days from the transaction date, a one-time interest charge of 12% shall be applied to the principal amount. Any interest payable is in addition to the OID and that OID (or prorated OID, if applicable) remains payable regardless of time and manner of payment by the Company. The maturity date is two years from the transaction date of each payment ("Maturity Date") and is the date upon which the principal amount of the Convertible Note, as well as any unpaid interest and other fees, shall be due and payable. The Investor has the right, at any time after the transaction date, at its election, to convert all or part of the outstanding and unpaid principal amount and accrued interest (and any other fees) into fully paid and non-assessable shares of common stock of the Company. The conversion price is the lesser of $0.16 or 60% of the lowest trade price in the 25 trading days prior to the conversion. Unless otherwise agreed in writing by both parties, at no time will the Investor convert any amount of the Convertible Note into common stock that would result in the Investor owning more than 4.99% of the common stock outstanding of the Company. At all times that this Convertible Note is outstanding, the Company agrees to reserve at least 10,000,000 shares of common stock for conversion.

On August 1, 2014, DNA Crypto Corp. (“DNAC”) entered into an updated Asset Purchase Agreement (“Agreement”) with Lynx Mining LLC, a Texas limited liability company (“Lynx”). The Agreement rescinds the prior Asset Purchase Agreement entered into between DNAC and Lynx dated June 20, 2014. The updated Agreement takes into account funding obligations by DNA Precious Metals, Inc. into DNAC. The accounting for DNAC as at and for the period ended June 30, 2014 remains the same as stipulated in the original Asset Purchase Agreement dated June 20, 2014. As part of the new Agreement and subsequent to its execution, the Company has remitted $11,000 to DNAC.

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

DNA Precious Metals, Inc., a Nevada corporation, (the “Company”) is an exploratory stage mining company. The Company may also be referred to as “we”, “our” or “us”, unless the context provides for otherwise.

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations discusses significant factors that have affected our financial position and operations during the six and three month periods ended June 30, 2014 and 2013. This discussion also includes events that occurred after the end of the last fiscal quarter end and contains both historical and forward-looking statements.

When used in this discussion, the words “expect(s)”, “feel(s)”,”believe(s)”, “will”, “may”, “anticipate(s)” “intend(s)” and similar expressions are intended to identify forward-looking statements. Such statements are subject to certain risks and uncertainties, which could cause actual results to differ materially from those projected.

MEASUREMENTS AND GLOSSARY

Conversion Table

For ease of reference in reviewing our business, we are providing you with conversion information and abbreviations:

1 acre	= 0.4047 hectare	1 mile	= 1.6093 kilometers
1 foot	= 0.3048 meter	1 troy ounce	= 31.1035 grams
1 gram per metric ton	= 0.0292 troy ounce/ short ton	1 square mile	= 2.59 square kilometers
1 short ton (2000 pounds)	= 0.9072 ton	1 square kilometer	= 100 hectares
1 ton	= 1,000 kg or 2,204.6 lbs	1 kilogram	= 2.204 pounds or 32.151 troy oz
1 hectare	= 10,000 square meters	1 hectare	= 2.471 acres

The following abbreviations may be used herein:

Au	= gold	m2	= square meter
G	= gram	m3	= cubic meter
g/t	= grams per ton	Mg	= milligram
Ha	= hectare	mg/m3	= milligrams per cubic meter
Km	= kilometer	T or t	= ton
Km2	= square kilometers	Oz	= troy ounce
Kg	= kilogram	Ppb	= parts per billion
M	= meter	Ma	= million years

Mining Terms

The following mining terms are used throughout this filing:

SEC Industry Guide 7 Definitions

exploration stage	An “exploration stage” prospect, which is not in either the development or production stage.

development stage	A “development stage” project is one which there is ongoing preparation of an established commercially mineable deposit for its extraction but which is not yet in production. This stage occurs after completion of a feasibility study.

mineralized material	The term “mineralized material” refers to material that is not included in the reserve as it does not meet all of the criteria for adequate demonstration for economic or legal extraction.

probable reserve	The term “probable reserve” refers to reserves for which quantity and grade and/or quality are computed from information similar to that used for proven (measured) reserves, but the sites for inspection, sampling, and measurement are farther apart or are otherwise less adequately spaced. The degree of assurance, although lower than that for proven reserves, is high enough to assume continuity between points of observation.

production stage	A “production stage” project is actively engaged in the process of extraction and beneficiation of mineral reserves to produce a marketable metal or mineral product.

proven reserve	The term “proven reserve” refers to reserves for which (a) quantity is computed from dimensions revealed in outcrops, trenches, workings or drill holes; grade and/or quality are computed from the results of detailed sampling and (b) the sites for inspection, sampling and measurement are spaced so closely and the geologic character is so well defined that size, shape, depth and mineral content of reserves are well-established.

Reserve	The term “reserve” refers to that part of a mineral deposit, which could be economically and legally extracted or produced at the time of the reserve determination. Reserves must be supported by a feasibility study done to bankable standards that demonstrates the economic extraction (“bankable standards” implies that the confidence attached to the costs and achievements developed in the study is sufficient for the project to be eligible for external debt financing). A reserve includes adjustments to the in-situ tons and grade to include diluting materials and allowances for losses that might occur when the material is mined.

Additional Definitions

alteration	Any change in the mineral composition of a rock brought about by physical or chemical means.

assay	A measure of the valuable mineral content.

dip	The angle that a structural surface, a bedding or fault plane, makes with the horizontal, measured perpendicular to the strike of the structure.

disseminated	Where minerals occur as scattered particles in the rock.

fault	A surface or zone of rock fracture along which there has been displacement.

feasibility study	A comprehensive study of a mineral deposit in which all geological, engineering, legal, operating, economic, social, environmental and other relevant factors are considered in sufficient detail that it could reasonably serve as the basis for a final decision by a financial institution to finance the development of the deposit for mineral production.

formation	A distinct layer of sedimentary rock of similar composition.

geochemistry	The study of the distribution and amounts of the chemical elements in minerals, ores, rocks, solids, water and the atmosphere.

geophysics	The study of the mechanical, electrical and magnetic properties of the earth’s crust.

geophysical surveys	A survey method used primarily in the mining industry as an exploration tool, applying the methods of physics and engineering to the earth’s surface.

geotechnical	The study of ground stability.

grade	Quantity of metal per unit weight of host rock.

heap leach

A mineral processing method involving the crushing and stacking of an ore on an

impermeable liner upon which solutions are sprayed to dissolve metals i.e. gold,

copper, etc.; the solutions containing the metals are then collected and treated to

recover the metals.

host rock	The rock in which a mineral or an ore body may be contained.

in-situ	In its natural position.

lithology	The character of the rock described in terms of its structure, color, mineral composition, grain size and arrangement of tits component parts, all those visible features that in the aggregate impart individuality to the rock.

mapped or geological mapping	The recording of geologic information including rock units and the occurrence of structural features and mineral deposits on maps.

mineral	A naturally occurring inorganic crystalline material having a definite chemical composition.

mineralization	A natural accumulation or concentration in rocks or soil of one or more potentially economic minerals, also the process by which minerals are introduced or concentrated in a rock.

outcrop	That part of a geologic formation or structure that appears at the surface of the earth.

open pit or open cut	Surface mining in which the ore is extracted from a pit or quarry, the geometry of the pit may vary with the characteristics of the ore body.

ore	Mineral bearing rock that can be mined and treated profitably under current or immediately foreseeable economic conditions.

ore body	A mostly solid and fairly continuous mass of mineralization estimated to be economically mineable.

ore grade	The average weight of the valuable metal or mineral contained in a specific weight of ore i.e. grams per ton of ore.

oxide	Gold bearing ore, which results from the oxidation of near surface sulfide ore.

preliminary assessment	A study that includes an economic analysis of the potential viability of Mineral Resources taken at an early stage of the project prior to the completion of a preliminary feasibility study.

QA/QC	Quality Assurance/Quality Control is the process of controlling and assuring data quality for assays and other exploration and mining data.

quartz	A mineral composed of silicon dioxide, SiO2 (silica).

rock	Indurated naturally occurring mineral matter of various compositions.

sampling analytical variance/ precision	An estimate of the total error induced by sampling, sample preparation and analysis.

sediment	Particles transported by water, wind or ice.

sedimentary rock	Rock formed at the earth’s surface from solid particles, whether mineral or organic, which have been moved from their position of origin and re-deposited.

strike	The direction or trend that a structural surface, e.g. a bedding or fault plane, takes as it intersects the horizontal.

strip	To remove overburden in order to expose ore.

Tailings	The residue from an ore crushing plant.

orphan site	Tailings residues from former mining operations that the Quebec government has taken responsibility for remediation

Background

We are a Nevada corporation organized on June 2, 2006. We were originally incorporated under the name, Celtic Capital, Inc. On October 20, 2008, we changed our name to Entertainment Education Arts, Inc. On May 12, 2010, we changed our name to DNA Precious Metals, Inc. to accurately reflect our new business plan.

Our Business

We are an exploration stage mining company. Our Montauban property is located in the Montauban and Chavigny townships near Grondines-West in Portneauf County, Province of Quebec, Canada (the “Montauban Property” or “Property”). Our business objective is to identify proven reserves of gold, silver and other base metals, construct a mill, build out the Property’s infrastructure and place the mine into production. The Property does not contain any known ore reserves according to the definition of ore reserves under Industry Guide 7 promulgated by the Securities and Exchange Commission (“SEC”) as well as various SEC mining related leases. There is no assurance that a commercially viable deposit will be proven through our exploration efforts. The funds we spend on our Property may be unsuccessful in measuring ore reserves that meet SEC guidelines.

PROPERTY DESCRIPTION AND LOCATION

The Property is composed of 103 mining claims totaling 3600 hectares located in the Montauban-les-Mines sector of the Notre-Dame-de-Montauban municipality, in the Montauban Township, Portneuf County, Province of Quebec, Canada. The Property is located 120 km east of Quebec City and 80 km north of Trois-Rivières. The Property is located one kilometer west of Montauban-les-Mines with multiple land accesses. Manpower, water and electric power are easily available within the very same distance.

Figure I: Montauban Location Map

Mining Claims Previously Acquired

New Mining Claims Acquired

On October 30, 2013 and November 27, 2013, the Company entered into binding agreements for the asset acquisitions of an undivided one hundred percent (100%) interest in certain mineral claims and mining assets located in the Province of Quebec’s Montauban and Chavigny townships near Grondines West, in the county of Portneuf, specifically Mining Lease BM 748 and Mining Concession Miniere CM 410. The purchase price was CDN$75,000 together with the issuance of 1,050,000 common shares of the Company. The common shares for the acquisition were valued at their fair market value on the day they were issued which totaled $496,860. In connection with the asset purchase, the Company also issued 40,000 shares of common stock to a former supplier of the vendor for mining related information of the assets purchased valued at $20,000 along with cash consideration of CDN$20,000. The total cost of the acquisition amounted to $612,431. The Company had been awaiting confirmation of the contemplated transaction from a bankruptcy court in Montreal, Quebec overviewing the financial restructuring of the vendor. The bankruptcy court approved the transaction on April 17, 2014 and has been included in mining rights on the consolidated balance sheet as at June 30, 2014.

There are mining residues, or tailings, (“Montauban Tailings”) located on the Montauban Property which are considered toxic wastes according to the Quebec Provincial Government. There are no environmental liabilities as such to our Company. However, the Company will have to obtain the necessary permits from the Quebec Government Authorities to realize any further fieldwork having an impact on the environment, especially if re-mobilization of mining residues is contemplated.

On September 14, 2012, we received the Certificate of Authorization issued by the MDDEFP (Ministère du Développement durable, de l’Environnement et des parc) of the Quebec Provincial Government to process the mining residues. On March 13, 2014, we received another Certificate of Authorization, also from the Quebec Provincial Government’s MDDEFP, with respect to operating a cyanization circuit to process the mining residues located on the Montauban Property. Previously, on February 28, 2014, we received approval, from the Quebec Provincial Government, for the Restoration Plan on the Montauban Tailings, which will be implemented after our processing of the mining residues (tailings) on the site. The two (2) Certificates of Authorization issued to us will allow for the construction and installation of equipment facilities to recuperate mica (phlogorite) and precious metals (gold and silver) from the mining residues (tailings) located on the Montauban Property.

The Company’s mineral claims are presented in Table I below, these coming from the Province of Quebec Government Ministry of Natural Resources GESTIM website.

Table I: List of Claims

CLAIM	CLAIM	CLAIM	CLAIM
NUMBER	NUMBER	NUMBER	NUMBER

CDC 2388117	CDC 2395241	CDC 2374988	CDC 2378932
CDC 2388118	CDC 2395242	CDC 2374989	CDC 2378933
CDC 2388119	CDC 2395243	CDC 2374990	CDC 2378934
CDC 2388120	CDC 2395244	CDC 2374991	CDC 2378935
CDC 2388121	CDC 2395245	CDC 2374992	CDC 2378936
CDC 2388122	CDC 2395246	CDC 2374993	CDC 2378937
CDC 2388123	CDC 2395247	CDC 2374994	CDC 2378938
CDC 2388124	CDC 2395248	CDC 2374995	CDC 2378939
CDC 2388125	CDC 2397489	CDC 2374996	CDC 2378940
CDC 2388126	CDC 2190140	CDC 2374997	CDC 2378941
CDC 2388127	CDC 2191456	CDC 2374998	CDC 2378942
CDC 2388128	CDC 2191457	CDC 2374999	CDC 2378943
CDC 2388129	CDC 2191512	CDC 2375000	CDC 2378944
CDC 2388130	CDC 2195875	CDC 2375001	CDC 2378945
CDC 2388131	CDC 2331339	CDC 2375002	CDC 2378946
BM 748	CDC 2331340	CDC 2375003	CDC 2378947
CM 410	CDC 2331341	CDC 2375004	CDC 2378948
	CDC 2331342	CDC 2375005	CDC 2378949
	CDC 2336204	CDC 2375006	CDC 2378950
	CDC 2397363	CDC 2375007	CDC 2378951
	CDC 2398022	CDC 2375008	CDC 2378952
	CDC 2398023	CDC 2375009	CDC 2378953
	CDC 2398024	CDC 2375010	CDC 2378954
	CDC 2398025	CDC 2375011	CDC 2378955
	CDC 2398026	CDC 2378927	CDC 2383757
	CDC 2398027	CDC 2378928	CDC 2383758
	CDC 2398028	CDC 2378929	CDC 2383759
	CDC 2398029	CDC 2378930	CDC 2383760
	CDC 2398030	CDC 2378931

DRILLING SUMMARY

A systematical sampling program was developed to provide an accurate and homogeneous grid of data to estimate the Montauban mining residues (tailings) potential located on the Property. A 24-hole percussion drilling campaign was performed totaling 143.1 meters. This percussion drilling campaign was considered part of completing a previous 25-hole drilling campaign performed earlier. A total of 49 holes totaling 302.3 meters of drilling were completed. No proven or indicated reserves were identified.

GEOLOGY

Regional geology consists of three main rock groups: the basement crust, the supracrustal rocks and the intrusive rocks which were respectively identified as the Mekinac Group, the Montauban Group and the La Bostonnais Complex

The Montauban Group is composed of Helikian supracrustal rocks. Those are various gneiss, quartzites, amphibolites, metabasalts and calcosilicated rocks reaching less than 2 kilometers in thickness. The Montauban Property is located in the upper part of this unit.

The Montauban Group is bordered to the East by the La Bostonnais Complex, an intrusive rocks complex formed of basic, tonalitic and felsic igneous rocks. To the West, the Montauban Group is in contact with the Mekinac Group mostly composed of charnockitic migmatites.

The Montauban Property is a three-kilometer long mineralized formation with a geology that is fairly complex being located within an extensively folded sequence of amphibolite facies rocks that are sandwiched between intrusions of granodioritic to gabbroic composition. In the area, these metamorphic rocks strike roughly North-South and dip ±60° to the East and consist of migmatitic biotite gneiss, amphibolite, quartzofeldspathic biotite gneiss and quartzite.

Locally, the Montauban Property mineralization is contained within a thin complex package of biotite gneiss, nodular sillimanite gneiss, cordierite-antophyllite gneiss, calc-silicate rocks and rocks as meta-exhalites (tourmalinite and, along strike iron formation and carbonate rocks).

The Montauban Property is distributed within numerous different zones along the strike length of the mineralization, from South to North, we have the zones: South, Tétreault, A, C, North and Montauban. All zones are zinc-bearing with the exception of the South and North zones which are gold-bearing.

MINERALIZATION

The base metal mineralization found on the Montauban Property is massive to semi-massive sulphides, coarsely grained and mostly composed of sphalerite, galena, pyrrhotite, pyrite and chalcopyrite with minor quantities of cubanite, tetrahedrite and molybdenite.

The gold-bearing mineralization is marginal and consists of disseminated pyrrhotite, galena, sphalerite and chalcopyrite with a large range of minor sulphides, sulphosalts and native minerals.

MONTAUBAN TAILINGS

The Montauban mining residues (“Montauban Tailings”) area of the Property covers a total area of 53,093 m² and amounts to a total volume of 250,750 m³. Since this volume is composed of tailings and that the water table is located within most of the blocks derived from each hole, the specific gravity of the material had to be evaluated to estimate the tonnage that is present on site. The estimation of the specific gravity was performed on the last drilling campaign 24 holes since no recovery evaluation is available from the first drilling campaign. Recovery of tailings in the sampling process averaged about 76% from the last percussion drilling campaign. Recoveries were ranging from 40 to 100 %, the lowest values being associated to the high water content of the deepest samples, the water table being at a depth of about 4,6 m (15 ft.) within the pile of tailings. The averaged recovery was in the order of 81 % (68 samples) for the upper portion of the tailings and it dropped to below 64 % (27 samples) for the deeper portion (below the water table). The specific gravity is then estimated to be 1, 71 g/cm³.

Montauban Tailings Hole Location Plan

The above graph shows the typical sections of the Montauban Tailings where it is clear that the drainage is towards the North (to the right on section C-C). It is also clear that the thickness is variable but not so thick compared to the value that should be reached if the whole production was to be still onsite. About 1.2 million tons were produced in the past; such a tonnage should be averaging over 13 meters in the Tailings pile. It is clear on site that an important fraction of the tailings was washed away through drainage.

Montauban Tailings Typical Sections

Figure X: Montauban Tailings View Looking South

A total of 49 blocks were defined from the two previous percussion-drilling campaigns. The drilling pattern is essentially regular with a hole each and every 30-meter on average. The block volumes were calculated with the help of the computer-modeling program that defined one polygon for each and every hole drilled. The perimeter of the tailings was mapped with the help of a GPS device, this perimeter is the limit where the surface meshing of the holes’ collars meets the meshing of the bottom of the holes. The block size is fairly regular averaging 8,740 tons, the smallest block being # 26 at 1 342 tons and the biggest one being # 21 at 24 334 tons.

To these metals one should add the mica content of the Montauban Tailings, with the mica being mostly composed of the phlogopite type, with some muscovite and minor amounts of biotite. The mica content is estimated to be at least 10 % of the total volume. The mica is an industrial mineral that is valued according to the market conditions.

DRILLING RESULTS

The distribution of metals within the tailings is not homogeneous. It was demonstrated with the 49 holes drilled on the Montauban Tailings that recoveries dropped from 81 to less than 64 % below the 4,6 m (15 ft.) horizon, which is more or less the location of the water table within the Montauban Tailings. The impact is seen on metal content when gold is 67 % richer over this horizon, silver is up 73 %, Copper also up 63 %, and the winner being lead with a jump of 149 %. The only one being evenly distributed is zinc.

Example of Block 15 Showing Richer Upper Portion of Montauban Tailings

MILL CONSTRUCTION

We are constructing a mill to process mining residues. Our focus will be to produce gold and silver concentrate in addition to the mica product. By extracting mica and producing the gold and silver concentrate, we will reduce the sulphide content of the tailings and thus lowering the environmental impact and cost for the project closure at the end of the operation.

Presently, there are no similar mills in the area surrounding our mining claims. The on-site mill production equipment to be constructed and installed will incorporate a closed cyanization circuit and separation equipment consisting of spiral classifiers and Nelson concentrators in addition to other equipment. Test work to date has indicated that this configuration will effectively segregate the mica and produce a gold/silver concentrate. There is a risk however that the plant will not effectively separate the components as planned. There is also a risk that the process being used is not ideal or optimal and that a different process may enhance or increase recovery of values. We intend to continue testing to improve the recuperation and extraction process. We have incorporated flexibility into our mill building design to allow for alternative/additional precious metal extraction processes to be installed. Initial testing results indicate that recovery of mica, gold and silver is possible but economic feasibility has not been proven and there is the associated risk that the operation as planned will not be profitable either with respect to our own mining operations or refining tailings or other mining concentrates from other mining companies in close proximity to our operations.

We anticipate that the mill will be able to process 1,000 tonnes per day. By constructing our own mill we will be able to reduce transportation costs.

PROPERTY DEVELOPMENT

The Company has completed construction of all access roads to and from the new milling facility. The hydropower source to the milling facility totaling 1.3 kilometers has been completed. The main power line consists of 2,500 amperes total output power and has been brought inside the newly erected 16,000 sq./ft. steel structure building.

We have also secured the necessary mining permits. On September 14, 2012, we received the Certificate of Authorization issued by the MDDEFP (Ministère du Développement durable, de l’Environnement et des parc) of the Quebec Provincial Government to process the mining residues. On March 13, 2014, we received another Certificate of Authorization, also from the Quebec Provincial Government’s MDDEFP, with respect to operating a cyanization circuit to process the mining residues located on the Montauban Mine Tailings. Previously, on February 28, 2014, we received approval, from the Quebec Provincial Government, for the Restoration Plan on the Montauban Mine Tailings, which will be implemented after our processing of the mining residues (tailings) on the site. The two (2) Certificates of Authorization issued to us will allow for the construction and installation of equipment facilities to recuperate mica (phlogorite) and precious metals (gold and silver) from the mining residues (tailings) located on the Montauban Mine Tailings.

Following an economic analysis of the project, our management made an assessment of the feasibility of the Anacon project and made a decision to commercially extract the gold, silver and other base metals located on the Property.

We have prepared a proposal to the Ministry of Natural Resources and Wildlife in Quebec to correct the environmental problems caused by the presence of tailings from previous operations on additional nearby tailings sites, Montauban United and Tetrault 1&2. These additional resource residues sites will increase the project life if we go into production.

SUBSEQUENT EVENTS

OUR PLAN OF OPERATIONS GOING FORWARD

We will need additional production financing, including working capital requirements, of $6 million to commence production. We have no commitments for additional financing.

We may also explore the local potential of other resources such as additional tailings and/or underground resources underneath the Property or close-by in the Montauban area.

COMPARISON OF OPERATING RESULTS FOR THE SIX AND THREE MONTHS ENDED JUNE 30, 2014 AND 2013

Six Months Ended June 30, 2014 and 2013:

We have not generated revenues from operations and do not anticipate generating any revenues from operations until we have obtained additional debt or equity financing to complete the infrastructure of the mill site and acquire milling equipment essential to the processing of gold, silver and other base metals located on the Montauban Property. There are no assurances that we will obtain the needed financing or in the amount we need to conduct our processing activities.

The condensed consolidated financial statements for the six months ended June 30, 2014, included in this report, reflect total operations and other expenses of $1,078,536, representing a decrease of $346,682 compared to the six months ended June 30, 2013 when total operations and other expenses were $1,425,218. The decrease is mainly attributable to lower amount charged for the cost of salaries and related expenses of $535,111, to lower professional fees of $50,097, to higher exploration costs of $91,682, to higher general and administrative expenses of $141,282, to higher interest expense charges of $35,981 and to an increase in the charge for the fair value adjustment in derivative liabilities of $88,848. We also recognized a loss on conversion of the promissory note of $125,000 during the six month period ended June 30, 2013 for which there was no similar charge during the six month period ended June 30, 2014.

We had engineering costs of $133,633 for the six months ended June 30, 2014, representing an increase of $91,682 compared to the six months ended June 30, 2013 when engineering costs were $41,951. The primary reason for the increase in engineering costs for the six months ended June 30, 2014 compared to the six months ended June 30, 2013 is attributable to the additional mining studies and drilling costs incurred in the current year. As mentioned above, the Company has now received all of its operating permits from the Ministry of Durable Development of the Environmental Parks (“MDDEFP”) of the Quebec Provincial government. With the issuance of all necessary mining permits and approval of the restoration plan and upon obtaining additional financing, we will proceed with the installation of a custom designed milling circuit for the treatment of the mining residues on the Anacon Property.

Three Months Ended June 30, 2014 and 2013:

The condensed consolidated financial statements for the three months ended June 30, 2014, included in this report, reflect total operations and other expenses of $482,440, representing a decrease of $57,939 compared to the three months ended June 30, 2013 when total operations and other expenses were $540,379. The decrease is mainly attributable to lower amount charged for the cost of salaries and related expenses of $229,687, to lower professional fees of $14,351, to higher exploration costs of $6,582, to higher general and administrative expenses of $59,480, to higher interest expense charges of $35,076 and to an increase in the charge for the fair value adjustment in derivative liabilities of $88,848.

We had engineering costs of $20,951 for the three months ended June 30, 2014, representing an increase of $6,582 compared to the three months ended June 30, 2013 when engineering costs were 14,369. The primary reason for the increase in engineering costs for the three months ended June 30, 2014 compared to the three months ended June 30, 2013 is attributable to the additional mining studies and drilling costs incurred in the current quarter. As mentioned above, the Company has now received all of its operating permits from the Ministry of Durable Development of the Environmental Parks (“MDDEFP”) of the Quebec Provincial government.

SOURCE OF FUNDS

We will require additional debt or equity funding to complete the mill and the infrastructure to otherwise conduct operations. In 2012, we filed a registration statement with the Securities and Exchange Commission offering 12 million shares of our common stock at $.25 per share. As of September 30, 2013, we sold a total of 9,428,000 shares of our common stock from the registration statement and secured $2,357,000 in financing. Prior to the effective date of the Registration Statement, we secured funding through the sales of both debt and equity securities in the form of private placements. In the third quarter of 2013, we raised $110,000 from equity securities private placements and an additional $442,000 in the fourth quarter of 2013 from equity securities private placements. Also in the fourth quarter of 2013, the Company raised $472,217 (CDN$500,000) from flow-through financing through the issuance of 1,000,000 shares of common stock and 500,000 warrants. In the first two quarters of 2014, the Company raised $222,500 from the issuance of a convertible note (see below) and $12,500 from the exercise of stock options.

On April 28, 2014, we entered into a Securities Purchase Agreement with Typenex Co-Investments, LLC, a(“Typenex”), under which we issued to Typenex a Secured Convertible Promissory Note (the “Promissory Note”) in the amount of $552,500. The Promissory Note includes an original issue discount of $50,000 (“OID”), calculated at 10% of the principal amount ($500,000), plus an additional $2,500 (“Transaction Expense Amount”) to cover Typenex's due diligence and legal fees in connection therewith. The principal amount will be paid to Typenex in six (6) tranches of an initial amount under the Promissory Note of $250,000 and five (5) additional amounts of $50,000. The initial $250,000 in cash has been paid to the Company.

Payment of the Typenex Notes will be made on a monthly basis, beginning six months after the issue date when we received the initial $250,000, in the amount of $34,531 per month plus all accrued but unpaid interest and other costs, fees or charges payable, for sixteen (16) months until the balance is paid in full. The Typenex Notes are convertible into common stock, at the option of Typenex, at a price of $0.40 per share subject to adjustment in the case of a default, reorganization or recapitalization. In the event the Company elects to prepay all or any portion of the Typenex Notes, the Company is required to pay to Typenex an amount in cash equal to 125% of the outstanding balance of the Typenex Notes, plus accrued interest and any other amounts owing.

Interest accrues at the rate of 10% per annum.

The Typenex Notes are secured by an interest in all right, title, interest, claims and demands of the Company.

The Typenex Notes are convertible into shares of our common stock in six tranches, consisting of (i) an initial tranche in an amount equal to $277,500 and any interest, costs, fees or charges accrued thereon or added thereto under the terms of this Note and the other Transaction Documents (as defined in the Securities Purchase Agreement), and (ii) five (5) additional tranches, each in the amount of $55,000, plus any interest, costs, fees or charges accrued thereon or added thereto under the terms of this Note and the other Transaction Documents. Except in the case of a Company default, the Typenex Notes are convertible by Typenex at a price of $.40 per share.

Concurrently with the Securities Purchase Agreement, we also issued to Typenex a warrant (the "Warrant") to purchase 693,750 shares of our common stock at an exercise price of $.75 per share. The warrant also contains a cashless exercise provision. The warrant is for a term of two (2) years.

Subsequent to the current balance sheet date, on August 6, 2014, the Company entered into an agreement with a U.S.-based private equity fund (“Investor”) under which the Company issued an unsecured Convertible Note (“Convertible Note”) in the principal amount of $250,000. The funds to be issued under the Convertible Note is $225,000 (“Consideration”). The Convertible Note includes an original issue discount of $25,000 (“OID”), calculated at 10% of the principal amount ($250,000). The initial Consideration paid to the Company on August 6, 2014 was $60,000. The Investor may pay additional Consideration to the Company in such amounts and at such dates as the Investor may choose in its sole discretion. The principal sum due to the Investor shall be prorated based on the Consideration actually paid by the Investor plus a 10% OID, as well as any other interest or fees, such that the Company is only required to repay the amounts funded and the Company is not required to repay any unfunded portions of the Convertible Note. The Company may repay the Convertible Note at any time on or before 90 days from the transaction date after which the Company may not make further payments on the Convertible Note prior to the Maturity Date without written approval from the Investor. If the Company makes a payment of Consideration on or before 90 days from the transaction date, the interest rate on that payment of Consideration shall be zero percent (0%). If the Company does not repay a payment of Consideration on or before 90 days from the transaction date, a one-time interest charge of 12% shall be applied to the principal amount. Any interest payable is in addition to the OID and that OID (or prorated OID, if applicable) remains payable regardless of time and manner of payment by the Company. The maturity date is two years from the transaction date of each payment ("Maturity Date") and is the date upon which the principal amount of the Convertible Note, as well as any unpaid interest and other fees, shall be due and payable. The Investor has the right, at any time after the transaction date, at its election, to convert all or part of the outstanding and unpaid principal amount and accrued interest (and any other fees) into fully paid and non-assessable shares of common stock of the Company. The conversion price is the lesser of $0.16 or 60% of the lowest trade price in the 25 trading days prior to the conversion. Unless otherwise agreed in writing by both parties, at no time will the Investor convert any amount of the Convertible Note into common stock that would result in the Investor owning more than 4.99% of the common stock outstanding of the Company.

LIQUIDITY AND CAPITAL RESOURCES

Assets and Liabilities

As of June 30, 2014, total assets were $3,050,513. We had current assets totaling $594,330 represented by cash totaling $35,779, prepaid expenses totaling $252,283, sales tax receivable totaling $51,824 and investor notes receivable totaling $254,444. Current assets as of December 31, 2013 totaled $1,374,306. We also had net fixed assets as of June 30, 2014 totaling $1,391,642, mining claims totaling $1,035,818, net deferred financing fees of $18,723 and proprietary software totaling $10,000. Total assets as of December 31, 2013 were $2,690,691 when we had cash totaling $535,934, prepaid deposit totaling $612,431, prepaid expenses totaling $190,514, sales tax receivable totaling $35,427, net fixed assets totaling $1,276,304, mining claims totaling $15,000 and net deferred financing fees totaling $25,081. There was not a significant change in total assets between December 31, 2013 and June 30, 2014. Total assets as of June 30, 2013 were $1,771,254. The primary reasons for the significant increase of $1,279,259 in our total assets between June 30, 2013 and June 30, 2014 were attributable to the purchases of mining rights resulting in an increase of $1,020,818, to the purchase of proprietary software resulting in an increase of $10,000, and to an increase in fixed assets of $115,338 and to an increase in investor notes receivable of $254,444 and offset by a decrease in prepaid deposits of $612,431 and by a decrease in cash of $500,155.

As of June 30, 2014, total liabilities were $882,754. We had current liabilities totaling $616,695, represented by accounts payable and accrued expenses totaling $164,083, convertible notes carrying value totaling 86,214 and derivative liabilities totaling $366,398. There were long-term liabilities represented by non-convertible notes carrying value totaling $148,908 and asset retirement obligation totaling $117,151. Total liabilities as of December 31, 2013, represented by current liabilities, totaled $186,729. The primary reasons for the significant increase of our total liabilities between December 31, 2013 and June 30, 2014 were attributable to the increase in convertible notes carrying value of $86,214, to the increase in non-convertible notes carrying value of $148,908, to the increase in derivative liabilities of $366,398 and to an increase in asset retirement obligation of $117,151. Total liabilities as of June 30, 2013, represented by current liabilities, totaled $104,101. The primary reasons for the significant increase of our total liabilities between June 30, 2013 and June 30, 2014 were attributable to the increase in convertible and non-convertible notes carrying value of $235,122, to the increase in derivative liabilities of $366,398, to an increase in asset retirement obligation of $117,151 and to an increase in accounts payable and accrued expenses of $59,982.

We have a working capital deficit of $22,365 as of June 30, 2014 as compared to a working capital surplus of $1,187,577 as of December 31, 2013, representing a decrease of $1,209,942. This decrease is mainly attributable to a decrease in prepaid deposit, represented by mining rights that were reclassified as such on the consolidated balance sheet as at December 31, 2013, of $612,431, by a decrease in cash of $500,155, by an increase in convertible notes carrying value of $86,214, by an increase in derivative liabilities of $366,398 and offset by an increase in investor notes receivable of $254,444. We have invested most of our funds to complete the infrastructure and construction on the mill.

As of June 30, 2014, the cost of fixed assets totaled $1,406,973 and consisted of the mill building at a cost value of $1,089,415, land at a cost value of $111,587, mill equipment at a cost value of $43,115, computer equipment at a cost of $5,867, office equipment at a cost value of $14,711, a vehicle at a cost value of $25,127 and an asset related to retirement obligation of $117,151. As of June 30, 2014, net fixed assets totaled $1,391,642. As of December 31, 2013, the cost of fixed assets totaled $1,285,766 and consisted of the mill building at a cost value of $1,089,415, land at a cost value of $108,974, mill equipment at a cost value of $43,115, computer equipment at a cost value of $4,424, office equipment at a cost value of $14,711 and a vehicle at a cost value $25,127. As of December 31, 2013, net fixed assets totaled $1,276,304. The primary reason for the difference in fixed assets between December 31, 2013 and June 30, 2014 is attributable to the increase in asset related to retirement obligation of $117,151.

As of June 30, 2014, the cost of mining claims totaled $1,035,818. As of December 31, 2013, the cost of mining claims totaled $15,000. The primary reason for the difference in mining claims between December 31, 2013 and June 30, 2014 is attributable to the completion of three (3) acquisitions of mining properties during the six months ended June 30, 2014. The cost of the first acquisition for 2 mining claims was $612,431, the second acquisition for 29 mining claims was $403,840 and the third acquisition for 57 mining claims was $4,547. The initial acquisition of 15 mining claims was for $15,000. As of June 30, 2014, the Company held 103 mining claims.

As of June 30, 2014, we had an accumulated deficit totaling $5,789,058 as compared to $4,710,522 as of December 31, 2013. The $1,078,536 increase in the accumulated deficit is attributable to the loss recorded for the six months ended June 30, 2014.

The success of our mining operations business and the ability to continue as a going concern will be dependent upon our ability to obtain additional and adequate financing to commence profitable commercial activities in the extraction of gold, silver and other base metals and meet anticipated performance specifications on a continuous and long term commercial basis.

Going Concern

Our consolidated financial statements have been prepared on a going concern basis. The going concern basis of presentation assumes that we will continue in operation for the foreseeable future and be able to realize assets and discharge its liabilities and commitments in the normal course of business. We have not generated revenues since our inception and we have generated losses totaling $2,937,475 and $797,126 for the years ended December 31, 2013 and 2012, respectively, losses totaling $1,078,536 and $1,425,218 for the six months ended June 30, 2014 and 2013, respectively. We have had very little operating history to date.

Our continuation as a going concern is dependent upon, amongst other things, continued financial support from our shareholders, attaining a satisfactory revenue level, attainment of profitable operations and the generation of cash from operations and the ability to secure new financing arrangements and new capital to carry out our business plan. These matters are dependent on a number of items outside of our control and there exists material uncertainties that may cast significant doubt about our ability to continue as a going concern. There are no assurances that we will achieve profitability or be capable of sustaining profitable operations. Our consolidated financial statements do not include any adjustments relating to the recoverability and classification of the carrying amounts of assets or the amount and classification of liabilities that might result if we are unable to continue as a going concern. These factors raise substantial doubt regarding our ability to continue as a going concern.

Off-Balance Sheet Arrangements

We are not currently a party to, or otherwise involved with, any off-balance sheet arrangements that have or are reasonably likely to have a current or future material effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

ITEM 3 – QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

Foreign Currency Exchange Rate Risk

We hold cash balances in both U.S. and Canadian dollars. We transact most of our financing in U.S. dollars and operational business in Canadian dollars. Some of our operational expenses denominated in Canadian dollars include building costs, labor costs and materials and supplies. As a result, currency exchange fluctuations may impact our operating costs. We do not manage our foreign currency exchange rate risk through the use of financial or derivative instruments, forward contracts or hedging activities.

In general, we do not believe that any weakening or strengthening of the U.S. dollar as compared to the Canadian dollar will have a positive or adverse material effect on our results of operations.

Interest Rate Risk

Our investment policy for our cash and cash equivalents is focused on the preservation of capital and supporting our liquidity requirements. We do not use interest rate derivative instruments to manage exposure to interest rate changes. We do not believe that interest rate fluctuations will have any effect on our results of operations.

Cyber-security Risk

We do not believe that we are subject to any undue cyber-security risk that may have an adverse material effect on our results of operations.

ITEM 4 – CONTROLS AND PROCEDURES

(a)	Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our President & Chief Executive Officer and our Chief Financial Officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) and determined that our disclosure controls and procedures were effective as of the end of the period covered by this Quarterly Report on Form 10-Q. The evaluation considered the procedures designed to ensure that the information required to be disclosed by us in reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and communicated to our management as appropriate to allow timely decisions regarding required disclosure.

(b)	Changes in Internal Control over Financial Reporting

During the period covered by this Quarterly Report on Form 10-Q, there was no change in our internal control over financial reporting (as such term is defined in Rules 13a-15(d) and 13d-15(d) under the Exchange Act) that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

(c)	Inherent Limitations of Disclosure Controls and Internal Controls over Financial Reporting

Because of its inherent limitations, internal controls over financial reporting may not prevent or detect misstatements. Projections of any evaluation or effectiveness to future periods are subject to risks that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

PART II - OTHER INFORMATION

ITEM 1 – LEGAL PROCEEDINGS

None.

ITEM 1A – RISK FACTORS

As a Smaller Reporting Company, we are not required to include risk factors in our Forms 10-Q. Nonetheless, the reader may review the risk factors included in our most recent Form 10-K for the fiscal year ended December 31, 2013 that was filed with the SEC on March 26, 2014.

ITEM 1B – UNRESOLVED STAFF COMMENTS

None.

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

We have issued shares of our common stock for services rendered, capital formation and corporate acquisitions. We relied on the exemption provisions of Section 4(2) of the Securities Act. We have also offered shares pursuant to the exemption provisions of Regulation S.

In May 2010, we issued to 28 purchasers residing in Canada an aggregate of 18,000,000 shares of our common stock at a purchase price of $.003 per share for a total of $54,000. Those shares were issued in transactions which qualify for that exemption from the registration and prospectus delivery requirements of the Securities Act of 1933, as amended (“Securities Act”), as specified by the provisions of Regulation S. Accordingly, none of those purchasers are U.S. persons as that term is defined in Regulation S. No underwriters were used, thus no commissions or other remuneration was paid. The securities were sold in an offshore transaction relying on Rule 903 of Regulation S of the Securities Act. We, any distributor, any of their respective affiliates or any person acting on behalf of any of the foregoing made no directed selling efforts in the United States. We are subject to Category 3 of Rule 903 of Regulation S and accordingly we implemented the offering restrictions required by Category 3 of Rule 903 of Regulations S by including a legend on all offering materials and documents which stated that the shares have not been registered under the Securities Act and may not be offered or sold in the United States or to US persons unless the shares are registered under the Securities Act, or an exemption from the registration requirements of the Securities Act is available.

In June 2010, we offered and sold to 5 United States purchasers 2,000,000 shares of our common stock at a purchase price of $.003 per share for a total of $6,000. The transactions did not involve a public offering of our securities and, therefore, were exempt from the registration and prospectus delivery requirements of the Securities Act pursuant to the provisions of Section 4(2) of the Securities Act. In connection with the offer and sale of those 2,000,000 shares, no general solicitation or advertising was used. The purchasers had pre-existing relationships with us on the dates we sold the 2,000,000 shares to them. No commission was paid in connection with the offer and sale of these 2,000,000 shares.

In 2011, we: (a) issued 5,000,000 common stock shares to acquire mining rights at a value of $15,000; (b) issued 5,000,000 shares of common stock to board members for services at a value of $15,000; (c) issued 1,000,000 shares of common stock for payment of interest on the promissory note of $3,000; (d) sold 3,350,000 common stock shares in a private placement of our securities totaling $670,000; (e) issued 1,500,000 common stock shares as consideration in employment agreements valued at $1,500,000; and (f) issued 250,000 common stock shares valued at $50,000 for engineering services. We relied on the exemption provisions of Securities Act Section 4(2) in issuing these securities.

There were no sales of unregistered securities in 2012. During the fiscal year ended December 31, 2012, we sold a total of 7,852,000 shares of our registered common stock for $1,963,000 with 6,924,000 of these shares being issued during the year ended December 31, 2012 and the remaining 928,000 shares were issued in during the three month period ended March 31, 2013. Also during the three month period ended March 31, 2013, we sold an additional 1,576,000 shares of our registered common stock for $394,000 and issued the shares during the three month period ended March 31, 2013. We used the proceeds from the sale of the 9,428,000 shares in 2012 and 2013 for working capital purposes including but not limited to the mill site building, infrastructure build-out, purchase of machines and equipment, wages and professional fees.

During the three months ended September 30, 2013, we sold 440,000 shares of our unregistered stock for $110,000. 400,000 of the shares were issued during the three months ended September 30, 2013 and the remaining 40,000 shares were issued in October 2013. During the three months ended December 31, 2013, we sold and issued 1,768,000 shares of our unregistered stock for $442,000.

With respect to the sale of the securities identified above, we relied on the exemption provisions of Section 4(2), Regulation S or Section 3(a) 10 of the Securities Act, as amended.

At all relevant times, the securities were offered subject to the following terms and conditions:

The sale was made to a sophisticated or accredited investor, as defined in Rule 502 or were issued pursuant to a specific exemption;

We gave the purchaser the opportunity to ask questions and receive answers concerning the terms and conditions of the offering and to obtain any additional information which we possessed or could acquire without unreasonable effort or expense that is necessary to verify the accuracy of information furnished;

At a reasonable time prior to the sale of securities, we advised the purchaser of the limitations on resale in the manner contained in Rule 502(d)2; and

Neither we nor any person acting on our behalf sold the securities by any form of general solicitation or general advertising.

ITEM 3 – DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4 – MINE SAFETY DISCLOSURE

Not applicable. We have no operational mines, in production or otherwise. We are subject to certain mining rules and regulations as promulgated by the Quebec Provincial government and other local municipalities and we have never been cited for any mining violations.

ITEM 5 – OTHER INFORMATION

Not applicable

ITEM 6 – EXHIBITS

Exhibit No.		Description

31.1		Rule 13a-14(a)/15d14(a) Certifications of Mark Holbrook Chief Executive Officer and Director (attached hereto)

31.2		Rule 13a-14(a)/15d14(a) Certifications of Cora J. Holbrook, the CFO (attached hereto)

32.1		Section 1350 Certifications of Mark Holbrook, the President, Chief Executive Officer and Director (attached hereto)

32.2		Section 1350 Certifications Cora Holbrook (attached hereto)

101.INS**		XBRL INSTANCE DOCUMENT

101.SCH**		XBRL TAXONOMY EXTENSION SCHEMA

101.CAL**		XBRL TAXONOMY EXTENSION CALCULATION LINKBASE

101.DEF**		XBRL TAXONOMY EXTENSION DEFINITION LINKBASE

101.LAB**		XBRL TAXONOMY EXTENSION LABEL LINKBASE

101.PRE**		XBRL TAXONOMY EXTENSION PRESENTATION LINKBASE

_____________

** XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.

SIGNATURES

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

		DNA Precious Metals, Inc.

Date: August 19, 2014		By: /s/ James Chandik

		James Chandik, Chief Executive Officer & President

Date: August 19, 2014		By: /s/ Tony J. Giuliano

		Tony J. Giuliano, Chief Financial Officer

WHITE FOX VENTURES, INC. - FORM 10-Q - August 19, 2014

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WHITE FOX VENTURES, INC. Reports