Our current operating funds are significantly less than necessary to complete all intended exploration of the property, and therefore we will need to obtain additional financing in order to complete our business plan. As of October 31, 2014, we had approximately $22,766 in cash.
We have budgeted expenditures for the TMC project for the next twelve months of approximately $2,100,000, depending on additional financing, for general and administrative expenses and exploration.
Our business plan calls for significant expenses in connection with the exploration of the property. We do not currently have sufficient funds to conduct continued exploration on the property and require additional financing in order to determine whether the property contains economic mineralization. We will also require additional financing if the costs of the exploration of the property are greater than anticipated.
As of February 10, 2015, we have $4,352,115 plus accrued interest of $1,436,351due to BOCO Investments LLC on three secured promissory notes that are now in default. While the Company has been attempting to negotiate an extension or other modification as we do not have the ability to repay the amount due, such negotiations have been ongoing for over a year and accordingly, there can be no assurance that we will be able extend the notes or to renegotiate the terms of these promissory notes under terms that are favorable to the Company. We are currently incurring interest at a default interest rate of 45% per year. If the Company is not successful at negotiating an extension or other modification, it may have to restructure its operations, divest all or a portion of its business, or file for bankruptcy.
On March 20, 2013, the Company entered into forward sale and loan agreements with three accredited investors for an aggregate loan of $600,000. The Company was required to tender, in the aggregate, no less than 600 ounces of gold in bar form to the three accredited investors by September 15, 2013. On November 1, 2013, the Company settled with one of the parties that had an agreement for 200 ounces of gold for 310,000 shares of common stock valued at $1.00 per share, plus warrants for an additional 310,000 shares at an exercise price of $1.50 per share. The second party obtained a judgment against the Company on March 31, 2014 for the amount of $204,143 plus attorneys fees and costs. On August 25, 2014 the Company reached a settlement agreement with the party whereby we paid $100,000 in cash and issued 266,667 shares of our common stock valued $0.45 per share, or $120,000 for a full satisfaction of the judgment. The Company recorded a loss of $70,000 to settle this forward contract.
The Company is continuing to negotiate with the third lender, Snowmass Mining Co., LLC, who is owed $300,000 (payable in cash or gold), together with interest thereon from September 15, 2013. The Company has paid Snowmass the sum of $100,000 during the twelve months ended October 31, 2014.
As of October 31, 2014, the value of the gold obligation to Snowmass is $300,000. The difference between the amount received and the fair value of the obligation will be recorded as additional interest expense or income at each reporting date based on the fair value of gold. During the twelve months ended October 31, 2014, the Company recorded additional interest expense of $270,704 for the change in the value of gold from October 31, 2013.
We will require additional financing to sustain our business operations if we are not successful in earning revenues once exploration is complete. We do not currently have any arrangements for financing and we can provide no assurance to investors that we will be able to find such financing if required. Obtaining additional financing would be subject to a number of factors, including the market prices for copper, silver and gold, investor acceptance of our property and general market conditions. These factors may make the timing, amount, terms or conditions of additional financing unavailable to us.
The most likely source of future funds presently available to us is through the sale of equity capital. Any sale of share capital will result in dilution to existing shareholders. The only other anticipated alternative for the financing of further exploration would be our sale of a partial interest in the property to a third party in exchange for cash or exploration expenditures, which is not presently contemplated.
Because our secured loans are in default, our secured creditor could foreclose at any time on our assets.
Our debt to BOCO Investments LLC is secured by a security interest in all of the Companys assets and we are currently in default on these loans. BOCO has not indicated its intentions regarding its rights and remedies under the loan and security agreements with the Company, but one remedy is the ability to foreclose on all of our assets, including our primary asset, the TMC project.
The volatility of the price of gold could adversely affect our future operations and our ability to develop our properties.
The potential for profitability of our operations, the value of our properties and our ability to raise funding to conduct continued exploration, if warranted, are directly related to the market price of gold and other precious metals. The price of gold may also have a significant influence on the market price of our common stock and the value of our properties. Our decision to put a mine into production and to commit the funds necessary for that purpose must be made long before the first revenue from production would be received. A decrease in the price of gold may prevent our property from being economically mined or result in the write-off of assets whose value is impaired as a result of lower gold prices.
As of February 10, 2015, the price of gold was $1,233.70 per ounce, based on the daily London PM fix on that date. The volatility of mineral prices represents a substantial risk which no amount of planning or technical expertise can fully eliminate. In the event gold prices decline or remain low for prolonged periods of time, we might be unable to develop our properties, which may adversely affect our results of operations, financial performance and cash flows.