Lode-Star Mining Inc. - FORM 10-Q

Attached files

file	filename
EX-32.1 - CERTIFICATION PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 FOR THE CHIEF EXECUTIVE AND CHIEF FINANCIAL OFFICER. - Lode-Star Mining Inc.	exhibit_32-1.htm
EX-31.1 - CERTIFICATION OF PRINCIPAL EXECUTIVE AND PRINCIPAL FINANCIAL OFFICER PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002. - Lode-Star Mining Inc.	exhibit_31-1.htm

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

FORM 10-Q

x	QUARTERLY REPORT UNDER TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2015

OR

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

Commission file number 000-53676

LODE-STAR MINING INC.

(formerly International Gold Corp.)

(Exact name of registrant as specified in its charter)

NEVADA

(State or other jurisdiction of incorporation or organization)

13529 Skinner Road, Suite N

Cypress, TX 77429-1775

(Address of principal executive offices, including zip code.)

(832) 371-6531

(Telephone number, including area code)

666 Burrard Street, Suite 600

Vancouver, British Columbia

Canada V6E 4M3

(Former name, former address and former fiscal year, if changed since last report)

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the last 90 days. YES x NO o

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,” “non-accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer	o	Accelerated Filer	o
Non-accelerated Filer	o	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 o NO þ

State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date: 47,658,000 as of November 6, 2015.

TABLE OF CONTENTS

	Page
PART I - FINANCIAL INFORMATION

Item 1. Financial Statements	3

Balance Sheets as of September 30, 2015 (unaudited) and December 31, 2014	4

Statements of Operations for the Three Months and Nine Months ended September 30, 2015 and 2014 (unaudited)	5

Statements of Cash Flows for the Nine Months ended September 30, 2015 and 2014 (unaudited)	6

Notes to Financial Statements (unaudited)	7

Item 2. Management’s Discussion and Analysis Of Financial Condition and Results of Operations	12

Item 3. Quantitative and Qualitative Disclosures About Market Risk	18

Item 4. Controls and Procedures	19

PART II - OTHER INFORMATION

Item 1A. Risk Factors	19

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	19

Item 6. Exhibits	20

SIGNATURES	21

PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.

LODE-STAR MINING INC.

(formerly International Gold Corp.)

INTERIM FINANCIAL STATEMENTS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2015 AND 2014

(Unaudited)

(Stated in U.S. Dollars)

LODE-STAR MINING INC.

(formerly International Gold Corp.)

INTERIM BALANCE SHEETS

(Stated in U.S. Dollars)


	SEPTEMBER 30			DECEMBER 31
	2015			2014
	(Unaudited)
ASSETS

Current
Cash	$	11,000		$	5,372
Prepaid fees		2,285			-
		13,285			5,372
Mineral Property Interest		230,180			230,180
	$	243,465		$	235,552

LIABILITIES

Current
Accounts payable and accrued liabilities	$	546		$	38,397
Loans payable		388,965			275,178
		389,511			313,575
Contractual Obligations, Commitments And Subsequent Events (Note 7)

STOCKHOLDERS’ DEFICIENCY

Capital Stock
Authorized:
100,000,000 voting common shares with a par value of $0.00001 per share

Issued:
47,658,000 common shares at September 30, 2015 and 46,509,000 common shares at December 31, 2014		477			465

Additional Paid-In Capital		975,416			922,215
Accumulated Deficit		(1,121,939	)		(1,000,703	)
		(146,046	)		(78,023	)

	$	243,465		$	235,552

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

Approved on behalf of the Board of Directors

/s/ Mark Walmesley		/s/ Thomas Temkin
Director		Director

LODE-STAR MINING INC.

(formerly International Gold Corp.)

INTERIM STATEMENTS OF OPERATIONS

(Unaudited)

(Stated in U.S. Dollars)


	THREE MONTHS ENDED						NINE MONTHS ENDED
	SEPTEMBER 30						SEPTEMBER 30
	2015			2014			2015			2014

Revenue	$	-		$	-		$	-		$	-

Expenses
Consulting services		6,102			9,789			19,356			61,590
Corporate support services		1,140			-			3,691			-
Interest, bank and finance charges		5,544			3,252			14,613			7,970
Office, foreign exchange and sundry		(2,306	)		(2,763	)		3,756			(2,723	)
Professional fees		10,592			16,769			50,301			38,800
Transfer and filing fees		2,470			3,064			29,519			10,280
		23,542			30,111			121,236			115,917

Loss from operations		(23,542	)		(30,111	)		(121,236	)		(115,917	)

Other income		-			19,599			-			19,599

Net Loss For The Period	$	(23,542	)	$	(10,512	)	$	(121,236	)	$	(96,318	)

Basic And Diluted Loss Per Common Share	$	(0.00	)	$	(0.00	)	$	(0.00	)	$	(0.01	)

Weighted Average Number Of Common Shares Outstanding		47,658,000			11,509,000			47,253,956			11,509,000

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

LODE-STAR MINING INC.

(formerly International Gold Corp.)

INTERIM STATEMENTS OF CASH FLOWS

(Unaudited)

(Stated in U.S. Dollars)


	NINE MONTHS ENDED
	SEPTEMBER 30
	2015			2014

Cash Provided By (Used In):

Operating Activities
Net loss for the period	$	(121,236	)	$	(96,318	)
Adjustments to reconcile net loss to net cash used in operating activities:
(Decrease) increase in accrued interest payable		(12,648	)		6,171
Net changes in non-cash operating working capital items:
Increase in prepaid fees and advances		(2,285	)		(8,300	)
(Decrease) increase in accounts payable and accrued liabilities		(37,851	)		29,990

		(174,020	)		(68,457	)
Financing Activities
Loan advances		179,648			84,628

Net Increase In Cash		5,628			16,171

Cash, Beginning Of Period		5,372			21

Cash, End Of Period	$	11,000		$	16,192

Supplemental Disclosure Of Cash Flow Information
Cash paid during the period for:
Interest	$	-		$	-
Income taxes	$	-		$	-
Shares issued for debt settlement	$	53,213		$	21,750

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

LODE-STAR MINING INC.

(formerly International Gold Corp.)

CONDENSED NOTES TO INTERIM FINANCIAL STATEMENTS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2015 AND 2014

(Unaudited)

(Stated in U.S. Dollars)

BASIS OF PRESENTATION AND NATURE OF OPERATIONS

Organization

Lode-Star Mining Inc. (formerly International Gold Corp.) (“the Company”) was incorporated in the State of Nevada, U.S.A., on December 9, 2004. The Company’s principal executive offices are located in Vancouver, British Columbia, Canada. The Company was originally formed for the purpose of acquiring exploration stage natural resource properties. The Company acquired a mineral property interest from Lode Star Gold Inc., a private Nevada corporation (“LSG”) on December 11, 2014 (See Note 3) in consideration for the issuance of 35,000,000 common shares of the Company. As a result of this transaction, control of the Company was acquired by LSG.

On May 12, 2015, International Gold Corp. completed a merger with its wholly owned subsidiary, Lode-Star Mining Inc., and formally assumed the subsidiary’s name by filing Articles of Merger with the Nevada Secretary of State (the “Name Change”). The subsidiary was incorporated entirely for the purpose of effecting the Name Change and the merger did not affect the Company’s corporate structure in any other way.

Going Concern

The accompanying financial statements have been prepared assuming the Company will continue as a going concern.

The future of the Company is dependent upon its ability to establish a business and to obtain new financing to execute a business plan. As shown in the accompanying financial statements, the Company has incurred accumulated losses of $1,121,939 for the period from December 9, 2004 (inception) to September 30, 2015, and has had no revenue. There is no assurance that management’s plans to seek additional capital through private placements of its common stock will be realized, and these factors cast substantial doubt upon the use of the going concern assumption. These financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts of and classification of liabilities that might be necessary in the event the Company cannot continue in existence.

Basis of Presentation

The unaudited financial information furnished herein reflects all adjustments which, in the opinion of management, are necessary to fairly state the Company’s financial position and the results of its operations for the periods presented. These third quarter financial statements should be read in conjunction with the Company’s financial statements and notes thereto included in the Company’s report on Form 10-K for the year ended December 31, 2014. The Company assumes that the users of the interim financial information herein have read, or have access to, the audited financial statements for the preceding fiscal year, and that the adequacy of additional disclosure needed for a fair presentation may be determined in that context. Accordingly, footnote disclosure, which would substantially duplicate the disclosure contained in the Company’s financial statements for the fiscal year ended December 31, 2014, has been omitted. The results of operations for the nine month period ended September 30, 2015 are not necessarily indicative of results for the entire year ending December 31, 2015.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”). Because a precise determination of many assets and liabilities is dependent upon future events, the preparation of financial statements for a period necessarily involves the use of estimates which have been made using careful judgment. All dollar amounts are in U.S. dollars unless otherwise noted.

The financial statements have, in management’s opinion, been properly prepared within reasonable limits of materiality and within the framework of the significant accounting policies summarized below:

LODE-STAR MINING INC.

(formerly International Gold Corp.)

CONDENSED NOTES TO INTERIM FINANCIAL STATEMENTS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2015 AND 2014

(Unaudited)

(Stated in U.S. Dollars)

2.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Basis of Accounting

The Company’s financial statements have been prepared using the accrual method of accounting. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the periods presented have been reflected herein.

Cash and Cash Equivalents

Cash consists of cash on deposit with high quality major financial institutions. For purposes of the balance sheets and statements of cash flows, the Company considers all highly liquid debt instruments purchased with maturity of 90 days or less to be cash equivalents. At September 30, 2015 and December 31, 2014, the Company had no cash equivalents.

Foreign Currency Accounting

The Company’s functional currency is the U.S. dollar. Head office financing and investing activities are generally in Canadian dollars. Transactions in Canadian currency are translated into U.S. dollars as follows:

monetary items at the exchange rate prevailing at the balance sheet date;

ii)

non-monetary items at the historical exchange rate; and

iii)

revenue and expense items at the rate in effect of the date of transactions.

		Gains and losses arising on the settlement of foreign currency denominated transactions or balances are recorded in the statements of operations.

	d)	Fair Value of Financial Instruments

		ASC Topic 820-10 establishes a three-tier value hierarchy, which prioritizes the inputs used in measuring fair value. The hierarchy prioritizes the inputs into three levels based on the extent to which inputs used in measuring fair value are observable in the market. These tiers include:

Level 1 – defined as observable inputs such as quoted prices in active markets;

Level 2 – defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and

Level 3 – defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions.

The Company’s financial instruments consist of cash, accounts payable and accrued liabilities, and loans payable. The Company is not exposed to significant interest, currency or credit risks arising from these financial instruments. Pursuant to ASC 820 and 825, the fair value of cash is determined based on “Level 1” inputs, which consist of quoted prices in active markets for identical assets. Accounts payable and accrued liabilities and loans payable are measured using “Level 2” inputs as there are no quoted prices in active markets for identical instruments. The carrying values of cash, accounts payable and accrued liabilities, and loans payable approximate their fair values due to the immediate or short term maturity of these financial instruments.

LODE-STAR MINING INC.

(formerly International Gold Corp.)

CONDENSED NOTES TO INTERIM FINANCIAL STATEMENTS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2015 AND 2014

(Unaudited)

(Stated in U.S. Dollars)

2.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Use of Estimates and Assumptions

The preparation of financial statements, in conformity with GAAP, requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying disclosures. By their nature, these estimates are subject to measurement uncertainty and the effect on the financial statements of changes in such estimates in future periods could be significant. Significant areas requiring management’s estimates and assumptions are determining the fair value of transactions involving related parties and common stock. Actual results may differ from the estimates.

Basic and Diluted Earnings (Loss) Per Share

The Company reports basic earnings or loss per share in accordance with ASC Topic 260, “Earnings Per Share”. Basic earnings or loss per share is calculated based on the weighted average number of common stock outstanding during the period. In periods with net income, the diluted per share amounts would include the dilutive effect of any common stock equivalents such as outstanding warrants or stock options. In periods with net losses, basic and diluted loss per share are the same, as including the effect of any common stock equivalents would be anti-dilutive. The Company has no stock option plan, warrants or other dilutive securities.

Income Taxes

The Company uses the asset and liability method of accounting for income taxes in accordance with ASC Topic 740, Income Taxes. This standard requires the use of an asset and liability approach for financial accounting and reporting on income taxes. If it is more likely than not that some portion or all of a deferred tax asset will not be realized, a valuation allowance is recognized.

Recent Accounting Pronouncements

The Company has implemented all applicable new accounting pronouncements that are in effect. Those pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.

MINERAL PROPERTY INTEREST

On December 5, 2014, the Company entered into a subscription agreement (the “Subscription Agreements”) with Lode Star Gold Inc. (“LSG”), a private Nevada corporation controlled by the spouse of the Company’s current President, pursuant to which the Company agreed to issue 35,000,000 shares of its common stock, valued at $230,180, to LSG in exchange for a 20% undivided interest in and to the mineral claims owned by LSG. The mineral claims, known as the “Goldfield Bonanza Project” (the “Property”), are located in the State of Nevada.

The execution of the Subscription Agreement was one of the closing conditions of an Option Agreement dated October 4, 2014, pursuant to which the Company acquired the sole and exclusive option to earn up to an 80% undivided interest in and to the Property. In order to earn the additional 60% interest in the Property, the Company is required to fund all expenditures on the Property and pay LSG an aggregate of $5 million in cash in the form of a net smelter royalty, each beginning on the Closing Date, which was December 11, 2014. Until such time as the Company has earned the additional 60% interest, the net smelter royalty will be split 79.2% to LSG, 19.8% to the Company and 1% to the former Property owner.

If the Company fails to make any cash payments to LSG within one year of the Closing Date, it is required to pay LSG an additional $100,000, and in any subsequent years in which the Company fails to complete the payment of the entire $5 million described above, it must make quarterly cash payments to LSG of $25,000 until such time as the Company has earned the additional 60% interest in the Property. Effective December 10, 2015, at the request of the Company’s management, LSG granted the Company a six month deferment of the payment to June 11, 2016, while permitting for operations on the Property is being completed.

LODE-STAR MINING INC.

(formerly International Gold Corp.)

CONDENSED NOTES TO INTERIM FINANCIAL STATEMENTS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2015 AND 2014

(Unaudited)

(Stated in U.S. Dollars)

MINERAL PROPERTY INTEREST (Continued)

In addition, the Option Agreement provides that the Company will act as the operator on the Property and that a management committee will be formed, comprised of representatives from the Company and LSG, with voting based on each party’s proportionate interest, to supervise exploration of the Property and approve work programs and budgets. To September 30, 2015, no work programs had been approved.

CAPITAL STOCK

During the nine months ended September, 2015, the Company had no cash subscriptions for shares of its common stock.

On January 9, 2015, agreements were reached in connection with the loans of $24,696 (CAD $28,650) and $1,767 (CAD $2,050) whereby the loan amounts were to be converted to Company shares at a price of CAD $0.05, to result in the issuance of 573,000 and 41,000 common shares respectively. Those shares were issued on April 6, 2015.

On March 19, 2015, an agreement was reached to modify the terms of a loan such that $26,750 of accrued interest together with a premium was to be converted to Company shares at a price of $0.05 per share, to result in the issuance of 535,000 common shares. Those shares were issued on April 6, 2015.

During the year ended December 31, 2014, the Company received no cash subscriptions for shares of its common stock, however, on December 11, 2014, the Company issued 35,000,000 shares, valued at $230,180, in exchange for a mineral property interest as described in Note 3.

The Company has no stock option plan, warrants or other dilutive securities.

5.	LOANS PAYABLE At September 30, 2015, the Company had the following loans payable:

$1,000 (December 31, 2014 - $5,000): unsecured; interest at 15% per annum; originally due on April 20, 2012.

On March 19, 2015, $4,000 was paid by the Company in partial settlement of the December 31, 2014 principal balance.

ii)

$75,000 (December 31, 2014 - $75,000): unsecured; interest at 10% per annum from January 10, 2015.

One-half of the outstanding principal, or $37,500, and any accrued interest shall become due and payable on written demand in full (not received to date) on the earlier of June 9, 2015 or the date on which the Company completes one or more debt or equity financings that generate aggregate gross proceeds of at least $250,000;

The balance of the outstanding principal, or $37,500, and any accrued interest shall become due and payable on written demand in full on January 9, 2016; and

The Company shall have the right to repay all or any part of the Principal and any accrued interest to the Lender at any time and from time to time, without any premium.

iii)

$39,835 (December 31, 2015 - $34,160): unsecured; interest at 5% per annum; with no specific terms of repayment.

iv)

$240,000 (December 31, 2014 - $100,000): unsecured; interest at 5% per annum from January 1, 2015; with no specific terms of repayment.

$11,801 (December 31, 2014 - $Nil): unsecured; interest at 5% per annum; with no specific terms of repayment.

vi)

$3,733 (December 31, 2014 - $4,310): unsecured; non-interest bearing; with no specific terms of repayment.

vii)

$Nil (December 31, 2014 - $24,696): unsecured; non-interest bearing; with no specific terms of repayment (converted on January 9, 2015 to shares that were issued on April 6, 2015).

viii)

$Nil (December 31, 2014 - $1,767): unsecured; non-interest bearing; with no specific terms of repayment (converted on January 9, 2015 to shares that were issued on April 6, 2015).

LODE-STAR MINING INC.

(formerly International Gold Corp.)

CONDENSED NOTES TO INTERIM FINANCIAL STATEMENTS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2015 AND 2014

(Unaudited)

(Stated in U.S. Dollars)

5.	LOANS PAYABLE (Continued) As of September 30, 2015, interest totaling $17,596 (December 31, 2014 - $30,244) was accrued on the above loan amounts.

6.	RELATED PARTY TRANSACTIONS AND AMOUNTS DUE Transactions with related parties were in the normal course of operations and have been valued in these financial statements at the exchange amount, which is the amount of consideration agreed to and established by the related parties.

Related Party Amounts Due

At September 30, 2015, $Nil (December 31, 2014 - $15,300) included in accounts payable was due to a company controlled by a former director and president of the Company.

At September 30, 2015, the following loan amounts and accrued interest were due to related parties:

$41,995 (December 31, 2014 - $35,043) including $2,160 (December 31, 2014 - $883) in accrued interest, to the current president of the Company.

ii)

$258,761 (December 31, 2014 - $100,000) including $6,960 (December 31, 2014 - $Nil) in accrued interest, to the majority shareholder of the Company for two loans.

iii)

$3,733 (December 31, 2014 - $4,310) to the controlling shareholder of the majority shareholder of the Company.

Consulting Services

During the nine months ended September 30, 2015, the Company incurred $Nil (2014 - $51,801) in consulting fees to a former director and president of the Company. See Note 7.

CONTRACTUAL OBLIGATIONS, COMMITMENTS AND SUBSEQUENT EVENTS

See Note 3 for details about the Company’s obligations and commitments regarding its Mineral Property Interest.

On February 21, 2012, the Company entered into a consulting agreement whereby the former sole director and officer of the Company was to provide services as the Company’s CEO, COO, CFO and Corporate Secretary. The consulting agreement, which would otherwise have extended to June 2016, was terminated with immediate effect in accordance with a settlement agreement dated December 5, 2014.

Under the terms of that settlement agreement, the Company agreed to pay an aggregate of $34,000 CAD.

Of that amount, $Nil was outstanding and included in accounts payable at September 30, 2015 (December 31, 2014: $17,500 CAD ($15,300 USD)).

Given that permitting for operations on the Property is still to be completed, at the request of the Company’s management, LSG granted, by a letter of agreement dated November 10, 2015, a six month deferment to June 11, 2016 of the $100,000 payment otherwise due within one year of the Closing Date (i.e. on December 11, 2015) if the Company fails to make any cash payments to LSG.

Management has evaluated subsequent events and the impact on the reported results and disclosures and has concluded that no other significant events require disclosure as of the date these financial statements were issued.

ITEM 2.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited consolidated financial statements and related notes appearing elsewhere in this Quarterly Report. In addition to historical financial information, the following discussion includes a number of forward-looking statements that reflect our plans, estimates and our current views with respect to future events and financial performance. Forward-looking statements are often identified by words like: believe, expect, estimate, anticipate, intend, project and similar expressions, or words which, by their nature, refer to future events. You should not place undue certainty on these forward-looking statements, which apply only as of the date of this report. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.

Recent Developments

On August 29, 2014, we entered into a Letter of Intent (the “LSG LOI”) with Lode-Star Gold, Inc. (“LSG"), a private Nevada corporation, pursuant to which we agreed to issue shares of our common stock and make certain payments to LSG in consideration for the acquisition of an interest in LSG's Nevada Goldfield Bonanza property (the “Property”). As a result of the intended transaction, control of us would be acquired by LSG.

On October 4, 2014, we entered into a definitive mineral option agreement (the "Option Agreement") with which superseded the LSG LOI. Pursuant to the Option Agreement, we were to issue LSG 35,000,000 shares of our common stock in exchange for a 20% undivided interest in the Property (the “Acquisition”). In order to earn an additional 60% undivided interest in the Property (for a total of 80%), we are required to fund all expenditures on the Property and pay LSG an aggregate of $5 million in cash in the form of a net smelter returns ("NSR") royalty, each beginning on the closing date of a subscription agreement for the shares (the “Closing Date”). Until such time as ITGC has earned the additional 60% interest, the NSR royalty will be split as to 79.2% to LSG, 19.8% to us and 1% to the former Property owner.

On December 5, 2014, we entered into a subscription agreement (the “Subscription Agreement”) with LSG pursuant to which we agreed to issue the 35,000,000 shares. On the Closing Date of December 11, 2014, we satisfied all the closing conditions in the Subscription Agreement and issued the 35,000,000 shares of our common stock to LSG, thereby completing the Acquisition. As a result of the Acquisition, LSG became our controlling stockholder.

If we fail to make any cash payments to LSG within one year of the Closing Date, we are required to pay LSG an additional $100,000, and in any subsequent years in which we fail to complete the payment of the entire $5 million described above, we must make quarterly cash payments to LSG of $25,000 until such time as we have earned the additional 60% interest in the Property. Effective December 10, 2015, at the request of our management, LSG granted us a six month deferment of the payment to June 11, 2016, while permitting for operations on the Property is being completed.

The Property is located in west-central Nevada, in the Goldfield Mining District at Latitude 37° 42’, and Longitude 117° 14’. The claims comprising the Property are located in surveyed sections 35 and 36, Township 2 South, Range 42 East, and in sections 1, 2, 11, and 12, Township 3 South, Range 42 East, in Esmeralda County, Nevada. The Property is accessible by traveling approximately one-half mile northeast of the community of Goldfield, along a county-maintained road that originates at U.S. Highway 95, which runs through “downtown” Goldfield. The town of Goldfield, which is the Esmeralda county seat (population 300), is approximately 200 air miles south of Reno and 180 air miles north of Las Vegas.

The Property consists of 31 patented claims and 1 unpatented millsite claim, covering a total of approximately 460 acres, or 186 hectares. Only the single unpatented claim is administered by the United States Bureau of Land Management, and annual assessment filings and payments are due on it. The patented claims are owned as private land by LSG, and only annual property taxes must be paid.

The Option Agreement provides that we will act as the operator on the Property and that a management committee will be formed, comprised of representatives from us and LSG, with voting based on each party’s proportionate interest, to supervise exploration of the Property and approve work programs and budgets. As the operator, we are also obliged to perform a number of functions, including the following:

Consider, develop and submit work programs to the management committee for consideration and approval, and to implement work programs when approved;

Carry out operations in a prudent and workmanlike manner and in accordance with all applicable laws and regulations, and all agreements, permits and licenses relating to the Property and LSG;

Pay and discharge all wages and accounts for material and services and all other costs and expenses that may be incurred by us in connection with our operations on the property;

ITEM 2.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)

Maintain and keep in force and, upon request by LSG provide reasonable documentary verification of, levels of insurance as are reasonable in respect of our activities in connection with the Property;

Maintain true and correct books, accounts and records of expenditures; and

Deliver to the management committee quarterly and annual progress reports.

To the issuance date of this report, no work programs have been approved and LSG has borne all costs in connection with operations on the Property. We expect the first work program, entailing Property-related costs for which we will be responsible, to be approved early next year.

On November 11, 2015, our board of directors and stockholders holding a majority of our voting shares authorized the following actions:

Adoption of an omnibus equity incentive plan for directors, officers, and consultants;

Adoption of Amended and Restated Articles of Incorporation filed with the Secretary of State of Nevada to effect the following:

authorize our board of directors to change our corporate name to a name selected by our directors;

establish corporate codes and committees of the board of directors;

increase the number of shares of capital stock we are authorized to issue; and

authorize the issuance of preferred stock with preferences, limitations, and relative rights designated by our board of directors.

Further details are provided in our filing on November 13, 2015 of Schedule 14C on Form PRE 14C, which is incorporated herein by reference.

Personnel

We have no employees. Our president and CEO, Mark Walmesley, receives no compensation for his services. We expect to continue to use outside consultants, advisors, attorneys and accountants as necessary.

Robert Baker, our former Corporate Secretary and Director, resigned from his positions with us effective April 17, 2015. Mr. Baker was previously our President and CEO.

On January 19, 2015, Thomas Temkin was appointed as Chief Operating Officer and to the Board of Directors. Mr. Temkin is a Certified Professional Geologist and a Qualified Person under National Instrument (NI) 43101, with more than 38 years of experience in the mining industry, primarily in exploration in the Western United States. He is currently a consulting geologist working with LSG. Mr. Temkin has been associated with LSG and the Property for over 15 years and has been instrumental through its entire exploration program to date.

Daniel Capparelli was appointed as our Vice President of Mine Development and Operations on January 22, 2015, however he no longer holds that position and is no longer associated with us. LSG elected not to renew Mr. Capparelli's employment contract upon its expiration on July 11, 2015 due to the immediate need to prioritize the permitting process rather than mine development and operations. See our Plan of Operations below.

On April 22, 2015, Pam Walters was appointed as our Corporate Secretary to replace Robert Baker. Ms. Walters has been associated with the mining industry for over 25 years and has managed the corporate finance and business operations of LSG and its owners.

LSG’s History

LSG was incorporated in the State of Nevada on March 13, 1998 for the purpose of acquiring exploration stage mineral properties. It currently has one shareholder, Lonnie Humphries, who is the spouse of Mark Walmesley, our Chief Financial Officer, Treasurer and director prior to the completion of the Acquisition, and now our President and Chief Executive Officer as well. Mr. Walmesley is also the Director of Operations and a director of LSG.

LSG is an exploration stage company and has not generated any revenues since its inception. The Property represents its only material asset. LSG acquired the leases to the Property in 1997 and became the registered and beneficial owner of the Property on September 19, 2009. Since the earlier of those dates, it has conducted contract exploration work on the Property resulting in the identification of several high grade gold zones. This gold mineralization has not been determined to be resource NI 43-101 compliant.

Plan of Operations

We anticipate that we will require approximately $1,998,000 to pursue our plan of operations over the next 12 months, as detailed below:

Permitting

Our primary focus now is on the mine permitting process. LSM has retained the following specialists in underground permitting of narrow vein, high sulphide mines to assist in executing that permitting process:

Rubicon Environmental Consulting to act as the lead consultant

Hydrogeologica Inc. to consult on water and geology

Tierra Group International to consult on mine planning and engineering

ITEM 2.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)

Unique to our permitting is the proposed underground area of work named the Red Hills Stope Zone. It is 300 feet above the 600 foot deep water table, making the mine essentially a dry mine. All water to be used for drilling is city water with a PH value of 7, while the water table is PH 2 meaning; should any water from the work area reach the water table, the quality of the water is improved.

The mine’s 300 foot level workings has pockets of unused volume where our highly sulphuric acidic waste rock can be stored. This means no waste rock will come to the surface and LSM will avoid, for the short-term, the expense of having to build and maintain a surface storage facility.

We are hopeful that the two aforementioned mitigating circumstances will make our permitting process more rapid and therefore, the costs of execution and infrastructure improvements will be kept at a minimum.

Permitting costs are anticipated as follows:

Rubicon	$40,000
Hydrogeologica	$135,000
Tierra	$75,000
State / NDEP
Total	$250,000

Site and Equipment Preparation

Funds required for development and output from the Red Hills Vein Zone are as follows:

Surface Infrastructure, Mine Support & Personnel Accomodation

Office/Shop Building (existing)	$0
Trailer Accommodations	$60,000
Contingency	$40,000
Total	$100,000

Equipment and Mining Material

Pneumatic Jacklegs (6)	$24,000
Pneumatic Slusher/with bucket (used) (4)	$80,000
Pneumatic Tugger (used) (2)	$10,000
1-Yard Scoop (used)	$208,000
Stopers/Buzzies (4)	$8,000
Schwing Pump	$10,000
Compressor	$60,000
Hoist Rehab & Retrofitting	$100,000
Total	$500,000

Underground Rehab & Preliminary Mine Development

Labor - 3.75 man crew x 10 hrs/day x 1 month	$31,428
Equipment Maintenance	$38,212
Ground Support	$20,000
Consumables – small hand tools	$1,000
Utilities	$19,600
Total	$110,240

Ore Grade Control

Total

$50,000

ITEM 2.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)

Red Hills Vein Zone Mining

Labor – 3.75 man crew x 10 hrs/day x 5 months	$145,620
Timber	$13,200
Equipment Maintenance	$28,320
Ground Support	$13,400
Explosives	$10,665
Backfill Material	$46,454
Consumables - small hand tools	$5,000
Utilities	$4,835
Total	$267,494

General Corporate and Administration Fees

Personnel	$320,000
Regulatory	$120,000
General	$280,000
Total	$720,000

Toll Milling

We have no facilities to process ore and are negotiating with local mill operators to have our ore processed.

We do not currently have sufficient funds to carry out our entire plan of operations, so we intend to meet the balance of our cash requirements for the next 12 months through a combination of debt financing and equity financing through private placements. Currently we are active in contacting broker/dealers regarding possible financing arrangements; however, we do not currently have any arrangements in place to complete any private placement financings and there is no assurance that we will be successful in completing any such financings.

If we are unsuccessful in obtaining sufficient funds through our capital raising efforts, we may review other financing options, although we cannot provide any assurance that any such options will be available to us or on terms reasonably acceptable to us. Further, if we are unable to secure any additional financing then we plan to reduce the amount that we spend on our operations, including our management-related consulting fees and other general expenses, so as not to exceed the capital resources available to us. Regardless, our current cash reserves and working capital will not be sufficient for us to sustain our business for the next 12 months, even if we decide to scale back our operations.

Going Concern

Our auditors have issued a going concern opinion. This means that there is substantial doubt that we can continue as an on-going business for the next twelve months unless we obtain additional capital to pay our expenses. This is because we have not generated any revenues to date and we cannot currently estimate the timing of any possible future revenues. Our only source for cash at this time is investments by others in our common stock, or loans.

ITEM 2.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)

Results of Operations

To September 30, 2015

The following summary of our results of operations should be read in conjunction with our financial statements for the period ended September 30, 2015 which are included with this Report.

	Three Months Ended September 30						Change
	2015			2014			Amount			Percentage
Revenue	$	-		$	-		$	-			-
Operating Expenses	$	23,542		$	30,111		$	(6,569	)		(22	%)
Loss from Operations	$	(23,542	)	$	(30,111	)	$	6,569			(22	%)
Other Income	$	-		$	19,599		$	(19,599	)		(100	%)
Net Loss For The Period	$	(23,542	)	$	(10,512	)	$	(13,030	)		124	%

	Nine Months Ended September 30						Change
	2015			2014			Amount			Percentage
Revenue	$	-		$	-		$	-			-
Operating Expenses	$	121,236		$	115,917		$	5,319			5	%
Loss from Operations	$	(121,236	)	$	(115,917	)	$	(5,319	)		5	%
Other Income	$	-		$	19,519		$	(19,519	)		(100	%)
Net Loss For The Period	$	(121,236	)	$	(96,398	)	$	(24,838	)		26	%

Revenues

We have had no operating revenues since our inception on December 9, 2004. We recorded a net loss of $23,542 for the three month period ended September 30, 2015 and have an accumulated deficit of $1,121,939. The possibility and timing of revenue being generated from our mineral property interest is uncertain. The loss from operations in both 2014 periods shown above was partially offset by Other Income of $19,599, which was the result of a gain on settlement of certain accounts payable. There was no such offset in the two equivalent 2015 periods.

Expenses – Three months ended September 30, 2015 and 2014

Expense categories with notable differences between the 2015 and matching 2014 quarters are as follows:

	Three Months Ended September 30				Change
	2015		2014		Amount			Percentage
Consulting services	$	6,102	$	9,789	$	(3,687	)		(38	%)
Interest, bank and finance charges	$	5,544	$	3,252	$	2,292			70	%
Professional fees	$	10,592	$	16,769	$	(6,177	)		(37	%)

Consulting services were lower in the third quarter of 2015 compared to the same quarter in 2014 due the final payment of approximately $9,000 for the services of our former director and Secretary being paid in July, 2014, with approximately $6,000 in business development consulting in the 2015 quarter and $Nil in 2014.

Interest, bank and finance charges were higher in 2015 primarily due to an increase in interest bearing loans compared to 2014, with a resultant increase in interest expense for the 2015 quarter.

Professional fees decreased in the 2015 quarter compared to 2014 primarily due to timing of billings for audit and review services. Professional fees year to date in 2015 were higher than in 2014 by approximately $12,000, primarily due to additional legal fees of approximately $8,000 and US tax work of approximately $3,000 in 2015, with no equivalent in 2014.

ITEM 2.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)

Balance Sheet at September 30, 2015 and December 31, 2014

Items with notable period-end differences are as follows:

	September 30		December 31		Change
	2015		2014		Amount			Percentage
Cash	$	11,000	$	5,372	$	5,628			105	%
Prepaid fees	$	2,285	$	-	$	2,285			-
Accounts payable and accrued liabilities	$	546	$	38,397	$	(37,851	)		(99	%)
Loans payable	$	388,965	$	275,178	$	113,787			41	%
Additional Paid-In Capital	$	975,416	$	922,215	$	53,201			6	%

The increase in Cash of approximately $6,000 is explained below in the section on Cash Flows.

Prepaid fees and advances increased due to payment in 2015 of a legal retainer for US tax services.

Accounts payable and accrued liabilities decreased mainly due to payments during the nine month period for December 31, 2014 payables for non-recurring legal services (approximately $6,000), year-end audit and accounting services (approximately $12,000), and a final amount due regarding settlement of the consulting agreement for the services of our former Secretary and director (approximately $15,000).

Loans payable increased due to the receipt in 2015 of loans of approximately $157,000, together with an increase in accrued interest of approximately $14,000, offset by a settlement of loan principal and interest totaling approximately $53,000 for shares, together with a loan principal payback of $4,000.

Additional paid-in capital increased as a result of the settlement of loan principal and interest totaling approximately $53,000 for 1,149,000 shares having a par value of approximately $12.

Liquidity and Capital Resources

As of September 30, 2015, our total assets were $243,465 (December 31, 2014: $235,552), comprised of cash, prepaid fees and mineral property interest, while our total liabilities were $389,511 (December 31, 2014: $313,575), comprised of accounts payable and accrued liabilities, and loans payable.

Our working capital as at September 30, 2015 and December 31, 2014 and the changes between those dates are summarized as follows:

	September 30			December 31			Increase/(Decrease)
	2015			2014			Amount			Percentage
Current Assets	$	13,285		$	5,372		$	7,913			147	%
Current Liabilities		389,511			313,575			75,936			24	%
Working Capital (Deficiency)	$	(376,226	)	$	(308,203	)	$	(68,023	)		22	%

The increase in our working capital deficiency from December 31, 2014 to September 30, 2015 is explained by the changes outlined above for notable Balance Sheet items, all of which (other than Additional Paid-In Capital) are Current Assets or Current Liabilities.

ITEM 2.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)

Cash Flows

	Nine Months Ended September 30						Change
	2015			2014			Amount			Percentage
Cash Flows (Used In) Provided By:
Operating Activities	$	(174,020	)	$	(68,457	)	$	(105,563	)		154	%
Financing Activities		179,648			84,628			95,020			112	%

Net increase in cash	$	5,628		$	16,171		$	(10,453	)		(65	%)

Cash Used In Operating Activities

The increase in cash used in operating activities of approximately $106,000 is due to the following:

Operating expenses being higher by approximately $5,000 in the current nine month period than in the equivalent period in the prior year, together with $Nil Other income in 2015, compared to approximately $20,000 in the prior year period, for a net year over year period difference of approximately $25,000 increased cash usage;

A decrease in accrued interest payable in 2015 of approximately $13,000, compared to an increase in 2014 of approximately $6,000, for a net year over year period difference of approximately $19,000 increased cash usage;

An increase in prepaid fees and advances of approximately $2,000 in 2015, compared to an increase of approximately $8,000 in 2014, for a net year over year period difference of approximately $6,000 decreased cash usage; and

A decrease in accounts payable of approximately $38,000 in 2015, compared to an increase of approximately $30,000 in 2014, resulting in a year over year difference in the period of approximately $68,000 increased cash usage.

Cash Provided By Financing Activities

The increase in cash provided by financing activities was due to:

net loan advances in the first nine months of 2015 of approximately $126,000, plus shares issued to settle debt of approximately $53,000, compared to loan advances in the same period in 2014 of approximately $85,000; resulting in a year over year net increase of approximately 95,000

As of the date of this quarterly report, we have yet to generate any revenues from our business operations. Our ability to generate adequate amounts of cash to meet our needs is entirely dependent on the issuance of shares, debt securities, or loans.

Our principal source of working capital has been in the form of loans and capital contributions from our shareholders or management, loans from third parties, and funds received as subscriptions for our common stock. For the foreseeable future, we will have to continue to rely on those sources for funding. We have no assurance that we can successfully engage in any further private sales of our securities or that we can obtain any additional loans.

ITEM 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

ITEM 4.

CONTROLS AND PROCEDURES.

Evaluation of Disclosure Controls and Procedures

We maintain “disclosure controls and procedures,” as such term is defined in Rule 13a-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”), that are designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission rules and forms, and that such information is accumulated and communicated to our management, including our Principal Executive Officer and our Principal Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. We conducted an evaluation under the supervision and with the participation of our Principal Executive Officer and our Principal Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this report pursuant to Rule 13a-15 of the Exchange Act. Based on this Evaluation, our Principal Executive Officer and our Principal Financial Officer concluded that our Disclosure Controls were effective as of the end of the period covered by this report.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting during the quarter ended September 30, 2015 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

ITEM 1A.

RISK FACTORS

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide information under this item. Our business is subject to risks inherent in the establishment of a new business enterprise, including, without limitation, the items listed in Item 1A RISK FACTORS in our report filed on Form 10-K for the year ended December 31, 2014.

ITEM 2.

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

We had no unregistered sales of securities during the three months ended September 30, 2015 or subsequently, to the date of this report.

Other than as disclosed in previous reports on Forms 10-Q, 10-K or 8-K, we have not issued any equity securities that were not registered under the Securities Act within the past three years.

ITEM 6.

EXHIBITS.

The following documents are included herein:

		Incorporated By Reference
Exhibit No.	Document Description	Form	Date	Number	Filed herewith
31.1	Certification of Principal Executive and Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.				X

32.1	Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for the Chief Executive and Chief Financial Officer.				X

20.1	Schedule 14C	PRE 14C	11/13/2015	20.1

101.INS	XBRL Instance Document				X

101.SCH	XBRL Taxonomy Extension Schema				X

101.CAL	XBRL Taxonomy Extension Calculation Linkbase				X

101.DEF	XBRL Taxonomy Extension Definition Linkbase				X

101.LAB	XBRL Taxonomy Extension Label Linkbase				X

101.PRE	XBRL Taxonomy Extension Presentation Linkbase				X

SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized on this 13th day of November, 2015

	LODE-STAR MINING INC.

	BY:	“Mark Walmesley”
		Mark Walmesley
		President, Principal Executive Officer, Treasurer, Principal Financial Officer, and Principal Accounting Officer

In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated:

Signature	Title	Date

/s/ Mark Walmesley	Director, President, Chief Executive Officer and Chief Financial Officer	November 13, 2015
Mark Walmesley


/s/ Thomas Temkin	Director and Chief Operating Officer	November 13 2015
Thomas Temkin

EXHIBIT INDEX

		Incorporated By Reference
Exhibit No.	Document Description	Form	Date	Number	Filed herewith
31.1	Certification of Principal Executive and Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.				X

32.1	Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for the Chief Executive and Chief Financial Officer.				X

20.1	Schedule 14C	PRE 14C	11/13/2015	20.1

101.INS	XBRL Instance Document				X

101.SCH	XBRL Taxonomy Extension Schema				X

101.CAL	XBRL Taxonomy Extension Calculation Linkbase				X

101.DEF	XBRL Taxonomy Extension Definition Linkbase				X

101.LAB	XBRL Taxonomy Extension Label Linkbase				X

101.PRE	XBRL Taxonomy Extension Presentation Linkbase				X

Lode-Star Mining Inc. - FORM 10-Q - November 13, 2015

Attached files

Lode-Star Mining Inc. Reports