SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
(Amendment No. 1)
(Mark One)
x ANNUAL
REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended August 31,
2014
o TRANSITION
REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ___________
to __________
Commission File No. 333-149552
RIMROCK GOLD CORP.
(Exact name of registrant as specified in
its charter)
NEVADA
(State or other jurisdiction of incorporation
or organization)
75-3266961
(IRS Employer Identification No.)
3651 Lindell Rd. Suite #D155
Las Vegas, NV
89103
(Address of principal executive offices)(Zip
Code)
1-800-854-7970
(Registrant’s telephone number, including
area code)
Securities registered under Section 12(b)
of the Exchange Act:
Title of each class registered: None
Name of each exchange on which registered:
None
Securities registered under Section 12(g)
of the Exchange Act:
Common Stock, par value $0.001
(Title of class)
Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Yes o No x
Indicate
by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o No x
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. Yes x
No o
Indicate
by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive
Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the
preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No o
Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not
contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements
incorporated by reference Part III of this Form 10-K or any amendment to this Form 10-K. x
Indicate by check mark whether the registrant
is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions
of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2
of the Exchange Act.
Large accelerated filer |
o |
Accelerated filer |
o |
Non-accelerated filer |
o |
Smaller reporting company |
x |
(Do not check if a smaller reporting company) |
|
|
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes o
No x
The aggregate market value of the voting
and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was sold, or
the average bid and asked price of such common equity, as of the last business day of the registrant’s most recently completed
second fiscal quarter, August 31, 2014 was $2,278,338.90.
As of January 22, 2015, the registrant had 37,664,627 shares
of common stock issued and outstanding.
Documents Incorporated by Reference:
None.
EXPLANATORY
NOTE
This Amendment No. 1 on Form 10-K/A
(this “Amendment No. 1”) amends Rimrock Gold Corp.’s (the “Company”) Annual Report on Form 10-K for
the fiscal year ended August 31, 2014 (“Original Filing”) originally filed on December 17, 2014 with the U.S. Securities
and Exchange Commission (the “Commission”). We are filing this Amendment No. 1 for the purpose of incorporating changes
to the Original Filing in response to comments received from the Commission.
TABLE OF CONTENTS
CAUTIONARY NOTE REGARDING FORWARD LOOKING
STATEMENTS
This Annual Report on Form 10-K contains
“forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A
of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended
(the “Exchange Act”). Forward-looking statements discuss matters that are not historical facts. Because they discuss
future events or conditions, forward-looking statements may include words such as “anticipate,” “believe,”
“estimate,” “intend,” “could,” “should,” “would,” “may,”
“seek,” “plan,” “might,” “will,” “expect,” “anticipate,”
“predict,” “project,” “forecast,” “potential,” “continue” negatives
thereof or similar expressions. Forward-looking statements speak only as of the date they are made, are based on various underlying
assumptions and current expectations about the future and are not guarantees. Such statements involve known and unknown risks,
uncertainties and other factors that may cause our actual results, level of activity, performance or achievement to be materially
different from the results of operations or plans expressed or implied by such forward-looking statements.
We cannot predict all of the risks and
uncertainties. Accordingly, such information should not be regarded as representations that the results or conditions described
in such statements or that our objectives and plans will be achieved and we do not assume any responsibility for the accuracy or
completeness of any of these forward-looking statements. These forward-looking statements are found at various places throughout
this Annual Report on Form 10-K and include information concerning possible or assumed future results of our operations, including
statements about potential acquisition or merger targets; business strategies; future cash flows; financing plans; plans and objectives
of management; any other statements regarding future acquisitions, future cash needs, future operations, business plans and future
financial results, and any other statements that are not historical facts.
These forward-looking statements represent
our intentions, plans, expectations, assumptions and beliefs about future events and are subject to risks, uncertainties and other
factors. Many of those factors are outside of our control and could cause actual results to differ materially from the results
expressed or implied by those forward-looking statements. In light of these risks, uncertainties and assumptions, the events described
in the forward-looking statements might not occur or might occur to a different extent or at a different time than we have described.
You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of the Annual
Report on Form 10-K. All subsequent written and oral forward-looking statements concerning other matters addressed in this Annual
Report on Form 10-K and attributable to us or any person acting on our behalf are expressly qualified in their entirety by the
cautionary statements contained or referred to in this Annual Report on Form 10-K.
Except to the extent required by law, we
undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events,
a change in events, conditions, circumstances or assumptions underlying such statements, or otherwise.
USE OF CERTAIN DEFINED TERMS
Except as otherwise indicated by the context,
references in this report to “we,” “us,” “our,” the “Company,” or “Rimrock
Gold” are to the combined business of Rimrock Gold Corp. and its consolidated subsidiaries, Tucana Exploration Inc.
and Rimrock Mining, Inc.
In addition, unless the context otherwise requires and for the
purposes of this report only
● |
“Exchange Act” refers to the Securities Exchange Act of 1934, as amended; |
● |
“SEC” refers to the United States Securities and Exchange Commission; |
● |
“Securities Act” refers to the Securities Act of 1933, as amended; |
PART I
ITEM 1. BUSINESS
General
Rimrock Gold Corp. (f/k/a Tucana Lithium
Corp., Oteegee Innovations Inc. and Pay By The Day Holdings Inc., (the “Company” or “Rimrock”) is a diversified
mineral exploration company focused on identifying, acquiring, advancing, and drilling high-grade gold-silver exploration projects
in Nevada, and lithium exploration projects in Quebec. The Company was incorporated in August 2007 in the State of Nevada.
On August 31, 2007 we entered into a share
exchange agreement with Pay By The Day Company Inc., an Ontario Corporation incorporated in June 2003 (“PBTD” or “Pay
By The Day”), whereby PBTD became our wholly owned subsidiary. PBTD commenced operations in July 2003 and at the time of
the share exchange agreement the sole owner of PBTD was Jordan Starkman, the Company’s officer and director.
On March 22, 2010, the Company filed a
certificate of amendment to the Company’s articles of incorporation with the Nevada Secretary of State changing the
Company’s name to Oteegee Innovations, Inc.
On April 7, 2010, the Company effected
a 1 for 10 forward split of its issued and outstanding common stock. The Company’s issued and outstanding common shares were
increased from 1,539,000 to 15,390,000. The Company also increased its authorized common shares from 100,000,000 to 200,000,000.
On December 2, 2010 the Company closed
an Asset Purchase Agreement with Alain Champagne and other parties (the “Seller Group”) to acquire 100% interest in
the Abigail Lithium Project located in the James Bay, Quebec region of Canada. It is covered by NTS sheets 32O12 and 32O13. The
property is made up of 222 map-designated cells totaling approximately 11,844 hectares. Pursuant to the Abigail purchase
Agreement, on December 7, 2010 the Company issued a total of 15,000,000 shares of common stock plus committed to an additional
payment of $250,000 in cash with $100,000 payable 90 days from the closing of the Agreement and $150,000 payable 180 days from
the closing of the Agreement. In addition, the Company agreed to a minimum initial exploration work budget of $300,000 to
commence no later than May 16, 2011. The Company announced on June 27, 2011 it started its first phase of the exploration
campaign on the Property. The program commence date was delayed due to poor weather conditions in the region.
In March 2011, the Company issued 5,000,000
shares of common stock at $0.02 per share reflecting the first payment of $100,000 for the property. On May 15, 2011,
the Company issued a 10% Convertible Debenture with a principal amount of $150,000 (the “Debenture”) to Alain Champagne
(the “Holder”). The Debenture is due twelve months from the date of issuance. Additionally, the Holder is entitled
to convert, at any time, until the Debenture is paid in full, all or any part of the principal plus accrued interest into shares
of the Company’s common stock at a per share conversion price of $0.15. On May 24, 2011 the Company repaid $100,000 and on
June 25, 2011 the Company paid off the balance of $50,000 fulfilling all the obligations to the Selling Group for the purchase
price of the property. In July 2011, the Ministry of Natural Resources transferred all mining claims into the name of
Tucana Exploration Inc., a company incorporated in the State of Wyoming on February 22, 2011 (“Tucana”). Tucana
is a 100% wholly owned subsidiary of the Company.
On May 3, 2011, the Company filed a certificate
of amendment to amend the articles of incorporation with the Nevada Secretary of State changing the Company’s name to Tucana
Lithium Corp.
After spending a total amount of $2,500,000
on the Abigail Lithium Project, the Seller Group will receive an additional 1,000,000 shares of the Company’s common stock
and an additional cash payment of $250,000. After spending a total amount of $5,000,000 on the Project, the Seller Group will receive
an additional 1,000,000 shares of the Company’s common stock and an additional cash payment of $250,000. If a feasibility
study is put in place an additional 1,000,000 shares and $250,000 will be delivered to the Seller Group, and if a bank feasibility
is put in place a further 2,000,000 shares and $500,000 cash will be delivered to the Seller Group. The Company has also agreed
to pay the Seller Group a 3% royalty on any commercial producing mineral deposit.
In December 2011, the Company staked an
additional 83 claims in the James Bay region of Quebec. The claims are 100% owned by the Company and registered in the name of
the Company’s subsidiary, Tucana Exploration Inc. The property is made up of 83 map-designated cells totaling 4,439 hectares
with 82 claims covered by NTS sheets 32O12 and 1 claim covered by NTS sheets 32N09. The cost of staking the claims was $8,215.
The claims expired in November 2013 and exploration work in the amount of $100,000 were required upon renewal. The Company secured
the additional claims based upon the NI 43-101 technical report and the magnetic and gradiometric airborne survey released by the
Quebec Ministry of Natural Resources in September 2011. The Lac des Montagnes formation is the most fertile rock in this area for
massive sulfides, and it is the same kind of volcano-sedimentary belt you would find in the Rouyn-Noranda and Val d'Or area yet
more metamorphosed. The gradiometric magnetic survey shows magnetic anomalies are present on the property and should be further
investigated.
In March 2012, the Company renewed 71 mineral
claims on the Abigail property based upon the exploration work reported in the summer of 2011. These claims expired between April
and May 2014 and exploration work in the amount of $84,000 were required upon renewal. In addition, the Company had dropped 85
mineral claims located on the northern perimeter of the property. The Company's decision was based upon the results from the exploration
program in the summer 2011 and a review of the airborne magnetic survey.
In September and November 2013, the Company
elected to drop the 25 EM-1 claims, the 12 Lac Kame claims, and 83 Abigail claims to hold 95 Abigail claims. In May and June 2014
the Company elected to drop the remaining 95 Abigail claims.
On May 11, 2012, the Company entered into
an Asset Purchase Agreement (the “Assets Purchase Agreement”) with a group of sellers with Alain Champagne as the representative
(“the Selling Group”) to acquire from the Selling Group all of the interest in two mining properties known as the Lac
Kame and EM-1 both located in the Nemaska area of James Bay, Quebec region of Canada (the “Acquired Mines”), and in
exchange, the Company shall issue a total of 2,000,000 shares of the Company’s common stock and make a cash payment of $3,000
to the Selling Group (the “Assets Acquisition”). The amount of consideration paid for the Acquired Mines is less than
10% of the total assets of the Company as of the closing of the Assets Acquisition. In addition, pursuant to the Assets Purchase
Agreement, the Company agreed to an additional payment of $50,000 and the issuance of 1,000,000 shares to the Selling Group if
and when the Company spends a total of $1,000,000, an additional payment of $100,000 and the issuance of 1,000,000 if and when
the Company spends $2,500,000, and an additional payment of $150,000 and the issuance of 1,000,000 shares if and when the Company
spends a total of $5,000,000 on the Acquired Mines. The amount of spending by the Company on the Acquired Mines is deemed as an
index of any previously unidentified and additional value of the properties. The Company also agreed to pay the Selling Group a
3% net smelter royalty on any commercial producing mineral deposit from the Acquired Mines pursuant to the Assets Purchase Agreement.
The Company's main interest with the Lac Kame and EM-1 claims will be magnetic anomalies for kimberlite based upon the airborne
magnetic survey released in October 2011.
On May 11, 2012, the Company also entered
into a Stock Purchase Agreement (the “Stock Purchase Agreement”) with (i) Pay By The Day Company Inc., a Ontario corporation
and a wholly owned subsidiary of the Company (“Pay By The Day”); and (ii) Jordan Starkman, Chief Executive Officer
and the sole director of the Company and President of the Subsidiary, pursuant to which, Mr. Starkman acquired all of the issued
and outstanding common shares of Pay By The Day, and in exchange, Starkman assumed and agreed to pay, perform and discharge any
and all the liabilities and obligations of Pay By The Day.
On January 24, 2013, the Company filed
a Certificate of Amendment to its Articles of Incorporation (the “Amendment”) to change its name from “Tucana
Lithium Corp.” to “Rimrock Gold Corp.”
On February 11, 2013, the Company closed
an Agreement and Plan of Merger (the “Merger Agreement”), by and among the Company, Tucana Holdings Inc., a Nevada
corporation and wholly-owned subsidiary of the Company (“Holdings”), and Rimrock Mining, Inc., a Nevada corporation
(“Rimrock”), pursuant to which Holdings merged with and into Rimrock, and Rimrock became a wholly-owned subsidiary
of the Company. Pursuant to the terms of the Merger Agreement, the Company acquired all the interest in three prospective gold
exploration properties known as Rimrock Property, West Silver Cloud and Pony Spur, located in northeast Nevada (the “Acquired
Properties”) and issued 17,800,000 shares of its common stock, par value $0.001 (the “Common Stock”), to the
sellers of the Acquired Properties as consideration for such properties. Any mineral production from the Rimrock, West Silver Cloud,
and Pony Spur Properties is subject to Net Smelter Returns royalties of 3%. To date, the Company’s main exploration target
has been the Abigail Lithium Property located in the James Bay, Quebec region of Canada.
As a condition to closing of the Merger
Agreement, on February 8, 2013 the Company effected a 1-for-8 reverse split of the issued and outstanding shares of the Common
Stock (the “Reverse Stock Split”). As a result, the issued and outstanding shares of Common Stock decreased from 66,435,908
shares prior to the Reverse Stock Split to 8,304,488 shares following the Reverse Stock Split.
On February 13, 2013, the Company completed
an initial closing (the “Initial Closing”) of a “best efforts min-max” private offering of a minimum of
$500,000 up to a maximum $1,000,000 (the “Offering”) with a group of accredited investors (the “Purchasers”)
for total gross proceeds to us of $502,000. Pursuant to a subscription agreement with the Purchasers (the “Subscription Agreement”),
we issued to the Purchasers (i) shares of our Common Stock at a purchase price of $0.20 per share; and (the “Shares”)
and (ii) warrants (the “Warrants”) to purchase shares (the “Warrant Shares” and together with the Shares
and the Warrants, the “Securities”) of our Common Stock at an exercise price of $0.30 per share.
On May 3, 2013, the Company entered into
a purchase agreement (the “Purchase Agreement”) with Geologix Explorations Inc., a corporation existing under the laws
of the Province of British Columbia (“Geologix Canada”) and Geologix (U.S.) Inc., a Nevada corporation (“Geologix
USA” and, together with Geologix Canada, “Geologix”) to acquire an exploration epithermal bonanaza gold-silver
property in Nevada known as the Silver Cloud Property (the “Silver Cloud Property”). Pursuant to the Purchase Agreement,
the Company acquired from Geologix a one hundred percent (100%) interest in and to: (i) certain properties that compress 552 unpatented
mining claims totaling 11,210 acres (the “Mining Claims” comprised of the Geologix Claims and the Pescio Claims), and
(ii) a lease agreement dated June 1, 1999 between Geologix USA as successor to Teck Resources Inc., and Carl Pescio and Janet Pescio
in respect of those Mining Claims held by Pescio (the “Pescio Lease”) which requires that the Company pays $50,000
to the Pescio family annually. The lease term is to June 30, 2023 with option to extend the lease term for three subsequent ten
years terms.
In consideration for the Mining Claims
and the Pescio Lease, the Company shall issue to Geologix 500,000 shares of the Company’s common stock (the “Rimrock
Shares”) comprised of 400,000 shares to Geologix and 100,000 shares Geologix is required to assign to Teck Resources Inc.
In addition, if the Company delineates more than two million ounces of gold in proven and probable reserves on the Mining Claims,
then the Company will issue a further 250,000 common shares of the Company to Geologix. Any mineral production from the Silver
Cloud Property is subject to net smelter return royalties of 2% due to Royal Gold Inc. and 3% to the underlying claim owners.
Geologix has agreed not to sell, transfer,
negotiate or enter into any agreement to sell or announce an intention to sell or transfer two-hundred thousand (200,000) of the
Rimrock Shares for a period of six (6) months from their date of issuance and the remaining two-hundred thousand (200,000) Rimrock
Shares for a period of twelve (12) months from their date of issuance.
On October 11, 2013, the Company acquired
the advanced-stage Ivanhoe Creek, Nevada, epithermal bonanza gold-silver property from RMIC Gold, a private Nevada company
controlled by Richard R Redfern. Mr. Redfern is a director of the Company and this transaction is a non-arms length transaction.
The Company has agreed to issue 150,000 shares of the Company’s common shares to RMIC Gold will pay one percent (1%) Net
Smelter Returns royalties to RMIC Gold for 100% interest in the Ivanhoe Creek property.
The Company operates under the web-site
address www.rimrockgold.com.
Gold Industry
Gold holds a significant role as a reserve
asset as it is a highly liquid commodity with extensive appeal and functionality. The future outlook for gold forecasts an increase
in demand that exceeds the amount of available supply.
Gold is referred to as a precious metal;
a classification of metals that are considered to be rare or have a high economic value. Humans have fashioned gold into decorations
and jewelry since as early as 4,000 BC.
The scarcity and beauty of this element
has made it both a valuable commodity and investment vehicle throughout the history of humans. Gold is used in a wide range of
technologies which can be attributed to its unique technical properties. It is both highly conductive, third to silver and copper,
and resistant to corrosion. It is also highly malleable and ductile making it easy to physically manipulate into wire or sheets.
Purchases of gold by central banks have
increased in 2011, reinforcing gold’s significant role as a reserve asset. The jewelry sector saw a steady rise during the
first quarter of 2011 with the demand increasing by 7% in comparison to the same quarter of 2010. India and China will continue
to lead the demand for gold as it is viewed as not just a commodity but a vital component of their cultural and religious traditions.
The global demand for gold in the form of jewelry, as an investment or within technology is expected to continue to grow in 2014
and beyond.
Gold Uses |
|
|
|
Jewelry |
Over 60% of the world’s supply of gold is manufactured
in various forms of jewellery.
|
Electronics |
Gold is the material of choice for telecommunications,
information technology, wiring, connectors, circuit boards, contacts and other critical applications that require high performance
and safety.
|
Medicine |
Use of gold in medicine and dentistry dates
back thousands of years. Recently, gold has been used in the treatment of cancers, treatment of facial nerve paralysis, as an implant
for microsurgery of the ear, and as a vaccine. Gold is used in dental applications as it is bio-compatible, malleable, and resistant
to corrosion.
|
Nanotechnology |
Gold appears differently on a nano-scale;
the particles are a deep crimson red or light blue and also become reactive. The unusual optical properties of these particles
have found uses in various diagnostic devices.
|
Space |
Reflective gold-coated plastic film protects
essential equipment from intense solar radiation and heat. Astronauts’ helmets also have a layer of gold on their helmets
to defend against lethal doses of radiation when working in space.
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Engineering |
Gold is used as a lubricating material, a coating on architectural glass, in fuel cells, jet engines and other high-tech applications by engineers. |
The supply of gold consists of a combination
of current production from mining and the draw-down of existing stocks of gold held by governments, financial institutions, industrial
organizations and private individuals. Based on publically available information, gold demand in 2012 was a record $236.4 billion
in value, despite declining tonnage demand of 4% year-over-year to 4,855 tons. In 2012, gold demand by sector was comprised of
jewelry (43%), bar and coin (29%), technology (10%), central bank purchases (12%), and ETF investments (6%). Global mine production
increased 2% year-over-year and supply from recycled gold decreased 5%. Mine production (3,138 tons) represented approximately
64% of global gold supply in 2012.
The price of gold is volatile and is affected
by many factors beyond our control, such as the sale or purchase of gold by central banks and financial institutions, inflation
or deflation, fluctuation in the value of the US dollar and foreign currencies, global and regional demand and the political and
economic conditions of major gold producing countries throughout the world. The following table presents the annual high, low and
average afternoon fixing prices for gold over the past ten years, expressed in US dollars per ounce, on the London Bullion Market.
Operations of Rimrock Mining
Rimrock Gold’s commitment to asset
growth and increased shareholder value will be sustained by the development of highly prospective projects, accelerated exploration
activities and the acquisition of viable properties. The Company has selected a strong advisory board of directors with years of
experience in the Nevada region to assist in the planning of the Company’s activities.
From the Nevada Bureau of Mines and Geology,
gold mining in Nevada is a major industry, and one of the largest sources of gold in the world. Nevada currently mines 79% of all
the gold in the United States, which is equivalent to 5,640,000 troy ounces (175 t) in 2009. Total gold production from Nevada
recorded from 1835 to 2008 totals 152,000,000 troy ounces (4,700 t), worth over US $228 billion at 2011 prices. Almost all the
gold in Nevada comes from large open pit mining and cyanide heap leaching recovery. The Carlin Trend, part of what is also known
as the Carlin Unconformity by geologists, is 5 miles (8 km) wide and 40 miles (60 km) long running northwest-southeast, has since
produced more gold than any other mining district in the United States and is one of the world’s richest gold districts.
The Company is currently focused on mineral
exploration and development activities in the Carlin trend and Midas trend regions of Nevada. The Company’s Nevada properties
include Rimrock, Silver Cloud, West Silver Cloud, Pony Spur and the more recent acquisition of Ivanhoe Creek.
Our strategy is to advance each of these
projects to the drilling stage as aggressively as prudent financing will allow and to determine the presence of gold, silver or
other precious mineral resources. If we are successful in doing so, we believe we can attract the attention of the existing mining
companies already operating in the area or new mining companies to either enter into development agreements with us or to acquire
the projects from us outright.
Rimrock Property
The Rimrock property is a Midas-style gold-silver
property situated in the Midas (“Northern Nevada Rifts”) gold trend and also directly along a domed up portion of the
Carlin Gold Trend, 8 Km northwest of Waterton Global’s Hollister gold-silver mine, and 16 Km east southeast of Newmont's
Midas Mine property. The Rimrock property comprises 54 lode claims that cover approximately 1,080 acres. The Rimrock property has
three old mercury mines in the area, with one situated directly on top of the main gold ore target, which lies at a major fault
intersection. The Paleozoic rocks at Rimrock have been domally uplifted to be present at surface, immediately west of the property
boundary. Consequently, the rocks with Carlin-style gold potential could be much closer to the surface than at Hollister or at
Midas. Anomalously elevated Carlin-only trace element thallium was found in three samples at Rimrock. This represents a geochemical
leakage-upward anomaly of thallium and arsenic. The Company is now focused upon the discovery of relatively shallower Midas style
gold-silver deposits. Any mineral production from the Rimrock, West Silver Cloud, and Pony Spur Properties is subject to Net Smelter
Returns royalties of 3%.
West Silver Cloud
The West Silver Cloud property is a Midas-style
gold-silver property situated 12 Km southwest of Waterton Global’s Hollister gold-silver mine, and 22 Km southeast of Newmont's
Midas Mine property. The nearby Silver Cloud Mine is an old, open-pit mercury mine situated on top of Placer Dome’s main
gold-silver ore target, which carries high-grade, drill-indicated gold mineralization. The West Silver Cloud property comprises
38 lode claims that cover approximately 760 acres. West Silver Cloud has never been tested by drilling, and we believe offers good
potential to hold a large, high-grade, underground-mineable Midas-Hollister-type Low Sulfidation gold-silver deposit.
Pony Spur
The Pony Spur property is a dual, Carlin-style
sediment-hosted and Low Sulfidation Breccia Pipe Style gold prospect in the southern part of the prolific Carlin-Rain Gold Trend,
and is situated 2.25 Km northwest of the adjoining Pony Creek gold deposit controlled by Allied Nevada Gold, owners of the Hycroft
gold mine in northwestern Nevada. The Pony Spur project is along Jerritt and Carlin Trends, near the Rain gold deposit cluster
, which includes the Rain, Tess, and Emigrant mines (Newmont / Premier Gold), Saddle gold deposit (presently being drilled by Premier
Gold Mines), Railroad-Bullion (presently being drilled by Gold Standard Ventures), and other peripheral gold deposits. Sage Gold
Inc. drilled one core hole on the Pony Spur property in 2007, discovering gold mineralization. The property comprises 7 lode mining
claims of approximately 140 acres, which have been filed with the BLM. The Pony Spur property area sits along a WNW trending, Rain
Fault-parallel fault system of undetermined width that intersects the Pony Creek gold deposit area just east of our property boundary.
Two types of strong surface gold mineralization and alteration are present at the Pony Spur gold property. A low-sulfidation silica-rich,
breccia pipe with gold mineralization crops out at the surface of Pony Spur, similar to mineralization present in Allied Nevada's
Pony Creek gold deposit, and the drill hole by Sage Gold intersected gold mineralization in this pipe. Carlin style, thallium-gold
rich geochemical rock anomalies also are present at the surface at Pony Spur, possibly indicative of Rain-Meikle type fault-controlled
Carlin-style sediment-hosted gold mineralization at depth.
Silver Cloud
The newly acquired Silver Cloud Property
consists of 552 Mining Claims totaling 11,210 acres situated 55 Km northeast of the mining center of Battle Mountain, and 80 Km
west-northwest of Elko city, a regional mining hub. The Silver Cloud Property lies immediately to the southwest of Waterton Global’s
epithermal bonanza gold-silver Hollister Mine, and 3.8 Km southwest of the Hollister Mine open pit. The Silver Cloud Property also
lies 16 Km southeast of Newmont's Midas Mine, which is currently producing gold and silver from high-grade volcanic epithermal
veins. The Company controls an additional 38 claims along the west side of the Silver Cloud Property, called the West Silver Cloud
property.
As a result of this latest acquisition,
the Company's land package in the region has increased by 11,000 acres, making it one of the largest landholders among junior exploration
companies operating in Nevada with over 13,000 acres held. The Company has inherited a comprehensive database reflecting previous
exploration campaigns conducted on the Silver Cloud Property by Placer Amex, Newmont, Placer Dome, Teck Resources and Geologix.
Any mineral production from the Silver
Cloud Property is subject to net smelter return royalties of 2% due to Royal Gold Inc. and 3% to the underlying claim owners. The
Company is also required to pay $50,000 to the Pescio family annually. The lease term is to June 30, 2023 with option to extend
the lease term for three subsequent ten years terms.
Ivanhoe Creek
On October 11, 2013, the Company acquired the
advanced-stage Ivanhoe Creek, Nevada, epithermal bonanza gold-silver property from RMIC Gold, a private Nevada company controlled
by Richard R Redfern. Mr. Redfern is a director of the Company and this transaction is a non-arms length transaction. The Company
has agreed to issue 150,000 shares of the Company’s common shares to RMIC Gold will pay one percent (1%) Net Smelter Returns
royalties to RMIC Gold for 100% interest in the Ivanhoe Creek property. The Ivanhoe Creek property consists of 22 unpatented lode
mining claims (440 acres) situated in north-central Nevada on lands administered by the U.S. Bureau of Land Management. The property
area is uninhabited and suitable for construction of large-scale mine facilities, if warranted. The property is situated 63 Km
northeast of the mining center of Battle Mountain, and 75 Km west-northwest of the mining hub city Elko. Rimrock Gold controls
22 claims along the north side of the Hollister property. The property lies at the former site of a small mercury mine/ prospect
from which an unknown but small quantity of flasks of mercury were produced, and south of Rimrock Gold’s Rimrock property.
The Ivanhoe Creek property lies immediately
adjacent to the north of the epithermal bonanza gold-silver Hollister Mine property that was recently purchased by Waterton Global
Resources. Ivanhoe Creek also lies 17 Km southeast of Newmont’s Midas Mine, which is currently producing gold and silver
from high-grade volcanic epithermal gold-silver veins.
Lithium Industry
The market for lithium is still small and
relatively restricted. Lithium is a key component in existing battery technology, particularly for portable electronics applications.
The lithium sector has been further stimulated with the need to develop more environmentally friendly transportation choices. A
combination of rising gasoline prices and environmentally-conscious consumers further spurred the hybrid and electric vehicle
sector in 2009, culminating in a US government stimulus package directed at the lithium battery and electric vehicle sector in
2009.
Lithium is a light, highly reactive metal
with uses in a variety of industrial applications including ceramics, lubricants and pharmaceuticals. The fastest growing
market for lithium is as lithium carbonate for use in batteries, including those in cell phones, computers and new generations
of electric and hybrid vehicles. The supply of lithium necessary to produce lithium carbonate can come from two
principal sources: (1) brines containing high concentrations of lithium and other elements; and (2) the mineral spodumene, which
is usually concentrated in pegmatite deposits. Lithium from spodumene is in silicate form and following mining and production
of a concentrate, requires processing to be converted to lithium carbonate. The Company believes that lithium demand will grow
as its value as a preferred battery material is fully realized.
The Company is still driven in its belief
in technology and is looking to stay in the vertical technology space. Our growth will continue with a focus in the
commodity supply side starting with the Property. Lithium is a viable entry point into the mining sector due to its
diverse range of end uses. This environmentally benign metal is the established power for literally billions of applications. We
consider the battery market, primarily for hybrid and electric vehicles and as storage batteries for wind and solar power plants,
as its target market. Lithium ion batteries have become the rechargeable battery of choice for the makers of cell phones,
laptop computers, power tools, and hybrid cars. Lithium dominates the battery market because of its relatively lighter
weight and energy density three times that of its nickel metal hydride competitor. As well, it recharges faster, lasts
longer and operates in temperatures well below freezing. In addition, the future of lithium lies in the global demand
for environmentally friendly plug-in electric cars. In the US, 300,000+ hybrid cars were sold last year and as a further
spur to the market, the US government has pledged US$27.4 billion in loans/grants to electric vehicle and lithium battery markets.
Operations of Tucana Exploration
The Abigail Lithium Project is located
in the James Bay, Quebec region and is made up of 95 map-designated cells totaling approximatety 5,000 hectares. They are
covered by NTS sheets 320/12. The Abigail Property is situated in the north-eastern part of the Superior Province, which itself
lies in the heart of the Canadian Shield. The Superior Province extends from Manitoba to Quebec, and is mainly made up of Archean
rocks. The general metamorphism is at the greenschist facies, except in the vicinity of intrusive bodies, where it can go to the
amphibolite-to-granulite facies.
The Property is located in a gneissic formation
between the Lac des Montagnes volcano-sedimentary belt and the Champion Lake granitoids. The geological maps by Valiquette reveal
the presence of basalt and/or amphibolite remnants in a gneissic formation intruded by granites.
Historical work done by the Quebec Ministry
of Natural Resources can be summarized by two reports. The first is a description of the geology of the area accompanied by a geological
map, and was released in 1975 as RG 158. This report outlined the geology of the whole area, including the Lac des Montagnes volcanic
belt found on the south part of the property. The other survey was released in 2011 and consisted of an airborne magnetic/gradiometric
survey that outlined several magnetic lineaments on the property. Only two mining companies can be considered to have performed
historical work on the property, the SDBJ in 1981, with an EM-Input airborne survey, and Westmin from 1986 to 1988, with airborne
Dighem survey and minor ground work, mainly prospection and VLF-EM survey. The Dighem survey revealed EM anomalies along a major
magnetic lineament, which crosses the south part of the property. Up until now, no drill holes have been reported on the Property.
From a geological standpoint, the Property
can be divided in two parts: north and south of the Route du Nord. The part north of Route du Nord is mainly underlain by paragneiss
and diorites, with granite and granodiorites in the extreme north part of the property. Remnants of basaltic flows have been recognized
in the paragneiss. This paragneiss is in fact made up of metamorphosed sediments and probably represents a Precambrian sedimentary
basin. The part of the property south of the Route du Nord is mainly underlain by the Lac des Montagnes Formation, a
metamorphosed greenstone belt composed of biotite, sillimanite and stauride-bearing schist. Ultramafic to felsic flows along with
ultramafic intrusions can be recognized in places in the Lac des Montagnes Formation. A diabase dyke crosses the western part of
the property in a NW/SE direction, and an unexplained circular magnetic structure is observed just to the SE of the property.
Mineralized zones have not been discovered
or estimated on the property and no production has ever occurred on the Property, however recent work in the area has been performed
by Golden Goose Resources outlined in Nisk-1 deposit, approximately 6.5 km to the SE of the Property. NI-43-101 compliant resources
were evaluated by RSW, This deposit is now owed by Nemaska Exploration, who bought Golden Goose’s interest in all its claims
in the James Bay area in 2009. In May 2010, Nemaska reported NI-43-101 resources estimated by Geostat System International on the
Whabouchi property; this deposit contains Li2O and BeO and is located 1.5 km to the W of the Property.
The geology of the Property is relatively
complex and unexplored. Five deposit types can be considered to guide exploration of the property; they are as follows:
● Lithium (spodumene)-bearing pegmatites
● Magmatic nickel sulphide deposits
associated with an ultramafic intrusion
● Volcanogenic Massive Sulphide (VMS)
deposits
● Uranium and associated elements
in pegmatites
● Chromite deposits
The Property is on strike with the spodumene-bearing
pegmatite located on the Whabouchi property held by Nemaska Exploration Inc. The Property is underlain by the same gneissic formation
that hosts the Lac Arques SW pegmatite. Magmatic NI-Cu type deposit associated with ultramafic intrusions may also be found. The
Whabouchi spodumene-bearing pegmatite is located in a low magnetic anomaly on the flank of a medium magnetic high. A high magnetic
anomaly located about 1 km north of the Whabouchi pegmatite can be interpreted as an ultramafic intrusion. An airborne survey over
the Property could lead to the discovery of the same magnetic signature and help locate pegmatite and ultramafic intrusions of
the Whabouchi and Nisk-1 type.
The Property is easily accessible which
greatly enhances the economics of the project, as “Route du Nord” crosses the south part of the Property. This road
originates in the town of Chibougamou, approximately 280 km to the SSE, and leads to the village of Nemaska and the Route de la
Baie-James. Due to the size of the Property, parts of the property must be accessed by boat, using the network of lakes and rivers,
and by foot. Several parts of the Property will probably require helicopter support, being too isolated. There are no
mining infrastructures on the property. Room and board are provided by CCDC Relais Routier Nemiscau, 23 km west of the Property. A
Hydro-Quebec powerline has been built along the “Route du Nord” in the region of the Property, and the Nemiscau airport
is located 20 km west of the property, serviced by Air Creebec and chartered flights. The village of Nemaska and the Relais Routier
CCDC located respectively 35 and 15 km to the west of the Property may be used to house workers and service the Property. In addition,
the Property is covered by the cellular networks.
The Company’s acquisition of the
Property allows us to experience and prosper from the booming mining sector. Furthermore, we are fortunate to be situated beside
Nemaska Exploration’s Whabouchi project. The Property is located 1.5 km west of Nemaska Exploration’s Whabouchi
lithium project. The Whabouchi property has confirmed high grade spodumene concentrate, and has been ranked 1st in Canada
and 3rd in the world amongst hard rock pegmatite projects being developed by researcher signumBOX.
Our growth will continue with a focus in
the commodity supply side starting with the Property. Lithium is a viable entry point into the mining sector due to
its diverse range of end uses. This environmentally benign metal is the established power for literally billions of
applications. We consider the battery market, primarily for hybrid and electric vehicles and as storage batteries for
wind and solar power plants, as its target market. Lithium ion batteries have become the rechargeable battery of choice
for the makers of cell phones, laptop computers, power tools, and hybrid cars. Lithium dominates the battery market
because of its relatively lighter weight and energy density three times that of its nickel metal hydride competitor. As
well, it recharges faster, lasts longer and operates in temperatures well below freezing. In addition, the future of
lithium lies in the global demand for environmentally friendly plug-in electric cars. In the US, 300,000+ hybrid cars
were sold last year and as a further spur to the market, the US government has pledged US$27.4 billion in loans/grants to electric
vehicle and lithium battery markets.
In September and November 2013, the Company
elected to drop the 25 EM-1 claims, the 12 Lac Kame claims, and 83 Abigail claims to hold 95 Abigail claims.
In May and June 2014 the Company elected
to drop the remaining 95 Abigail claims.
Competition
We compete with other mineral resource
exploration companies for financing and for the acquisition of new mineral properties. Many of the mineral resource exploration
companies with whom we compete have greater financial and technical resources than those available to us. Accordingly, these
competitors may be able to spend greater amounts on acquisitions of mineral properties of merit, on exploration of their mineral
properties and on development of their mineral properties. In addition, they may be able to afford more geological expertise
in the targeting and exploration of mineral properties. This competition could result in competitors having mineral properties
of greater quality and interest to prospective investors who may finance additional exploration. This competition could adversely
impact on our ability to finance further exploration and to achieve the financing necessary for us to develop our mineral properties.
Compliance with Governmental Regulation
We are committed to complying with and
are, to our knowledge, in compliance with, all governmental and environmental regulations applicable to our company and our Property.
Permits from a variety of regulatory authorities are required for many aspects of mine operation and reclamation. We cannot predict
the extent to which these requirements will affect our company or our Property if we identify the existence of minerals in commercially
exploitable quantities. In addition, future legislation and regulation could cause additional expense, capital expenditure, restrictions
and delays in the exploration of our Property.
Employees
As of December 2014, we had two employees
and two part-time consultants to the Company.
ITEM 1A.
RISK FACTORS
Our business, operating results, financial
condition, and prospects are subject to a variety of significant risks, many of which are beyond our control. The following is
a description of some of the important risk factors that may cause our actual results in future periods to differ substantially
from those we currently expect or seek. The risks described below are not the only risks facing us. There are additional risks
and uncertainties not currently known to us or that we currently deem to be immaterial that also may materially adversely affect
our business, operating results, financial condition, or prospects.
We have a limited operating history
that you can use to evaluate us, and the likelihood of our success must be considered in light of the problems, expenses, difficulties,
complications and delays frequently encountered by a small developing company.
We were incorporated in Nevada in August
2007. With the exception of cash on hand of $472 as at August 31, 2014, we have no significant financial resources and limited
revenues to date. The likelihood of our success must be considered in light of the problems, expenses, difficulties, complications
and delays frequently encountered by a small developing company starting a new business enterprise and the highly competitive environment
in which we will operate. Since we have a limited operating history, we cannot assure you that our business will be profitable
or that we will ever generate sufficient revenues to meet our expenses and support our anticipated activities.
Our auditor has expressed substantial
doubt as to our ability to continue as a going concern.
Based on our financial history since inception,
our auditor has expressed substantial doubt as to our ability to continue as a going concern. For the year ended August 31, 2014
we have incurred a net loss of $851,330 and an accumulated deficit of $3,898,369. If we cannot generate sufficient revenues from
our services, we may have to delay the implementation of our business plan.
Our future success is dependent,
in part, on the performance and continued service of Jordan Starkman, our only officer. Without his continued service, we may be
forced to interrupt or eventually cease our operations.
We are presently dependent to a great extent
upon the experience, abilities and continued services of Jordan Starkman and Richard Redfern our only Directors. We currently do
not have an employment agreement with Mr. Starkman or Mr. Redfern. The loss of his services could have a material adverse effect
on our business, financial condition or results of operation.
Because of the speculative nature
of exploration of mineral properties, we may never discover a commercially exploitable quantity of minerals, our business may fail
and investors may lose their entire investment.
We are in the very early exploration stage
and cannot guarantee that our exploration work will be successful, or that any minerals will be found, or that any production of
minerals will be realized. The search for valuable minerals as a business is extremely risky. Substantial investment will be required
to move the Company toward the production of minerals. This may require bringing in a partner to make the necessary investment,
but there are no plans at this time for any form of partnership or merger. We can provide investors with no assurance that exploration
on our properties will establish that commercially exploitable reserves of minerals exist on our property. Additional potential
problems that may prevent us from discovering any reserves of minerals on our property include, but are not limited to, unanticipated
problems relating to exploration and additional costs and expenses that may exceed current estimates. If we are unable to establish
the presence of commercially exploitable reserves of minerals on our property our ability to fund future exploration activities
will be impeded, we will not be able to operate profitably and investors may lose all of their investment in our company.
We have no known mineral reserves
and we may not find any gold, silver, or lithium and even if we find gold, silver or lithium it may not be in economic quantities.
If we fail to find any gold, silver, or lithium or if we are unable to find gold, silver, or lithium in economic quantities, we
will have to suspend operations.
We have no known mineral reserves. Additionally,
even if we find gold, silver, or lithium in sufficient quantity to warrant recovery it ultimately may not be recoverable.
Finally, even if any gold, silver, or lithium is recoverable, we do not know that this can be done at a profit. Failure
to locate gold, silver, or lithium in economically recoverable quantities will cause us to suspend operations.
Supplies needed for exploration may
not always be available. If we are unable to secure exploration supplies we may have to delay our anticipated business operations.
Competition and unforeseen limited sources
of supplies needed for our proposed exploration work could result in occasional spot shortages of supplies of certain products,
equipment or materials. There is no guarantee we will be able to obtain certain products, equipment and/or materials as and when
needed, without interruption, or on favorable terms. Such delays could affect our anticipated business operations and increase
our expenses.
Because of the unique difficulties
and uncertainties inherent in mineral exploration ventures, we face a high risk of business failure.
Potential investors should be aware of
the difficulties normally encountered by new mineral exploration companies and the high rate of failure of such enterprises. The
likelihood of success must be considered in light of the problems, expenses, difficulties, complications and delays encountered
in connection with the exploration of the mineral properties that we plan to undertake. These potential problems include, but are
not limited to, unanticipated problems relating to exploration, and additional costs and expenses that may exceed current estimates.
The expenditures to be made by us in the exploration of the mineral claim may not result in the discovery of mineral deposits.
Problems such as unusual or unexpected formations and other conditions are involved in mineral exploration and often result in
unsuccessful exploration efforts. If the results of our exploration do not reveal viable commercial mineralization, we may decide
to abandon our claims. If this happens, our business will likely fail.
The marketability of natural resources
will be affected by numerous factors beyond our control which may result in us not receiving an adequate return on invested capital
to be profitable or viable.
The marketability of natural resources
which may be acquired or discovered by us will be affected by numerous factors beyond our control. These factors include market
fluctuations in gold, silver, or lithium pricing and demand, the proximity and capacity of natural resource markets and
processing equipment, governmental regulations, land tenure, land use, regulation concerning the importing and exporting of mineral
resources and environmental protection regulations. The exact effect of these factors cannot be accurately predicted, but the combination
of these factors may result in us not receiving an adequate return on invested capital to be profitable or viable.
Exploration and production activities
are subject to certain environmental regulations which may prevent or delay the commencement or continuation of our operations.
In general, our exploration and production
activities are subject to certain federal, state and local laws and regulations relating to environmental quality and pollution
control. Such laws and regulations increase the costs of these activities and may prevent or delay the commencement or continuation
of a given operation. Specifically, we may be subject to legislation regarding emissions into the environment, water discharges
and storage and disposition of hazardous wastes. In addition, legislation has been enacted which requires well and facility sites
to be abandoned and reclaimed to the satisfaction of state authorities. However, such laws and regulations are frequently changed
and we are unable to predict the ultimate cost of compliance. Generally, environmental requirements do not appear to affect us
any differently or to any greater or lesser extent than other companies in the industry.
Any change to government regulation/administrative
practices may have a negative impact on our ability to operate and our profitability.
The business of mineral exploration and
development is subject to substantial regulation under various countries’ laws relating to the exploration for, and the development,
upgrading, marketing, pricing, taxation, and transportation of mineral resources and related products and other matters. Amendments
to current laws and regulations governing operations and activities of mineral exploration and development operations could have
a material adverse impact on our business. In addition, there can be no assurance that income tax laws, royalty regulations and
government incentive programs related to the properties mineral exploration industry generally will not be changed in a manner
which may adversely affect our progress and cause delays, inability to explore and develop or abandonment of these interests.
Permits, leases, licenses, and approvals
are required from a variety of regulatory authorities at various stages of exploration and development. There can be no assurance
that the various government permits, leases, licenses and approvals sought will be granted in respect of our activities or, if
granted, will not be cancelled or will be renewed upon expiry. There is no assurance that such permits, leases, licenses, and approvals
will not contain terms and provisions which may adversely affect our exploration and development activities.
Planned exploration, and if warranted,
development and mining activities involve a high degree of risk.
We cannot assure you of the success of
our planned operations. Exploration costs are not fixed, and resources cannot be reliably identified until substantial development
has taken place, which entails high exploration and development costs. The costs of mining, processing, development and exploitation
activities are subject to numerous variables which could result in substantial cost overruns. Mining for base or precious metals
may involve unprofitable efforts, not only from dry properties, but from properties that are productive but do not produce sufficient
net revenues to return a profit after accounting for mining, operating and other costs.
Our operations may be curtailed, delayed
or cancelled as a result of numerous factors, many of which are beyond our control, including economic conditions, mechanical problems,
title problems, weather conditions, compliance with governmental requirements and shortages or delays of equipment and services.
We do not insure against all risks associated
with our business because insurance is either unavailable or its cost of coverage is prohibitive. The occurrence of an event that
is not covered by insurance could have a material adverse effect on our financial condition.
The impact of government regulation
could adversely affect our business.
Our business is subject to applicable domestic
and foreign laws and regulations, including laws and regulations on taxation, exploration, and environmental and safety matters.
Many laws and regulations govern the spacing of mines, rates of production, prevention of waste and other matters. These laws and
regulations may increase the costs and timing of planning, designing, drilling, installing, operating and abandoning our mines
and other facilities. In addition, our operations are subject to complex environmental laws and regulations adopted by domestic
and foreign jurisdictions where we operate. We could incur liability to governments or third parties for any unlawful discharge
of pollutants into the air, soil or water, including responsibility for remedial costs.
The submission and approval of environmental
impact assessments may be required.
Environmental legislation is evolving in
a manner which means stricter standards; enforcement, fines and penalties for noncompliance are more stringent. Environmental assessments
of proposed projects carry a heightened degree of responsibility for companies and directors, officers and employees. The cost
of compliance with changes in governmental regulations has a potential to reduce the profitability of operations. Because the requirements
imposed by these laws and regulations frequently change, we cannot assure you that laws and regulations enacted in the future,
including changes to existing laws and regulations, will not adversely affect our business.
Decline in mineral prices may make
it commercially infeasible for us to develop our property and may cause our stock price to decline.
The value and price of your investment
in our common shares, our financial results, and our exploration, development and mining activities may be significantly adversely
affected by declines in the price of minerals and other precious metals. Mineral prices fluctuate widely and are affected by numerous
factors beyond our control such as interest rates, exchange rates, inflation or deflation, fluctuation in the value of the United
States dollar and foreign currencies, global and regional supply and demand, and the political and economic conditions of mineral-producing
countries throughout the world. The price of minerals fluctuates in response to many factors, which are beyond anyone’s prediction
abilities. The prices used in making the estimates in our plans differ from daily prices quoted in the news media. Because mining
occurs over a number of years, it may be prudent to continue mining for some periods during which cash flows are temporarily negative
for a variety of reasons. Such reasons include a belief that the low price is temporary, and/or the expense incurred is greater
when permanently closing a mine.
We may not have access to all of
the supplies and materials we need to begin exploration, which could cause us to delay or suspend operations.
Competition and unforeseen limited sources
of supplies in the industry could result in occasional spot shortages of supplies such as dynamite as well as certain equipment
like bulldozers and excavators that we might need to conduct exploration. If we cannot obtain the necessary supplies, we will have
to suspend our exploration plans until we do obtain such supplies.
The ability to successfully deploy
our business model is heavily dependent upon United States’ and Canadian economic conditions.
The ability to successfully deploy our
business model is heavily dependent upon the general state of the US and Canadian economy. We cannot assure you that favorable
conditions will exist in the future. A general economic recession in the United States and Canada or a devaluation of the US Dollar
and Canadian Dollar relative to the Euro could have a serious adverse economic impact on us and our ability to obtain funding and
generate projected revenues.
There is no assurance of an active
public market or that the common stock will ever trade on a recognized exchange. Therefore, you may be unable to liquidate your
investment in our stock.
There is no established public trading
market for our common stock. Our shares are not and have not been listed or quoted on any exchange or quotation system. There can
be no assurance that a market maker will agree to file the necessary documents with the National Association of Securities Dealers,
which operates the OTC Electronic Bulletin Board, nor can there be any assurance that such an application for quotation will be
approved or that a regular trading market will develop or that if developed, will be sustained. In the absence of a trading market,
an investor may be unable to liquidate their investment.
The Financial Industry Regulatory
Authority, or FINRA, has adopted sales practice requirements which may also limit a shareholder's ability to buy and sell our stock.
In addition to the "penny stock"
rules described above, FINRA has adopted rules that require that in recommending an investment to a customer, a broker-dealer must
have reasonable grounds for believing that the investment is suitable for that customer. Prior to recommending speculative low
priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about
the customer's financial status, tax status, investment objectives and other information. Under interpretations of these rules,
FINRA believes that there is a high probability that speculative low priced securities will not be suitable for at least some customers.
FINRA requirements make it more difficult for broker-dealers to recommend that their customers buy our common stock, which may
limit your ability to buy and sell our stock and have an adverse effect on the market for its shares.
We do not intend to pay dividends
and there will thus be fewer ways in which you are able to make a gain on your investment.
We have never paid dividends and do not
intend to pay any dividends for the foreseeable future. To the extent that we may require additional funding currently not provided
for in our financing plan, our funding sources may prohibit the declaration of dividends. Because we do not intend to pay dividends,
any gain on your investment will need to result from an appreciation in the price of our common stock. There will therefore be
fewer ways in which you are able to make a gain on your investment.
We face risks related to compliance
with corporate governance laws and financial reporting standards.
The Sarbanes-Oxley Act of 2002, as well
as related new rules and regulations implemented by the Securities and Exchange Commission and the Public Company Accounting Oversight
Board, require changes in the corporate governance practices and financial reporting standards for public companies. These new
laws, rules and regulations, including compliance with Section 404 of the Sarbanes-Oxley Act of 2002 relating to internal control
over financial reporting, referred to as Section 404, have materially increased our legal and financial compliance costs and made
some activities more time-consuming and more burdensome.
Our common stock is considered a
penny stock, which is subject to restrictions on marketability, so you may not be able to sell your shares.
If our common stock becomes tradable in
the secondary market, we will be subject to the penny stock rules adopted by the SEC that require brokers to provide extensive
disclosure to their customers prior to executing trades in penny stocks. These disclosure requirements may cause a reduction in
the trading activity of our common stock, which in all likelihood would make it difficult for our stockholders to sell their securities.
Penny stocks generally are equity securities
with a price of less than $5.00 (other than securities registered on certain national securities exchanges or quoted on the NASDAQ
system). Penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules,
to deliver a standardized risk disclosure document that provides information about penny stocks and the risks in the penny stock
market. The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation
of the broker-dealer and its salesperson in the transaction, and monthly account statements showing the market value of each penny
stock held in the customer’s account. The broker-dealer must also make a special written determination that the penny stock
is a suitable investment for the purchaser and receive the purchaser’s written agreement to the transaction. These requirements
may have the effect of reducing the level of trading activity, if any, in the secondary market for a security that becomes subject
to the penny stock rules. The additional burdens imposed upon broker-dealers by such requirements may discourage broker-dealers
from effecting transactions in our securities, which could severely limit their market price and liquidity of our securities. These
requirements may restrict the ability of broker-dealers to sell our common stock and may affect your ability to resell our common
stock.
Other Risks
Trends, Risks and Uncertainties
We have sought to identify what we believe
to be the most significant risks to our business, but we cannot predict whether, or to what extent, any of such risks may be realized
nor can we guarantee that we have identified all possible risks that might arise. Investors should carefully consider all of such
risk factors before making an investment decision with respect to our common stock.
ITEM 1B.
UNRESOLVED STAFF COMMENTS
Not applicable.
ITEM 2. PROPERTIES
Executive Offices
Our principal executive office location
and mailing address is 3651 Lindell Rd. Suite #D155, Las Vegas, NV, 89103. Currently, this space is sufficient to meet our office
and telephone facility needs; however, if we expand our business to a significant degree, we will have to find a larger space. In
addition, the Company has facilities in Toronto, Ontario sufficient to sustain our office in Canada at a cost of $2000 per month.
Rimrock Property
The Rimrock property is a Midas-style gold-silver
property situated in the Midas (“Northern Nevada Rifts”) gold trend and also directly along a domed up portion of the
Carlin Gold Trend, 8 Km northwest of Waterton Global’s Hollister gold-silver mine, and 16 Km east southeast of Newmont's
Midas Mine property. The Rimrock property comprises 54 lode claims that cover approximately 1,080 acres. The Rimrock property has
three old mercury mines in the area, with one situated directly on top of the main gold ore target, which lies at a major fault
intersection. The Paleozoic rocks at Rimrock have been domally uplifted to be present at surface, immediately west of the property
boundary. Consequently, the rocks with Carlin-style gold potential could be much closer to the surface than at Hollister or at
Midas. Anomalously elevated Carlin-only trace element thallium was found in three samples at Rimrock. This represents a geochemical
leakage-upward anomaly of thallium and arsenic. The Company is now focused upon the discovery of relatively shallower Midas style
gold-silver deposits. Any mineral production from the Rimrock, West Silver Cloud, and Pony Spur Properties is subject to Net Smelter
Returns royalties of 3%.
The Rimrock property is located 48 miles
northwest of Elko in the Sheep Creek Range. The property is accessed from Elko, driving north on paved Hwy 225 for 27 miles and
northwest on paved Hwy 226 for 19 miles to the graded dirt Midas-Tuscarora County Road for 36 miles, and three miles southwest
on the graded dirt Ivanhoe Mining District Road. These claims can be accessed by unimproved two track dirt trails. Some minor work
would be required for drilling access. There is currently no water supply or electricity or other infrastructure on the property.
The closest source is within two miles from the property at the Hollister Mine of Waterton Global Mining.
The property is in rolling sagebrush-covered
desert. Elevations in the area are between 5,100 feet along Ivanhoe Creek and 6,400 feet on a hilltop in the eastern portion of
the property. Mining and exploration in the region takes place year-round with only occasional weather-related difficulties. Winters
are cool to cold, with moderate snowfalls. Summer days are warm to hot with cool nights. The area is fairly dry with infrequent
rains during the summer.
Exploration may be conducted year-round
with some interruptions due to snow in the winter and muddy unstable roads in the spring. Mining is conducted year round in the
area. Elko is the major supply center for the region and can provide almost any mining related supply or service. The specific
claims area is uninhabited. The topography does not impose any significant challenges for the construction of mining or milling
facilities.
The Property area is administered by the
BLM. Any work program which disturbs the surface necessitates that a Notice of Intent to Conduct Exploration (“NOI”)
be submitted to the BLM and a reclamation bond, which is calculated on the amount of surface disturbance, be paid. The bond is
held by the BLM. The necessary work permit is issued upon the BLM’s receipt of the bond. The bond is to fund future land
reclamation should the operator of the work program default on reclaiming the land at the completion of the program. Once the operator
has reclaimed the land to the satisfaction of the BLM, the operator’s reclamation bond is returned.
The political climate of the area is pro-mining.
Project permitting standards are well established by both federal and state statutes, along with informal local policies and procedures.
Permits are required for all exploration and mining activities that disturb the surface. Reclamation bonds are also required prior
to any disturbance. Total annual BLM and State holding fees of US$8,941.00 must be paid annually to hold these lode mining claims.
There are no detailed plans yet to further
explore the Rimrock property. Such plans will be formulated upon completion of a financing.
Ivanhoe Creek
The Ivanhoe Creek property consists of
22 unpatented lode mining claims (440 acres) situated in north-central Nevada on lands administered by the U.S. Bureau of Land
Management, just south of the Rimrock property owned by the company. The property area is uninhabited and suitable for construction
of large-scale mine facilities, if warranted. The property is situated 63 Km northeast of the mining center of Battle Mountain,
and 75 Km west-northwest of the mining hub city Elko. Rimrock Gold controls 22 claims along the north side of the Hollister property.
The property lies at the former site of a small mercury mine/ prospect from which an unknown but small quantity of flasks of mercury
were produced, and south of Rimrock Gold’s Rimrock property. Total annual BLM and State holding fees of US$3,643.00 must
be paid annually to hold these lode mining claims.
The Ivanhoe Creek property lies immediately
adjacent to the north of the epithermal bonanza gold-silver Hollister Mine property that was recently purchased by Waterton Global
Resources. Ivanhoe Creek also lies 17 Km southeast of Newmont’s Midas Mine, which is currently producing gold and silver
from high-grade volcanic epithermal gold-silver veins.
The Property is located 48 miles (77 km)
northwest of Elko in the Sheep Creek Range. Access is from Elko, driving north on paved Highway 225 for 27 miles (43 km) and northwest
on paved Highway 226 for 19 miles (30 km) to the graded dirt Midas-Tuscarora County Road for 36 miles (58 km), and 3 miles (5 km)
southeast on the graded dirt Ivanhoe Mining District road. Claims can be accessed by unimproved “two track” dirt trails.
The Property is in rolling sagebrush-covered
desert. Elevations are between 5,549 feet (1,690 m) and 6,200 feet (1,890 meters). Mining and exploration in the region takes place
year-round with only occasional weather-related difficulties. Winters are cool to cold, with moderate snowfalls. Summer days are
warm to hot, with cool nights. The area is fairly dry, with infrequent rains during the summer. Most precipitation comes as winter
snow and spring rains, although locally intense storms may develop any time of year. Exploration may be conducted year-round, with
some interruptions due to snow in the winter and muddy, unstable roads in the spring.
Elko is the major supply center for the
region and can provide almost any miningrelated supply or service. New exploration and development projects are welcomed by the
majority of area residents. The topography does not impose any significant challenges for the construction of mining or milling
facilities. As there is no infrastructure on the property, and there are no nearby power lines, electrical power would have to
be generated on site.
The Property area is administered by the
BLM. Any work program which disturbs the surface necessitates that a Notice of Intent to Conduct Exploration (“NOI”)
be submitted to the BLM and a reclamation bond, which is calculated on the amount of surface disturbance, be paid. The bond is
held by the BLM. The necessary work permit is issued upon the BLM’s receipt of the bond. The bond is to fund future land
reclamation should the operator of the work program default on reclaiming the land at the completion of the program. Once the operator
has reclaimed the land to the satisfaction of the BLM, the operator’s reclamation bond is returned.
There are no detailed plans yet to explore
the Ivanhoe Creek property. Such plans will be formulated upon completion of a financing.
West Silver Cloud
The West Silver Cloud property is a Midas-style
gold-silver property situated 12 Km southwest of Waterton Global Mining’s Hollister gold-silver mine, and 22 Km southeast
of Newmont's Midas Mine property. The nearby Silver Cloud Mine is an old, open-pit mercury mine situated on top of Placer Dome’s
main gold-silver ore target, which carries high-grade, drill-indicated gold mineralization. The West Silver Cloud property comprises
38 lode claims that cover approximately 760 acres. West Silver Cloud has never been tested by drilling, and we believe offers good
potential to hold a large, high-grade, underground-mineable Midas-Hollister-type Low Sulfidation gold-silver deposit.
The Property area is administered by the
BLM. Any work program which disturbs the surface necessitates that a Notice of Intent to Conduct Exploration (“NOI”)
be submitted to the BLM and a reclamation bond, which is calculated on the amount of surface disturbance, be paid. The bond is
held by the BLM. The necessary work permit is issued upon the BLM’s receipt of the bond. The bond is to fund future land
reclamation should the operator of the work program default on reclaiming the land at the completion of the program. Once the operator
has reclaimed the land to the satisfaction of the BLM, the operator’s reclamation bond is returned. Total annual BLM and
State holding fees of US$6,293.00 must be paid annually to hold these lode mining claims.
There are no detailed plans yet to explore
the West Silver Cloud property. Such plans will be formulated upon completion of a financing.
Pony Spur
The Pony Spur property is a dual, Carlin-style
sediment-hosted and Low Sulfidation Breccia Pipe Style gold prospect in the southern part of the prolific Carlin-Rain Gold Trend,
and is situated 2.25 Km northwest of the adjoining Pony Creek gold deposit controlled by Allied Nevada Gold, owners of the Hycroft
gold mine in northwestern Nevada. The Pony Spur project is along Jerritt and Carlin Trends, near the Rain gold deposit cluster
, which includes the Rain, Tess, and Emigrant mines (Newmont / Premier Gold), the. high-grade Saddle gold deposit (presently being
drilled by Premier Gold Mines), Railroad-Bullion (presently being drilled by Gold Standard Ventures), and other peripheral gold
deposits. Sage Gold Inc. drilled one core hole on the Pony Spur property in 2007, discovering gold mineralization. The property
comprises 7 lode mining claims of approximately 140 acres, which have been filed with the BLM.
The Pony Spur property area sits along
a WNW trending, Rain Fault-parallel fault system of undetermined width that intersects the Pony Creek gold deposit area just east
of our property boundary. Two types of strong surface gold mineralization and alteration are present at the Pony Spur gold property.
A low-sulfidation silica-rich, breccia pipe with gold mineralization crops out at the surface of Pony Spur, similar to mineralization
present in Allied Nevada's Pony Creek gold deposit, and the drill hole by Sage Gold intersected gold mineralization in this pipe.
Carlin style, thallium-gold rich geochemical rock anomalies also are present at the surface at Pony Spur, possibly indicative of
Rain-Meikle type fault-controlled Carlin-style sediment-hosted gold mineralization at depth.
The Pony Spur property is located in the
Larrabee mining district of Elko County, Nevada, in the southern half of the Carlin Trend, 28 miles southeast of the town of Carlin
and 19 miles south of Newmont Gold Company’s Rain Mine. Travel to the property is as follows: begin in Elko at the corner
of 12th Street and Lamoille Highway and proceed south on State Highway 227 for a distance of 5.4 miles. At the intersection of
State Highway 228, turn right and travel on a paved highway to the town of Jiggs and then a short distance past the town for a
total of 33.1 miles to the intersection with a graded gravel road and turn right. After 1.3 miles bear left at the intersection
and bear left again at the next intersection after another 1.4 miles. After traveling 15.1 miles, turn right on a 2-track road
and after 1.3 miles turn right on another 2-track road. The southeastern edge of the property is reached in a distance of 3.1 miles.
The property lies across the crest of the
Pinyon Range at elevations ranging from 6,600 feet to about 8,000 feet. Most of the property is comprised of dry, sagebrush- and
grasscovered hills with a few juniper and pinyon pines. The temperatures are cool to cold during the winter, with occasional moderate
snowfalls, and are warm during the summer with cool nights. The area is fairly dry, with infrequent rains during the summer. Total
annual precipitation is about 9 inches per year, mostly as snow during the winter months. The climate is favorable for year-round
mining and exploration may be done from May through November after which road access is limited by snow during the winter and mud
in the spring. Conditions are highly variable from year to year.
The Property area is administered by the
BLM. Any work program which disturbs the surface necessitates that a Notice of Intent to Conduct Exploration (“NOI”)
be submitted to the BLM and a reclamation bond, which is calculated on the amount of surface disturbance, be paid. The bond is
held by the BLM. The necessary work permit is issued upon the BLM’s receipt of the bond. The bond is to fund future land
reclamation should the operator of the work program default on reclaiming the land at the completion of the program. Once the operator
has reclaimed the land to the satisfaction of the BLM, the operator’s reclamation bond is returned. Total annual BLM and
State holding fees of US$1,162.50 must be paid annually to hold these lode mining claims.
A highly trained mining-industrial workforce
is available at Carlin and Elko, and throughout north-central Nevada. Power for a modern mill can be brought in from the vicinity
of Elko, but ranch power is available only a few miles away. Water is not available on the surface, but may be encountered in most
of the reverse circulation drill holes. Water may also be present in sufficient quantities in the nearby valleys to the east
and west. No other infrastructure is present. The claims carry with them the surface rights for mining and no local residents are
present. Although the area is hilly, sufficient flat areas are present in the property area for potential processing plant sites,
tailings storage areas, waste disposal areas and leach pads.
There are no detailed plans yet to explore
the Pony Spur property. Such plans will be formulated upon completion of a financing.
Silver Cloud
The acquired Silver Cloud Property consists
of 552 Mining Claims totaling 11,210 acres situated 55 Km northeast of the mining center of Battle Mountain, and 80 Km west-northwest
of Elko city, a regional mining hub. The Silver Cloud Property lies immediately to the southwest of Waterton Global Mining’s
epithermal bonanza gold-silver Hollister Mine, and 3.8 Km southwest of the Hollister Mine open pit. The Silver Cloud Property also
lies 16 Km southeast of Newmont's Midas Mine, which is currently producing gold and silver from high-grade volcanic epithermal
veins. The Company controls an additional 38 claims along the west side of the Silver Cloud Property, called the West Silver Cloud
property. Total annual BLM and State holding fees of US$97,649.00 must be paid annually to hold these lode mining claims.
As a result of this latest acquisition,
the Company's land package in the region has increased by 11,000 acres, making it one of the largest landholders among junior exploration
companies operating in Nevada with over 13,000 acres held. The Company has inherited a comprehensive database reflecting previous
exploration campaigns conducted on the Silver Cloud Property by Placer Amex, Newmont, Placer Dome, Teck Resources and Geologix.
Any mineral production from the Silver
Cloud Property is subject to net smelter return royalties of 2% due to Royal Gold Inc. and 3% to the underlying claim owners. The
Company is also required to pay $50,000 to the Pescio family annually. The lease term is to June 30, 2023 with option to extend
the lease term for three subsequent ten years terms.
The Silver Cloud property is easily accessible
all year long, although access is more challenging during the winter and early spring. Access to the property from Battle Mountain,
Nevada is via state highway 35 (paved) heading north across the Humboldt River. Highway 35 merges into the Izzenhood Road until
it turns east into the Rock Creek Ranch Road near the Izzenhood Ranch. The Rock Creek road, a well maintained gravel road, forks
to the east off the Rock Creek Ranch Road and proceeds east – northeasterly towards the property. Approximately 11.5 kilometers
(7.2 miles) beyond the Rock Creek crossing a BLM maintained dirt road turns off of the Rock Creek Road and proceeds northwest across
Antelope Creek and onto the property. The road continues on to the Ivanhoe / Hollister area 8 kilometers (5 miles) northeast and
the Midas District 20 kilometers (12.5 miles) north.
The climate and rainfall is typical of
the northern Great Basin province with yearly rainfall totaling about 15.25 cm (6 inches) of which most occurs as winter-time snows
(up to 51 cm /20 inches) and as summer thunder storms. Temperatures range from an average winter time temperature of 2 degrees
C (35 degrees F) to a summer time average of 35 degrees C (95 degrees F). Elevation across the Silver Cloud Property ranges from
1555 meters (5100 feet) near Antelope Creek to 1885 meters on a ridge of low peaks overlooking the Rock Creek drainage on the northern
end of the property. The property is covered by an abundance of low grasses, sagebrush and other low-lying brush. On the higher
slopes and ridges the property is covered in sparse grasses, sagebrush and juniper trees.
The Silver Cloud property is ideally situated
for development of a mine. A large electrical transmission line traverses the Silver Cloud property near the southern boundary.
The property lies immediately to the southeast of the currently developing Hollister / Clementine – Gwenivere deposit of
Great Basin Gold Ltd. – Hecla Mining Co. and lies between the northern end of the Carlin Trend and Newmont Mining Company’s
Midas deposit. Communities in the vicinity of the property, Battle Mountain, Winnemucca and Elko, are well suited to provide personnel,
supplies and expertise to the mining community. The property possesses adequate space within the boundaries of its claims for tailings
storage, waste disposal, heap leach pads and processing plant sites, but permits will need to be obtained through the BLM. Surrounding
land is also available for lease or purchase. Water on the property, beyond use for exploration, will need to be obtained through
the state by permit. No other infrastructure is present.
The Property area is administered by the
BLM. Any work program which disturbs the surface necessitates that a Notice of Intent to Conduct Exploration (“NOI”)
be submitted to the BLM and a reclamation bond, which is calculated on the amount of surface disturbance, be paid. The bond is
held by the BLM. The necessary work permit is issued upon the BLM’s receipt of the bond. The bond is to fund future land
reclamation should the operator of the work program default on reclaiming the land at the completion of the program. Once the operator
has reclaimed the land to the satisfaction of the BLM, the operator’s reclamation bond is returned.
There are no detailed plans yet to explore
the Silver Cloud property. Such plans will be formulated upon completion of a financing.
The Nevada claims are located on Federal
land administered by the Bureau of Land Management (BLM). In order for the Company to maintain and hold its Nevada claims the Company
is required to pay the BLM fees totaling $105,000 per year due every August 31. In addition, the Company is required to pay Elko
County fees in totaling $7,100 per year due every October 31.
Rimrock Gold's Vice President of Exploration,
who is a certified professional geologist and “qualified person” for purposes of Canada’s National Instrument
43-101 Standards Disclosure for Mineral Properties, will prepare the Company’s detailed exploration plans once a financing
for the proposed work is completed.
Tucana Exploration Property
Abigail Property, Quebec
The Company's Quebec exploration target
in 2013/2014 was expected to be the Abigail Lithium Property (the “Abigail Property”) situated within and adjacent
to Nemaska Exploration's Whabouchi Lithium discovery (as referenced in the Form 8-K filed with the SEC on December 3, 2010). The
Abigail Lithium Project is located in the James Bay, Quebec region and is made up of 95 map-designated cells totaling approx 5,000
hectares. They are covered by NTS sheets 320/12. The Abigail Property is located in a gneissic formation between the Lac
des Montagnes volcano-sedimentary belt and the Champion Lake granitoids. The principal exploration target for the Abigail
Property is lithium-bearing spodumene and the Abigail Property is on strike with the high-grade spodumene-bearing pegmatite located
on the Whabouchi property. The Abigail Property is underlain by the same gneissic formation that hosts the Lac Arques SW pegmatite.
Magmatic NI-Cu type deposit associated with ultramafic intrusions may also be found. The Whabouchi spodumene-bearing pegmatite
is located in a low magnetic anomaly on the flank of a medium magnetic high. A high magnetic anomaly located about one km north
of the Whabouchi pegmatite can be interpreted as an ultramafic intrusion.
An airborne survey over the Abigail Property
could lead to the discovery of the same magnetic signature and help locate pegmatite and ultramafic intrusions of the Whabouchi
and Nisk-1 type. In addition, the Abigail Property is easily accessible with year round roads, electrical power intersecting the
Abigail Property from the town of Nemaska, cell phone service throughout the region, and a local airport in the town of Nemaska.
In September - November 2013, the Company
elected to drop the 25 EM-1 claims, the 12 Lac Kame claims, and 83 Abigail claims to hold 95 Abigail claims.
In May and June 2014 the Company elected
to drop the remaining 95 Abigail claims.
Lac Kame and EM-1 Properties, Quebec
The Company closed the Lac Kame and EM-1
Purchase Agreement to acquire a One Hundred (100%) interest in two mining properties known as the Lac Kame and EM-1 both located
in the James Bay, Quebec region of Canada. It is covered by NTS sheets 32O13. The property is made up of 37 map-designated cells
totaling 1,961 hectares. The claims will expire in November 2013 and exploration work in the amount of $44,000 will be required
upon renewal. The Company's main interest with the newly acquired claims will be magnetic anomalies for kimberlite based upon the
airborne magnetic survey released in October 2011. The Company plans on raising an addition $150,000 to commence
an initial exploration campaign designed to discover the precise location of drill test targets identified by the aireborne electromagnetic
(“EM”) data. Each identified target will be surveyed with ground EM instruments to insure that the character
of the anomaly is consistent with known kimberlites. The Company elected to let these claims expire in November 2013.
ITEM 3. LEGAL PROCEEDINGS
From time to time, we may become involved
in various lawsuits and legal proceedings, which arise, in the ordinary course of business. However, litigation is subject to inherent
uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business. We are currently
not aware of any such legal proceedings or claims that we believe will have a material adverse effect on our business, financial
condition or operating results.
ITEM 4. MINE SAFETY DISCLOSURES
We consider health, safety and environmental
stewardship to be a core value for the Company.
Our properties are subject to regulation
by the Federal Mine Safety and Health Administration (“MSHA”) under the Federal Mine Safety and Health Act of 1977
(the “Mine Act”). Pursuant to Section 1503(a) of the recently enacted Dodd-Frank Wall Street Reform and Consumer Protection
Act (the “Dodd-Frank Act”), issuers that are operators, or that have a subsidiary that is an operator, of a coal or
other mine in the United States are required to disclose in their periodic reports filed with the SEC information regarding specified
health and safety violations, orders and citations, related assessments and legal actions, and mining-related fatalities. During
the fiscal year ended August 31, 2014, the Company had no such specified health and safety violations, orders or citations, related
assessments or legal actions, mining-related fatalities, or similar events in relation to our United States operations requiring
disclosure pursuant to Section 1503(a) of the Dodd-Frank Act and Item 104 of Regulation S-K.
PART II
ITEM 5. MARKET
FOR THE REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS, AND ISSUER PURCHASES OF EQUITY SECURITIES
No Public Market for Common Stock
Our common stock is quoted on the OTC QB
under symbol RMRK. Minimal trading has occurred through the date of this annual report. There can be no assurance that a
liquid market for our securities will ever develop. Transfer of our common stock may also be restricted under the securities or
blue sky laws of various states and foreign jurisdictions. Consequently, investors may not be able to liquidate their investments
and should be prepared to hold the common stock for an indefinite period of time.
Price range of common
stock
The following table shows, for the periods
indicated, the high and low bid prices per share of our common stock as reported by the OTCBB quotation service. These bid
prices represent prices quoted by broker-dealers on the OTCBB quotation service. The quotations reflect inter-dealer prices,
without retail mark-up, mark-down or commissions, and may not represent actual transactions.
| |
Fiscal August 31, 2014 | |
| |
High | | |
Low | |
| |
| | |
| |
First Quarter (September 1, 2013 – November 30, 2013) | |
$ | 0.22 | | |
$ | 0.08 | |
Second Quarter (December 1, 2013 – February 28, 2014) | |
$ | 0.15 | | |
$ | 0.08 | |
Third Quarter (March 1, 2014 – May 31, 2014) | |
$ | 0.17 | | |
$ | 0.07 | |
Fourth Quarter (June 1, 2014 – August 31, 2014) | |
$ | 0.11 | | |
$ | 0.04 | |
| |
Fiscal August 31, 2013 | |
| |
High | | |
Low | |
| |
| | |
| |
First Quarter (September 1, 2012 – November 30, 2012) | |
$ | 0.33 | | |
$ | 0.12 | |
Second Quarter (December 1, 2012 – February 28, 2013) | |
$ | 0.64 | | |
$ | 0.12 | |
Third Quarter (March 1, 2013 – May 31, 2013) | |
$ | 0.45 | | |
$ | 0.19 | |
Fourth Quarter (June 1, 2013 – August 31, 2013) | |
$ | 0.34 | | |
$ | 0.12 | |
Holders
As of the August 31, 2014, we had 51 stockholders of our common
stock.
Dividends
Since inception we have not paid any dividends
on our common stock. We currently do not anticipate paying any cash dividends in the foreseeable future on our common stock, when
issued pursuant to this offering. Although we intend to retain our earnings, if any, to finance the exploration and growth of our
business, our Board of Directors will have the discretion to declare and pay dividends in the future.
Payment of dividends in the future will
depend upon our earnings, capital requirements, and other factors, which our Board of Directors may deem relevant.
Securities Authorized for Issuance Under Equity Compensation
Plans
As of August 31, 2014, we do not have any
compensation plan under which equity securities of the Company are authorized for issuance.
ITEM 6. SELECTED FINANCIAL DATA.
Smaller reporting companies are not required to provide the
information required by this item.
ITEM 7. MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following plan of operation provides
information which management believes is relevant to an assessment and understanding of our results of operations and financial
condition. The discussion should be read along with our financial statements and notes thereto. This section includes a number
of forward-looking statements that reflect 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. These
forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially
from our predictions.
The Company has incurred losses since inception
and the ability of the Company to continue as a going-concern depends upon its ability to raise adequate financing and develop
profitable operations. Management is actively targeting sources of additional financing to provide continuation of the Company’s
operations. In order for the Company to meet its liabilities as they come due and to continue its operations, the Company is solely
dependent upon its ability to generate such financing. If we cannot generate sufficient revenues from our services or
raise adequate, we may have to delay the implementation of our business plan.
The Company is actively seeking financing
for its current projects. The Company is optimistic that the financing will be secured and the going concern risk will
be removed. We are in discussions with various parties and believe a successful financing is likely. Any capital raised
will be through either a private placement and will result in the issuance of shares of common stock from the Company’s authorized
capital or through issuance of a convertible debenture.
On January 24, 2013, the Company filed
a Certificate of Amendment to its Articles to change its name from “Tucana Lithium Corp.” to “Rimrock Gold Corp.”
On February 11, 2013, the Company effected
a 1-for-8 reverse split (the “Reverse Split) of the issued and outstanding shares of the common stock. Except as otherwise
indicated, all of the share and per share information referenced in this Report has been adjusted to reflect the Reverse Split
of our common stock.
Plan of Operation: Quebec
Abigail Lithium Property, Quebec
The Company's Quebec exploration target
in 2013/2014 was expected to be the Abigail Lithium Property (the “Abigail Property”) situated within and adjacent
to Nemaska Exploration's Whabouchi Lithium discovery (as referenced in the Form 8-K filed with the SEC on December 3, 2010). The
Abigail Lithium Project is located in the James Bay, Quebec region and is made up of 95 map-designated cells totaling approx 5,000
hectares. They are covered by NTS sheets 320/12. The Abigail Property is located in a gneissic formation between the Lac
des Montagnes volcano-sedimentary belt and the Champion Lake granitoids. The principal exploration target for the Abigail
Property is lithium-bearing spodumene and the Abigail Property is on strike with the high-grade spodumene-bearing pegmatite located
on the Whabouchi property. The Abigail Property is underlain by the same gneissic formation that hosts the Lac Arques SW pegmatite.
Magmatic NI-Cu type deposit associated with ultramafic intrusions may also be found. The Whabouchi spodumene-bearing pegmatite
is located in a low magnetic anomaly on the flank of a medium magnetic high. A high magnetic anomaly located about one km north
of the Whabouchi pegmatite can be interpreted as an ultramafic intrusion. An airborne survey over the Abigail Property could lead
to the discovery of the same magnetic signature and help locate pegmatite and ultramafic intrusions of the Whabouchi and Nisk-1
type. In addition, the Abigail Property is easily accessible with year round roads, electrical power intersecting the Abigail Property
from the town of Nemaska, cell phone service throughout the region, and a local airport in the town of Nemaska.
Nemaska's Whabouchi deposit continues to
confirm high-grade channel samples illustrating the width of the main mineralized zone. Furthermore, Nemaska has recently announced
it is partnering with Chengdu Tianqi. Tianqi isthe largest lithium battery material provider in China that uses spodumene concentrate
as its raw material to produce lithium carbonate and has extensive expertise in lithium products. This relationship validates Nemaska's
deposit and signals the strong potential for their lithium assets in the James Bay region.
On June 13, 2011, the Company entered into
a geological and management services agreement (the “Exploration Agreement”) with Nemaska Exploration Inc. (“Nemaska”)
to coordinate and execute the Company’s Summer 2011 exploration program. The exploration campaign was led by geologist
Yves Caron. Mr. Caron is currently Vice-President Exploration for both Nemaska Exploration and Monarques Resources and has been
a member of the Ordre des Gйologues du Quйbec since 2001. The Exploration Agreement term which was for a
period of six months has expired and the Company is currently negotiating to renew the contract at a future date.
Nemaska provided exploration services to the Company subject
to the schedule of fees below.
Position | |
Cost per
day | |
Sr. consultant - QP services | |
$ | 1000 | |
Project manager – i.t. geologist | |
$ | 600 | |
Student geologist | |
$ | 450 | |
Geologist assistant | |
$ | 350 | |
The Company had committed to an initial
exploration work budget of a minimum of $300,000 to commence no later than May 16, 2011. The Company announced on June
27, 2011 it started its first phase of the exploration campaign on the Property. The program commence date was delayed due to poor
weather conditions in the region. The program was carried out with a team of six people including two geologists and four technicians
under a service agreement with Nemaska. The work program covered geological reconnaissance of approximately 2,500 hectares, mostly
in the central and north part of the property. In addition, the Company focused its efforts on the same geological corridor east
of the Whabouchi lithium deposit consisting of twelve kilometers on the same geological trend. The purpose of the exploration program
was mainly to locate mineralized pegmatites, but also any other kind of economic mineralization. The Company has completed its
geological and prospecting program on approximately 15% of the Property for approximately $175,000, following the budgeted schedule
listed below.
On September 19, 2011 the Company obtained
the airborne magnetic survey for the Abigail Property from the Ministry of Natural Resources in Quebec. The airborne survey
encompasses the entire Property covered by NTS Sheets 32O12 and 32O13 in the Lac Des Montagnes and Lac Abigail region of Quebec.
The airborne survey will locate the ultramafic intrusions if they exist, the basalt and/or ultramafic remnants, the contrast between
the gneiss and Champion Lake granitoids and, if the magnetic contrast with the encasing rocks is strong enough, the pregmatites.
The Company believes the airborne survey is a critical step in the development of the Abigail Property. The Company had budgeted
$150,000 for the survey, and fortunately was able to obtain the report from the Ministry of Natural Resources at a zero cost base.
The Company retained the services of Donald Theberge, a professional engineer, to fulfill a Canadian NI43-101 report on its field
operations, and to review the survey in respect to the planning of Phase II (discussed in details below) of the Company's exploration
campaign. The Nemaska report in conjunction with the airborne survey has allowed the Company to prepare a plan and budget for Phase
II of the exploration campaign on the Abigail Property. Phase II of the exploration campaign will involve a geological
survey and prospecting program covering the targets to be defined by the airborne survey.
On November 4, 2011, the Company received
the NI 43-101 report (the “Report”) summarizing the analysis of the airborne survey and containing the details and
results from the Nemaska exploration campaign in June 2011. The reconnaissance geology program was carried out on the
property by Nemaska on behalf of the Company. More than 2,000 GPS points were recorded and 39 samples were taken and analyzed.
Samples were mainly taken from pegmatites, but also from granitoid, gabbro, basalts and diab ases. Samples were taken
where mineralization was seen or suspected, like pegmatite and rusted and/or silicified zones, and when sulphides were observed. Samples
were analyzed by ALS Minerals, located at 1322, rue Harricana, Val-d’Or (Quйbec). Two grab samples returned
slightly anomalous results. The first, numbered 18070, is from a pegmatite visually containing 1% Mo, which returned 292 ppm Mo
and 466 ppm Rb. The second, numbered 18005, is from a pink pegmatite and returned 151.5 ppm Nb, 24 ppm Sm and 147.5 ppm Ta.
No drilling has been conducted by the Company
since it purchased the Abigail Property. According to the Report, the magnetic/gradiometric airborne survey released
in September 2011, observed at least three families of magnetic lineaments. The first is oriented at about 070 °, and
outlines the north boundary of the Lac des Montagnes volcanic belt. The second is oriented at approximately 040 ° and
is located in the paragneiss. The third is oriented NW/SE and has been mapped in the field as a regional diabase dyke. At
this point, the most interesting magnetic feature is the magnetic lineament located on the south part of the property, which seems
to outline the north boundary of the volcanic belt. In 1987, Westmin detected several Dighem EM anomalies along this lineament,
but did not follow up. This horizon can be fertile, mainly for sulphide-type mineralization.
The Company believes the Abigail Property
has good potential for both rare earths in pegmatites and for sulphide deposits in volcanics. In addition, the airborne
survey has found magnetic anamalies for kimberlite targets. Several kimberlite targets were discovered in the
immediate vicinity of the Property, from one to three kilometers to the north/west of the Property. On May 11, 2012, the Company
entered into an Asset Purchase Agreement to acquire 37 mining claims relevant to these kimberlite targets.
To fully explore the potential of the Property,
a two-phase program is recommended. It is described in the proposed budget shown below:
Phase I (Compilation, geophysical and geological surveys and sampling with 2000 m of drilling)
Work | |
Quantity | | |
Unit | | |
Unit Cost | | |
Total | | |
| |
Compilation of the EM Input (SDBJ) and Dighem (2007) anomalies (location of anomalies and interpretation) | |
| | | |
| | | |
| | | |
$ | 10,000 | | |
| | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Line cutting (cut every 100 m and picketed every 25 m) on the main coincident Mag and EM anomalies. Provision of 125 km | |
| 125 | | |
| km | | |
$ | 550 | | |
$ | 68,750 | | |
| | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Ground geophysics, EM (MaxMin) and Mag | |
| 125 | | |
| km | | |
$ | 350 | | |
$ | 43,750 | | |
| | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Geology and prospecting on the cut lines and on the north part of the property (including room and board, transportation, etc.) | |
| | | |
| | | |
| | | |
$ | 100,000 | | |
| | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Stripping, trenching and sampling, all inclusive | |
| | | |
| | | |
| | | |
$ | 50,000 | | |
| | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Drilling on the target to be defined ($225/m, all inclusive) | |
| 2,000 | | |
| m | | |
$ | 225 | | |
$ | 460,000 | | |
| | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Report update, NI 43-101 and for statutory purposes | |
| | | |
| | | |
| | | |
$ | 10,000 | | |
| | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Contingency, estimated at 10% | |
| | | |
| | | |
| | | |
| | | |
| | |
| |
| | | |
| | | |
| | | |
| TOTAL PHASE I | | |
$ | 805,750 | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Phase II | |
| | | |
| | | |
| | | |
| | | |
| | |
Provision of 5,000 m of drilling to test the targets defined during Phase I | |
| 5,000 | | |
| m | | |
$ | 225 | | |
$ | 1,125,000 | | |
| | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Report update, NI 43-101 and for statutory purposes | |
| | | |
| | | |
| | | |
$ | 12,000 | | |
| | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Contingency, estimated at 10% | |
| | | |
| | | |
| | | |
$ | 113,700 | | |
| | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
| |
| | | |
| | | |
| | | |
| TOTAL PHASE II | | |
$ | 1,250,700 | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
| |
| | | |
| | | |
| | | |
| TOTAL PHASE I AND II | | |
$ | 2,056,450 | |
In December 2011, the Company staked an
additional 83 claims in the James Bay region of Quebec. The claims are 100% owned by the Company and registered in the name of
the Company’s subsidiary, Tucana Exploration Inc. The property is made up of 83 map-designated cells totaling 4,439 hectares
with 82 claims covered by NTS sheets 32O12 and 1 claim covered by NTS sheets 32N09. The cost of staking the claims was $8,215.
The claims will expire in November 2013 and exploration work in the amount of $100,000 will be required upon renewal. The Company
secured the additional claims based upon the NI 43-101 technical report and the magnetic and gradiometric airborne survey released
by the Quebec Ministry of Natural Resources in September 2011. The Lac des Montagnes formation is the most fertile rock in this
area for massive sulfides, and it is the same kind of volcano-sedimentary belt you would find in the Rouyn-Noranda and Val d'Or
area yet more metamorphosed. The gradiometric magnetic survey shows magnetic anomalies are present on the property and should be
further investigated.
In March 2012, the Company renewed 71 mineral
claims on the Abigail Property based upon the exploration work reported in the summer of 2011. These claims will expire between
April and May 2014 and exploration work in the amount of $84,000 will be required upon renewal. In addition, the Company has dropped
85 mineral claims located on the northern perimeter of the property. The Company's decision was based upon the results from the
exploration program in the summer 2011 and a review of the airborne magnetic survey. The majority of the claims are located in
the Lac des Montagnes volcano-sedimentary formation, and its immediate surrounding area. This is the most fertile ground in the
area, and resembles the Abitibi greenstone volcano-sedimentary formations. The Company believes it has kept the most promising
portion of the Property based upon the geology reports. The Property now consists of 220 map-designated cells totaling approximately
11,400 hectares within and adjacent to Nemaska Lithium's Whabouchi discovery.
In March 2012, the Company also retained
the services of Gestion SDM Inc. to represent the Company and manage all of the Company's mineral claims with the Department of
Natural Resources in Quebec and has terminated the agreement as of August 2013.
In October 2013, the Company elected to
drop 83 Abigail claims to hold 95 Abigail claims.
In May and June 2014 the Company elected
to drop the remaining 95 Abigail claims.
Lac Kame and EM-1Properties, Quebec
In addition to the Abigail Property, the
Company closed an Lac Kame and EM-1 Purchase Agreement to acquire a One Hundred (100%) interest in two mining properties known
as the Lac Kame and EM-1 both located in the James Bay, Quebec region of Canada. It is covered by NTS sheets 32O13. The property
is made up of 37 map-designated cells totaling 1,961 hectares. The claims will expire in November 2013 and exploration work in
the amount of $44,000 will be required upon renewal. The Company's main interest with the newly acquired claims will be magnetic
anomalies for kimberlite based upon the airborne magnetic survey released in October 2011. The Company plans on
raising an addition $150,000 to commence an initial exploration campaign designed to discover the precise location of drill test
targets identified by the aireborne electromagnetic (“EM”) data. Each identified target will be surveyed
with ground EM instruments to insure that the character of the anomaly is consistent with known kimberlites. The Company
elected to let these claims expire in November 2013.
Plan of Operation: Nevada
On February 11, 2013, the Company closed
an Agreement and Plan of Merger (the “Merger Agreement”), by and among the Company, Tucana Holdings Inc., a Nevada
corporation and wholly-owned subsidiary of the Company (“Holdings”), and Rimrock Mining, Inc., a Nevada corporation
(“Rimrock”), pursuant to which Holdings merged with and into Rimrock, and Rimrock became a wholly-owned subsidiary
of the Company. Pursuant to the terms of the Merger Agreement, the Company acquired all the interest in three prospective gold
exploration properties known as the Rimrock, West Silver Cloud and Pony Spur properties, located in northeast Nevada (the
“Acquired Properties”) and issued 17,800,000 shares of the Company’s Common Stock, to the sellers of the Acquired
Properties as consideration for such properties. In accordance with the guidance provided in ASC 805-50-30-5, the transaction has
been accounted for as “Transactions between Entities under Common Control”. The Acquired Properties were recorded
based on the carrying amounts in the accounts of the transferring entity at the date of transfer. In addition, the Company
issued 2,000,000 shares of its common stock to a consultant and paid legal charges amounting to $52,117 in connection with the
transaction. Any mineral production from the Acquired Properties is subject to net smelter return royalties of 3% to
the previous claim owners. The Acquired Properties are comprised of almost 2,000 acres of land and are located on or in close proximity
to the Carlin Trend and Midas Trend in Elko, Nevada.
On February 13, 2013, the Company completed
an Initial Closing of a “best efforts min-max” private offering of a minimum of $500,000 up to a maximum $1,000,000
with a group of accredited investors for total gross proceeds to us of $502,000. The proceeds from the financing will
be used exclusively for the newly acquired Nevada properties.
The Company’s plan in the coming
months includes additional exploration research and operations on the Rimrock, West Silver Cloud, and Pony Spur gold-silver properties.
A detailed program of geologic mapping and local geochemical sampling and analysis has been conducted on the Rimrock property,
and a new geophysical exploration program of Controlled Source Audio Magnetotellurics has been designed and will commence in the
coming months. These programs are designed to help the Company to refine its drilling targets at the Rimrock property. The Company
will also begin on a revised 43-101 compliant technical report for the Rimrock property after the geophysics program has been completed.
Core drilling of gold-silver Midas and Carlin-style drill targets is contemplated to begin in late 2014. Further data compilation
work and interpretive geological and geophysical analyses are being conducted on the West Silver Cloud and Pony Spur properties.
The preparation of revised technical reports of the West Silver Cloud and Pony Spur properties will be completed in late 2014.
No drilling is expected for the West Silver Cloud and Pony Spur properties in 2014.
On April 18, 2013, the Company announced
that it has completed an initial geological mapping and geochemical sampling program on the Rimrock gold-silver property in Elko
County, Nevada. The purpose of this property evaluation was to develop a surface map of the property with regard to lithology,
alteration, vein and structural kinematics and report on observations. The new geologic mapping has shown that the Rimrock gold
property contains a large-scale, multiple-fault dilation zone gold-silver target situated just north of the Hollister Mine.
The CSAMT survey covered 10.9 line Km east-west
across the property, with four survey lines spaced 250 to 400 meters apart, encompassing all of the previously identified mineralization
targets on the property. The CSAMT data were acquired using a 50 meter electric-field receiver dipole, and one CSAMT transmitter,
of a grounded dipole configuration. Initial interpretations of the CSAMT survey validate the mineralization model developed by
the Company's technical team, and include the following observations:
— The previously identified "Dilation"
gold-silver target on surface along the major "IC Fault Zone" has been verified at depth by the survey.
— The siliceous mineralization associated
with the "Dilation" target has been interpreted to be constrained by steeply dipping near-vertical fault zones.
— These fault zones are interpreted
to be up to 150 meters in width, representing one of the widest gold-silver targets in the entire Midas-Hollister region, potentially
hosting near-surface bulk-mineable gold mineralization.
— The location of older Paleozoic
basement rocks has been identified to be between 275 and 375 meters below surface, confirming the mineralization model developed
by Company geologists.
The Paleozoic basement is likely part of
the siliceous "Upper Plate" Vinini Formation package that lies beneath surface volcanic rocks, and above the Roberts
Mountain Thrust fault package that separates the Vinini from "Lower Plate" sedimentary rocks. This "Lower Plate"
sedimentary unit is known to host the large Carlin-style gold deposits situated further south at the Goldstrike-BlueStar-Carlin
mine complex. The Paleozoic rocks at Rimrock are believed to have been domally uplifted to the surface, immediately west of the
property boundary. As a result, the mineralized layer with Carlin-style gold potential could be much closer to the surface at Rimrock
than at Hollister or at Midas. An updated evaluation of the northwest extension of the Carlin trend has been recently completed,
and the Rimrock project is interpreted to lie directly in the heart of this projection of the prolific gold-bearing trend.
Overall, the new CSAMT data appear to provide
a much clearer basis for defining the presence, geometry, and depth extensions of the northerly-trending structures at Rimrock
that contain opalite-cinnabar (mercury sulfide) mineralization. The Company is continuing to further interpret the survey data,
with the help of Wright Geophysics. The final interpretations will be used to design new exploration drillholes at Rimrock.
The principal epithermal Midas style gold-silver
target was validated and even augmented by the new geologic mapping and sampling. Seventeen new samples were taken and analyzed,
to further investigate alteration and mineralization seen on the property. These new detailed sample data show anomalous gold (to
13 ppb Au), silver (to 0.87 ppm Ag), antimony (to 5.5 ppm Sb), arsenic (to 39.5 ppm As), mercury (to 327 ppm Hg), selenium (to
6.5 ppm Se), and thallium (to 3.45 ppm Tl), which could be associated with Midas and Carlin-style gold-silver deposits along certain
major fault structures on the property. These were surface spot rock chip samples taken well above the zone where anomalous gold
values would be expected to occur. See full table below.
The "Dilation" target was formulated
based upon new geologic mapping and geochemical sampling by the Company’s chief consulting geologist. The "Dilation"
was formed when the northeast-trending IC Fault "jogged" to the east, forming a dilated rhomboidal shaped block in the
jog area, which allowed hydrothermal fluids to more easily migrate upward and cause mercury-arsenic mineralization and alteration
at the ground surface. Two small-scale mercury mines are situated in the southwestern part of this "Dilation" fault intersection
block at Rimrock. The Dilation target at Rimrock shows highly altered, faulted, silicified felsic tuffaceous volcanic rocks at
the surface, overlain by post-mineral rhyolitic flow domes similar to those near the Hollister Mine. The altered rocks locally
show significant amounts of opaline silica and local mercury minerals, and local veining that crosscuts these rocks.
Newmont drilled several very shallow rotary
drillholes in the project area in 1984 searching for near-surface disseminated gold mineralization. The “top elevations”
of epithermal Midas-Hollister type gold-silver targets at Rimrock likely start at 150 to 300 metre depths below surface. The main
zone of ore grade gold-silver mineralization at Midas is at least 500 metres in height, below the “top elevations”. Local
small poddy bodies of mineralization may occur above this "top elevation" level as at Midas. Rimrock Gold's exploration
efforts are focused upon discovery of deeper Midas and Hollister Mine style gold-silver mineralization, 125 to 300 metres below
the surface. The elevations of ore zones at Hollister will be used to help guide exploration on the Rimrock property.
On May 3, 2013, Rimrock Gold entered
into a Purchase Agreement with Geologix to acquire an exploration epithermal bonanaza gold-silver property in Nevada known as the
Silver Cloud Property. Pursuant to the Purchase Agreement, the Company acquired from Geologix a one hundred percent
(100%) interest in and to: (i) certain properties that compress 552 unpatented mining claims totaling 11,210 acres (the Mining
Claims comprised of the Geologix Claims and the Pescio Claims), and (ii) a lease agreement dated June 1, 1999 between Geologix
USA as successor to Teck Resources Inc., and Carl Pescio and Janet Pescio in respect of those Mining Claims held by Pescio. The
Company is also required to pay $50,000 to the Pescio family annually. The lease term is to June 30, 2023 with option to extend
the lease term for three subsequent ten years terms.
In consideration for the Mining Claims
and the Pescio Lease, the Company shall issue to Geologix 500,000 shares of the Company’s Common Stock comprised of 400,000
shares to Geologix and 100,000 shares Geologix is required to assign to Teck Resources Inc. In addition, if the Company
delineates more than two million ounces of gold in proven and probable reserves on the Mining Claims, then the Company will issue
a further 250,000 common shares of the Company to Geologix. Any mineral production from the Silver Cloud Property is subject to
net smelter return royalties of 2% due to Royal Gold Inc. and 3% to the underlying claim owners.
The 500,000 shares were issued on May 5,
2013. The acquired properties were recorded based on the fair value of the Company’s shares of common stock issued,
which was determined based on a recent private placement transaction adjusted for the fair value of warrants issued under that
transaction.
Currently, our VP of Exploration and our
advisory board are reviewing all of the data and reports received from Geologix Exploration on the Silver Cloud property. The
Company expects to have an exploration plan prepared in the coming months.
Rimrock Property
The Rimrock property is a Midas-style gold-silver
property situated in the Midas (“Northern Nevada Rifts”) gold trend and also directly along a domed up portion of the
Carlin Gold Trend, 8 Km northwest of Waterton Global’s Hollister gold-silver mine, and 16 Km east southeast of Klondex Mines
Ltd.'s Midas Mine property. The Rimrock property comprises 54 lode claims that cover approximately 1,080 acres. The Rimrock property
has three old mercury mines in the area, with one situated directly on top of the main gold ore target, which lies at a major fault
intersection. The Paleozoic rocks at Rimrock have been domally uplifted to be present at surface, immediately west of the property
boundary. Consequently, the rocks with Carlin-style gold potential could be much closer to the surface than at Hollister or at
Midas. Anomalously elevated Carlin-only trace element thallium was found in three samples at Rimrock. This represents a geochemical
leakage-upward anomaly of thallium and arsenic. The Company is now focused upon the discovery of relatively shallower Midas style
gold-silver deposits. Any mineral production from the Rimrock, West Silver Cloud, and Pony Spur Properties is subject to Net Smelter
Returns royalties of 3%.
In April 2013, announce that it has completed
an initial geological mapping and geochemical sampling program on the Rimrock gold-silver property in Elko County, Nevada. The
new geologic mapping has shown that the Rimrock gold property contains a large-scale, multiple-fault dilation zone gold-silver
target situated just north of the Hollister Mine.
The principal epithermal Midas style gold-silver
target was validated and even augmented by the new geologic mapping and sampling. Seventeen new samples were taken and analyzed,
to further investigate alteration and mineralization seen on the property. These new detailed sample data show anomalous gold (to
13 ppb Au), silver (to 0.87 ppm Ag), antimony (to 5.5 ppm Sb), arsenic (to 39.5 ppm As), mercury (to 327 ppm Hg), selenium (to
6.5 ppm Se), and thallium (to 3.45 ppm Tl), which could be associated with Midas and Carlin-style gold-silver deposits along certain
major fault structures on the property. These were surface spot rock chip samples taken well above the zone where anomalous gold
values would be expected to occur. More detailed geochemical data from this program may be found in Rimrock Gold's upcoming 10Q
report.
The "Dilation" target was formulated
based upon new geologic mapping and geochemical sampling by Rimrock's chief consulting geologist. The "Dilation" was
formed when the northeast-trending IC Fault "jogged" to the east, forming a dilated rhomboidal shaped block in the jog
area, which allowed hydrothermal fluids to more easily migrate upward and cause mercury-arsenic mineralization and alteration at
the ground surface. Two small-scale mercury mines are situated in the southwestern part of this "Dilation" fault intersection
block at Rimrock. The Dilation target at Rimrock shows highly altered, faulted, silicified felsic tuffaceous volcanic rocks at
the surface, overlain by post-mineral rhyolitic flow domes similar to those near the Hollister Mine. The altered rocks locally
show significant amounts of opaline silica and local mercury minerals, and local veining that crosscuts these rocks.
Newmont drilled several very shallow rotary
drillholes in the project area in 1984 searching for near-surface disseminated gold mineralization. The "top elevations"
of epithermal Midas-Hollister type gold-silver targets at Rimrock likely start at 150 to 300 metre depths below surface. The main
zone of ore grade gold-silver mineralization at Midas is at least 500 metres in height, below the "top elevations".
Local small poddy bodies of mineralization may occur above this "top elevation" level as at Midas. Rimrock Gold's exploration
efforts are focused upon discovery of deeper Midas and Hollister Mine style gold-silver mineralization, 125 to 300 metres below
the surface. The elevations of ore zones at Hollister will be used to help guide exploration on the Rimrock property.
In April 2013, the Company also announced
that its contractor Zonge Engineering has completed a new Controlled Source Audio Magnetotelluric ("CSAMT") geophysical
resistivity survey on the Company's Rimrock gold-silver project. CSAMT surveys have previously been very successful in delineating
lithological boundaries and major fault zones in the region, including at the Hollister mine.
Zonge Engineering completed a 4-line survey
covering 10.9 line Km east-west across the project property, spaced 250 to 400 meters apart, encompassing numerous geological targets
previously identified by the Company's technical team. The Company is presently interpreting the data with the help of Wright Geophysics.
The final interpretations will be used to help select new exploration drilling targets at Rimrock.
Preliminary analysis of the raw CSAMT data
appears to provide an excellent basis for defining and interpreting potentially mineralized structures at Rimrock. Some of these
structural zones appear to be much wider than previously thought, including the previously identified "Dilation" Midas-style
gold-silver target. The CSAMT survey also appears to have better defined the lithological boundary between the older Paleozoic
basement rocks and the overlying volcanic rocks present at the surface, along with the geometry of faulting in the property area.
The Paleozoic rocks at Rimrock have been
domally uplifted to the surface, immediately west of the property boundary, with Vinini Formation sedimentary rocks present. As
a result, the mineralized layer with Carlin-style gold potential could be much closer to the surface than at Hollister or at Midas.
Fault feeders for gold are critical in defining where both Midas- and Carlin-style gold mineralized bodies lie, and CSAMT has been
proven as an excellent, cost-effective technique to identify fault feeders in the region. An updated evaluation of the northwest
extension of the Carlin trend has just been completed, and the Rimrock property is interpreted to lie directly in the heart of
this projection of the prolific gold-bearing trend.
In May 2013, the Company announced that
its geophysics consultant Wright Geophysics has provided the Company with an initial interpretation of the recently completed Controlled
Source Audio Magnetotelluric ("CSAMT") geophysical resistivity survey on the Company's wholly-owned Rimrock gold-silver
property in Elko County, Nevada. The Rimrock property is strategically located in a highly mineralized epithermal gold-silver district,
7 Km northwest of Rodeo Creek's Hollister mine, and 16 Km southeast of Newmont's Midas mine.
The survey covered 10.9 line Km east-west
across the property, with four survey lines spaced 250 to 400 meters apart, encompassing all of the previously identified mineralization
targets on the property. The CSAMT data were acquired using a 50 meter electric-field receiver dipole, and one CSAMT transmitter,
of a grounded dipole configuration. Initial interpretations of the CSAMT survey validate the mineralization model developed by
the Company's technical team, and include the following observations:
|
● |
The previously identified "Dilation" gold-silver target on surface along the major "IC Fault Zone" has been verified at depth by the survey. |
|
● |
The siliceous mineralization associated with the "Dilation" target has been interpreted to be constrained by steeply dipping near-vertical fault zones. |
|
● |
These fault zones are interpreted to be up to 150 meters in width, representing one of the widest gold-silver targets in the entire Midas-Hollister region, potentially hosting near-surface bulk-mineable gold mineralization. |
|
● |
The location of older Paleozoic basement rocks has been identified to be between 275 and 375 meters below surface, confirming the mineralization model developed by Company geologists. |
The Paleozoic basement is likely part of
the siliceous "Upper Plate" Vinini Formation package that lies beneath surface volcanic rocks, and above the Roberts
Mountain Thrust fault package that separates the Vinini from "Lower Plate" sedimentary rocks. This "Lower Plate"
sedimentary unit is known to host the large Carlin-style gold deposits situated further south at the Goldstrike-BlueStar-Carlin
mine complex. The Paleozoic rocks at Rimrock are believed to have been domally uplifted to the surface, immediately west of the
property boundary. As a result, the mineralized layer with Carlin-style gold potential could be much closer to the surface at Rimrock
than at Hollister or at Midas. An updated evaluation of the northwest extension of the Carlin trend has been recently completed,
and the Rimrock project is interpreted to lie directly in the heart of this projection of the prolific gold-bearing trend.
Overall, the new CSAMT data appear to provide
a much clearer basis for defining the presence, geometry, and depth extensions of the northerly-trending structures at Rimrock
that contain opalite-cinnabar (mercury sulfide) mineralization. The Company is continuing to further interpret the survey data,
with the help of Wright Geophysics. The final interpretations will be used to design new exploration drillholes at Rimrock.
In July 2013, the Company announced that
it has identified and selected five new drill sites for drilling. The new drill sites were defined through interpretation of geological,
geochemical, and geophysical data collected on the project by various former property owners and option-holders over the past 35
years. The Company's management team has identified several mineralization targets along the IC Fault system, including the large
Dilation Zone located between two well-defined faults representing a 100 meter wide drill target area. The Company plans to drill-test
the area of convergence of these two faults at the northern and southern ends of the Dilation Zone. The Rimrock project has never
been drill-tested specifically for the Midas-style gold-silver mineralization envisioned by the Company's management. Rock samples
from a recently completed surface sampling program at the project show anomalous values of several indicator metals typically associated
with Midas-Hollister gold deposits, including arsenic and selenium.
In conclusion the Company's comprehensive
database for the Rimrock project provides a much clearer basis for defining the presence, geometry, and depth extensions of north-south
trending structures that contain opalite-cinnabar (mercury sulfide) mineralization. The Company is planning to drill these initial
targets, upon posting the requisite reclamation bond and receiving the drill-permit from the U.S. Bureau of Land Management.
These gold-silver targets at the Rimrock
property have never been drill tested at depth for Midas-Hollister style gold-silver mineralization, nor for Carlin-style gold
mineralization. The Company expects that the Rimrock property offers potential to hold a large, high-grade, underground mineable
Midas-Hollister-type Low Sulfidation gold-silver deposit.
Final Report - Job No: 12-338-08679-01
Sample | |
Au | | |
Ag | | |
Ce | | |
Hf | | |
La | | |
Hg | | |
Hg | | |
Hg | | |
Al | | |
As | | |
Ba | | |
Be | | |
Bi | | |
Ca | | |
Cd | | |
Co | | |
Cr | | |
Cs | | |
Cu | |
Designation | |
ppb | | |
ppm | | |
ppm | | |
ppm | | |
ppm | | |
ppb | | |
ppm | | |
ppb | | |
% | | |
ppm | | |
ppm | | |
ppm | | |
ppm | | |
% | | |
ppm | | |
ppm | | |
ppm | | |
ppm | | |
ppm | |
| |
Au- 1AT- AA | | |
50- 4A- UT | | |
50-4A- UT | | |
50- 4A- UT | | |
50- 4A- UT | | |
Hg-AR- OR- CVAA | | |
Hg-AR- TR- CVAA | | |
Hg-AR- TR- CVAA | | |
50- 4A- UT | | |
50- 4A- UT | | |
50- 4A- UT | | |
50- 4A- UT | | |
50- 4A- UT | | |
50- 4A- UT | | |
50- 4A- UT | | |
50-
4A- UT | | |
50-
4A- UT | | |
50-
4A- UT | | |
50-
4A- UT | |
RMR-01 | |
| <5 | | |
| 0.27 | | |
| 6.83 | | |
| <0.1 | | |
| 6.1 | | |
| | | |
| 28.16 | | |
| 28160 | | |
| 0.24 | | |
| 1.5 | | |
| 618 | | |
| 3.22 | | |
| <0.01 | | |
| 0.07 | | |
| 0.05 | | |
| 0.6 | | |
| 308 | | |
| 0.28 | | |
| 2 | |
RMR-02 | |
| <5 | | |
| 0.41 | | |
| 47.47 | | |
| <0.1 | | |
| 26.7 | | |
| | | |
| 0.11 | | |
| 108 | | |
| 4.47 | | |
| 12.6 | | |
| 305 | | |
| 7.76 | | |
| 0.87 | | |
| 0.33 | | |
| 0.19 | | |
| 1 | | |
| 150 | | |
| 5.17 | | |
| 7.6 | |
RMR-03 | |
| <5 | | |
| 0.39 | | |
| 83.04 | | |
| 0.1 | | |
| 52.9 | | |
| | | |
| 0.15 | | |
| 147 | | |
| 4.9 | | |
| 6.1 | | |
| 174 | | |
| 5.65 | | |
| <0.01 | | |
| 0.32 | | |
| 0.17 | | |
| 0.9 | | |
| 159 | | |
| 4.08 | | |
| 5.3 | |
RMR-04 | |
| 13 | | |
| 0.12 | | |
| 22.53 | | |
| <0.1 | | |
| 15.6 | | |
| | | |
| 19.53 | | |
| 19525 | | |
| 0.79 | | |
| 14.9 | | |
| 580 | | |
| 0.74 | | |
| 1.21 | | |
| 0.11 | | |
| 0.2 | | |
| 1 | | |
| 260 | | |
| 1.3 | | |
| 7.5 | |
RMR-05 | |
| <5 | | |
| 0.21 | | |
| 2.57 | | |
| 2.5 | | |
| 1.6 | | |
| | | |
| 68.5 | | |
| 68502 | | |
| 0.17 | | |
| <0.2 | | |
| 726 | | |
| 0.59 | | |
| <0.01 | | |
| 0.06 | | |
| 0.1 | | |
| 1 | | |
| 531 | | |
| 0.24 | | |
| 2.2 | |
RMR-06 | |
| <5 | | |
| 0.14 | | |
| 0.31 | | |
| 1.1 | | |
| 0.5 | | |
| 327116 | | |
| >100 | | |
| >100000 | | |
| 0.07 | | |
| <0.2 | | |
| 41 | | |
| 1.07 | | |
| <0.01 | | |
| 0.02 | | |
| 0.07 | | |
| 2.6 | | |
| 626 | | |
| 0.07 | | |
| 2.5 | |
RMR-07 | |
| <5 | | |
| 0.1 | | |
| 23.18 | | |
| 0.6 | | |
| 15.9 | | |
| | | |
| 5.12 | | |
| 5120 | | |
| 1.33 | | |
| 39.5 | | |
| 820 | | |
| 1.25 | | |
| 0.98 | | |
| 0.18 | | |
| 0.22 | | |
| <0.1 | | |
| 239 | | |
| 1.01 | | |
| 5.2 | |
RMR-08 | |
| <5 | | |
| 0.44 | | |
| 4.83 | | |
| 2.7 | | |
| 2.9 | | |
| 311326 | | |
| >100 | | |
| >100000 | | |
| 0.3 | | |
| 1.4 | | |
| 644 | | |
| 0.16 | | |
| <0.01 | | |
| 0.05 | | |
| 0.17 | | |
| 2.3 | | |
| 520 | | |
| 0.24 | | |
| 3.8 | |
RMR-09 | |
| <5 | | |
| 0.32 | | |
| 82.42 | | |
| 5.8 | | |
| 46.5 | | |
| | | |
| 10.23 | | |
| 10229 | | |
| 8.91 | | |
| 4.7 | | |
| 903 | | |
| 4.14 | | |
| 1.76 | | |
| 1.42 | | |
| 0.17 | | |
| 3.1 | | |
| 26 | | |
| 5.13 | | |
| 14.4 | |
RMR-10 | |
| 8 | | |
| 0.23 | | |
| 6.96 | | |
| <0.1 | | |
| 3.6 | | |
| | | |
| 84.94 | | |
| 84943 | | |
| 0.37 | | |
| 16 | | |
| 2004 | | |
| 1.13 | | |
| 0.8 | | |
| 0.11 | | |
| 0.42 | | |
| 0.5 | | |
| 314 | | |
| 0.86 | | |
| 5.1 | |
RMR-11 | |
| <5 | | |
| 0.37 | | |
| 64.77 | | |
| 2.5 | | |
| 36 | | |
| | | |
| 19.74 | | |
| 19740 | | |
| 4.37 | | |
| 8.3 | | |
| 891 | | |
| 3.07 | | |
| 1.03 | | |
| 0.47 | | |
| 0.44 | | |
| 0.6 | | |
| 39 | | |
| 4.71 | | |
| 10.3 | |
RMR-12 | |
| <5 | | |
| 0.26 | | |
| 3.51 | | |
| 0.3 | | |
| 2.4 | | |
| 276411 | | |
| >100 | | |
| >100000 | | |
| 0.2 | | |
| <0.2 | | |
| 400 | | |
| 0.18 | | |
| 1.28 | | |
| 0.04 | | |
| 0.12 | | |
| 1.3 | | |
| 722 | | |
| 0.29 | | |
| 3.1 | |
RMR-13 | |
| <5 | | |
| 0.05 | | |
| 1.57 | | |
| 1.6 | | |
| 1.3 | | |
| | | |
| 0.72 | | |
| 721 | | |
| 0.42 | | |
| <0.2 | | |
| 152 | | |
| <0.05 | | |
| <0.01 | | |
| 0.15 | | |
| 0.06 | | |
| 0.5 | | |
| 77 | | |
| 0.76 | | |
| 0.6 | |
RMR-14 | |
| 7 | | |
| 0.26 | | |
| 116.99 | | |
| 2.1 | | |
| 54.8 | | |
| | | |
| 6.76 | | |
| 6758 | | |
| 5.08 | | |
| 25.3 | | |
| 1274 | | |
| 0.56 | | |
| <0.01 | | |
| 0.11 | | |
| 0.07 | | |
| 0.2 | | |
| 70 | | |
| 1.13 | | |
| 7.1 | |
RMR-15 | |
| <5 | | |
| 0.53 | | |
| 61.74 | | |
| 6.4 | | |
| 32.1 | | |
| | | |
| 4.21 | | |
| 4212 | | |
| 6.08 | | |
| 19.1 | | |
| 1654 | | |
| 0.41 | | |
| <0.01 | | |
| 0.53 | | |
| <0.02 | | |
| 1.2 | | |
| 25 | | |
| 2.5 | | |
| 40.3 | |
RMR-16 | |
| 6 | | |
| 0.87 | | |
| 58.16 | | |
| 3.8 | | |
| 31.7 | | |
| | | |
| 0.22 | | |
| 220 | | |
| 6.51 | | |
| 5.3 | | |
| 75 | | |
| 10.43 | | |
| <0.01 | | |
| 0.29 | | |
| 0.2 | | |
| 0.6 | | |
| 123 | | |
| 9.27 | | |
| 5.8 | |
RMR-17 | |
| <5 | | |
| 0.8 | | |
| 68.43 | | |
| 3.4 | | |
| 34.5 | | |
| | | |
| 0.14 | | |
| 137 | | |
| 5.25 | | |
| 5.8 | | |
| 469 | | |
| 7.4 | | |
| <0.01 | | |
| 0.24 | | |
| 0.12 | | |
| 0.4 | | |
| 148 | | |
| 5.76 | | |
| 3.9 | |
RMR-18 | |
| <5 | | |
| 0.87 | | |
| 32.35 | | |
| 4.2 | | |
| 17.7 | | |
| | | |
| 0.14 | | |
| 145 | | |
| 5.45 | | |
| 6.6 | | |
| 1103 | | |
| 7.64 | | |
| 3.11 | | |
| 0.31 | | |
| 0.13 | | |
| 0.7 | | |
| 179 | | |
| 5.1 | | |
| 4.6 | |
Final Report - Job No: 12-338-08679-01
Sample | |
Fe | | |
Ga | | |
Ge | | |
In | | |
K | | |
Li | | |
Mg | | |
Mn | | |
Mo | | |
Na | | |
Nb | | |
Ni | | |
P | | |
Pb | | |
Re | |
Designation | |
% | | |
ppm | | |
ppm | | |
ppm | | |
% | | |
ppm | | |
% | | |
ppm | | |
ppm | | |
% | | |
ppm | | |
ppm | | |
ppm | | |
ppm | | |
ppm | |
| |
50-
4A-
UT | | |
50- 4A- UT | | |
50-4A-
UT | | |
50-4A-
UT | | |
50- 4A- UT | | |
50-
4A-
UT | | |
50-4A- UT | | |
50- 4A- UT | | |
50- 4A- UT | | |
50- 4A- UT | | |
50- 4A- UT | | |
50- 4A- UT | | |
50- 4A- UT | | |
50- 4A- UT | | |
50-4A- UT | |
RMR-01 | |
| 0.82 | | |
| 1.68 | | |
| <0.05 | | |
| <0.01 | | |
| 0.04 | | |
| 3.6 | | |
| 0.04 | | |
| 69 | | |
| 1.49 | | |
| 0.03 | | |
| <0.1 | | |
| 6.1 | | |
| 45 | | |
| 3.2 | | |
| <0.002 | |
RMR-02 | |
| 2.3 | | |
| 15.56 | | |
| 0.09 | | |
| 0.07 | | |
| 2.68 | | |
| 61.1 | | |
| 0.12 | | |
| 308 | | |
| 1.86 | | |
| 1.78 | | |
| 13.2 | | |
| 4.4 | | |
| 409 | | |
| 43.8 | | |
| 0.024 | |
RMR-03 | |
| 1.28 | | |
| 15.92 | | |
| 0.26 | | |
| 0.04 | | |
| 3.16 | | |
| 26.4 | | |
| 0.04 | | |
| 163 | | |
| 2.83 | | |
| 1.92 | | |
| 15.5 | | |
| 4.1 | | |
| 633 | | |
| 29.2 | | |
| 0.026 | |
RMR-04 | |
| 2.14 | | |
| 3.82 | | |
| 0.12 | | |
| 0.03 | | |
| 0.26 | | |
| 2.2 | | |
| 0.04 | | |
| 116 | | |
| 2.14 | | |
| 0.04 | | |
| 4.1 | | |
| 4.3 | | |
| 315 | | |
| 16.9 | | |
| 0.009 | |
RMR-05 | |
| 1.03 | | |
| 1.3 | | |
| 0.17 | | |
| <0.01 | | |
| 0.05 | | |
| 1.1 | | |
| 0.02 | | |
| 102 | | |
| 0.71 | | |
| 0.03 | | |
| 7.1 | | |
| 8.6 | | |
| 63 | | |
| 3.6 | | |
| <0.002 | |
RMR-06 | |
| 1.26 | | |
| 0.43 | | |
| 0.5 | | |
| <0.01 | | |
| 0.03 | | |
| 0.6 | | |
| <0.01 | | |
| 79 | | |
| 0.4 | | |
| 0.01 | | |
| <0.1 | | |
| 9 | | |
| 22 | | |
| <0.5 | | |
| 0.004 | |
RMR-07 | |
| 6.37 | | |
| 5.05 | | |
| 0.6 | | |
| 0.07 | | |
| 0.44 | | |
| 2.3 | | |
| 0.13 | | |
| 90 | | |
| 5.81 | | |
| 0.03 | | |
| 3.5 | | |
| 4 | | |
| 391 | | |
| 13.3 | | |
| 0.01 | |
RMR-08 | |
| 1.28 | | |
| 1.39 | | |
| 0.3 | | |
| <0.01 | | |
| 0.06 | | |
| 2.2 | | |
| 0.03 | | |
| 205 | | |
| 0.93 | | |
| 0.02 | | |
| 7.6 | | |
| 8 | | |
| 64 | | |
| 3.7 | | |
| 0.005 | |
RMR-09 | |
| 3.03 | | |
| 18.22 | | |
| 0.31 | | |
| 0.07 | | |
| 1.37 | | |
| 21.5 | | |
| 0.98 | | |
| 315 | | |
| 0.23 | | |
| 0.8 | | |
| 8.4 | | |
| 4.9 | | |
| 544 | | |
| 21.1 | | |
| 0.019 | |
RMR-10 | |
| 6.38 | | |
| 5.34 | | |
| 1.66 | | |
| 0.06 | | |
| 0.11 | | |
| 1.3 | | |
| 0.03 | | |
| 64 | | |
| 4.14 | | |
| 0.02 | | |
| 3.7 | | |
| 4 | | |
| 179 | | |
| 34.7 | | |
| 0.01 | |
RMR-11 | |
| 2.44 | | |
| 13.11 | | |
| 0.35 | | |
| 0.09 | | |
| 1.15 | | |
| 13.1 | | |
| 0.49 | | |
| 97 | | |
| 3.56 | | |
| 0.35 | | |
| 12.8 | | |
| 1.4 | | |
| 478 | | |
| 29.1 | | |
| 0.008 | |
RMR-12 | |
| 2.73 | | |
| 1.87 | | |
| 0.41 | | |
| 0.01 | | |
| 0.06 | | |
| 1.9 | | |
| 0.02 | | |
| 107 | | |
| 2.5 | | |
| 0.03 | | |
| 3.6 | | |
| 10.1 | | |
| 108 | | |
| 33 | | |
| 0.007 | |
RMR-13 | |
| 0.51 | | |
| 1.16 | | |
| 0.08 | | |
| <0.01 | | |
| 0.11 | | |
| 0.5 | | |
| 0.03 | | |
| 60 | | |
| 0.45 | | |
| 0.03 | | |
| <0.1 | | |
| 1.9 | | |
| 32 | | |
| 13.8 | | |
| 0.006 | |
RMR-14 | |
| 1.71 | | |
| 15.32 | | |
| 0.32 | | |
| 0.09 | | |
| 0.42 | | |
| 10.8 | | |
| 0.01 | | |
| 23 | | |
| 4.82 | | |
| 0.11 | | |
| 12.5 | | |
| 1.4 | | |
| 1013 | | |
| 23.9 | | |
| 0.01 | |
RMR-15 | |
| 4.95 | | |
| 19.53 | | |
| 0.16 | | |
| 0.13 | | |
| 0.42 | | |
| 8.1 | | |
| 0.89 | | |
| 129 | | |
| 0.91 | | |
| 0.12 | | |
| 16.6 | | |
| 2.1 | | |
| 281 | | |
| 21.8 | | |
| 0.016 | |
RMR-16 | |
| 1.49 | | |
| 21.83 | | |
| 0.33 | | |
| 0.07 | | |
| 4.09 | | |
| 51.5 | | |
| 0.07 | | |
| 127 | | |
| 1.74 | | |
| 2.83 | | |
| 35.8 | | |
| 3.3 | | |
| 281 | | |
| 54.8 | | |
| 0.025 | |
RMR-17 | |
| 1.2 | | |
| 17.08 | | |
| 0.35 | | |
| 0.17 | | |
| 3.48 | | |
| 46 | | |
| 0.12 | | |
| 123 | | |
| 2.34 | | |
| 1.89 | | |
| 34.1 | | |
| 4.1 | | |
| 185 | | |
| 49.9 | | |
| 0.017 | |
RMR-18 | |
| 1.09 | | |
| 16.94 | | |
| 0.26 | | |
| 0.18 | | |
| 3.3 | | |
| 36.9 | | |
| 0.17 | | |
| 90 | | |
| 3.27 | | |
| 2.01 | | |
| 38.6 | | |
| 4.3 | | |
| 182 | | |
| 52.7 | | |
| 0.012 | |
Final Report - Job No: 12-338-08679-01
Sample | |
Sb | | |
Sc | | |
S | | |
Se | | |
Rb | | |
Sn | | |
Sr | | |
Ta | | |
Te | | |
Th | | |
Ti | | |
Tl | | |
U | | |
V | | |
W | | |
| | |
n | | |
Zr | |
Designation | |
ppm | | |
ppm | | |
% | | |
ppm | | |
ppm | | |
ppm | | |
ppm | | |
ppm | | |
ppm | | |
ppm | | |
% | | |
ppm | | |
ppm | | |
ppm | | |
ppm | | |
ppm | | |
ppm | | |
ppm | |
| |
50-4A- UT | | |
50- 4A- UT | | |
50-4A- UT | | |
50-
4A- UT | | |
50-4A- UT | | |
50- 4A- UT | | |
50-4A- UT | | |
50-4A- UT | | |
50-4A- UT | | |
50- 4A- UT | | |
50-4A- UT | | |
50-4A- UT | | |
50- 4A- UT | | |
50- 4A- UT | | |
50- 4A- UT | | |
50- 4A- UT | | |
50- 4A- UT | | |
50- 4A- UT | |
RMR-01 | |
| 1.45 | | |
| 0.2 | | |
| 0.034 | | |
| <1.0 | | |
| 0.3 | | |
| 3.3 | | |
| 25 | | |
| 1.06 | | |
| <0.05 | | |
| 2.7 | | |
| 0.034 | | |
| 0.49 | | |
| 16.6 | | |
| 6 | | |
| <0.1 | | |
| 8.8 | | |
| <2 | | |
| 24.9 | |
RMR-02 | |
| 1.71 | | |
| 1.3 | | |
| 0.011 | | |
| 2.5 | | |
| 190.1 | | |
| 6.6 | | |
| 40.4 | | |
| 0.74 | | |
| <0.05 | | |
| 20.7 | | |
| 0.046 | | |
| 1.45 | | |
| 14.4 | | |
| 26 | | |
| <0.1 | | |
| 80.8 | | |
| 135 | | |
| 26.2 | |
RMR-03 | |
| <0.05 | | |
| 1.1 | | |
| 0.021 | | |
| 2.5 | | |
| 175.7 | | |
| 5.1 | | |
| 29.2 | | |
| 0.54 | | |
| <0.05 | | |
| 21.4 | | |
| 0.047 | | |
| <0.02 | | |
| 25.5 | | |
| 10 | | |
| <0.1 | | |
| 73.9 | | |
| 54 | | |
| 26 | |
RMR-04 | |
| 0.98 | | |
| 3.3 | | |
| 0.386 | | |
| <1.0 | | |
| 9.4 | | |
| 1.6 | | |
| 72.9 | | |
| <0.05 | | |
| <0.05 | | |
| 5.2 | | |
| 0.279 | | |
| 0.11 | | |
| 9.3 | | |
| 40 | | |
| <0.1 | | |
| 13 | | |
| 3 | | |
| 53.2 | |
RMR-05 | |
| 2.76 | | |
| 1.5 | | |
| 0.025 | | |
| <1.0 | | |
| 0.4 | | |
| 1.3 | | |
| 16.5 | | |
| 0.16 | | |
| <0.05 | | |
| 0.4 | | |
| 0.089 | | |
| 1.54 | | |
| 12.4 | | |
| 4 | | |
| <0.1 | | |
| 3.9 | | |
| <2 | | |
| 164.2 | |
RMR-06 | |
| 3.98 | | |
| 1.4 | | |
| 0.012 | | |
| 3.2 | | |
| <0.1 | | |
| 0.6 | | |
| 3.7 | | |
| <0.05 | | |
| <0.05 | | |
| <0.2 | | |
| 0.12 | | |
| 0.58 | | |
| 13.3 | | |
| 3 | | |
| <0.1 | | |
| 0.8 | | |
| <2 | | |
| 100.3 | |
RMR-07 | |
| 3.78 | | |
| 5.2 | | |
| 0.3 | | |
| <1.0 | | |
| 11.4 | | |
| 1.5 | | |
| 126.5 | | |
| <0.05 | | |
| <0.05 | | |
| 6.3 | | |
| 0.234 | | |
| 0.14 | | |
| 4.3 | | |
| 197 | | |
| <0.1 | | |
| 28.9 | | |
| 4 | | |
| 117.3 | |
RMR-08 | |
| 1.9 | | |
| 3.1 | | |
| 0.036 | | |
| 1.6 | | |
| 1.3 | | |
| 1.9 | | |
| 23.4 | | |
| 0.52 | | |
| <0.05 | | |
| 1.3 | | |
| 0.153 | | |
| 0.73 | | |
| 6.2 | | |
| 10 | | |
| <0.1 | | |
| 5 | | |
| <2 | | |
| 172.2 | |
RMR-09 | |
| <0.05 | | |
| 10.7 | | |
| 0.366 | | |
| 1.8 | | |
| 97.9 | | |
| 3 | | |
| 253.7 | | |
| 0.17 | | |
| <0.05 | | |
| 11.3 | | |
| 0.39 | | |
| 1.26 | | |
| 4 | | |
| 54 | | |
| <0.1 | | |
| 40.5 | | |
| 91 | | |
| 300.4 | |
RMR-10 | |
| 3.6 | | |
| 7.4 | | |
| 0.111 | | |
| 6.5 | | |
| 4.5 | | |
| 2 | | |
| 77.4 | | |
| <0.05 | | |
| <0.05 | | |
| 8.2 | | |
| 0.317 | | |
| 0.68 | | |
| 17.8 | | |
| 89 | | |
| <0.1 | | |
| 29.4 | | |
| 5 | | |
| 59.9 | |
RMR-11 | |
| <0.05 | | |
| 4.5 | | |
| 1.098 | | |
| <1.0 | | |
| 46.2 | | |
| 4.1 | | |
| 163.8 | | |
| 0.57 | | |
| <0.05 | | |
| 11.4 | | |
| 0.408 | | |
| 2.08 | | |
| 3.2 | | |
| 39 | | |
| <0.1 | | |
| 17.9 | | |
| 69 | | |
| 183.4 | |
RMR-12 | |
| 3.98 | | |
| 2.6 | | |
| 0.027 | | |
| <1.0 | | |
| 1.8 | | |
| 1.1 | | |
| 12.5 | | |
| <0.05 | | |
| <0.05 | | |
| 1.4 | | |
| 0.229 | | |
| 0.68 | | |
| 8.3 | | |
| 36 | | |
| <0.1 | | |
| 5.6 | | |
| <2 | | |
| 61.6 | |
RMR-13 | |
| <0.05 | | |
| 3.5 | | |
| 0.01 | | |
| <1.0 | | |
| 1.2 | | |
| 1 | | |
| 31.5 | | |
| <0.05 | | |
| <0.05 | | |
| 0.4 | | |
| 0.13 | | |
| 0.23 | | |
| 7.7 | | |
| 5 | | |
| <0.1 | | |
| 3.1 | | |
| 3 | | |
| 179.1 | |
RMR-14 | |
| <0.05 | | |
| 6.9 | | |
| 0.837 | | |
| 2.1 | | |
| 5.3 | | |
| 3.6 | | |
| 535.4 | | |
| 0.47 | | |
| <0.05 | | |
| 18.1 | | |
| 0.187 | | |
| 1.27 | | |
| 6.8 | | |
| 33 | | |
| <0.1 | | |
| 29.8 | | |
| 7 | | |
| 108.7 | |
RMR-15 | |
| <0.05 | | |
| 6.3 | | |
| 0.341 | | |
| <1.0 | | |
| 26.4 | | |
| 3.5 | | |
| 71.7 | | |
| 0.2 | | |
| <0.05 | | |
| 14.3 | | |
| 0.249 | | |
| 1.03 | | |
| 4.4 | | |
| 48 | | |
| <0.1 | | |
| 42.1 | | |
| 81 | | |
| 320.8 | |
RMR-16 | |
| <0.05 | | |
| 1 | | |
| 0.017 | | |
| 2.9 | | |
| 309.1 | | |
| 12.8 | | |
| 18.7 | | |
| 2.12 | | |
| <0.05 | | |
| 34.2 | | |
| 0.048 | | |
| 3.45 | | |
| 7.4 | | |
| 11 | | |
| <0.1 | | |
| 78.5 | | |
| 88 | | |
| 77.9 | |
RMR-17 | |
| <0.05 | | |
| 0.5 | | |
| 0.017 | | |
| 1.8 | | |
| 245.4 | | |
| 10.7 | | |
| 35.9 | | |
| 1.48 | | |
| <0.05 | | |
| 30.1 | | |
| 0.039 | | |
| 2.46 | | |
| 8.6 | | |
| 13 | | |
| 0.2 | | |
| 70.5 | | |
| 81 | | |
| 77.1 | |
RMR-18 | |
| 1.84 | | |
| 0.7 | | |
| 0.036 | | |
| <1.0 | | |
| 219.2 | | |
| 18.7 | | |
| 58.6 | | |
| 2.18 | | |
| <0.05 | | |
| 33 | | |
| 0.043 | | |
| 2.24 | | |
| 8.2 | | |
| 9 | | |
| 0.7 | | |
| 34.4 | | |
| 44 | | |
| 95.1 | |
West Silver Cloud
The West Silver Cloud property is a Midas-style
gold-silver property situated 12 Km southwest of Waterton Global’s Hollister gold-silver mine, and 22 Km southeast of Newmont's
Midas Mine property. The nearby Silver Cloud Mine is an old, open-pit mercury mine situated on top of Placer Dome’s main
gold-silver ore target, which carries high-grade, drill-indicated gold mineralization. The West Silver Cloud property comprises
38 lode claims that cover approximately 760 acres. West Silver Cloud has never been tested by drilling, and we believe offers good
potential to hold a large, high-grade, underground-mineable Midas-Hollister-type Low Sulfidation gold-silver deposit.
Silver Cloud
The Silver Cloud Property consists of 552
Mining Claims totaling 11,210 acres situated 55 Km northeast of the mining center of Battle Mountain, and 80 Km west-northwest
of Elko city, a regional mining hub. The Silver Cloud Property lies immediately to the southwest of Waterton Global’s epithermal
bonanza gold-silver Hollister Mine, and 3.8 Km southwest of the Hollister Mine open pit. The Silver Cloud Property also lies 16
Km southeast of Newmont's Midas Mine, which is currently producing gold and silver from high-grade volcanic epithermal veins. The
Company controls an additional 38 claims along the west side of the Silver Cloud Property, called the West Silver Cloud property.
Any mineral production from the Silver
Cloud Property is subject to net smelter return royalties of 2% due to Royal Gold Inc. and 3% to the underlying claim owners. The
Company is also required to pay $50,000 to the Pescio family annually. The lease term is to June 30, 2023 with option to extend
the lease term for three subsequent ten years terms.
As a result of this latest acquisition,
the Company's land package in the region has increased by 11,000 acres, making it one of the largest landholders among junior exploration
companies operating in Nevada with over 13,000 acres held. The Company has inherited a comprehensive database reflecting previous
exploration campaigns conducted on the Silver Cloud Property by Placer Amex, Newmont, Placer Dome, Teck Resources and Geologix.
This database includes:
|
● |
Drilling information including drill hole locations, drill core logs, cross-sections, long-sections, level plans, down hole survey information, QA/QC information and assay results. |
|
● |
Regional and local geological information including lithological mapping, structural interpretations, alteration mapping, large-scale formational modeling and detailed mineralization modeling. |
|
● |
Geochemical information including surface rock chip sampling, multivariate soil sampling and biogeochemical sampling surveys. |
|
● |
Geophysical information including Airborne Magnetics (AeroMag), Controlled Source Audio Magnetotelluric (CSAMT), E Scan, and Ground Gravity surveys. |
|
● |
Base maps including claim maps, topographic maps and satellite images. |
Modern exploration on the Silver Cloud
Property was conducted in the 1980's, when Placer Amex drilled 14 shallow holes in search of mercury. That campaign's best gold
hit was a 3.05 meter intercept grading 0.197 g/t Au. In 1989, Newmont optioned the property and conducted additional shallow drilling
of 23 holes in different parts of this large property through 1994, including in the Quiver Mine area in the northwest part of
the property. Highlights from these Newmont drill programs included a 1.52 meter intercept grading 3.1 g/t Au at shallow depths.
Teck Cominco optioned the property and
conducted 4,023 m of drilling in 10 holes between 1999 and 2001. Teck discovered high-grade gold mineralization at the historic
mercury-producing Silver Cloud Mine in reverse-circulation hole SCT-6 that encountered three intervals of good grade gold mineralization
totaling 27.4 meters of down-hole core length between 310.9m and 452.6m. Those intervals included a 1.52 meter intercept grading
145 g/t Au at a depth of 318m in sheared volcanics.
Placer Dome optioned the property in 2002
and subsequently drilled 3,832 meters in 11 rotary and core holes in the property area. Placer Dome's best drill intercept was
from a new discovery in the Egg Hill target area, situated 1400 meters west of the Silver Cloud Mine and close to the West Silver
Cloud property. The intercept graded 5.53 g/t Au over a 12.2 meter interval in a structure at the contact between two lithological
units – the rhyolite tuff and the intrusive rhyolite porphyry.
Geologix acquired control of the property
in 2003, and subsequently drilled 2 deep holes on the property in 2005. These holes were drilled on the northwest side of the Silver
Cloud Mine away from the high-grade Teck drill holes and targeting two inferred fault structural zones. Geologix encountered numerous
zones of breccia and silica mineralization in these two holes over significantly wide intervals.
The working Midas-style gold target model
used by the Company's technical team interprets the "top elevations" of epithermal Midas-Hollister type gold-silver targets
at Silver Cloud to start at 150 to 300 meter depths below surface. The main zone of ore grade gold-silver mineralization at Midas
extends for at least 500 meters vertically, below the "top elevations". Local "pod-like" bodies of gold mineralization
may occur above this "top elevation" level, as at Midas and in the larger open pit at Hollister. The Company's exploration
efforts are focused upon discovery of Midas and Hollister style gold-silver mineralization, 125 to 300 metres below the surface.
The main gold-silver targets at the Silver
Cloud Property are Midas-Hollister style volcanic epithermal low-sulfidation vein and disseminated gold deposits, which appear
to be situated along or near fault zones, near or beneath siliceous "sinter" hot spring deposits. These siliceous sinters
occur on and close to the paleo ground surfaces along the Midas - Silver Cloud trend, which is part of the "Northern Nevada
Rifts" volcanic province. Mercury occurrences are present locally in and near these siliceous sinters, and are interpreted
to be locally indicative of gold mineralization at further depth, as at Hollister. At least three gold target areas have been discovered
by rock chip sampling and drilling to date on the Silver Cloud Property: 1) the "Mine" target at the Silver Cloud Mine
discovered by Teck, where a drill hole carried a 1.5 meter intercept grading 157 g/t Au at a depth of 318 meters below surface,
2) the "Egg Hill" target area initially discovered by Placer Dome and further explored by Geologix, and 3) the Quiver
target area explored by Newmont and Geologix. Several exploration holes were drilled at Egg Hill, including a significant gold
discovery hole yielding 12.2 metres of 5.53 g/t Au at a depth of 208 metres below surface, situated at the contact with a rhyolitic
intrusive.
Geologix drilled two core holes in the
Mine target area, away from the earlier Teck and Placer Dome drillholes. These holes encountered highly anomalous gold and silver
in sulfide-rich breccias and low-temperature banded Midas-style quartz veins. To date, less than 10% of the large Silver Cloud
Property has been explored. No drilling work has yet been conducted on the Company's adjoining West Silver Cloud claims area.
The Silver Cloud Property also lies directly
astride the prolific Carlin Trend break that boasts numerous giant world-class sediment-hosted gold deposits. Excitingly, the Paleozoic
rocks that host numerous gold deposits in the region, are present at the surface at the Hollister Mine and near the Company's Rimrock
property, north of Silver Cloud. Consequently, Silver Cloud may have Carlin-style gold potential, albeit at fairly great depths.
The CSAMT data is being evaluated to further investigate this Carlin-style gold potential. Great Basin Gold drilled one deep hole
at Hollister and penetrated Devonian Rodeo Creek unit Paleozoic rocks, but never reached the Carlin-host Popovich-equivalent limestone
rock section, which lies at still greater depths.
AngloGold drilled a deep hole at the Hatter
prospect, east of the Hollister open pit, and penetrated lower Paleozoic rocks and a granitic intrusive of possible Mesozoic
age. Rodeo Creek Gold discovered a new granitic intrusive body (possibly Eocene in age) situated between the Hatter granitic stock
and the Hollister open pit, and found gold mineralization in this area, away from their main east-west trending gold-silver vein
systems. Thus, the Silver Cloud area may have potential for gold deposits associated with granitic stocks and nearby faults, at
depth. The gravity and CSAMT data will be used to further evaluate this possibility. For now, the Company is focused on the discovery
of relatively shallow Midas style gold-silver deposits.
In September 2013, the Company announced
hat it has received the Silver Cloud project drill core from Geologix Explorations. More than $2.4 million in exploration
expenditures have been made on Silver Cloud since 2003. Prior to that, Placer Amex, Newmont, Teck, and Placer Dome conducted significant
exploration on the Silver Cloud Property as well.
The Company will study the newly-acquired
Silver Cloud drill core in an effort to develop new drill targets for potential gold-silver development at Silver Cloud. Geologix'
latest two drillholes at Silver Cloud encountered several zones of gold mineralization, and previous drilling by Placer Dome and
Teck encountered local zones of very high-grade gold mineralization.
After an initial study of the Company's
new database including previous exploration campaigns conducted on the Silver Cloud Property, has led to the discovery of a fourth,
possibly significant new target extension of one of the southernmost vein systems occurring directly on the Hollister Mine property.
This is located in the northeast corner of the Silver Cloud property. The Company now will conduct further research on this target
zone in advance of possible drilling in 2015.
The main gold-silver targets at the Silver
Cloud Property are Midas-Hollister style volcanic epithermal low-sulfidation vein and disseminated gold deposits, which appear
to be situated along or near fault zones. Mercury occurrences are present locally in and near these siliceous sinters, and are
interpreted to be locally indicative of gold mineralization at further depth as at Hollister. At least four gold target areas have
been discovered by rock chip sampling, mapping and drilling to date on the Silver Cloud Property: 1) the "Mine" target
at the Silver Cloud Mine discovered by Teck, where a drilled hole carried a 1.5 meter (5 feet) intercept grading 157 g/t Au at
a depth of 318 meters below surface, 2) the "Egg Hill" target area initially discovered by Placer Dome and further explored
by Geologix, where up to 12.2 metres of 5.53 g/t Au, 3) the Quiver target area explored by Newmont, and 4) the newly discovered
Hollister South target mentioned above.
The Silver Cloud Property also lies directly
astride the prolific Carlin Trend break that boasts numerous giant world-class sediment-hosted gold deposits. This is a highly
favorable environment for Carlin-style gold deposits found at the Gold Acres and Getchell mines owned by Barrick Gold Corp. Silver
Cloud may have Carlin-style gold potential at depth.
In September 2014, the Company announced
that it has begun a new program to geologically re-log, re-assay, and reinterpret the drill core and 5 foot chip samples from reverse
circulation drilling conducted by certain previous lessees on its high-grade Silver Cloud gold-silver property (“Silver Cloud”)
in Elko County, Nevada. Rimrock Gold will be re-logging and assaying certain high-grade gold-silver zones drilled at Silver Cloud
by Teck, Placer Dome, and Geologix Explorations.
Rimrock Gold's Vice President of Exploration,
who is a certified professional geologist and “qualified person” for purposes of Canada’s National Instrument
43-101 Standards Disclosure for Mineral Properties will study and re-assay portions of the newly-acquired Silver Cloud drill core
in an effort to develop new drill targets for potential gold-silver development at Silver Cloud. Previous drilling by Placer Dome
and Teck encountered two local zones of very high-grade gold mineralization known as the large "Silver Cloud Mine" target
of Teck, and the "West Ridge" target of Placer Dome. There are four or more other gold-silver target areas on the property;
the "Central Core", "Northeast Extension", "Quiver", and "West Silver Cloud."
Teck Explorations discovered the Silver
Cloud Mine target in angled drillhole SCT-5, which encountered a 1.5 meter (5 feet) interval assaying 157 grams per tonne gold
("g/t Au") at a depth of 318 meters below surface. Placer Dome tried to twin this drillhole in hole SCP-11c, and found
an interval near the SCT-5 intercept that assayed 279 g/t silver and 760 ppm tungsten, a drill assay very similar to that found
at Rimrock Gold's Ivanhoe Creek property situated along trend north of and adjacent to the Hollister Mine. These samples will be
studied in detail and re-assayed in shorter intervals. The goal is to determine how to re-drill this high-grade target effectively
in order to define the geology and possible high-grade gold-silver mineralization. The Silver Cloud Mine target area is quite large
being at least 2,000 meters in length.
The other highest priority target is West
Ridge, which was initially discovered in highly gold mineralized drillhole SCP-15 by Placer Dome that locally assayed gold mineralization
between 184.5 through 231.7 meters, a core length of 47.2 meters (true width not yet known). The highest grade assay interval in
SCP-15 was 12.2 metres of 5.53 g/t Au at a core depth starting at 208.8 meters. The West Ridge gold-silver mineralization lies
along a cymoid loop fault system that appears to be more than 1,900 meters in length. Newmont geologists at Midas defined the methodology
for testing these cymoid loop controlled gold systems. Rimrock will use and expand these procedures to evaluate and test the gold
systems at Silver Cloud in order to define and prioritize new drilling on the Silver Cloud property.
The third target to be analyzed in Rimrock
Gold's new work program is the Central Core target area where Geologix drilled two extended, lower angle drillholes in 2005 totaling
1,603 meters of core length across the Central Core target area at Silver Cloud. These two drillholes encountered several zones
of gold mineralization in a broad brush sweep across the target area. Rimrock Gold has the core for these drillholes and will re-log
this core and re-assay any intervals of geological interest.
Newmont and Placer Amex also drilled a
number of holes into the large Quiver target region in the northwestern portion of the Silver Cloud property. Newmont reportedly
encountered significant local zones of sulfide mineralization at depth, and reported gold assay values in excess of 1.5 grams per
tonne gold. Rimrock Gold has the Newmont assay data but does not at this time have any of these drill samples to re-log or old
sample pulps to re-analyze.
This initial program of geological re-interpretation
of past work at Silver Cloud will be continued until multiple detailed gold-silver drilling targets have been defined on the property.
The company believes that the Silver Cloud property is large enough and holds sufficient high-grade gold-silver mineralization
to hold a mine-size gold-silver system within its boundaries. Local experts with detailed experience on the property will be utilized
to gain a scientifically accurate interpretation of the property as this work progresses.
Ivanhoe Creek
On October 11, 2013, the Company acquired the
advanced-stage Ivanhoe Creek, Nevada, epithermal bonanza gold-silver property from RMIC Gold, a private Nevada company controlled
by Richard R Redfern. Mr. Redfern is a director of the Company and this transaction is a non-arms length transaction. The Company
has agreed to issue 150,000 shares of the Company’s common shares to RMIC Gold will pay one percent (1%) Net Smelter Returns
royalties to RMIC Gold for 100% interest in the Ivanhoe Creek property. The Ivanhoe Creek property consists of 22 unpatented lode
mining claims (440 acres) situated in north-central Nevada on lands administered by the U.S. Bureau of Land Management. The property
area is uninhabited and suitable for construction of large-scale mine facilities, if warranted. The property is situated 63 Km
northeast of the mining center of Battle Mountain, and 75 Km west-northwest of the mining hub city Elko. Rimrock Gold controls
22 claims along the north side of the Hollister property. The property lies at the former site of a small mercury mine/ prospect
from which an unknown but small quantity of flasks of mercury were produced, and south of Rimrock Gold’s Rimrock property.
The Ivanhoe Creek property lies immediately
adjacent to the north of the epithermal bonanza gold-silver Hollister Mine property that was recently purchased by Waterton Global
Resources. Ivanhoe Creek also lies 17 Km southeast of Newmont’s Midas Mine, which is currently producing gold and silver
from high-grade volcanic epithermal gold-silver veins.
Gold exploration drilling has been conducted
near and under certain of these mercury prospects. Most recently, Kent Exploration Ltd drilled 5 shallow exploration core drillholes
in 2007 for gold and silver, totaling 791.3 meters. Drilling to date at Ivanhoe Creek has discovered at least two significant gold-silver
target areas. These are associated with northerly-trending uplifted fault-bounded blocks of rocks (“horsts”), which
extend northward into the Rimrock property, and south into the Hollister property. These horsts were delineated and verified by
CSAMT geological surveys in 2006. Mercury-bearing silica deposits (“sinter”) locally are associated with gold in Nevada,
and mercuric sinters are found at Ivanhoe Creek alongside and above these horsts. Kent’s shallow drilling tested some of
these sinter targets.
The five exploration holes drilled at Ivanhoe
Creek are believed to have been too shallow to adequately test for the Midas-style gold-silver targets envisioned by the Company.
The drillholes at Ivanhoe Creek found: 1) Anomalous assay values of gold in each hole drilled, and 2) Anomalous silver values in
each hole, including up to an assay value of 7.64 ounces per ton silver in hole 07-10 between 426-436 feet (core length; true width
not known). This latter silver-rich intercept also contained high values of 1130 ppm tungsten, more than 100 ppm mercury, and 0.02
ppm gold. Local high geochemical analysis values of arsenic, antimony, and selenium suggest that a Midas-style mineral system was
imposed on these rocks altered and metamorphosed earlier by contact metamorphism of nearby granitic plutons
The main gold-silver targets at Ivanhoe
Creek are Midas-Hollister style volcanic epithermal low-sulfidation vein and disseminated gold deposits, which appear to be situated
along or near fault zones, beneath siliceous silica “sinter” hot spring deposits that occur on the paleo ground surface
along the Midas – Silver Cloud trend, which is part of the “Northern Nevada Rifts” volcanic province. Mercury
occurrences are present locally in and near these surficial siliceous sinter deposits, perhaps locally indicative of gold deposits
at further depth, as at Hollister. The “top elevations” of epithermal Midas-Hollister type gold-silver targets typically
start at 150 to 300 meter depths below surface. The main zone of ore grade gold-silver mineralization at Midas is at least 500
metres in height, below the “top elevations”. Local small poddy bodies of high-grade gold mineralization may occur
above this “top elevation” level as at Midas. Rimrock Gold’s exploration efforts are focused upon discovery of
deeper Midas and Hollister Mine style gold-silver mineralization at Ivanhoe Creek, but the possibility of finding near-surface
open pittable gold-silver mineralization is still present due to the minimal level of exploration of Ivanhoe Creek. The elevations
of the main ore zones at Hollister are at elevations of 4900 to 5400 feet ASL. This will be used to help guide exploration on the
Ivanhoe Creek and Rimrock properties.
The Ivanhoe Creek property also lies directly
astride the prolific Carlin Trend break that boasts numerous giant world-class sediment-hosted gold deposits. Excitingly, the Paleozoic
rocks at Ivanhoe Creek are present at surface just north of the property boundary, and also were encountered in Kent’s drillholes.
Consequently, the Ivanhoe Creek property does have Carlin-style gold potential, albeit perhaps at fair depths. Great Basin Gold
drilled one deep hole in the southeastern part of their property at Hollister and penetrated Devonian Rodeo Creek unit Paleozoic
rocks. They never reached the Carlin-host Popovich-equivalent limestone rock section, which lies at still greater depths at this
particular locality. The Rimrock – Ivanhoe Creek area is interpreted as being a structurally uplifted dome, which could have
brought Carlin deposit age rocks closer to the surface. The Company is now focused upon the discovery of relatively shallow Midas
style gold-silver deposits.
Pony Spur
The Pony Spur property is a dual, Carlin-style
sediment-hosted and Low Sulfidation Breccia Pipe Style gold prospect in the southern part of the prolific Carlin-Rain Gold Trend,
and is situated 2.25 Km northwest of the adjoining Pony Creek gold deposit controlled by Allied Nevada Gold, owners of the Hycroft
gold mine in northwestern Nevada. The Pony Spur project is along Jerritt and Carlin Trends, near the Rain gold deposit cluster
, which includes the Rain, Tess, and Emigrant mines (Newmont / Premier Gold), the high-grade Saddle gold deposit (presently being
drilled by Premier Gold Mines), Railroad-Bullion (presently being drilled by Gold Standard Ventures), and other peripheral gold
deposits. Sage Gold Inc. drilled one core hole on the Pony Spur property in 2007, discovering gold mineralization.
The property comprises 7 lode mining claims
of approximately 140 acres, which have been filed with the BLM. The Pony Spur property area sits along a WNW trending, Rain Fault-parallel
fault system of undetermined width that intersects the Pony Creek gold deposit area just east of our property boundary. Two types
of strong surface gold mineralization and alteration are present at the Pony Spur gold property. A low-sulfidation silica-rich,
breccia pipe with gold mineralization crops out at the surface of Pony Spur, similar to mineralization present in Allied Nevada's
Pony Creek gold deposit, and the drill hole by Sage Gold intersected gold mineralization in this pipe. Carlin style, thallium-gold
rich geochemical rock anomalies also are present at the surface at Pony Spur, possibly indicative of Rain-Meikle type fault-controlled
Carlin-style sediment-hosted gold mineralization at depth.
Spin-Out PBTD Segment
On May 11, 2012, the Company entered into
a Stock Purchase Agreement (with (i) Pay By The Day; and (ii) Jordan Starkman, Chief Executive Officer and the director of the
Company and President of the Subsidiary (“Starkman”), pursuant to which, Starkman acquired all of the issued and outstanding
common shares of Pay By The Day, and in exchange, Starkman assumed and agreed to pay, perform and discharge any and a all the liabilities
and obligations of Pay By The Day (the “Spin-out”). The Company has divested its interest and no longer operates
and own as a wholly owned subsidiary Pay By The Day Company Inc.
Consulting Agreement
On March 1, 2013, the Company signed a
one year consulting agreement with a United States company, under common control, and agreed to pay the Company 3,500,000 shares
of common stock for market expansion and business consulting.
Results of Operations for the years ended August 31, 2014
and August 31, 2013
Revenues
We currently have no known mineral reserves
and have not generated any revenue from our mining activities.
Operating Expenses
Operating expenses from continuing operation
for the year ended August 31, 2014 was $851,330 compared to $1,092,749 for the year ended August 31, 2013. The decrease in operating
expenses of $241,419 during the year ended August 31, 2014 compared to the year ended August 31, 2013 is primarily attributed to
decrease in professional fees related to the acquisition of the Property, as well as Nevada claims maintenance fees in the previous
year 2013. Professional fees the years ended August 31, 2014 and August 31, 2013 were $599,871 and $866,071, respectively. The
Company’s professional fees mainly consisted of consulting fees, accounting, audit and legal fees related to the acquisition.
In addition, advisory services, public/investor relations relating to the Company’s current operation and future planned
corporate acquisitions were responsible for the professional fees. Claim maintenance fees are incurred on the newly acquired Properties
in Nevada during the year 2013.
Net Loss
For the period from inception through August
31, 2014, our operating expenses and loss from operation were $3,898,369 and our net loss for the year ended August 31, 2014 was
$851,330 as compared to net loss of $1,225,857 for the year ended August 31, 2013.
The decrease in loss of $374,527 is mainly
due to the decrease in professional fees and impairment of mining property claims in the fiscal year end 2014 compared to professional
fees in 2013.
During the years ending August 31, 2014
and August 31, 2013, we had no provision for income taxes due to the net operating losses incurred.
Liquidity and Capital Resources
As of August 31, 2014 we had a cash balance
of $472 as compared to $36,449 as at August 31, 2013. Decrease in cash is mainly due to payments made to suppliers.
The Company raised approximately $188,500
from the issuance of convertible notes during the year ended August 31, 2014. The proceeds are being used to fund operating such
as Bureau of Land Management and County fees for the Nevada claims, and investing activities of the Company as discussed above
in our Plan of Operations.
The Company is actively seeking financing
in the amount of $1,000,000 to fully execute the next phase of the Company’s exploration campaign, and the Company’s
detailed plan for drilling the Rimrock Property plus any future acquisitions. In addition, the Company is preparing a detailed
exploration plan to advance the recently acquired Silver Cloud property. Any capital raised will be through either a private placement
or a convertible debenture and will result in the issuance of common shares from the Company’s authorized capital. The
Company is optimistic that the financing will be secured and our going concern risk will be removed.
We anticipate that our fixed costs made
up of legal & accounting and general & administrative expenses for the next twelve months will total approximately $45,000. Legal
and accounting expenses of $35,000 represents the minimum funds needed to sustain operations. The $35,000 will be financed
through the Company’s cash on hand, additional financing, and if needed, advances from our director, Jordan Starkman. Currently
there is no firm loan commitment in place between the Company and Jordan Starkman.
We believe we can satisfy our cash requirements
for the next twelve months with our cash balances and if needed an additional loan from our director, Jordan Starkman. However,
completion of our plan of operations is subject to attaining adequate revenue and adequate financing. We cannot assure investors
that adequate revenues will be generated from our mining properties. In the absence of our projected revenues, we may be unable
to proceed with our plan of operations. Even without adequate revenues within the next twelve months, we still anticipate being
able to continue with our present activities, but we may require financing to achieve our growth and exploration goals.
We do not anticipate the purchase or sale
of any significant equipment. We also do not expect any significant additions to the number of employees, unless financing is raised.
The foregoing represents our best estimate of our cash needs based on current planning and business conditions. The exact allocation,
purposes and timing of any monies raised in subsequent private financings may vary significantly depending upon the exact amount
of funds raised and required, and our progress with the execution of our business plan.
In the event we are not successful in reaching
our initial revenue targets or operational goals, additional funds may be required, and we may not be able to proceed with our
business plan for the development and exploration of our mining targets. Should this occur, we would likely seek additional financing
to support the continued operation of our business. We anticipate that depending on market conditions and our plan of operations,
we may incur operating losses in the foreseeable future. Therefore, our auditors have raised substantial doubt about our ability
to continue as a going concern. We will need approximately $1,000,000 to aggressively pursue and implement our business
plan’s exploration campaign.
Off-Balance Sheet Arrangements
We do not have any off-balance sheet arrangements.
ITEM 7A. QUANTITATIVE
AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
We are subject to certain market risks, including changes in
interest rates and currency exchange rates. We have not undertaken any specific actions to limit those exposures.
ITEM 8. FINANCIAL
STATEMENTS
RIMROCK GOLD CORP. (FORMERLY TUCANA LITHIUM CORP.)
(An Exploration Stage Company)
CONSOLIDATED FINANCIAL STATEMENTS
AUGUST 31, 2014 AND 2013
CONTENTS
Schwartz Levitsky Feldman llp
CHARTERED ACCOUNTANTS
LICENSED PUBLIC ACCOUNTANTS
TORONTO ● MONTREAL
REPORT OF INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM
To the Board of Directors and Stockholders
of
Rimrock Gold Corp.
(Formerly Tucana Lithium Corp.)
(An exploration stage company)
We have audited the accompanying consolidated
balance sheets of Rimrock Gold Corp. (formerly Tucana Lithium Corp.,) (an exploration stage company) as of August 31, 2014 and
2013, and the related consolidated statements of operations and comprehensive loss, stockholders' equity (deficiency), and cash
flows for the years ended August 31, 2014 and 2013. These consolidated financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.
We conducted our audits in accordance with
the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement.
The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.
Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s
internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the consolidated financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial
statements referred to above present fairly, in all material respects, the financial position of the company as of August 31, 2014
and 2013, and the results of its operations and its cash flows for the years ended August 31, 2014 and 2013, in conformity with
accounting principles generally accepted in the United States of America.
The accompanying consolidated financial
statements have been prepared assuming that the company will continue as a going concern. As discussed in Note 3 to the consolidated
financial statements, the company has experienced recurring losses that raise substantial doubt about its ability to continue as
a going concern. Management's plans in regard to these matters are also described in Note 3. The consolidated financial statements
do not include any adjustments that might result from the outcome of this uncertainty.
/s/ SCHWARTZ LEVITSKY FELDMAN LLP
Toronto, Ontario, Canada |
Chartered Accountants |
December 16, 2014 |
Licensed Public Accountants |
|
2300 Yonge Street, Suite 1500, Box 2434 |
|
Toronto, Ontario M4P 1E4 |
|
Tel: 416 785 5353 |
|
Fax: 416 785 5663 |
RIMROCK GOLD CORP. (FORMERLY TUCANA LITHIUM CORP.)
(An Exploration Stage Company)
CONSOLIDATED BALANCE SHEETS AS OF
(Expressed in United States Dollars)
| |
August 31,
2014 | | |
August 31,
2013
(Restated
- Note 17) | |
| |
$ | | |
$ | |
ASSETS | |
| | | |
| | |
Current assets | |
| | | |
| | |
Cash | |
| 472 | | |
| 36,449 | |
Prepaid and sundry | |
| 909 | | |
| 80,596 | |
Total current assets | |
| 1,381 | | |
| 117,045 | |
| |
| | | |
| | |
Long term assets | |
| | | |
| | |
Mining property claims [Note 5] | |
| 394,970 | | |
| 379,970 | |
Equipment, net [Note 7] | |
| 612 | | |
| 758 | |
Total assets | |
| 396,963 | | |
| 497,773 | |
| |
| | | |
| | |
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY) | |
| | | |
| | |
Current liabilities | |
| | | |
| | |
Accounts payable and accrued liabilities | |
| 134,189 | | |
| 8,603 | |
Short term advance [Note 8a] | |
| 50,000 | | |
| — | |
Advances from a related party [Note 8b] | |
| 22,418 | | |
| 16,109 | |
Convertible notes payable [Note 9] | |
| 241,864 | | |
| — | |
Shares to be issued | |
| 4,740 | | |
| — | |
Derivative liabilities [Note 9] | |
| 521 | | |
| — | |
Total current liabilities | |
| 453,732 | | |
| 24,712 | |
| |
| | | |
| | |
Going concern [Note 3] | |
| | | |
| | |
Related party transactions [Note 10] | |
| | | |
| | |
Contingencies and commitments [Note 12] | |
| | | |
| | |
Subsequent events [Note 16] | |
| | | |
| | |
| |
| | | |
| | |
Stockholders' equity (deficiency) | |
| | | |
| | |
Common stock, $0.001 par value, 200,000,000 shares authorized, 37,664,627 and 34,614,627 common shares outstanding as at August 31, 2014 and 2013, respectively [Note 11] | |
| 37,665 | | |
| 34,615 | |
Additional paid-in capital | |
| 3,803,935 | | |
| 3,485,485 | |
Deficit accumulated during exploration stage | |
| (3,898,369 | ) | |
| (3,047,039 | ) |
Total stockholders' equity (deficiency) | |
| (56,769 | ) | |
| 473,061 | |
Total liabilities and stockholders' equity (deficiency) | |
| 396,963 | | |
| 497,773 | |
See accompanying notes
RIMROCK GOLD CORP. (FORMERLY TUCANA LITHIUM CORP.)
(An Exploration Stage Company)
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
FOR THE YEARS ENDED AUGUST 31, 2014, AUGUST 31, 2013 (RESTATED)
AND
FOR THE PERIOD FROM INCEPTION (JUNE 5, 2003) TO AUGUST 31,
2014 (UNAUDITED)
(Expressed in United States Dollars)
| |
For the
year ended
August 31,
2014 | | |
For the
year ended
August 31,
2013
(Restated -
Note 17) | | |
For the
period
from
Inception
(June 5,
2003)
to August
31, 2014
(Unaudited
- restated) | |
| |
$ | | |
$ | | |
$ | |
| |
| | | |
| | | |
| | |
EXPENSES | |
| | | |
| | | |
| | |
Professional fees | |
| 599,871 | | |
| 866,071 | | |
| 2,473,125 | |
Changes in fair values of derivative [Note 9] | |
| (50,934 | ) | |
| — | | |
| (50,934 | ) |
Mining property maintenance fee | |
| 161,899 | | |
| 91,140 | | |
| 253,039 | |
Exploration | |
| — | | |
| 4,017 | | |
| 119,740 | |
Advertising and promotion | |
| 4,916 | | |
| 7,526 | | |
| 21,623 | |
Telecommunications | |
| 6,558 | | |
| 6,422 | | |
| 23,613 | |
Rent and occupancy costs | |
| 3,283 | | |
| 16,450 | | |
| 30,593 | |
Office and general | |
| 12,322 | | |
| 16,886 | | |
| 42,426 | |
Interest and bank charges | |
| 110,845 | | |
| 83,775 | | |
| 239,364 | |
Foreign exchange loss | |
| 2,424 | | |
| 262 | | |
| 2,686 | |
Depreciation | |
| 146 | | |
| 200 | | |
| 466 | |
Total operating expenses | |
| 851,330 | | |
| 1,092,749 | | |
| 3,155,741 | |
Net loss from operations | |
| (851,330 | ) | |
| (1,092,749 | ) | |
| (3,155,741 | ) |
Interest income | |
| — | | |
| — | | |
| 11,821 | |
Impairment of mining property claims | |
| — | | |
| (133,108 | ) | |
| (584,978 | ) |
Impairment of convertible not receivable | |
| — | | |
| — | | |
| (23,621 | ) |
Net loss from continuing operations before income taxes | |
| (851,330 | ) | |
| (1,225,857 | ) | |
| (3,752,519 | ) |
Income tax [Note 14] | |
| — | | |
| — | | |
| — | |
Net loss from continuing operations, net of tax | |
| (851,330 | ) | |
| (1,225,857 | ) | |
| (3,752,519 | ) |
Net loss from discontinuing operations, net of tax | |
| — | | |
| — | | |
| (145,850 | ) |
Net loss and total comprehensive loss for the period | |
| (851,330 | ) | |
| (1,225,857 | ) | |
| (3,898,369 | ) |
| |
| | | |
| | | |
| | |
Loss per share, basic and diluted | |
| (0.02 | ) | |
| (0.06 | ) | |
| | |
| |
| | | |
| | | |
| | |
Weighted average number of common shares outstanding | |
| 36,435,452 | | |
| 21,807,142 | | |
| | |
See accompanying notes
RIMROCK GOLD CORP. (FORMERLY TUCANA LITHIUM CORP.)
(An Exploration Stage Company)
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIENCY)
FOR THE PERIOD FROM THE DATE OF INCEPTION (JUNE 5, 2003)
TO AUGUST 31, 2014 (UNAUDITED)
(Expressed in United States Dollars)
| |
| | |
| | |
| | |
| | |
| | |
Deficit | | |
| |
| |
| | |
| | |
| | |
| | |
Accumulated | | |
Accumulated | | |
Total | |
| |
| | |
| | |
Additional | | |
Common | | |
other | | |
during the | | |
shareholder's | |
| |
Common stock | | |
paid-in | | |
stock | | |
comprehensive | | |
exploration | | |
equity | |
| |
Shares | | |
Amount | | |
capital | | |
issuable | | |
loss | | |
stage | | |
(deficiency) | |
| |
| | |
$ | | |
$ | | |
| | |
$ | | |
$ | | |
$ | |
Issuance of stock at inception | |
| 250,000 | | |
| 250 | | |
| (50 | ) | |
| — | | |
| — | | |
| — | | |
| 200 | |
Foreign currency translation | |
| — | | |
| — | | |
| — | | |
| | | |
| (109 | ) | |
| — | | |
| (109 | ) |
Net loss | |
| — | | |
| — | | |
| — | | |
| | | |
| — | | |
| (1,257 | ) | |
| (1,257 | ) |
August 31, 2003 (Unaudited) | |
| 250,000 | | |
| 250 | | |
| (50 | ) | |
| — | | |
| (109 | ) | |
| (1,257 | ) | |
| (1,166 | ) |
Foreign currency translation | |
| — | | |
| — | | |
| — | | |
| — | | |
| (505 | ) | |
| — | | |
| (505 | ) |
Net loss | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| (5,825 | ) | |
| (5,825 | ) |
August 31, 2004 (Unaudited) | |
| 250,000 | | |
| 250 | | |
| (50 | ) | |
| — | | |
| (614 | ) | |
| (7,082 | ) | |
| (7,496 | ) |
Foreign currency translation | |
| — | | |
| — | | |
| — | | |
| — | | |
| (504 | ) | |
| — | | |
| (504 | ) |
Net loss | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| (5,810 | ) | |
| (5,810 | ) |
August 31, 2005 (Unaudited) | |
| 250,000 | | |
| 250 | | |
| (50 | ) | |
| — | | |
| (1,118 | ) | |
| (12,892 | ) | |
| (13,810 | ) |
Foreign currency translation | |
| — | | |
| — | | |
| — | | |
| — | | |
| 8,200 | | |
| — | | |
| 8,200 | |
Net loss | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| (18,388 | ) | |
| (18,388 | ) |
August 31, 2006 (Unaudited) | |
| 250,000 | | |
| 250 | | |
| (50 | ) | |
| — | | |
| 7,082 | | |
| (31,280 | ) | |
| (23,998 | ) |
Issuance of stock for cash | |
| 62,500 | | |
| 62 | | |
| (12 | ) | |
| — | | |
| — | | |
| — | | |
| 50 | |
Unrealized loss | |
| — | | |
| — | | |
| — | | |
| — | | |
| (2,815 | ) | |
| — | | |
| (2,815 | ) |
Foreign currency translation | |
| — | | |
| — | | |
| — | | |
| — | | |
| (12,682 | ) | |
| — | | |
| (12,682 | ) |
Net loss | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| (16,945 | ) | |
| (16,945 | ) |
August 31, 2007 (Unaudited) | |
| 312,500 | | |
| 312 | | |
| (62 | ) | |
| — | | |
| (8,415 | ) | |
| (48,225 | ) | |
| (56,390 | ) |
Issuance of stock for cash | |
| 448,750 | | |
| 449 | | |
| 35,451 | | |
| — | | |
| — | | |
| — | | |
| 35,900 | |
Issuance of stock for services | |
| 12,500 | | |
| 13 | | |
| 987 | | |
| — | | |
| — | | |
| — | | |
| 1,000 | |
Unrealized loss | |
| — | | |
| — | | |
| — | | |
| — | | |
| (1,994 | ) | |
| — | | |
| (1,994 | ) |
Foreign currency translation | |
| — | | |
| — | | |
| — | | |
| — | | |
| 3,926 | | |
| — | | |
| 3,926 | |
Net loss | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| (94,389 | ) | |
| (94,389 | ) |
August 31, 2008 (Unaudited) | |
| 773,750 | | |
| 774 | | |
| 36,376 | | |
| — | | |
| (6,483 | ) | |
| (142,614 | ) | |
| (111,947 | ) |
Issuance of stock for services | |
| 125,000 | | |
| 125 | | |
| 49,875 | | |
| — | | |
| — | | |
| — | | |
| 50,000 | |
Foreign currency translation | |
| — | | |
| — | | |
| — | | |
| — | | |
| (973 | ) | |
| — | | |
| (973 | ) |
Net loss | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| (124,214 | ) | |
| (124,214 | ) |
August 31, 2009 (Unaudited) | |
| 898,750 | | |
| 899 | | |
| 86,251 | | |
| — | | |
| (7,456 | ) | |
| (266,828 | ) | |
| (187,134 | ) |
Issuance of stock for notes conversion | |
| 750,000 | | |
| 750 | | |
| 119,250 | | |
| — | | |
| — | | |
| — | | |
| 120,000 | |
Issuance of stock for cash | |
| 250,000 | | |
| 250 | | |
| 74,750 | | |
| — | | |
| — | | |
| — | | |
| 75,000 | |
Issuance of stock for accounts payable | |
| 25,000 | | |
| 25 | | |
| 9,975 | | |
| — | | |
| — | | |
| — | | |
| 10,000 | |
Issuance of stock for services | |
| — | | |
| — | | |
| — | | |
| 50,000 | | |
| — | | |
| — | | |
| 50,000 | |
Forgiveness of advances | |
| — | | |
| — | | |
| 120,000 | | |
| — | | |
| — | | |
| — | | |
| 120,000 | |
Foreign currency translation | |
| — | | |
| — | | |
| — | | |
| — | | |
| 2,442 | | |
| — | | |
| 2,442 | |
Net loss | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| (267,389 | ) | |
| (267,389 | ) |
August 31, 2010 (Unaudited) | |
| 1,923,750 | | |
| 1,924 | | |
| 410,226 | | |
| 50,000 | | |
| (5,014 | ) | |
| (534,217 | ) | |
| (77,081 | ) |
August 31, 2010 (Unaudited) | |
| 1,923,750 | | |
| 1,924 | | |
| 410,226 | | |
| 50,000 | | |
| (5,014 | ) | |
| (534,217 | ) | |
| (77,081 | ) |
Issuance of stock for mineral claims | |
| 2,500,000 | | |
| 2,500 | | |
| 397,500 | | |
| — | | |
| — | | |
| — | | |
| 400,000 | |
Issuance of stock for cash | |
| 2,059,275 | | |
| 2,059 | | |
| 808,494 | | |
| — | | |
| — | | |
| — | | |
| 810,553 | |
Issuance of stock for accounts payable | |
| 250,000 | | |
| 250 | | |
| 49,750 | | |
| (50,000 | ) | |
| — | | |
| — | | |
| — | |
Issuance of stock for notes conversion | |
| 75,000 | | |
| 75 | | |
| 14,915 | | |
| — | | |
| — | | |
| — | | |
| 14,990 | |
Unrealized loss | |
| — | | |
| — | | |
| — | | |
| — | | |
| (23,622 | ) | |
| — | | |
| (23,622 | ) |
Foreign currency translation | |
| — | | |
| — | | |
| — | | |
| — | | |
| (5,530 | ) | |
| — | | |
| (5,530 | ) |
Net loss | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| (498,393 | ) | |
| (498,393 | ) |
August 31, 2011 (Unaudited) | |
| 6,808,025 | | |
| 6,808 | | |
| 1,680,885 | | |
| — | | |
| (34,166 | ) | |
| (1,032,610 | ) | |
| 620,917 | |
Issuance of stock for rent | |
| 15,625 | | |
| 16 | | |
| 3,484 | | |
| — | | |
| — | | |
| — | | |
| 3,500 | |
Issuance of stock for cash | |
| 301,459 | | |
| 301 | | |
| 54,077 | | |
| — | | |
| — | | |
| — | | |
| 54,378 | |
Issuance of stock for services | |
| 45,000 | | |
| 45 | | |
| 17,955 | | |
| — | | |
| — | | |
| — | | |
| 18,000 | |
Issuance of stock for mineral properties | |
| 250,000 | | |
| 250 | | |
| 19,750 | | |
| — | | |
| — | | |
| — | | |
| 20,000 | |
Convertible debentures equity portion | |
| — | | |
| — | | |
| 125,000 | | |
| — | | |
| — | | |
| — | | |
| 125,000 | |
Unrealized loss | |
| — | | |
| — | | |
| — | | |
| — | | |
| 4,809 | | |
| (4,809 | ) | |
| — | |
Unrealized gain | |
| — | | |
| — | | |
| — | | |
| — | | |
| 23,621 | | |
| — | | |
| 23,621 | |
Foreign currency translation | |
| — | | |
| — | | |
| — | | |
| — | | |
| 5,736 | | |
| (4,730 | ) | |
| 1,006 | |
Net loss | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| (779,033 | ) | |
| (779,033 | ) |
August 31, 2012 (Unaudited) | |
| 7,420,109 | | |
| 7,420 | | |
| 1,901,151 | | |
| — | | |
| — | | |
| (1,821,182 | ) | |
| 87,389 | |
Issuance of stock for notes conversion | |
| 641,370 | | |
| 642 | | |
| 127,633 | | |
| — | | |
| — | | |
| — | | |
| 128,275 | |
Issuance of stock for cash | |
| 2,753,148 | | |
| 2,753 | | |
| 505,531 | | |
| — | | |
| — | | |
| — | | |
| 508,284 | |
Issuance of stock for services | |
| 4,500,000 | | |
| 4,500 | | |
| 670,500 | | |
| — | | |
| — | | |
| — | | |
| 675,000 | |
Issuance of stock for mineral properties | |
| 19,300,000 | | |
| 19,300 | | |
| 280,670 | | |
| — | | |
| — | | |
| — | | |
| 299,970 | |
Net loss | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| (1,225,857 | ) | |
| (1,225,857 | ) |
August 31, 2013 (Restated) | |
| 34,614,627 | | |
| 34,615 | | |
| 3,485,485 | | |
| — | | |
| — | | |
| (3,047,039 | ) | |
| 473,061 | |
Issuance of stock for services | |
| 2,900,000 | | |
| 2,900 | | |
| 303,600 | | |
| — | | |
| — | | |
| — | | |
| 306,500 | |
Issuance of stock for mineral properties | |
| 150,000 | | |
| 150 | | |
| 14,850 | | |
| — | | |
| — | | |
| — | | |
| 15,000 | |
Net loss | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| (851,330 | ) | |
| (851,330 | ) |
August 31, 2014 | |
| 37,664,627 | | |
| 37,665 | | |
| 3,803,935 | | |
| — | | |
| — | | |
| (3,898,369 | ) | |
| (56,769 | ) |
See accompanying notes
RIMROCK GOLD CORP. (FORMERLY TUCANA LITHIUM CORP.)
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED AUGUST 31, 2014, AUGUST 31, 2013 (RESTATED)
AND
FOR THE PERIOD FROM THE DATE OF INCEPTION (JUNE 5, 2003)
TO AUGUST 31, 2014 (UNAUDITED)
(Expressed in United States Dollars)
| |
For the
year
ended
August
31, 2014 | | |
For the
year ended
August 31,
2013 | | |
For the
period from
Inception
(June 5,
2003)
to August
31, 2014 | |
| |
| | |
(Restated -
Note 17) | | |
(Unaudited-
restated) | |
| |
$ | | |
$ | | |
$ | |
OPERATING ACTIVITIES | |
| | | |
| | | |
| | |
Net loss for the period | |
| (851,330 | ) | |
| (1,225,857 | ) | |
| (3,898,369 | ) |
Less: Loss from discontinuing operations, net of tax | |
| — | | |
| — | | |
| 145,850 | |
Loss from continuing operations | |
| (851,330 | ) | |
| (1,225,857 | ) | |
| (3,752,519 | ) |
Items not affecting cash | |
| | | |
| | | |
| | |
Depreciation | |
| 146 | | |
| 200 | | |
| 466 | |
Accretion expense including day one derivative loss | |
| 104,819 | | |
| 88,542 | | |
| 229,819 | |
Changes in fair values of derivative | |
| (50,934 | ) | |
| — | | |
| (50,934 | ) |
Accrued interest on convertible notes payable | |
| — | | |
| 3,274 | | |
| 3,274 | |
Impairment of mineral property claims | |
| — | | |
| 133,108 | | |
| 584,978 | |
Impairment of convertible note receivable | |
| — | | |
| — | | |
| 23,621 | |
Loss on disposal of assets | |
| — | | |
| — | | |
| 2,762 | |
Issuance of common stock for services | |
| 381,500 | | |
| 600,000 | | |
| 1,025,500 | |
Issuance of common stock for rental | |
| — | | |
| — | | |
| 3,500 | |
Write off of deferred offering costs | |
| — | | |
| — | | |
| 120,000 | |
Change in prepaid and sundry | |
| 5,596 | | |
| 5,533 | | |
| 75,000 | |
Change in accounts payable and accrued liabilities | |
| 125,586 | | |
| (23,936 | ) | |
| 134,189 | |
Net cash used in operating activities from continuing operations | |
| (284,617 | ) | |
| (419,136 | ) | |
| (1,600,344 | ) |
Net cash used in operating activities from discontinued operations | |
| — | | |
| — | | |
| (114,257 | ) |
Net cash used in operating activities | |
| (284,617 | ) | |
| (419,136 | ) | |
| (1,714,601 | ) |
| |
| | | |
| | | |
| | |
INVESTING ACTIVITIES | |
| | | |
| | | |
| | |
Acquisition of mining property claims | |
| — | | |
| (80,000 | ) | |
| (94,978 | ) |
Disposition of equipment | |
| — | | |
| — | | |
| 4,462 | |
Acquisition of equipment | |
| — | | |
| — | | |
| (30,124 | ) |
Net cash used in investing activities | |
| — | | |
| (80,000 | ) | |
| (120,640 | ) |
| |
| | | |
| | | |
| | |
FINANCING ACTIVITIES | |
| | | |
| | | |
| | |
Convertible notes receivable | |
| — | | |
| — | | |
| (21,978 | ) |
Proceeds from convertible note payable | |
| 188,500 | | |
| — | | |
| 342,040 | |
Repayment of convertible notes payable | |
| — | | |
| — | | |
| (163,550 | ) |
Short term advance | |
| 50,000 | | |
| — | | |
| 50,000 | |
Advances from related parties | |
| 5400 | | |
| 16,109 | | |
| 146,509 | |
Proceeds from common stock to be issued | |
| 4,740 | | |
| 508,285 | | |
| 1,488,906 | |
Net cash provided by financing activities | |
| 248,640 | | |
| 524,394 | | |
| 1,841,927 | |
| |
| | | |
| | | |
| | |
Net (decrease) increase in cash during the period | |
| (35,977 | ) | |
| 25,258 | | |
| 6,686 | |
Effect of foreign currency translation adjustment | |
| — | | |
| — | | |
| (6,214 | ) |
Cash, beginning of year | |
| 36,449 | | |
| 11,191 | | |
| — | |
Cash, end of year | |
| 472 | | |
| 36,449 | | |
| 472 | |
| |
| | | |
| | | |
| | |
NON CASH INVESTING AND FINANCING ACTIVITIES | |
| | | |
| | | |
| | |
Issuance of common stock for acquisition of mineral property claims | |
| 15,000 | | |
| 299,970 | | |
| — | |
Convertible debt payable and accrued interest converted to common stock | |
| — | | |
| 128,274 | | |
| — | |
See accompanying notes
RIMROCK GOLD CORP. (FORMERLY TUCANA LITHIUM CORP.) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |
(An Exploration Stage Company) |
FOR THE YEARS ENDED AUGUST 31, 2014, AUGUST 31, 2013 (RESTATED) AND |
FOR THE PERIOD FROM THE DATE OF INCEPTION (JUNE 5, 2003) TO AUGUST 31, 2014 (UNAUDITED) |
(Expressed in United States Dollars) |
|
| 1. | NATURE
OF OPERATIONS AND ORGANIZATION |
Rimrock Gold is a diversified mineral exploration
company focused on identifying, acquiring, advancing, and drilling high-grade gold-silver exploration projects in Nevada, and lithium
exploration projects in Quebec.
Rimrock Gold Corp., formerly named Tucana
Lithium Corp., Oteegee Innovations Inc. and Pay By The Day Holdings Inc., (the “Company” or “Rimrock”)
was incorporated in August 2007 in the State of Nevada.
On August 31, 2007 the Company entered
into a share exchange agreement with Pay By The Day Company Inc., an Ontario Corporation incorporated in June 2003 (“PBTD”
or “Pay By The Day”), whereby PBTD became our wholly owned subsidiary. PBTD commenced operations in July 2003 and at
the time of the share exchange agreement the sole owner of PBTD was Jordan Starkman, the Company’s sole officer and director.
On 12 March 2010, the Company entered into
a non-binding letter of intent (“Letter of Intent”) with Grail Semiconductor, Inc. (“Grail”), to acquire
all of the assets of Grail. As a result of entering into the Letter of Intent, on 22 March 2010, the Company filed a certificate
of amendment to the Company’s articles of incorporation with the Nevada Secretary of State changing the Company’s
name to Oteegee Innovations, Inc.
On April 7, 2010, the Company effected
a 1 for 10 forward split of its issued and outstanding common stock. The Company’s issued and outstanding common shares were
increased from 1,539,000 to 15,390,000. The Company also increased its authorized common shares from 100,000,000 to 200,000,000.
On July 6, 2010, the Company closed a share
exchange agreement with Oteegee International Holdings Limited, a company incorporated in Hong Kong (“Oteegee”). Pursuant
to the share exchange agreement, the Company issued 61,647,250 shares of common stock pending the close of the share exchange agreement
in exchange for 4,000 common shares representing 40% of Oteegee.
On August 20, 2010, the Company received
a notice of termination of the Letter of Intent with Grail, and as a result, the Company cancelled the 61,647,250 of its common
shares issued to Oteegee. The Letter of Intent was terminated due to the Company’s inability to raise preliminary funding
during the due diligence period of the Letter of Intent. In accordance with the Letter of Intent, the Company is entitled
to convert its advances to Grail into equity of Grail.
On December 2, 2010 the Company closed
an Asset Purchase Agreement with Alain Champagne and other parties to acquire a One Hundred (100%) interest in the Abigail Lithium
Project located in the James Bay, Quebec region of Canada (the “Property”). It is covered by NTS sheets 32O12 and 32O13. The
Property is made up of 222 map-designated cells totaling approx 11,844 hectares. Pursuant to the Abigail purchase Agreement,
on December 7, 2010 the Company issued a total of 15,000,000 shares of common stock plus committed to an additional payment of
$250,000 in cash with $100,000 payable 90 days from the closing of the Agreement and $150,000 payable 180 days from the closing
of the Agreement. In addition, the Company agreed to a minimum initial exploration work budget of $300,000 to commence no
later than May 16, 2011. The Company announced on June 27, 2011 it started its first phase of the exploration campaign
on the Property. The program commence date was delayed due to poor weather conditions in the region.
In March 2011, the Company issued 5,000,000
shares of common stock at $0.02 per share reflecting the first payment of $100,000 for the Property. On May 15, 2011,
the Company issued a 10% Convertible Debenture with a principal amount of $150,000 (the “Debenture”) to Alain Champagne
(the “Holder”). The Debenture is due twelve months from the date of issuance. Additionally, the Holder is entitled
to convert, at any time, until the Debenture is paid in full, all or any part of the principal plus accrued interest into shares
of the Company’s common stock at a per share conversion price of $0.15. On May 24, 2011 the Company repaid $100,000 and on
June 25, 2011 the Company paid off the balance of $50,000 fulfilling all the obligations to the Selling Group for the purchase
price of the Property. In July 2011, the Ministry of Natural Resources transferred all mining claims into the name of
Tucana Exploration Inc., a company incorporated in the State of Wyoming on February 22, 2011 (“Tucana”). Tucana
is a 100% wholly owned subsidiary of the Company.
After spending a total amount of $2,500,000
on the Project, the Seller Group will receive an additional 1,000,000 shares of the Company’s common stock and an additional
cash payment of $250,000. After spending a total amount of $5,000,000 on the Project, the Seller Group will receive an additional
1,000,000 shares of the Company’s common stock and an additional cash payment of $250,000. If a feasibility study
is put in place an additional 1,000,000 shares and $250,000 will be delivered to the Seller Group, and if a bank feasibility is
put in place a further 2,000,000 shares and $500,000 cash will be delivered to the Seller Group. The Company has also
agreed to pay the Selling Group a 3% royalty on any commercial producing mineral deposit.
On May 3, 2011, the Company filed a certificate
of amendment to amend the articles of incorporation with the Nevada Secretary of State changing the Company’s name to Tucana
Lithium Corp.
In December 2011, the Company staked an
additional 83 claims in the James Bay region of Quebec. The claims are 100% owned by the Company and registered in the name of
Tucana's subsidiary, Tucana Exploration Inc. The property is made up of 83 map-designated cells totaling 4,439 hectares with 82
claims covered by NTS sheets 32O12 and 1 claim covered by NTS sheets 32N09. The cost of staking the claims was $8,215. The claims
will expire in November 2013 and exploration work in the amount of $100,000 will be required upon renewal. The Company secured
the additional claims based upon the NI 43-101 technical report and the magnetic and gradiometric airborne survey released by the
Quebec Ministry of Natural Resources in September 2011. The Lac des Montagnes formation is the most fertile rock in this area for
massive sulfides, and it is the same kind of volcano-sedimentary belt you would find in the Rouyn-Noranda and Val d'Or area yet
more metamorphosed. The gradiometric magnetic survey shows magnetic anomalies are present on the property and should be further
investigated.
In March 2012, the Company renewed 71 mineral
claims on the Abigail property based upon the exploration work reported in the summer of 2011. These claims will expire between
April and May 2014 and exploration work in the amount of $84,000 will be required upon renewal. In addition, the Company has dropped
85 mineral claims located on the northern perimeter of the property. The Company's decision was based upon the results from the
exploration program in the summer 2011 and a review of the airborne magnetic survey.
On May 11, 2012, the Company entered into
an Asset Purchase Agreement (the “Assets Purchase Agreement”) with a group of sellers with Alain Champagne as the representative
(“the Selling Group”) to acquire from the Selling Group all of the interest in two mining properties known as the Lac
Kame and EM-1 both located in the Nemaska area of James Bay, Quebec region of Canada (the “Acquired Mines”), and in
exchange, the Company shall issue a total of 2,000,000 shares of the Company’s common stock (the “Shares”) and
make a cash payment of $3,000 to the Selling Group(the “Assets Acquisition”). The amount of consideration paid for
the Acquired Mines is less than 10% of the total assets of the Company as of the closing of the Assets Acquisition. In addition,
pursuant to the Assets Purchase Agreement, the Company agreed to an additional payment of $50,000 and the issuance of 1,000,000
shares to the Selling Group if and when the Company spends a total of $1,000,000, an additional payment of $100,000 and the issuance
of 1,000,000 shares if and when the Company spends $2,500,000, and an additional payment of $150,000 and the issuance of 1,000,000
shares if and when the Company spends a total of $5,000,000 on the Acquired Mines. The amount of spending by the Company on the
Acquired Mines is deemed as an index of any previously unidentified and additional value of the properties. The Company also agreed
to pay the Selling Group a 3% net smelter royalty on any commercial producing mineral deposit from the Acquired Mines pursuant
to the Assets Purchase Agreement. The Company's main interest with the newly acquired claims will be magnetic anomalies for kimberlite
based upon the airborne magnetic survey released in October 2011.
On May 11, 2012, the Company also entered
into a stock purchase agreement with Jordan Starkman, Chief Executive Officer and the sole director of the Company, pursuant to
which, Mr. Starkman acquired all of the issued and outstanding common shares of the PBTD. Upon sale of PBTD, the Company
didn’t recognize a gain or loss since PBTD was dormant with limited transactions.
On January 24, 2013, the Company filed
a certificate of amendment to amend the articles of incorporation with the Nevada Secretary of State changing the Company’s
name to Rimrock Gold Corp.
On February 11, 2013, Rimrock Gold Corp.,
closed an Agreement and Plan of Merger (the “Merger Agreement”), by and among the Company, Tucana Holdings Inc., a
Nevada corporation and wholly-owned subsidiary of the Company (“Holdings”), and Rimrock Mining, Inc., a Nevada corporation
(“Rimrock”), pursuant to which Holdings merged with and into Rimrock, and Rimrock became a wholly-owned subsidiary
of the Company. Pursuant to the terms of the Merger Agreement, the Company acquired all the interest in three prospective gold
exploration properties known as Rimrock Property, West Silver Cloud and Pony Spur, located in northeast Nevada (the “Acquired
Properties”) and issued 17,800,000 shares of its common stock, par value $0.001 (the “Common Stock”), to the
sellers of the Acquired Properties as consideration for such properties.
In accordance with the guidance provided
in ASC 805-50-30-5, the transaction has been accounted for as “Transactions between Entities under Common Control”.
The acquired properties were recorded based on the carrying amounts in the accounts of the transferring entity at the date of transfer.
In addition, the Company issued 2,000,000 shares of its common stock to a consultant and paid legal charges amounting to $52,117
in connection with the transaction. Any mineral production from the Rimrock, West Silver Cloud, and Pony Spur Properties is subject
to Net Smelter Returns royalties of 3%.
As a condition to closing of the Merger
Agreement, on February 8, 2013 the Company effected a 1-for-8 reverse split of the issued and outstanding shares of the Common
Stock (the “Reverse Stock Split”). As a result, the issued and outstanding shares of Common Stock decreased
from 66,435,908 shares prior to the Reverse Stock Split to 8,304,488 shares following the Reverse Stock Split.
Concurrent with the acquisition, the Company
completed an initial closing (the “Initial Closing”) of a “best efforts min-max” private offering of a
minimum of $500,000 up to a maximum $1,000,000 (the “Offering”) with a group of accredited investors (the “Purchasers”)
for total gross proceeds to us of $502,000. Pursuant to a subscription agreement with the Purchasers (the “Subscription Agreement”),
the Company issued to the Purchasers (i) shares of the Company’s Common Stock at a purchase price of $0.20 per share; and
(the “Shares”) and (ii) warrants (the “Warrants”) to purchase shares (the “Warrant Shares”
and together with the Shares and the Warrants, the “Securities”) of the Company’s Common Stock at an exercise
price of $0.30 per share.
On May 3, 2013, Rimrock Gold Corp.
(the “Company”) entered into a purchase agreement (the “Purchase Agreement”) with Geologix Explorations
Inc., a corporation existing under the laws of the Province of British Columbia (“Geologix Canada”) and Geologix (U.S.)
Inc., a Nevada corporation (“Geologix USA” and, together with Geologix Canada, “Geologix”) to acquire an
exploration epithermal bonanaza gold-silver property in Nevada known as the Silver Cloud Property (the “Silver Cloud Property”). Pursuant
to the Purchase Agreement, the Company acquired from Geologix a one hundred percent (100%) interest in and to: (i) certain properties
that compress 552 unpatented mining claims totaling 11,210 (the “Mining Claims” comprised of the Geologix Claims and
the Pescio Claims), and (ii) a lease agreement dated June 1, 1999 between Geologix USA as successor to Teck Resources Inc., and
Carl Pescio and Janet Pescio in respect of those Mining Claims held by Pescio (the “Pescio Lease”). The Company is
also required to pay $50,000 to the Pescio family annually. The lease term is to June 30, 2023 with option to extend the lease
term for three subsequent ten years terms. In consideration for the Mining Claims and the Pescio Lease, the Company shall issue
to Geologix 500,000 shares of the Company’s common stock (the “Rimrock Shares”) comprised of 400,000 shares to
Geologix and 100,000 shares Geologix is required to assign to Teck Resources Inc. In addition, if the Company delineates
more than two million ounces of gold in proven and probable reserves on the Mining Claims, then the Company will issue a further
250,000 common shares of the Company to Geologix. Any mineral production from the Silver Cloud Property is subject to net smelter
return royalties of 2% due to Royal Gold Inc. and 3% to the underlying claim owners.
Geologix has agreed not to sell, transfer,
negotiate or enter into any agreement to sell or announce an intention to sell or transfer two-hundred thousand (200,000) of the
Rimrock Shares for a period of six (6) months from their date of issuance and the remaining two-hundred thousand (200,000) Rimrock
Shares for a period of twelve (12) months from their date of issuance.
On August 31, 2013, Tucana Exploration
Inc., a wholly owned subsidiary of Rimrock Gold Corp., decided to write down the entire book value of the 215 claims in Abigail
property based on the management’s decision to not renew any of the claims upon their expiration in 2014.
During October 2013, Rimrock Gold
Corp., and its wholly owned subsidiary, Rimrock Mining Inc., closed a purchase agreement with RMIC Gold, a private Nevada company,
to acquire an epithermal bonanza gold-silver property known as the Ivanhoe Creek Property. This transaction is a non-arms length
transaction due to common ownership of a director. Ivanhoe Creek Property consists of 22 unpatented lode-mining claims (440 acres)
situated in north-central Nevada. In consideration for the acquisition, the Company has agreed to issue 150,000 shares of the Company's
common shares to RMIC Gold. Any mineral production from Ivanhoe Creek Property is subject to Net Smelter Returns royalties
of 1% due to RMIC Gold.
The Company’s main exploration targets
are for gold/silver deposits located in the State of Nevada. The Company continues its plans to explore these properties.
The Company operates Tucana Exploration
Inc. and Rimrock Mining, Inc. as wholly owned subsidiaries.
The Company operates under the web-site
address www.rimrockgold.com.
| 2. | BASIS
OF PRESENTATION AND PRINCIPLES OF CONSOLIDATION |
The accompanying consolidated financial
statements of the Company include the accounts of Rimrock Gold Corp. and its wholly owned subsidiaries. Inter-company balances
and transactions have been eliminated upon consolidation.
The Company is considered to be in the
development stage as defined in Accounting Standards Codification (“ASC”) 915, Development Stage Entities. The
Company has devoted substantially all of its efforts to business planning and development by means of raising capital for operations.
The Company has also not realized any significant revenues. Among the disclosures required by ASC 915 are that the Company's financial
statements be identified as those of a development stage company, and that the statements of operations and comprehensive loss,
stockholders' equity (deficiency) and cash flows disclose activity since the date of the Company's inception.
These consolidated financial statements
are presented in accordance with GAAP accepted in the United States.
These consolidated financial statements
have been prepared assuming the Company will continue on a going concern basis. The Company has incurred losses during the year
and since inception amounting to $851,330 and $3,898,369, respectively. The ability of the Company to continue as a going-concern
depends upon its ability to develop profitable operations and to continue to raise adequate financing. Management is actively targeting
sources of additional financing to provide continuation of the Company’s operations. In order for the Company to meet its
liabilities as they come due and to continue its operations, the Company is solely dependent upon its ability to generate such
financing. The Company is actively seeking financing to fully execute the next phase of the Company’s exploration campaign
and future acquisitions. Any capital raised will be through either a private placement or a convertible debenture and will result
in the issuance of common shares from the Company’s authorized capital. The Company believes it can satisfy minimum
cash requirements for the next twelve months with either an equity financing, convertible debenture or if needed, loans from shareholders.
There can be no assurance that the Company
will be able to continue to raise funds, in which case the Company may be unable to meet its obligations. Should the Company be
unable to realize its assets and discharge its liabilities in the normal course of business, the net realizable value of its assets
may be materially less than the amounts recorded in these consolidated financial statements.
The consolidated financial statements do
not include any adjustments relating to the recoverability and classification of recorded asset amounts and classification of liabilities
that might be necessary should the Company be unable to continue in existence.
| 4. | SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES |
The accounting policies of the Company
are in accordance with accounting principles generally accepted in the United States of America. Presented below are
those policies considered particularly significant:
Exploration Stage Company
The Company is an exploration stage company.
The Company is still devoting substantially all of its efforts on establishing the business. All losses accumulated,
since inception, have been considered as part of the Company’s exploration stage activities.
Convertible notes
The Company accounts for conversion options
embedded in convertible notes in accordance with ASC 815. ASC 815 generally requires companies to bifurcate conversion options
embedded in convertible notes from their host instruments and to account for them as free standing derivative financial instruments.
ASC 815 provides for an exception to this rule when convertible notes, as host instruments, are deemed to be conventional, as defined
by ASC 815-40.
The Company accounts for convertible notes
deemed conventional and conversion options embedded in non-conventional convertible notes which qualify as equity under ASC 815,
in accordance with the provisions of ASC 470-20, which provides guidance on accounting for convertible securities with beneficial
conversion features. Accordingly, the Company records, as a discount to convertible notes, the intrinsic value of such conversion
options based upon the differences between the fair value of the underlying common stock at the commitment date of the note transaction
and the effective conversion price embedded in the note. Debt discounts under these arrangements are amortized over the term of
the related debt.
Mineral Properties and Exploration and
Development Costs
The costs of acquiring mineral rights are
capitalized at the date of acquisition. After acquisition, various factors can affect the recoverability of the capitalized costs.
If, after review, management concludes that the carrying amount of a mineral property is impaired, it will be written down to estimated
fair value. Exploration and pre-extraction expenditures incurred on mineral properties are expensed as incurred until such time
the Company exits the Exploration Stage by establishing proven or probable reserves, as defined by the SEC under Industry Guide
7, through the completion of a “final” or “bankable” feasibility study. Development costs incurred on proven
and probable reserves will be capitalized. Upon commencement of production, capitalized costs will be amortized using the unit-of-production
method over the estimated life of the ore body based on proven and probable reserves (which exclude non-recoverable reserves and
anticipated processing losses). When the Company receives an option payment related to a property, the proceeds of the payment
are applied to reduce the carrying value of the exploration asset. Under Industry Guide 7, the Company does not have proven or
probable reserves.
Impairment of Long-Lived Assets
Long-lived assets to be held and used are
analyzed for impairment whenever events or changes in circumstances indicated that the related carrying amounts may not be recoverable.
The Company evaluates at each balance sheet date whether events and circumstances have occurred that indicate possible impairment.
If there are indications of impairment, the Company uses future undiscounted cash flows of the related asset or asset grouping
over the remaining life in measuring whether the assets are recoverable or comparisons with other comparable assets in the vicinity
or some business as may be applicable under the circumstances. In the event such cash flows are not expected to be sufficient to
recover the recorded asset values, the assets are written down to their estimated fair value. Long-lived assets to be disposed
of are reported at the lower of carrying amount or fair value of the asset less costs to sell.
Fair Value of Financial Assets and Financial
Liabilities
The Company measures its financial assets
and liabilities in accordance with the requirements of ASC 820, Fair Value Measurements and Disclosures. ASC 820 clarifies
the definition of fair value, prescribes methods for measuring fair value, and establishes a fair value hierarchy to classify the
inputs used in measuring fair value as follows:
Level 1-Inputs are unadjusted quoted prices
in active markets for identical assets or liabilities available at the reporting date.
Level 2-Inputs are unadjusted quoted prices
for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets
that are not active, inputs other than quoted prices that are observable, and inputs derived from or corroborated by observable
market data.
Level 3-Inputs are unobservable inputs
which reflect the reporting entity’s own assumptions on what assumptions the market participants would use in pricing the
asset or liability based on the best available information
The Company's financial instruments consist
of cash, accounts payable and accrued liabilities, short-term advance, convertible notes payable, and advances from related party.
Unless otherwise noted, it is management's opinion that the Company is not exposed to significant interest, currency or credit
risks arising from these financial instruments. The fair value of these financial instruments approximates their carrying values
due to the short-term maturity of these instruments.
Foreign Translation Adjustment
The accounts of the Company’s foreign
subsidiaries whose functional currency is the Canadian dollar, were translated into United States dollars in accordance with the
provisions of ASC 830, Foreign Currency Matters. In accordance with the provisions of ASC 830, transaction gains
and losses on these assets and liabilities are included in the determination of income for the relevant periods. Adjustments,
if any, resulting from the translation of the consolidated financial statements from their functional currencies to United States
dollars are accumulated as a separate component of accumulated other comprehensive income (loss) and have not been included in
the determination of income for the relevant periods.
Income Taxes
The Company accounts for income taxes pursuant
to ASC 740, Income Taxes. Deferred tax assets and liabilities are recorded for differences between the financial
statements and tax basis of the assets and liabilities that will result in taxable or deductible amounts in the future based on
enacted tax laws and rates. Valuation allowances are established when necessary to reduce deferred tax assets to the
amount expected to be realized. Income tax expense is recorded for the amount of income tax payable or refundable for
the period increased or decreased by the change in deferred tax assets and liabilities during the period.
Use of Estimates
The preparation of consolidated financial
statements in conformity with accounting principles generally accepted in the United States requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities
at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual
results could differ from those estimates. These estimates are reviewed periodically, and, as adjustments become necessary,
they are reported in earnings in the period in which they become known. The estimates on depreciation were based on the estimated
useful lives of the Company's assets. Estimates on impairment of mining property claims are made based on quantitative analysis
and evaluation of the recoverability of the mineral claims. The other significant estimates used by management are determination
of fair values of stock based compensations, convertible notes and deferred income taxes.
Loss Per Share
The Company accounts for loss per share
pursuant ASC 260, Earnings per Share, which require disclosure on the financial statements of “basic” and “diluted”
earnings (loss) per share. Basic earnings (loss) per share is computed by dividing net income (loss) by the weighted average number
of common shares outstanding for the year. Diluted earnings (loss) per share is computed by dividing net income (loss)
by the weighted average number of common shares outstanding plus common stock equivalents (if dilutive) related to stock options
and warrants for each year.
There were no dilutive financial instruments
for the years ended August 31, 2014 and 2013 or for the period from inception (June 5, 2003) to August 31, 2014, as the inclusion
of dilutive shares would be anti-dilutive.
Comprehensive Income/(Loss)
The Company follows the guidance in ASC
220, Comprehensive Income. ASC 220 establishes standards for the reporting and presentation of comprehensive income and
its components in a full set of consolidated financial statements. Comprehensive income is presented in the statements
of changes in stockholders' equity (deficiency), and consists of unrealized gains (losses) on available for sale marketable securities
and foreign currency translation adjustments. ASC 220 requires only additional disclosures in the consolidated financial
statements and does not affect the Company's financial position or results of operations.
Equipment
Equipment is stated at cost less accumulated
depreciation. Depreciation, based on the estimated useful lives of the assets, is provided using the under noted annual
rates and methods:
Furniture and fixtures |
|
20% declining balance |
Computer |
|
30% declining balance |
Stock-Based Compensation
The Company accounts for Stock-Based Compensation
in accordance with ASC 718, Compensation – Stock Compensation. ASC 718 establishes standards for the accounting for
transactions in which an entity exchanges its equity instruments for goods or services. It also addresses transactions
in which an entity incurs liabilities in exchange for goods or services that are based on the fair value of the entity’s
equity instruments or that may be settled by the issuance of those equity instruments. ASC 718 focuses primarily on
accounting for transactions in which an entity obtains employee services in share-based payment transactions. ASC 718
requires that the compensation cost relating to share-based payment transactions be recognized in the consolidated financial statements. That
cost is measured based on the fair value of the equity or liability instruments issued.
Recent Accounting Pronouncements
In March 2013, the FASB issued ASU 2013-05,
“Foreign Currency Matters”, which provides guidance on a parent’s accounting for the cumulative translation adjustment
upon de-recognition of a subsidiary or group of assets within a foreign entity. This new guidance requires that the parent release
any related cumulative translation adjustment into net income only if the sale or transfer results in the complete or substantially
complete liquidation of the foreign entity in which the subsidiary or group of assets had resided. The new guidance will be effective
for the Company beginning October 1, 2014. The adoption of this guidance is not expected to have a material impact on the Company’s
consolidated financial statements.
In July 2013, the FASB issued ASU 2013-11,
"Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carry-forward, a Similar
Tax Loss, or a Tax Credit Carry-forward Exists," which defines the presentation requirements of an unrecognized tax benefit,
or a portion of an unrecognized tax benefit, in the financial statements. The new guidance will be effective for the Company beginning
October 1, 2014. The Company is currently evaluating the impact of adopting this guidance.
In April 2014, the FASB issued ASU 2014-08,
"Presentation of Financial Statements and Property, Plant, and Equipment — Reporting Discontinued Operations and Disclosures
of Disposals of Components of an Entity,'' which revises what qualifies as a discontinued operation, changes the criteria for determining
which disposals can be presented as discontinued operations and modifies related disclosure requirements. This ASU will be effective
for the Company for applicable transactions occurring after October 1, 2015. The Company will prospectively apply the guidance
to applicable transactions.
In May 2014, the FASB issued ASU 2014-09,
"Revenue from Contracts with Customers," which clarifies existing accounting literature relating to how and when a company
recognizes revenue. Under ASU 2014-09, a company will recognize revenue when it transfers promised goods or services to customers
in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods and services.
ASU 2014-09 will be effective for the Company beginning October 1, 2017. The Company is in the process of determining what impact,
if any; the adoption of this ASU will have on its financial position, results of operations and cash flows.
Effective June 2014, the FASB issued ASU
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. The objective of the amendments is to improve financial
reporting by reducing the cost and complexity associated with the incremental reporting requirements for development stage entities.
As a result, the amendments in this Update remove all incremental financial reporting requirements from U.S. GAAP for development
stage entities.
The amendments also eliminate an exception
previously provided to development stage entities in Topic 810, Consolidation, for determining whether an entity is a variable
interest entity on the basis of the amount of investment equity at risk. The amendments in this Update remove the definition
of a development stage entity from the Master Glossary of the Accounting Standards Codification, thereby removing the financial
reporting distinction between development stage entities and other reporting entities from U.S. GAAP. In addition, the amendments
eliminate the requirements for development stage entities to:
1) present inception-to-date
information in the statements of income, cash flows, and shareholder equity;
2) label the financial
statements as those of a development stage entity;
3) disclose a description of the
development stage activities in which the entity is engaged; and
4) disclose in the first year in
which the entity is no longer a development stage entity that in prior years it had been in the development stage.
The amendments also clarify that the guidance
in Topic 275, Risks and Uncertainties, is applicable to entities that have not commenced planned principal operations. The
amendments related to the elimination of inception-to-date information and the other remaining disclosure requirements of Topic
915 should be applied retrospectively except for the clarification to Topic 275, which shall be applied prospectively. For public
business entities, those amendments are effective for annual reporting periods beginning after December 15, 2014, and interim periods
therein. The Company will adopt the new reporting requirements of ASU No. 2014-10 in its financial reporting for its
interim and annual periods in the fiscal year ending August 31, 2016.
In June 2014, the FASB issued ASU 2014-12,
"Compensation – Stock Compensation," which requires that a performance target that affects vesting and that could
be achieved after the requisite service period is treated as a performance condition. Compensation cost should be recognized in
the period in which it becomes probable that the performance target will be achieved and should represent the compensation cost
attributable to the period(s) for which the requisite service has already been rendered. If the performance target becomes probable
of being achieved before the end of the requisite service period, the remaining unrecognized compensation cost should be recognized
prospectively over the remaining requisite service period. The total amount of compensation cost recognized during and after the
requisite service period should reflect the number of awards that are expected to vest and should be adjusted to reflect those
awards that ultimately vest. The requisite service period ends when the employee is able to cease rendering service and still be
eligible to vest in the award if the performance target is achieved. The ASU will be effective for the Company beginning October
1, 2016. The Company will prospectively apply the guidance to applicable transactions.
In August 2014, the FASB issued ASU 2014-15,
"Presentation of Financial Statements—Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s
Ability to Continue as a Going Concern," which the intent is to define the Company's responsibility to evaluate whether there
is substantial doubt about an organization’s ability to continue as a going concern and to provide related footnote disclosures.
This ASU will be effective for the Company October 1, 2017. The Company will prospectively apply the guidance to applicable transactions.
| 5. | MINERAL
PROPERTY CLAIMS |
As at August 31, 2014, the Company had
Lithium Property in the James Bay region of Quebec and Gold Property in Nevada. These mineral properties are acquired through purchase
or lease agreements and are subject to varying royalty interests and lease payments. During the year ended August 31, 2014, annual
maintenance payments of approximately $111,899 (2013 - $91,140) were made to maintain these mineral properties.
Mineral property claims acquisition costs consist of the following:
| |
August 31, 2014 | | |
August 31, 2013 (Restated) | |
Lithium Properties (a) | |
$ | - | | |
$ | - | |
Rimrock Property, West Silver Cloud and Pony Spur (b) | |
| 74,970 | | |
| 74,970 | |
Silver Cloud Property (c) | |
| 305,000 | | |
| 305,000 | |
Ivanhoe Creek Property (d) | |
| 15,000 | | |
| - | |
| |
$ | 394,970 | | |
$ | 379,970 | |
The Company was exploring lithium deposits
in the Abigail Lithium Property located in the James Bay region of Quebec, Canada. As of August 31, 2014, the Company
elected not to renew the 95 map-designated cells totaling approximately 5,000 hectares. In addition, the Company’s 12 map-designated
cells just north of the Abigail property named Lac Kame and 25 map-designated cells named EM-1 have expired and have not been renewed. On
August 31, 2013, management decided to fully write down the capitalized cost of Abigail property, based on the management’s
decision to not further renew the claims upon their expiration between November 2013 to November 2014.
| b. | Rimrock
Property, West Silver Cloud and Pony Spur |
On February 11, 2013, the Company acquired
interests in three prospective gold exploration properties known as the Rimrock Property, West Silver Cloud and Pony Spur, located
in northeast Nevada. The Acquired Properties (defined below) are comprised of almost 2,000 acres of land and are
located on or in close proximity to the Carlin Trend and Midas Trend. At February 28, 2014, the capitalized costs totaled
$74,970 (2013 - $74,970).
The Company acquired these interests through
the issuance of 17,800,000 shares of its common stock in exchange for 100% of the shares in Rimrock Mining, Inc., a Nevada corporation. Any
mineral production from the Rimrock, West Silver Cloud, and Pony Spur Properties is subject to Net Smelter Returns royalties of
3%. Rimrock Mining, Inc. holds the interests in the properties and otherwise has nominal net assets. In accordance with
the guidance provided in ASC 805-50-30-5, the transaction has been accounted for as “Transactions between Entities under
Common Control”. The acquired properties were recorded based on the carrying amounts in the accounts of the transferring
entity at the date of transfer. In addition, the Company issued 2,000,000 shares of its common stock to a consultant
and paid legal charges amounting to $52,117 in connection with the transaction. These costs have been expensed in the
period incurred.
On May 3, 2013, the Company entered into
a purchase agreement (the “Purchase Agreement”) to acquire an exploration epithermal bonanaza gold-silver property
in Nevada, known as the Silver Cloud Property. Pursuant to the Purchase Agreement, the Company acquired from Geologix
a one hundred percent (100%) interest in and to: (i) the Mining Claims that compress 552 unpatented mining claims totaling 11,210
acres, and (ii) the Pescio Lease dated June 1, 1999 between Teck Resources Inc., and Carl Pescio and Janet Pescio, which requires
that the Company pays $50,000 to Pescio family annually. The lease term is to June 30, 2023 with option to extend the lease term
for three subsequent ten years terms.
In consideration for the Mining Claims
and the Pescio Lease, the Company shall issue to Geologix 500,000 shares of the Company’s common stock (the “Rimrock
Shares”) comprised of 400,000 shares to Geologix and 100,000 shares Geologix is required to assign to Teck Resources Inc. In
addition, if the Company delineates more than two million ounces of gold in proven and probable reserves on the Mining Claims,
then the Company will issue a further 250,000 common shares of the Company to Geologix. Any mineral production from
the Silver Cloud Property is subject to net smelter return royalties of 2% due to Royal Gold Inc. and 3% to the underlying claim
owners. These 500,000 shares were issued during the last quarter ended August 31, 2013. The acquired properties
were recorded based on the fair value of the Company’s shares of common stock to be issued, which was determined based on
a recent private placement transaction adjusted for the fair value of warrants issued under that transaction.
The Company issued 1,000,000 shares of
its common stock to a consultant and paid legal charges of $30,000 in connection with the transaction. The total transaction
costs of $180,000 have been included in the cost of the assets acquired. At August 31, 2014, the capitalized costs totaled
$305,000 (2013 – $305,000).
During October 2013, the Company closed
a purchase agreement with RMIC Gold to acquire an epithermal bonanza gold-silver property in Nevada known as the Ivanhoe Creek
Property. RMIC Gold is a private Nevada company controlled by a director of the Company and therefore, this is a non-arm’s
length transaction. Pursuant to the Purchase Agreement, the Company acquired from RMIC Gold a one hundred percent (100%) interest
in the Ivanhoe Creek Property and to certain properties that compress 22 unpatented mining claims totaling 440 acres. In
consideration for the acquisition, the Company issued 150,000 shares of the Company's common shares to RMIC Gold. Any
mineral production from Ivanhoe Creek Property is subject to Net Smelter Returns royalties of 1% due to RMIC Gold. The
acquired property was valued by the fair value of the Company's share of common stock issued, which was based on a recent private
placement transaction.
| 6. | IMPAIRMENT
OF MINERAL PROPERTIES |
The Company’s mineral properties
are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be
recoverable. The Company evaluates at each balance sheet date whether events and circumstances have occurred that indicate possible
impairment. If there are indications of impairment or in the event such recoverable values are not expected to be sufficient
to recover the recorded asset values, the assets are written down to their estimated fair value.
During August 31, 2013, management decided
to fully write down the capitalized cost of Abigail property, based on the management’s decision not to further renew the
claims upon their expiration, and recognized an impairment loss of $133,108 for the year ended August 31, 2013.
As at August 31, 2014, the Company believes
that there is no indication of impairment.
The components of equipment were as follows:
| |
Cost | | |
Accumulated Depreciation | | |
Net 2014 | | |
Net 2013 (Restated) | |
Furniture and equipment | |
$ | 3,634 | | |
$ | 3,204 | | |
$ | 430 | | |
$ | 561 | |
Computer | |
| 15,695 | | |
| 15,513 | | |
| 182 | | |
| 197 | |
| |
$ | 19,329 | | |
$ | 18,717 | | |
$ | 612 | | |
$ | 758 | |
The depreciation charge for the years ended
August 31, 2014 and August 31, 2013 are $146 and $200, respectively.
This is a short-term bridge loan from a
non-related party and will be repaid and borrowed frequently based on the Company’s operation requirement.
| 8b. | ADVANCES
FROM A RELATED PARTY |
These advances are from a shareholder of
the Company. The amount is non-interest bearing, unsecured and due on demand. The carrying value of the advances approximates the
market value due to the short-term maturity of the financial instruments.
| 9. | CONVERTIBLE
NOTES PAYABLE AND DERIVATIVE LIABILITIES |
As of August 31, 2014, the estimated fair
value of our convertible promissory notes and warrants is as follows:
Convertible Notes and Warrants | |
Fair Value Issuance date May 31, 2014 | | |
Fair Value August 31, 2014 | |
Redwood Funds Convertible Note - $100,000 | |
$ | 151,195 | | |
$ | 107,215 | |
KBM Worldwide Convertible Note issued on August 25, 2014 – face value of $88,500 | |
$ | 134,406 | | |
$ | 134,649 | |
Total | |
| | | |
| 241,864 | |
Redwood Funds Warrants – 100,000 – Derivative liability | |
$ | 7,718 | | |
$ | 521 | |
Redwood Fund Convertible Note and Warrants
On April 14, 2014, the Company issued a
$100,000 12% convertible note with a term to October 14, 2014 (the “Maturity Date”) to Redwood Fund (the “Holder”).
The principal amount of the note and interest is payable on the maturity date. The note is convertible into common stock beginning
six months after the issuance date, at the holder’s option, at a fixed conversion price of $0.075% per share. The conversion
price provides for down-round protection in the event any subsequent equity sales are issued at a lower conversion price. The Company
has the option to prepay all or any portion of the purchase price; however, the prepayment amount must be 110% of the principal
amount to be prepaid together with all accrued but unpaid interest. The terms of the convertible note provide for certain redemption
features which include features indexed to equity risks. In the event of default, the amount of principal and interest not paid
when due bear interest at the rate of 20% per annum and the note becomes immediately due and payable.
In connection with the issuance of the
convertible note, the Company also issued detachable warrants to Redwood Fund indexed to 100,000 shares of the Company’s
common stock. The exercise price of the warrants is $0.10 per share. The term to expiration for the warrants is five years. The
exercise price provides for down-round protection in the event any subsequent equity sales are issued at a lower conversion price.
The Company has evaluated the terms and
conditions of the convertible note and warrants under the guidance of ASC 815. The conversion feature did not meet the definition
of “indexed to a company’s own stock” provided for in ASC 815 due to the down round protection feature. Therefore,
the conversion feature requires bifurcation and liability classification. Additionally, the default put requires bifurcation because
it is indexed to risks that are not associated with credit or interest risk. As a result, the compound embedded derivative comprises
of (i) the embedded conversion feature and (i) the default put. Rather than bifurcating and recording the compound embedded derivative
as a derivative liability, the Company elected to initially and subsequently measure the convertible note in its entirety at fair
value, with changes in fair value recognized in earnings in accordance with ASC 815-15-25-4. Additionally, the warrants did not
meet the definition of “indexed to a company’s own stock” provided for in ASC 815 due to the down round protection
feature. As a result, the warrants require liability classification.
KBM Worldwide Convertible Note
On August 29, 2014, the Company completed
an offering by entering into a Securities Purchase Agreement (the “Securities Purchase Agreement”), dated August 25,
2014, with KBM Worldwide, Inc., a New York corporation (the “Holder”) for an aggregate principal amount of $88,500
(the “Purchase Price”) in the form of a convertible promissory note (“KBM Note”).
The KBM Note earns an interest rate equal
to 8% per annum and matures on May 27, 2015. This Note may not be prepaid in whole or in part except as otherwise explicitly set
forth therein. Any amount of principal or interest on this KBM Note which is not paid when due shall bear interest at the rate
of 22% per annum from the due date thereof until the same is paid (“Default Interest”).
The KBM Note is convertible any time after
180 days after issuance, and the Purchaser has the right to convert the KBM Note into shares of the Company’s common stock
at a conversion price (the “Conversion Price”) equal to 58% multiplied by the Market Price (closing bid) (representing
a discount rate of 42%). “Market Price” means the average of the lowest three (3) trading prices for the common stock
during the twenty (20) trading day period ending on the latest complete trading day prior to the conversion date. The Conversion
Price is subject to adjustment in the case of stock splits, stock dividends, combinations of shares and similar recapitalization
transactions and any issuances of securities below the Conversion Price (a full ratchet reset).
In addition, in no event the Purchaser
may convert the shares into common stock if the Purchaser’s total number of shares beneficially held at that time would exceed
9.99% of the number of shares of the Company’s common stock. The Investor Note conversion price and Warrants exercise price
is subject to adjustments with dilutive and full reset provisions. The embedded reset feature, conversion feature, and redemption
provisions in the Note should be accounted for as a derivative liability based on guidance in ASC 820 and ASC 815.
The following table reflects the allocation of the KBM Note
purchase on the financing date August 25, 2014:
KBM Convertible Note | |
Note Allocation/Costs | |
Proceeds | |
$ | 88,500 | |
Convertible promissory notes | |
| 88,500 | |
Fair Value at Issuance (including derivative value) | |
| 134,406 | |
Day One Excess value interest expense | |
| 45,906 | |
Fair Value Considerations
ASC 820 Fair Value Measurements and Disclosures
(“ASC 820”), defines fair value, establishes a framework for measuring fair value and enhances disclosures about fair
value measurements. It defines fair value as the exchange price that would be received for an asset or paid to transfer a liability
(an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market
participants on the measurement date. ASC 820 also establishes a fair value hierarchy which requires an entity to maximize the
use of observable inputs and minimize the use of unobservable inputs when measuring fair value.
The Company follows the provisions of ASC
820 with respect to its financial instruments. As required by ASC 820, assets and liabilities measured at fair value are classified
in their entirety based on the lowest level of input that is significant to their fair value measurement. The Company’s convertible
promissory notes which are required to be measured at fair value on a recurring basis under of ASC 815 as of August 31, 2014 are
all measured at fair value using Level 3 inputs. Level 3 inputs are unobservable inputs that are supported by little or no market
activity and that are significant to the fair value of the assets or liabilities as of August 31, 2014.
| |
| | |
Fair Value Measurements Using: | |
| |
Fair Value | | |
Quoted Prices in Active Markets (Level 1) | | |
Significant Other Observable Inputs (Level 2) | | |
Significant Unobservable Inputs (Level 3) | |
Convertible Notes | |
$ | 241,864 | | |
$ | - | | |
$ | - | | |
$ | 241,864 | |
Derivative Warrants | |
| 521 | | |
| | | |
| | | |
| 521 | |
Totals | |
$ | 242,385 | | |
$ | - | | |
$ | - | | |
$ | 242,385 | |
The Company values its derivative instruments
related to embedded derivative features and warrants from the issuance of convertible debentures in accordance with the Level 3
guidelines.
Derivative Financial Instruments
Derivative Liabilities
The Company evaluated the conversion feature
embedded in the convertible notes to determine if such conversion feature should be bifurcated from its host instrument and accounted
for as a freestanding derivative. Due to the note not meeting the definition of a conventional debt instrument because it contained
a diluted issuance provision, the convertible notes were accounted for in accordance with ASC 815. According to ASC 815, the derivatives
associated with the convertible notes were recognized as a discount to the debt instrument, and the discount is being amortized
over the life of the note and any excess of the derivative value over the note payable value is recognized as additional expense
at issuance date.
Further, and in accordance with ASC 815,
the embedded derivatives are revalued at each balance sheet date and marked to fair value with the corresponding adjustment as
a “gain or loss on change in fair values” in the consolidated statement of operations. As of May 31, 2014, the
fair value of the notes and warrants included on the accompanying consolidated balance sheet was $158,913. During the year
ended August 31, 2014, the Company recognized a gain on change in fair value totaling $50,934.
Key assumptions used in the valuation of
the convertible notes for each of the valuation dates were as follows:
Note Holder | |
Valuation Date | |
Term | | |
Volatility | | |
Risk Adjusted Rate | |
| |
| |
| | | |
| | | |
| | |
KBM Worldwide - 2 | |
August 25, 2014 | |
| 0.75 | | |
| 180 | % | |
| 9.650 | % |
Redwood Fund - 1 | |
August 31, 2014 | |
| 0.12 | | |
| 134 | % | |
| 9.590 | % |
KBM Worldwide - 2 | |
August 31, 2014 | |
| 0.73 | | |
| 180 | % | |
| 9.650 | % |
Key assumptions used in the valuation of
the warrants for each of the valuation dates were as follows:
Warrant Holder | |
Valuation Date | |
Term | | |
Volatility | | |
Risk Free Rate | |
Redwood Fund - 1 | |
August 31, 2014 | |
| 4.62 | | |
| 253 | % | |
| 0.940 | % |
The Company classifies the fair value of
these securities under level three of the fair value hierarchy of financial instruments. The fair value of the derivative liability
was calculated using a multi-nomial lattice model that values the compound embedded derivatives based on a probability weighted
discounted cash flow model. This model is based on future projections of the various potential outcomes. The fair values including
the embedded derivatives that were analyzed and incorporated into the model included the conversion feature with the full ratchet
reset and dilutive reset, and the redemption options.
Level 3 – | |
Balance at May 31,
2014 | | |
New Issuances | | |
Settlements | | |
Change in Fair
Values | | |
Balance at August 31, 2014 | |
Fair Values from: | |
| | | |
| | | |
| | | |
| | | |
| | |
Convertible Notes | |
$ | 151,195 | | |
$ | 134,406 | | |
| - | | |
$ | (43,737 | ) | |
$ | 241,864 | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Warrants | |
$ | 7,718 | | |
$ | - | | |
| - | | |
$ | (7,197 | ) | |
$ | 521 | |
| |
$ | 158,913 | | |
$ | 134,406 | | |
| | | |
$ | (50,934 | ) | |
$ | 242,385 | |
Changes in the unobservable input values
would likely cause material changes in the fair value of the Company’s Level 3 financial instruments.
10. |
RELATED PARTY TRANSACTIONS |
The transactions with related parties were
in the normal course of operations and were measured at the exchange value which represented the amount of consideration established
and agreed to by the parties. Related party transactions not disclosed elsewhere in these consolidated financial statements are
as follows:
During October 2013, the Company closed
a purchase agreement with RMIC Gold, a private Nevada company controlled by a director of the Company. The Company issued
150,000 common shares as consideration for 100% interest of the Epithermal bonanza gold-silver property known as the Ivanhoe Creek
Property.
Consulting fees paid to CEO for the year
ended August 31, 2014 were $2,622 (2013 – $24,068).
Consulting fees paid to a director of the
Company for the year ended 31 August 2014 were nil (2013 – 6,763).
Amounts due to a related party as at August
31, 2014 was $22,418 (2013 - $16,109) in connection with the reimbursement of expenses. These expenses have already been included
in the statements of operations.
Persuant to the Agreement signed between
the Company and Uptick Capital LLC (related party by virtue of common directorship), both the parties agreed to make the following
changes to the agreement dated March 1, 2013.
As of March 30, 2014 the agreement
will be deferred until January 1, 2015 and shall begin in full force on such date. On January 1, 2015 the Company
shall make a one time lump sum payment to Uptick Capital of 2.5 million shares for consulting services and thereafter beginning February
1, 2015 Renewal Payments from the agreement shall be changed to 750,000 shares per quarter from 250,000 per month paid in
advance of the said period.
COMMON SHARES - AUTHORIZED
As at August 31, 2014, the Company has
200,000,000 common shares authorized. The common shares have a $0.001 par value.
COMMON SHARES - ISSUED AND OUTSTANDING
During fiscal 2003, the Company completed
non-brokered private placements of 250,000 shares of common stock for proceeds of $200.
During fiscal 2007, the Company completed
non-brokered private placements of 62,500 shares of common stock for proceeds of $50.
During fiscal 2008, the Company issued
12,500 shares of common stock for legal services rendered at $0.08 per share.
During fiscal 2008, the Company issued
448,750 shares of common stock for cash at $0.08 per share.
In August 2009 the company issued 125,000
shares of common stock for consulting services rendered at $0.4 per share.
In January 2010 a $120,000 note payable
was converted to 750,000 shares of common stock in the Company at a price of $0.16 per share.
In January 2010 the Company issued 250,000
shares of common stock for cash at $0.3 per share.
In February 2010 the Company issued 25,000
shares of common stock in settlement of accounts payable at $0.4 per share.
On April 7, 2010, the Company affected
a 1 for 10 forward split of its issued and outstanding common stock. The Company’s issued and outstanding common shares were
increased from 192,375 to 1,923,750. All references in the financial statements to the number of shares outstanding
and per share amounts of the Company’s common stock have been restated retroactively to reflect the effect of the stock split
for all periods presented. The Company also increased its authorized common shares from 100,000,000 to 200,000,000.
During the year ended August 31, 2010,
the Company recorded $50,000 for consulting services rendered in exchange for common shares to be issued. On March 1,
2011, the Company issued 250,000 shares of common stock at a price of $0.2 per share in settlement of these services.
In September 2010 the Company issued a
one-year convertible note payable in the amount of $14,990. On April 16, 2011 the note payable was converted to 75,000
shares of common stock of the Company at $0.2 per share.
In December 2010, pursuant to the Agreement,
the Company issued 1,875,000 shares of common stock at $0.16 per share to the Selling Group to acquire a 100% interest in the Property.
On March 1, 2011, the Company issued an additional 625,000 shares of common stock at a price of $0.16 per share reflecting payment
of $100,000 towards the Property. The shares issued in connection with the Property acquisition were based on the fair market value
of the stock on the date of issuance.
During the year ended August 31, 2011,
the Company issued 2,059,275 shares of common stock for total gross proceeds of $891,551 from various issuances in prices ranging
from $0.24 to $0.88 per share. The Company paid $80,998 in commissions related to raising these proceeds and has accordingly been
deducted from additional paid-in capital. The net proceeds from these issuances were $810,553.
In September 2011, the Company entered
into a rental agreement for a period of two years commencing 1 September 2011. The Company paid $12,000 in cash and will deliver
to the lessor shares of common stock worth $3,500 to fulfill rental payment for the entire term of lease. In April 2012, the Company
issued 15,625 shares of common stock pursuant to the rental agreement at a price of $0.224 per share.
On September 5, 2011, the Company received
$5,000 in exchange for 12,500 shares of common stock at $0.40 per share. These shares were issued on May 17, 2012.
On September 15, 2011, the Company issued
45,000 shares of common stock at $0.40 per share for consulting services. The services were valued based on the fair
market value of the common stock on the date of issuance.
On December 15, 2011, the Company received
$15,000 in exchange for 93,750 shares of common stock at $0.16 per share. These shares were issued on May 17, 2012.
On February 8, 2012, the Company received
$6,600 in exchange for 27,500 shares of common stock at $0.24 per share. These shares were issued on May 17, 2012.
On February 29, 2012, the Company received
$26,250 in exchange for 109,375 shares of common stock at $0.24 per share. These shares were issued on May 17, 2012.
On March 5, 2012, the Company received
$5,000 in exchange for 20,833 shares of common stock at $0.24 per share. These shares were issued in August 2012.
On April 13, 2012, the Company received
$9,000 in exchange for 37,500 shares of common stock at $0.24 per share. These shares were issued in August 2012.
On May 17, 2012, the Company issued 250,000
shares of common stock in connection with its purchase of the Lac Kame and EM-1 Properties, as disclosed in note 7. The issuance
of these shares was recorded at a price of $0.08 per share. The Company paid $12,472 in commissions related to raising the above
mentioned private placements and has accordingly been deducted from additional paid-in capital.
On January 9, 2013, the Company’s
$125,000 convertible note payable with accrued interest of $3,274 were converted into 641,370 shares of common stock at price of
$0.20 per share.
On January 9, 2013, the Company issued 243,148
shares of common stock at $0.20 per share in exchange for cash of $48,602. The Company paid $4,860 in fees and $1,458 in legal
expenses related to raising the above mentioned private placements and has accordingly been deducted from Shares to be issued as
presented on the consolidated balance sheet.
On February 11, 2013, the Company completed
a private placement with unrelated investors for total gross proceeds of $502,000. The Company issued 2,510,000 common
stock at a purchase price of $0.20 per share, each with one warrant to purchase common stock at an exercise price of $0.30 per
share. The Company paid $36,000 in fees related to raising the above mentioned private placement. The fair value of the warrants
issued at the date of the grant was $145,247. This amount was estimated using the Black-Scholes Option Pricing model with an expected
life of two years, a risk free interest rate of 0.29%, a dividend yield of 0%, and an expected volatility of 75%.
On February 11, 2013, the Company issued
17,800,000 shares of its common stock in exchange for 100% of the shares in Rimrock Mining, Inc., to acquire interests in three
prospective gold exploration properties. The Company also issued 2,000,000 shares of its common stock to a consultant company as
a fee for above transaction. The acquired properties were recorded at its carrying value based on the fact that the assets are
transferred among entities under common control.
On February 11, 2013, the Company effected
a 1-for-8 reverse split of the issued and outstanding shares of the common stock. The effect of reverse split has been
accounted for retrospectively.
On March 1 and June 5, 2013, the Company
issued 1,250,000 shares and 750,000 respectively of common stock to a consultant in connection with the consulting services for
market expansion and business development. These services were recorded in the consolidated statement of operations
based on the fair value of the Company’s shares of common stock issued, which was determined based on a recent private placement
transaction adjusted for the fair value of warrants issued under that transaction. Additionally, on June 5, 2013, the Company
issued 500,000 shares to the same consultant as prepaid consulting fee payment for the quarter ending November 30, 2013.
On March 15, 2013, the Company issued 1,000,000
shares of its common stock to a consultant company as reference fee for the acquisition of Silver Cloud Property. The
fair value of these shares was determined based on a recent private placement transaction adjusted for the fair value of warrants
issued under that transaction. The fair value of the shares issued has been capitalized with the value of the property acquired.
On May 3, 2013, the Company entered
into a purchase agreement to acquire the Silver Cloud Property, and issued 400,000 shares and 100,000 shares of its common stock
to Geologix Explorations Inc. and Teck Resources Inc. respectively as the consideration for the purchase. The acquired properties
were recorded based on the fair value of the Company’s shares of common stock to be issued, which was determined based on
a recent private placement transaction adjusted for the fair value of warrants issued under that transaction.
In September 2013, the Company issued 850,000
shares of common stock for consulting services rendered at $0.15 per share.
During October 2013, the Company closed
a purchase agreement to acquire the Ivanhoe Creek Property. On December 20, 2013, the Company issued 150,000 shares of its common
stock at $0.10 per share to RMIC Gold as the consideration for the purchase.
In November 2013, the Company received
$4,740 in exchange for 50,000 shares of common stock at $0.095 per share. These shares are expected to be issued in
the next year.
In December 2013, the Company issued 750,000
shares of common stock for consulting services valued at $0.10 per share.
In March 2014, the Company issued 1,050,000
shares of common stock for consulting services valued at $0.08 per share.
In April 2014, the Company issued 250,000
shares of common stock for consulting services valued at $0.08 per share.
b. |
Share purchase warrants |
| |
No. of warrants | | |
Warrant value | | |
Weighted average exercise price | | |
Weighted average remaining life | |
Outstanding and exercisable at September 1, 2012 | |
| - | | |
| - | | |
| | | |
| | |
Issued with common shares at private placement | |
| 2,510,000 | | |
$ | 145,247 | | |
| 0.30 | | |
| 1.45 | |
Outstanding and exercisable at August 31, 2013 | |
| 2,510,000 | | |
$ | 145,247 | | |
| 0.30 | | |
| 1.45 | |
| |
| | | |
| | | |
| | | |
| | |
Outstanding and exercisable at August 31, 2014 | |
| 2,510,000 | | |
$ | 145,247 | | |
| 0.30 | | |
| 0.45 | |
On February 11, 2013, the Company completed
a private placement with unrelated investors for total gross proceeds of $502,000. The Company issued 2,510,000 common
stock at a purchase price of $0.20 per share, each with one warrant to purchase common stock at an exercise price of $0.30 per
share. The Company paid $36,000 in fees related to raising the above mentioned private placement.
The fair value of the warrants issued at
the date of the grant was $145,247. This amount was estimated using the Black-Scholes Option Pricing model with an expected life
of two years, a risk free interest rate of 0.29%, a dividend yield of 0%, and an expected volatility of 75%.
12. |
CONTINGENCIES AND COMMITMENTS |
The Company is committed under lease agreements
for the exclusive right to explore, develop and mine on the Silver Cloud Property. The minimum annual future lease payments are
$50,000 until year 2023 with total commitments of $500,000.
In accordance with the Abigail Purchase
Agreement, the Company will also owe to the selling group of the Abigail Property the following contingent payments:
● |
After spending a total amount of $2,500,000 on the property, $250,000 and an additional 125,000 shares of the Company’s common stock shall be delivered to the selling group. |
● |
After spending a total amount of $5,000,000 on the property, a further $250,000 and 125,000 shares of the Company’s common stock shall be delivered to the selling group. |
● |
If a feasibility study is put in place an additional $250,000 and 125,000 shares of the Company’s common stock shall be delivered to the selling group. |
● |
If a bankable feasibility is put in place a further $500,000 and 250,000 shares of the Company’s common stock shall be delivered to the selling group. |
In accordance with the Lac Kame and EM-1
Purchase Agreement, the Company will also owe to the selling group of the properties the following contingent payments:
● |
After spending a total amount of $1,000,000 on the property, $50,000 and an additional 125,000 shares of the Company’s common stock shall be delivered to the selling group. |
● |
After spending a total amount of $2,500,000 on the property, a further $100,000 and 250,000 shares of the Company’s common stock shall be delivered to the selling group. |
● |
After spending a total amount of $5,000,000 on the property, a further $150,000 and 125,000 shares of the Company’s common stock shall be delivered to the selling group. |
If the Company reaches commercial production,
it is also subject to a 3% net smelter returns royalty payable to the selling groups in the Abigail Purchase Agreement and the
Lac Kame EM-1 Purchase Agreement.
In accordance with the Rimrock, West Silver
Cloud and Pony Spur Property purchase agreement, any mineral production from the Rimrock, West Silver Cloud, and Pony Spur Properties
is subject to Net Smelter Returns royalties of 3%.
In accordance with the Silver Cloud Property
purchase agreement, if the Company delineates more than two million ounces of gold in proven and probable reserves on the Mining
Claims, then the Company will issue a further 250,000 common shares of the Company to Geologix. Any mineral production
from the Silver Cloud Property is subject to net smelter return royalties of 2% due to Royal Gold Inc. and 3% to the underlying
claim owners.
In accordance with the Ivanhoe Creek Property
purchase agreement, any mineral production from Ivanhoe Creek Property is subject to net smelter return royalties of 1% due to
RMIC Gold.
13. |
SUPPLEMENTAL CASH FLOW INFORMATION |
During the years ended August 31, 2014
and 2013 and for the period from inception to August 31, 2014 (Unaudited), there was no interest or taxes paid by the Company.
As at August 31, 2014, the Company has
income tax losses of approximately $1,861,035 (2013 - $1,445,090) available to be applied against future years income as a result
of the losses incurred since inception. The losses will expire in various years upto 2034. At the tax rate
of 34% these losses create a deferred tax benefit of approximately $632,752 (2013 - $491,331), however, due to the losses incurred
in the period and expected future operating results, management determined that it is more likely than not that the deferred tax
asset resulting from the tax losses available for carry forward will not be realized through the reduction of future income tax
payments. Accordingly a 100% valuation allowance has been recorded for income tax losses available for carry forward.
The income tax provision for the years ended August 31, 2014 and August 31, 2013 as follows:
| |
Year ended August
31, 2014 | | |
Year ended August
31, 2013 | |
| |
| | |
| |
Loss before income taxes | |
$ | 851,330 | | |
$ | 1,225,857 | |
Applicable tax rates | |
| 34 | % | |
| 34 | % |
| |
| | | |
| | |
Income tax benefit computed at applicable statutory rates | |
$ | 289,452 | | |
$ | 416,791 | |
Tax effect of expenses not deductible for tax purposes | |
| (148,031 | ) | |
| (279,361 | ) |
Change in valuation allowance | |
| (141,421 | ) | |
| (137,430 | ) |
| |
| | | |
| | |
Total income tax provision | |
$ | - | | |
$ | - | |
The components of deferred tax benefit are summarized as follows:
| |
As at August 31, 2014 | | |
As at August 31, 2013 | |
| |
| | |
| |
Non-capital losses carried forward | |
$ | 632,752 | | |
$ | 491,331 | |
Valuation allowance | |
| (632,752 | ) | |
| (491,331 | ) |
Net deferred tax benefit | |
$ | - | | |
$ | - | |
15. |
FINANCIAL INSTRUMENTS |
Foreign Currency Risk
The Company is exposed to currency risks
due to the potential variation of the currencies in which it operates. Principal currencies include the United States
dollar and Canadian dollar. The Company monitors its foreign currency exposure regularly to minimize our foreign currency
risk exposure.
Concentration of Credit Risk
The Company does not have significant off-balance-sheet
risk or credit concentration. The Company maintains cash with major financial institutions. From time to
time, the Company may have funds on deposit with commercial banks that exceed federally insured limits. Management does
not consider this to be a significant risk.
Liquidity Risk
The Company is exposed to liquidity risk
as its continued operations are dependent upon obtaining additional capital or achieving profitable operations to satisfy its liabilities
as they come due.
Other price risk
The Company is exposed to other price risk
due to volatility in gold and other allied metals prices which may have an impact on the assessment of impairment measurement of
mining properties.
The Company’s management has evaluated
the subsequent events up to the date of the filing of this report and conclude that there is no subsequent event to report except
for the following:
|
a) |
As disclosed in the current report on Form 8-K filed with the Securities and Exchange Commission on April 21, 2014, on April 14, 2014, Rimrock Gold Corp. (the “Company”) entered into a securities purchase agreement with Redwood Fund LP, a Delaware limited partnership (“Redwood”) for an aggregate principal amount of $100,000. Pursuant to the securities purchase agreement, the Company issued the following to Redwood: (i) a convertible promissory note in the principal amount of $100,000; and (ii) a five-year warrant to purchase an aggregate of 100,000 shares of the Company’s common stock for an exercise price of $0.10 per share. |
On September 30, 2014, the parties
entered into amendments to the securities purchase agreement, the note and the warrant. Pursuant to the amendments, the maturity
date shall be the earlier of (i) six (6) months from the date of the amendments or (ii) thirty (30) days prior to the conversion
of that certain convertible note issued by the Company to KBM Worldwide, Inc. on August 25, 2014. The definition of “Permitted
Indebtedness” in the note is removed as well as relevant provisions. Also, the conversion price of the note of $0.075 is
reduced to $0.03 per share; the exercise price of the warrant of $0.10 is reduced to $0.04 per share. In addition, Redwood waives
any acts of default pursuant to the terms of the note committed by the Company prior to the date of the execution of the amendments.
|
b) |
On October 21, 2014, the Company completed an offering by entering into a securities purchase agreement, dated October 1, 2014, with KBM Worldwide, Inc., a New York corporation (“KBM”) for an aggregate principal amount of $42,500 (the “Purchase Price”) in the form of a convertible promissory note. |
The terms of the note are as follows:
The note earns an interest rate
equal to 8% per annum and matures on July 3, 2015. This note may not be prepaid in whole or in part except as otherwise
explicitly set forth therein. Any amount of principal or interest on this note which is not paid when due shall bear interest at
the rate of twenty two percent (22%) per annum from the due date thereof until the same is paid (“Default Interest”).
The note is convertible any
time after 180 days after issuance, and KBM has the right to convert the note into shares of the Company’s common stock at
a conversion price (the “Conversion Price”) equal to 58% multiplied by the Market Price (as defined below) (representing
a discount rate of 42%). “Market Price” means the average of the lowest three (3) trading prices for the common stock
during the twenty (20) trading day period ending on the latest complete trading day prior to the conversion date. The Conversion
Price is subject to adjustment in the case of stock splits, stock dividends, combinations of shares and similar recapitalization
transactions and any issuances of securities below the Conversion Price.
In addition, in no event KBM
may convert the shares into common stock if KBM’s total number of shares beneficially held at that time would exceed 4.99%
of the number of shares of the Company’s common stock as determined in accordance with Rule 13(d) of the Securities Exchange
Act of 1934, as amended, unless such limitation is waived by KBM by giving not less than 61 days prior notice to the Company.
|
c) |
On December 16, 2014, the Company received a “Notice of default” letter from KBM for not filing its annual 10-K in accordance with the requirements of the Exchange Act. The Company is now liable to pay 150% of the remaining outstanding principal balance, together with the default interest (the “Default Amount”). Should the default amount not be paid within 5 business days from the date of demand, KBM will be entitled at its sole discretion to convert the Default Amount into equity. |
During the previous year ended August 31,
2013, the Company has made adjustments to its consolidated balance sheet, consolidated statement of operations and comprehensive
loss, consolidated statement of Stockholder’s equity, and consolidated statement of cash flows due to an adjustment to the
valuation of mining property claims and adjustments in the application of the beneficial conversion features calculation on convertible
debentures. The Company originally accounted for the acquisition of mineral rights as a “Purchase of Assets” under
the guidance of ASC 505 in which the acquired property were recorded on the fair value of the Company’s common stock issued,
which was determined based on a recent private placement transaction adjusted for fair value of warrants issued under that transaction.
In further review, the Company determined that the property was under common control at the date of acquisition. Therefore the
transaction should have been accounted for as an exchange of assets between entities under common control. The guidance ASC 805-50-30-56
requires the entity receiving the equity interests to initially measure the recognized assets and liabilities transferred at the
carrying amounts in the accounts of the transferring entities at the date of transfer. The Company originally accounted for their
convertible debenture under the guidance of FASB 470-20-25-23, which requires determining the carrying amount of the liability
component first, and then determining the carrying amount of the equity component represented by the embedded conversion option.
In further review, the Company determined the convertible debenture is not within the scope of the Cash conversion Subsections,
and should calculate the intrinsic value for its beneficial conversion feature under the guidance of FASB 470-20-25-4. The restatement
also adjusted accumulated other comprehensive loss to deficit accumulated during the exploration stage for realization of loss
on available for sale securities and derecognizing translation adjustments.
In addition, effective March 6, 2014 the
Company’s predecessor auditor, DNTW Toronto LLP, formerly known as DNTW Chartered Accountants, LLP (“DNTW”),
is no longer registered with the PCAOB and on May 20, 2014 the Securities and Exchange Commission ("SEC”) denied the
two partners of DNTW, the privilege of appearing or practicing before the SEC as accountants. Therefore, the Company is no longer
allowed to include any audit report issued by DNTW in any filing with the SEC on or after May 20, 2014. Schwartz Levitsky Feldman
LLP, Chartered Accountant, has audited the restated financial statements for the fiscal year ended August 31, 2013. The Company’s
financial statements for the year ended August 31, 2012 and for the period (June 5, 2003) to August 31, 2013 are deemed to be unaudited.
a. |
Reconciliation of Consolidated Balance Sheet as at August 31, 2013 |
Consolidated Balance Sheet as at August 31, 2013
| |
August 31, 2013 Previously stated | | |
August 31, 2013 Adjustments | | |
August 31, 2013 Restated | |
ASSETS | |
| | | |
| | | |
| | |
Current Assets | |
| | | |
| | | |
| | |
Cash | |
$ | 36,449 | | |
| | | |
$ | 36,449 | |
Prepaid and sundry | |
| 80,596 | | |
| | | |
| 80,596 | |
Total Current Assets | |
| 117,045 | | |
| | | |
| 117,045 | |
Long Term Assets | |
| | | |
| | | |
| | |
Mineral property claims (1) | |
| 3,327,117 | | |
| (2,947,147 | ) | |
| 379,970 | |
Equipment | |
| 758 | | |
| | | |
| 758 | |
Total Long Term Assets | |
| 3,327,875 | | |
| (2,947,147 | ) | |
| 380,728 | |
Total Assets | |
$ | 3,444,920 | | |
| (2,947,147 | ) | |
$ | 497,773 | |
| |
| | | |
| | | |
| | |
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) | |
| | | |
| | | |
| | |
Current Liabilities | |
| | | |
| | | |
| | |
Accounts payable and accrued liabilities | |
$ | 8,603 | | |
| | | |
$ | 8,603 | |
Convertible notes payable | |
| - | | |
| | | |
| 16,109 | |
Advances from a related party | |
| 16,109 | | |
| | | |
| - | |
Total Liabilities | |
| 24,712 | | |
| | | |
| 24,712 | |
| |
| | | |
| | | |
| | |
Stockholders' Equity | |
| | | |
| | | |
| | |
Capital stock, $0.001 par value; Authorized 200,000,000; Issued and outstanding 34,614,489 (August 31, 2012 unaudited – 7,420,109) | |
| 34,615 | | |
| | | |
| 34,615 | |
Additional paid-in capital (2) | |
| 5,962,315 | | |
| (2,476,830 | ) | |
| 3,485,485 | |
Accumulated other comprehensive loss (3) | |
| (9,802 | ) | |
| 9,802 | | |
| - | |
Deficit accumulated during the exploration stage (4) | |
| (2,566,920 | ) | |
| (480,119 | ) | |
| (3,047,039 | ) |
Total Stockholders' Equity | |
| 3,420,208 | | |
| (2,947,147 | ) | |
| 473,061 | |
Total Liabilities and Stockholders' Equity | |
$ | 3,444,920 | | |
| (2,947,147 | ) | |
$ | 497,773 | |
b. |
Reconciliation of Consolidated statements of operations and comprehensive loss for the year ended August 31, 2013 |
| |
For the Year Ended August 31, 2013 (Previously
stated) | | |
For the
Year Ended August 31, 2013 (Adjustment) | | |
For the Year Ended August 31, 2013 (Restated) | |
EXPENSES | |
| | | |
| | | |
| | |
Professional fees (6) | |
$ | 513,954 | | |
$ | 352,117 | | |
$ | 866,071 | |
Mineral property claims maintenance fee | |
| 91,140 | | |
| - | | |
| 91,140 | |
Exploration | |
| 4,017 | | |
| - | | |
| 4,017 | |
Advertising and promotion | |
| 7,526 | | |
| - | | |
| 7,526 | |
Telecommunications | |
| 6,422 | | |
| - | | |
| 6,422 | |
Rent and occupancy costs | |
| 16,450 | | |
| - | | |
| 16,450 | |
Office and general | |
| 16,886 | | |
| - | | |
| 16,886 | |
Interest and bank charges (5) | |
| 8,903 | | |
| 74,872 | | |
| 83,775 | |
Foreign currency exchange loss | |
| - | | |
| 262 | | |
| 262 | |
Depreciation | |
| 200 | | |
| - | | |
| 200 | |
TOTAL OPERATING EXPENSES | |
| 665,498 | | |
| 427,251 | | |
| 1,092,749 | |
LOSS FROM OPERATIONS | |
| (665,498 | ) | |
| 427,251 | | |
| (1,092,749 | ) |
Interest income | |
| - | | |
| - | | |
| - | |
Impairment of mineral property claims | |
| (133,108 | ) | |
| - | | |
| (133,108 | ) |
Impairment of convertible note receivable | |
| - | | |
| - | | |
| - | |
LOSS FROM CONTINUING OPERATIONS BEFORE TAX | |
| (798,606 | ) | |
| (427,251 | ) | |
| (1,225,857 | ) |
Income tax | |
| - | | |
| - | | |
| - | |
LOSS FROM CONTINUING OPERATIONS | |
| (798,606 | ) | |
| (427,251 | ) | |
| (1,225,857 | ) |
LOSS FROM DISCONTINUED OPERATION, NET OF TAX | |
| - | | |
| - | | |
| - | |
NET LOSS | |
$ | (798,606 | ) | |
$ | (427,251 | ) | |
$ | (1,225,857 | ) |
OTHER COMPREHENSIVE LOSS FROM CONTINUING OPERATIONS | |
| | | |
| | | |
| | |
Foreign currency translation adjustment (7) | |
| (262 | ) | |
| 262 | | |
| 0 | |
Unrealized loss on convertible note receivable and available-for-sale securities, net of tax | |
| - | | |
| - | | |
| - | |
COMPREHENSIVE LOSS OF CONTINUING OPERATIONS | |
$ | (798,868 | ) | |
$ | (426,989 | ) | |
| (1,225,857 | ) |
OTHER COMPREHENSIVE LOSS FROM DISCONTINUED OPERATIONS | |
| | | |
| | | |
| | |
Foreign currency translation adjustment | |
| - | | |
| - | | |
| - | |
COMPREHENSIVE LOSS OF DISCONTINUED OPERATIONS | |
| - | | |
| - | | |
| - | |
TOTAL COMPREHENSIVE LOSS | |
| (798,868 | ) | |
| (426,989 | ) | |
| (1,225,857 | ) |
LOSS FROM CONTINUING OPERATIONS PER SHARE - BASIC AND DILUTED | |
| (0.04 | ) | |
| - | | |
| (0.06 | ) |
LOSS FROM DISCONTINUED OPERATIONS PER SHARE - BASIC AND DILUTED | |
| - | | |
| - | | |
| - | |
NET LOSS PER SHARES - BASIC AND DILUTED | |
| (0.04 | ) | |
| - | | |
| (0.06 | ) |
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING - BASIC AND DILUTED | |
| 21,807,142 | | |
| - | | |
| 21,807,142 | |
| |
For the Period from
Inception (June 5, 2003) to August 31, 2013 (Previously stated) (Unaudited) | | |
For the Period from Inception (June 5,
2003) to August 31, 2013 Adjustment (Unaudited) | | |
For the Period from
Inception (June 5,
2003) to August 31, 2013 (Restated) (Unaudited) | |
EXPENSES | |
| | | |
| | | |
| | |
Professional fees | |
$ | 1,512,283 | | |
$ | 360,971 | | |
$ | 1,873,254 | |
Mineral property claims maintenance fee | |
| 91,140 | | |
| - | | |
| 91,140 | |
Exploration | |
| 119,740 | | |
| - | | |
| 119,740 | |
Advertising and promotion | |
| 16,707 | | |
| - | | |
| 16,707 | |
Telecommunications | |
| 17,055 | | |
| - | | |
| 17,055 | |
Rent and occupancy costs | |
| 27,310 | | |
| - | | |
| 27,310 | |
Office and general | |
| 30,104 | | |
| - | | |
| 30,104 | |
Interest and bank charges | |
| 19,172 | | |
| 109,347 | | |
| 128,519 | |
Foreign currency exchange loss | |
| - | | |
| 262 | | |
| 262 | |
Depreciation | |
| 320 | | |
| - | | |
| 320 | |
TOTAL OPERATING EXPENSES | |
| 1,833,831 | | |
| 470,580 | | |
| 2,304,411 | |
LOSS FROM OPERATIONS | |
| (1,833,831 | ) | |
| (470,580 | ) | |
| (2,304,411 | ) |
Interest income | |
| 11,821 | | |
| - | | |
| 11,821 | |
Impairment of mineral property claims | |
| (584,978 | ) | |
| - | | |
| (584,978 | ) |
Impairment of convertible note receivable | |
| (23,621 | ) | |
| - | | |
| (23,621 | ) |
LOSS FROM CONTINUING OPERATIONS BEFORE TAX | |
| (2,430,609 | ) | |
| (470,580 | ) | |
| (2,901,189 | ) |
Income tax | |
| - | | |
| - | | |
| - | |
LOSS FROM CONTINUING OPERATIONS | |
| (2,430,609 | ) | |
| (470,580 | ) | |
| (2,901,189 | ) |
LOSS FROM DISCONTINED OPERATION, NET OF TAX | |
| (136,311 | ) | |
| (9,539 | ) | |
| (145,850 | ) |
NET LOSS | |
$ | (2,566,920 | ) | |
$ | (480,119 | ) | |
$ | (3,047,039 | ) |
c. |
Consolidated statements of Stockholders’ Equity |
| |
Common stock | | |
Additional Paid in | | |
Accumulated Other Comprehensive | | |
Deficit Accumulated During the exploration | | |
Total Stockholders’ | |
| |
Shares | | |
Amount | | |
Capital | | |
income | | |
stage | | |
equity | |
Balance, August 31, 2011 (Previously stated) (Unaudited) | |
| 6,808,025 | | |
$ | 6,808 | | |
$ | 1,680,885 | | |
$ | (34,166 | ) | |
$ | (1,032,610 | ) | |
$ | 620,917 | |
Realized loss on available for sale securities – year 2007 & 2008 | |
| - | | |
| - | | |
| - | | |
| 4,809 | | |
| (4,809 | )(3) | |
| - | |
Reclassification of foreign currency translation for prior years to retained earnings | |
| - | | |
| - | | |
| - | | |
| 4,730 | | |
| (4,730 | )(3) | |
| - | |
Issuance of common stock for rent | |
| 15,625 | | |
| 16 | | |
| 3,484 | | |
| - | | |
| - | | |
| 3,500 | |
Issuance of common stock for cash, net of commissions | |
| 301,459 | | |
| 301 | | |
| 54,077 | | |
| - | | |
| - | | |
| 54,378 | |
Issuance of common stock for consulting services | |
| 45,000 | | |
| 45 | | |
| 17,955 | | |
| - | | |
| - | | |
| 18,000 | |
Issuance of common stock for purchase of properties | |
| 250,000 | | |
| 250 | | |
| 19,750 | | |
| - | | |
| - | | |
| 20,000 | |
Convertible debentures equity portion | |
| - | | |
| - | | |
| 125,000 | | |
| - | | |
| - | | |
| 125,000 | |
Realized gain on convertible notes receivable | |
| - | | |
| - | | |
| - | | |
| 23,621 | | |
| - | | |
| 23,621 | |
Foreign currency translation | |
| - | | |
| - | | |
| - | | |
| 1,006 | | |
| - | | |
| 1,006 | |
Net loss | |
| - | | |
| - | | |
| - | | |
| - | | |
| (779,033 | ) | |
| (779,033 | ) |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Balance, August 31, 2012 (Restated) (Unaudited) | |
| 7,420,109 | | |
$ | 7,420 | | |
$ | 1,901,151 | | |
$ | - | | |
$ | (1,821,182 | ) | |
$ | 87,389 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Conversion of convertible debentures | |
| 641,370 | | |
| 642 | | |
| 127,633 | | |
| - | | |
| - | | |
| 128,275 | |
Issuance of common stock for cash, net of issuance costs | |
| 2,753,148 | | |
| 2,753 | | |
| 505,531 | | |
| - | | |
| - | | |
| 508,284 | |
Issuance of common stock for consulting services | |
| 4,500,000 | | |
| 4,500 | | |
| 670,500 | | |
| - | | |
| - | | |
| 675,000 | |
Issuance of common stock to acquire mineral property claims | |
| 19,300,000 | | |
| 19,300 | | |
| 280,670 | | |
| - | | |
| - | | |
| 299,970 | |
Net loss | |
| - | | |
| - | | |
| - | | |
| - | | |
| (1,225,857 | ) | |
| (1,225,857 | ) |
Balance, August 31, 2013 (Restated) | |
| 34,614,627 | | |
$ | 34,615 | | |
$ | 3,485,485 | | |
$ | - | | |
$ | (3,047,039 | ) | |
$ | 473,061 | |
d. |
Consolidated statement of cash flows |
| |
For the Year Ended August 31, 2013 (Previously stated) | | |
For the Year Ended August 31, 2013 (Adjustments) | | |
For the Year Ended August 31, 2013 (Restated) | |
CASH FLOWS FROM OPERATING ACTIVITIES | |
| | | |
| | | |
| | |
Net loss | |
$ | (798,606 | ) | |
$ | (427,251 | ) | |
$ | (1,225,857 | ) |
Less: Loss from discontinued operations, net of tax expense | |
| - | | |
| - | | |
| - | |
Loss from continuing operations | |
| (798,606 | ) | |
| (427,251 | ) | |
| (1,225,857 | ) |
Items not affecting cash | |
| | | |
| | | |
| | |
Depreciation | |
| 200 | | |
| - | | |
| 200 | |
Accretion expense on convertible notes payable | |
| 13,670 | | |
| 74,872 | (5) | |
| 88,542 | |
Accrued interest on convertible notes payable | |
| 3,274 | | |
| - | | |
| 3,274 | |
Foreign currency exchange loss | |
| - | | |
| - | | |
| | |
Impairment of mineral property claims | |
| 133,108 | | |
| - | | |
| 133,108 | |
Impairment of convertible note receivable | |
| - | | |
| - | | |
| - | |
Issuance of common stock for services | |
| 300,000 | | |
| 300,000 | (6) | |
| 600,000 | |
Issuance of common stock for rental | |
| - | | |
| - | | |
| - | |
Write off of deferred offering costs | |
| - | | |
| - | | |
| - | |
Change in prepaid and sundry | |
| 5,533 | | |
| - | | |
| 5,533 | |
Change in accounts payable and accrued liabilities | |
| (23,936 | ) | |
| - | | |
| (23,936 | ) |
Net cash used in operating activities from continuing operations | |
| (366,757 | ) | |
| (52,379 | ) | |
| (419,136 | ) |
Net cash used in operating activities from discontinued operations | |
| - | | |
| - | | |
| - | |
CASH FLOWS USED IN OPERATING ACTIVITIES | |
| (366,757 | ) | |
| (52,379 | ) | |
| (419,136 | ) |
CASH FLOWS FROM INVESTING ACTIVITIES | |
| | | |
| | | |
| | |
Acquisition of mineral property claims | |
| (132,117 | ) | |
| 52,117 | (6) | |
| (80,000 | ) |
Disposition of equipment | |
| - | | |
| - | | |
| - | |
Acquisition of equipment | |
| - | | |
| - | | |
| - | |
CASH FLOWS USED IN INVESTING ACTIVITIES | |
| (132,117 | ) | |
| 52,117 | | |
| (80,000 | ) |
CASH FLOWS FROM FINANCING ACTIVITIES | |
| | | |
| | | |
| | |
Convertible notes receivable | |
| - | | |
| - | | |
| - | |
Proceeds from convertible note payable | |
| - | | |
| - | | |
| - | |
Repayment of convertible notes payable | |
| - | | |
| - | | |
| - | |
Advances (to) from a related party | |
| 16,109 | | |
| - | | |
| 16,109 | |
Repayment of advance from a related party | |
| - | | |
| - | | |
| - | |
Issuance of common stock, net of issuance costs | |
| 508,285 | | |
| | | |
| 508,285 | |
CASH FLOWS PROVIDED BY FINANCING ACTIVITIES | |
| 524,394 | | |
| | | |
| 524,394 | |
EFFECT OF EXCHANGE RATE CHANGES ON CASH | |
| (262 | ) | |
| 262 | (7) | |
| - | |
NET INCREASE (DECREASE) IN CASH | |
| 25,258 | | |
| - | | |
| 25,258 | |
CASH, BEGINNING OF PERIOD | |
| 11,191 | | |
| - | | |
| 11,191 | |
CASH, END OF PERIOD | |
$ | 36,449 | | |
| $ | | |
| 36,449 | |
| |
| | | |
| | | |
| | |
NON CASH INVESTING AND FINANCING ACTIVITES | |
| | | |
| | | |
| | |
Issuance of common stock for acquisition of mineral property claims | |
$ | 3,195,000 | | |
| (2,895,030 | )(1) | |
| 299,970 | |
Convertible debt payable and accrued interest converted to common stock | |
$ | 128,274 | | |
| - | | |
| 128,274 | |
| |
For The Period From Inception (June 5, 2003) To August 31, 2013 (Previously stated) (Unaudited) | | |
For The Period From Inception (June 5, 2003) To August 31, 2013 (Adjustments) (Unaudited) | | |
For The Period From Inception (June 5, 2003) To August 31, 2013 (Restated) (Unaudited) | |
CASH FLOWS FROM OPERATING ACTIVITIES | |
| | | |
| | | |
| | |
Net loss | |
$ | (2,566,920 | ) | |
$ | (480,119 | ) | |
| (3,047,039 | ) |
Less: Loss from discontinued operations, net of tax expense | |
| 136,311 | | |
| 9,539 | | |
| 145,850 | |
Loss from continuing operations | |
| (2,430,609 | ) | |
| (470,580 | ) | |
| (2,901,189 | ) |
Items not affecting cash | |
| - | | |
| - | | |
| - | |
Depreciation | |
| 320 | | |
| - | | |
| 320 | |
Accretion expense on convertible notes payable | |
| 19,300 | | |
| 105,700 | | |
| 125,000 | |
Accrued interest on convertible notes payable | |
| 3,274 | | |
| - | | |
| 3,274 | |
Foreign currency exchange loss | |
| - | | |
| - | | |
| - | |
Impairment of mineral property claims | |
| 584,978 | | |
| - | | |
| 584,978 | |
Impairment of convertible note receivable | |
| 23,621 | | |
| - | | |
| 23,621 | |
Loss on disposal of assets | |
| 2,762 | | |
| - | | |
| 2,762 | |
Issuance of common stock for services | |
| 419,000 | | |
| 300,000 | | |
| 719,000 | |
Issuance of common stock for rental | |
| 3,500 | | |
| - | | |
| 3,500 | |
Write off of deferred offering costs | |
| 120,000 | | |
| - | | |
| 120,000 | |
Change in prepaid and sundry | |
| (5,596 | ) | |
| - | | |
| (5,596 | ) |
Change in accounts payable and accrued liabilities | |
| 8,603 | | |
| - | | |
| 8,603 | |
Net cash used in operating activities from continuing operations | |
| (1,250,847 | ) | |
| (64,880 | ) | |
| (1,315,727 | ) |
Net cash used in operating activities from discontinued operations | |
| (114,257 | ) | |
| - | | |
| (114,257 | ) |
CASH FLOWS USED IN OPERATING ACTIVITIES | |
| (1,365,104 | ) | |
| (64,880 | ) | |
| (1,429,984 | ) |
CASH FLOWS FROM INVESTING ACTIVITIES | |
| | | |
| | | |
| | |
Acquisition of mineral property claims | |
| (147,095 | ) | |
| 52,117 | | |
| (94,978 | ) |
Disposition of equipment | |
| 4,462 | | |
| - | | |
| 4,462 | |
Acquisition of equipment | |
| (30,124 | ) | |
| - | | |
| (30,124 | ) |
CASH FLOWS USED IN INVESTING ACTIVITIES | |
| (172,757 | ) | |
| 52,117 | | |
| (120,640 | ) |
CASH FLOWS FROM FINANCING ACTIVITIES | |
| | | |
| | | |
| | |
Convertible notes receivable | |
| (21,978 | ) | |
| - | | |
| (21,978 | ) |
Proceeds from convertible note payable | |
| 141,040 | | |
| 12,500 | | |
| 153,540 | |
Repayment of convertible notes payable | |
| (163,550 | ) | |
| - | | |
| (163,550 | ) |
Advances (to) from a related party | |
| 141,109 | | |
| - | | |
| 141,109 | |
Repayment of advance from a related party | |
| - | | |
| - | | |
| - | |
Issuance of common stock, net of issuance costs | |
| 1,484,166 | | |
| - | | |
| 1,484,166 | |
CASH FLOWS PROVIDED BY FINANCING ACTIVITIES | |
| 1,580,787 | | |
| 12,500 | | |
| 1,593,287 | |
EFFECT OF EXCHANGE RATE CHANGES ON CASH | |
| (6,477 | ) | |
| 262 | | |
| (6,214 | ) |
NET INCREASE (DECREASE) IN CASH | |
| 36,449 | | |
| | | |
| 36,449 | |
CASH, BEGINNING OF PERIOD | |
| - | | |
| - | | |
| - | |
CASH, END OF PERIOD | |
$ | 36,449 | | |
| - | | |
$ | 36,449 | |
| |
| | | |
| | | |
| | |
NON CASH INVESTING AND FINANCING ACTIVITES | |
| | | |
| | | |
| | |
Issuance of common stock for mineral property claims | |
| - | | |
| - | | |
| - | |
Convertible debt converted to common stock | |
| - | | |
| - | | |
| - | |
(1) |
Assets originally recorded at fair value were adjusted to record at carrying value due to acquiree under common control and to expense acquisition costs incurred. |
(2) |
Adjustment due to original recording of assets at fair value. |
(3) |
Adjustments due to realized loss on available for sale securities and derecognization of translation adjustments for prior year. |
(4) |
Accumulated all adjustments related to the year ended August 31, 2013. |
(5) |
$125,000 convertible notes payable originally accounted for within the scope of the cash conversion subsections, and were adjusted to accounted for within the scope of beneficial conversion feature. |
(6) |
Adjustment arises from the incorrect capitalization of mining properties acquisition costs. |
(7) |
To adjust translation difference from accumulated other comprehensive income to loss from operations. |
ITEM 9. CHANGES
IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
ITEM 9A. CONTROLS AND PROCEDURES
Evaluation of disclosure controls and procedures
Pursuant to Rule 13a-15(b) under the Securities
Exchange Act of 1934 (“Exchange Act”), the Company carried out an evaluation, with the participation of the Company’s
management, including the Company’s principal executive officer and principal financial officer of the effectiveness of the
Company’s disclosure controls and procedures (as defined under Rule 13a-15(e) under the Exchange Act) as of the end of the
period covered by this report. Based upon that evaluation, the Company’s principal executive officer and principal financial
officer concluded that the Company’s disclosure controls and procedures were not effective as of August 31, 2014 for the
material weakness identified below under the section of Report of Management on Internal Control over Financial Reporting.
It should be noted that any system of controls,
however well designed and operated, can provide only reasonable, and not absolute, assurance that the objectives of the system
are met. In addition, the design of any control system is based in part upon certain assumptions about the likelihood of future
events. Because of these and other inherent limitations of control systems, there can be no assurance that any design will succeed
in achieving its stated goals under all potential future conditions.
Report of Management on Internal Control
over Financial Reporting
The management of the Company is responsible
for establishing and maintaining adequate internal control over financial reporting for the Company. Our internal control
system was designed to, in general, provide reasonable assurance to the Company’s management and board regarding the preparation
and fair presentation of published financial statements, but because of its inherent limitations, internal control over financial
reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods
are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance
with the policies or procedures may deteriorate.
Management conducted an evaluation of the
effectiveness of our internal control over financial reporting based on the framework in Internal Control – Integrated
Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. A material weakness is a deficiency,
or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that
a material misstatement to the Company's annual or interim financial statements will not be prevented or detected.
In the course of management's assessment,
we have identified the following material weaknesses in internal control over financial reporting:
● |
Segregation of Duties – As a result of limited resources, we did not maintain proper segregation of incompatible duties, namely the lack of an audit committee, an understaffed financial and accounting function, and the need for additional personnel to prepare and analyze financial information in a timely manner and to allow review and on-going monitoring and enhancement of our controls. The effect of the lack of segregation of duties potentially affects multiple processes and procedures. |
● |
Maintenance of Current Accounting Records – We may from time to time fail to maintain our records that in reasonable detail accurately and fairly reflect the transactions of the Company. This weakness specifically affects the payments and purchase cycle and therefore we failed to maintain effective internal controls over the completeness and cut off of accounts payable, expenses and other capital transactions. |
● |
Application of GAAP – We did not maintain effective internal controls relating to the application of generally accepted accounting principles in accounting for transactions in a foreign currency. |
We are in the continuous process of improving
our internal control over financial reporting in an effort to eliminate these material weaknesses through improved supervision
and training of our staff, but additional effort is needed to fully remedy these deficiencies. Management has engaged a Certified
Public Accountant as a consultant to assist with the financial reporting process in an effort to mitigate some of the identified
weaknesses. The Company is still in its development stage and intends on hiring the necessary staff to address the weaknesses once
full operations have commenced.
This annual report does not include an
attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting.
Management's report was not subject to attestation by the Company's registered public accounting firm pursuant to temporary rules
of the Securities and Exchange Commission that permit the Company to provide only management's report in this annual report.
Changes in internal controls
No change in our system of internal control
over financial reporting occurred during the fourth quarter of the fiscal year ended August 31, 2014 that has materially affected,
or is reasonably likely to materially affect, our internal control over financial reporting.
ITEM 9B. OTHER INFORMATION
None.
PART III
ITEM 10. DIRECTORS, EXECUTIVE
OFFICERS AND CORPORATE GOVERNANCE
Our executive officers and directors are as follows:
Name |
|
Age |
|
Positions and Offices Held |
Richard R. Redfern |
|
63 |
|
Director |
Jordan Starkman |
|
44 |
|
President, Secretary & Director |
JORDAN STARKMAN, 44, President.
Mr. Starkman brings over twenty years’
experience in sales, financial consulting, and investor and client relations Rimrock Gold. He is a co-founder of Pay By the Day
Company Inc. and was VP Operations from June 2003 prior to becoming President in January 2006. In addition to being President of
Pay By The Day Company Inc., Mr. Starkman has been the President of Pacific Green Technologies (formerly E Cash) since October
2008 and Health Advance Inc. since April 2010, both of which are quoted on the OTCQB. Pay By The Day Company Inc. was owned
by Rimrock Gold (formerly Pay By The Day Holdings) until May 2012. Mr. Starkman spends the majority of his time overseeing
the operations of Rimrock Gold, a junior mining/exploration company, and Health Advance, an online medical supply company. Prior
to forming Pay By The Day Company Inc. in 2003, Jordan was a sales person from January 2002 to February 2003 at The Buck A Day
Company, an Ontario based direct sales company focused on sales of computers and consumer electronics, and was President of Guardians
of Gold from November 2005 to October 2011. Jordan has an extensive background in finance and business development. He worked for
10 years as an independent consultant for various publicly traded companies responsible for initiating new business and developing
long-term relationships with customers. Jordan also holds a BA in Statistics from the University of Western Ontario.
RICHARD R. REDERN, 63, Director.
Mr. Redfern is a Certified Professional
Geologist and Qualified Person under NI 43-101 and businessman with 35 years of mineral exploration and mining industry experience
throughout the Americas, Europe, Africa, and Australia. He has been involved with major and junior mineral exploration and mining
companies since 1975, and has made mineral discoveries, such as in the Keystone, South Dakota gold district for Homestake Mining.
He has an extensive list of contacts with present and former government officials and business people in many countries worldwide.
Mr. Redfern is President of Mexivada Mining Corp., and worked for Barrick Gold Exploration Inc. in Mexico. He is a Director of
Pepper Rock Resources, and has consulted for several listed mining and exploration companies. He is a Fellow of the Society of
Economic Geologists, is a Certified Professional Geologist with the American Institute of Professional Geologists, and a Member
of the Northwest Mining Association, AIMMGM of Mexico, the British Columbia Chamber of Mines, and the Prospector’s and Developer’s
Association. Mr. Redfern graduated from UCLA in 1977 with a Master’s Degree in Geology.
Term of Office
Our directors are appointed for a one-year
term to hold office until the next annual general meeting of our stockholders or until removed from office in accordance with our
bylaws. Our officers are appointed by our board of directors and hold office until removed by the board.
All officers and directors listed above
will remain in office until the next annual meeting of our stockholders, and until their successors have been duly elected and
qualified. There are no agreements with respect to the election of Directors. We have not compensated our Directors for service
on our Board of Directors, any committee thereof, or reimbursed for expenses incurred for attendance at meetings of our Board of
Directors and/or any committee of our Board of Directors. Officers are appointed annually by our Board of Directors and each Executive
Officer serves at the discretion of our Board of Directors. We do not have any standing committees. Our Board of Directors may
in the future determine to pay Directors’ fees and reimburse Directors for expenses related to their activities.
None of our Officers and/or Directors have
filed any bankruptcy petition, been convicted of or been the subject of any criminal proceedings or the subject of any order, judgment
or decree involving the violation of any state or federal securities laws within the past five (5) years.
Audit Committee
We do not have a standing audit committee
of the Board of Directors. Management has determined not to establish an audit committee at present because of our limited resources
and limited operating activities do not warrant the formation of an audit committee or the expense of doing so. We do not have
a financial expert serving on the Board of Directors or employed as an officer based on management’s belief that the cost
of obtaining the services of a person who meets the criteria for a financial expert under Item 401(e) of Regulation S-B is beyond
its limited financial resources and the financial skills of such an expert are simply not required or necessary for us to maintain
effective internal controls and procedures for financial reporting in light of the limited scope and simplicity of accounting issues
raised in its financial statements at this stage of its development.
We have not formed a Compensation Committee
or Nominating and Corporate Governance Committee as of the filing of this Annual Report.
Certain Legal Proceedings
No director, nominee for director, or executive
officer of the Company has appeared as a party in any legal proceeding material to an evaluation of his ability or integrity during
the past five years.
Compliance With Section 16(A) Of The Exchange Act.
We do not have a class of equity securities
registered pursuant to section 12 of the Securities Exchange Act and therefore our directors, officers and persons who beneficially
own more than 10% of a registered class of our equity securities are not required to file reports of ownership and changes in ownership
with the SEC or furnish us with copies of these reports.
Code of Ethics
We currently do not have a code of ethics
that applies to our officers, employees and director, including our Chief Executive Officer.
ITEM 11. EXECUTIVE COMPENSATION
Compensation of Executive Officers
The following summary compensation table
sets forth all compensation awarded to, earned by, or paid to the named executive officer paid by us during the fiscal years ended
August 31, 2014 in all capacities for the accounts of our executive officer:
SUMMARY COMPENSATION TABLE
Name and Principal Position | |
Year | |
Salary/ consulting ($) | | |
Bonus ($) | | |
Stock Awards ($) | | |
Option Awards ($) | | |
Non-Equity Incentive Plan Compensation ($) | | |
Non-Qualified Deferred Compensation Earnings ($) | | |
All Other Compensation ($) | | |
Totals ($) | |
| |
| |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| |
Jordan Starkman | |
2014 | |
$ | 2,622 | | |
| 0 | | |
| 0 | | |
| 0 | | |
| 0 | | |
| 0 | | |
| 0 | | |
$ | 2,622 | |
President, Secretary & Director | |
2013 | |
$ | 24,204 | | |
| 0 | | |
| 0 | | |
| 0 | | |
| 0 | | |
| 0 | | |
| 0 | | |
$ | 24,204 | |
| |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Richard Redfern Director(1) | |
2014 | |
$ | 0 | | |
| 0 | | |
| 0 | | |
| 0 | | |
| 0 | | |
| 0 | | |
| 0 | | |
$ | 0 | |
Richard Redfern Director(1) | |
2013 | |
$ | 6,763 | | |
| 0 | | |
| 0 | | |
| 0 | | |
| 0 | | |
| 0 | | |
| 0 | | |
$ | 6,763 | |
(1) |
Richard Redfern was appointed as director of the Company on February 11, 2013. |
Employment Agreements
We do not have any employment agreements in place with our officer
and directors.
ITEM 12. SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
The following table sets forth certain
information as of the date hereof with respect to the beneficial ownership of our ordinary shares, the sole outstanding class of
our voting securities, by (i) each stockholder known to be the beneficial owner of 5% or more of the outstanding common stock of
the Company, (ii) each executive officer and director, and (iii) all executive officers and directors as a group.
Beneficial ownership is determined in accordance
with the rules of the Securities and Exchange Commission and generally includes voting or investment power with respect to securities.
ordinary shares subject to options, warrants or convertible securities exercisable or convertible within 60 days as of the date
hereof are deemed outstanding for computing the percentage of the person or entity holding such options, warrants or convertible
securities but are not deemed outstanding for computing the percentage of any other person and is based on 37,664,627 shares of
common stock issued and outstanding as of December 15, 2014.
Name and Address | |
Amount and Nature of Beneficial Ownership | | |
Percentage of Class | |
Directors and named executive officers | |
| | | |
| | |
Jordan Starkman, President, Secretary and Director | |
| 254,248 | | |
| 0.67 | % |
3651 Lindell Rd #D155 Las Vegas, NV 89103 | |
| | | |
| | |
| |
| | | |
| | |
All directors and executive officers as a group (1 persons) | |
| 258,248 | | |
| 0.67 | % |
| |
| | | |
| | |
5% Security Holder | |
| | | |
| | |
| |
| | | |
| | |
Zahav Resources Inc. (1) 30 Morgan Street Stamford, CT 06905 | |
| 17,800,000 | | |
| 47.26 | % |
| |
| | | |
| | |
Uptick Capital LLC (2) 30 Morgan St Stamford, CT 06905 | |
| 3,750,000 | | |
| 9.96 | % |
|
(1) |
Ari Blaine, Simeon Wohlberg and Richard Redfern have sole voting and dispositive power with respect to the shares owned by Zahav Resources Inc. |
|
(2) |
Ari Blaine and Simeon Wohlberg have sole voting and dispositive power with respect to the shares owned by Uptick Capital LLC. |
ITEM 13. CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
Consulting fees paid to Mr. Starkman for the year ended August
31, 2014 were $2,622 (2013: $24,204).
Consulting fees paid to Mr. Redfern for the year ended 31 August
2013 were $nil (2013 – $6,763).
Advances from a related party were from
a company controlled by Jordan Starkman, the director and officer of the Company, are non-interest bearing, unsecured and due on
demand.
On October 7, 2013, the Company closed
a purchase agreement with RMIC Gold to acquire an exploration epithermal bonanaza gold-silver property in Nevada known as the Ivanhoe
Creek Property. RMIC Gold is a private Nevada company controlled by Richard R Redfern, who is a director of the Company
and this is a non-arm’s length transaction. Pursuant to the Purchase Agreement, the Company acquired from RMIC Gold a one
hundred percent (100%) interest in and to certain properties that compress 22 unpatented mining claims totaling 440 acres. In consideration
for the Mining Claims, the Company shall issue to RMIC Gold 150,000 shares of the Company’s common stock (the “Rimrock
Shares”). Any mineral production from the Ivanhoe Creek Property is subject to net smelter return royalties of 1% due
to RMIC Gold.
ITEM 14. PRINCIPAL ACCOUNTANT
FEES AND SERVICES
Audit Fees
For the Company’s fiscal year ended
August 31, 2014, we were billed approximately $35,000 (2013 - $28,000) for professional services rendered for the audit of our
financial statements.
Tax Fees
For the Company’s fiscal year ended
August 31, 2014 and 2013, we were not billed for professional services rendered for tax compliance, tax advice, and tax planning.
All Other Fees
The Company did not incur any other fees
related to services rendered by our principal accountant for the fiscal year ended August 31, 2014 and 2013.
PART IV
ITEM 15. EXHIBITS,
FINANCIAL STATEMENT SCHEDULES.
a) Documents filed as part of this Annual Report
1. Consolidated Financial Statements
2. Financial Statement Schedules
3. Exhibits
31.1* |
Certification of Principal Executive Officer and Principal Financial Officer, pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
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32.1+ |
Certification of Principal Executive Officer and Principal Financial Officer, pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
SIGNATURES
Pursuant to the requirements of Section
13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the
undersigned, there unto duly authorized.
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RIMROCK GOLD CORP. |
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By: |
/s/ Jordan Starkman |
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Jordan Starkman |
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President and Secretary |
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(Duly Authorized Officer, Principal Executive Officer and Principal Financial Officer) |
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Date: January 22, 2015 |
Pursuant to the requirements of the Securities
Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities
and on the dates indicated.
Name |
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Title |
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Date |
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/s/ Jordan Starkman |
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President, Secretary, and |
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January 22, 2015 |
Jordan Starkman |
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Chairman of the Board of Directors |
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(Principal Executive Officer and Principal Financial Officer) |
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/s/ Richard Redfern |
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Director |
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January 22, 2015 |
Richard Redfern |
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Exhibit 31.1
CERTIFICATION OF PRINCIPAL EXECUTIVE
OFFICER
PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 302
OF
THE SARBANES-OXLEY ACT OF 2002
I, Jordan Starkman, certify that:
1. |
I have reviewed this Form 10-K/A of Rimrock Gold Corp.; |
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2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
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3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
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4. |
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13-a-15(f) and 15d-15(f)) for the registrant and have: |
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a) |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
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b) |
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
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c) |
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
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d) |
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
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5. |
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
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a) |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
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b) |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: January 22, 2015 |
By: |
/s/ Jordan Starkman |
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Jordan Starkman |
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President and Chief Excecutive Officer, Chief
Financial
Officer |
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Exhibit 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906 OF
THE SARBANES-OXLEY ACT OF 2002
In connection with this Annual Report of
Rimrock Gold Corp. (the “Company”), on Form 10-K/A for the year ended August 31, 2014 as filed with the U.S. Securities
and Exchange Commission on the date hereof, I, Jordan Starkman, President and Chief Excecutive Office and Chief Financial Officer
of the Company, certify to the best of my knowledge, pursuant to 18 U.S.C. Sec. 1350, as adopted pursuant to Sec. 906 of the Sarbanes-Oxley
Act of 2002, that:
| (1) | Such Annual Report on Form 10-K/A for the year ended August 31, 2014 fully
complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
| (2) | The information contained in such Annual Report on Form 10-K/A for the year
ended August 31, 2014 fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date: January 22, 2015 |
By: |
/s/ Jordan Starkman |
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Jordan Starkman |
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President and Chief Executive Officer, Chief
Financial
Officer |
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