10-Q 1 gnmt_10q-15928.htm GENERAL METALS CORP. 01/31/2014 10-Q gnmt_10q-15928.htm


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
Form 10-Q
(Mark One)
þ
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the quarterly period ended January 31, 2014
or
 
o
TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the transition period from___________________to____________________
 
Commission File Number  000-30230
 
 
GENERAL METALS CORPORATION
 
 
(Exact name of registrant as specified in its charter)
 
 
Delaware
 
65-0488983
(State or other jurisdiction of incorporation or organization)
 
(IRS Employer Identification No.)
 
1155 W 4TH St Ste 210, Reno, NV 89503
 
89511
(Address of principal executive offices)
 
(Zip Code)
 
 
775.583.4636
 
 
(Registrant’s telephone number, including area code)
 
 
 
 N/A
 
 
(Former name, former address and former fiscal year, if changed since last report)
 
 
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. þ YES   o NO
 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a small reporting company.  See the definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
 
Large accelerated filer
o
Accelerated filer
o
Non-accelerated filer
(Do not check if a smaller reporting company)
o
Smaller reporting company
þ
 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.  o YES   þ NO
 
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
 
Check whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Exchange Act after the distribution of securities under a plan confirmed by a court.     
 
APPLICABLE ONLY TO CORPORATE ISSUERS
 
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
 
375,526,796 common shares issued and outstanding as of February 27, 2014
 


 

 
 
1

 
 
PART 1 – FINANCIAL INFORMATION
 
 
ITEM 1. FINANCIAL STATEMENTS.
General Metals Corporation
 (An Exploration Stage Company)

Unaudited Condensed Consolidated Balance Sheet
 
   
January 31
   
April 30
 
   
2014
   
2013
 
ASSETS
 
             
Current assets
           
Cash and cash equivalents
    1,045     $ 4,717  
Prepaid expenses
    18,000       13,555  
                 
Total current assets
    19,045       18,272  
                 
Other assets
               
Land
    67,742       67,742  
Mineral property
    613,941       613,941  
Property and equipment, net
    -       647  
Other assets
    34,430       35,238  
                 
Total other assets
    716,113       717,568  
                 
Total assets
  $ 735,158     $ 735,840  
                 
LIABILITIES AND STOCKHOLDERS' EQUITY/(DEFICIT)
 
                 
Current Liabilities
               
Accounts payable
  $ 579,411     $ 472,331  
Notes payable, current portion
    5,721       5,421  
Convertible debt, net of discount
    34,206       -  
Accrued liabilities
    234,280       148,417  
Accounts payable to related parties
    70,096       58,186  
Derivative liability
    20,691       -  
Loan from related parties
    12,850       -  
                 
Total current liabilities
    957,255       684,355  
                 
Long-term liabilities
               
Notes payable, net of current portion
    26,506       29,105  
                 
Total long-term liabilities
    26,506       29,105  
                 
Total liabilities
    983,761       713,460  
                 
Commitments and Contingencies
               
                 
Stockholders' equity/(deficit)
               
Preferred stock, authorized 50,000,000
               
shares, par value $0.001, zero issued and
               
outstanding
    -       -  
                 
Common stock, authorized 500,000,000
               
shares, par value $0.001, issued and
               
outstanding on January 31, 2014 and April 30, 2013
               
is 376,132,345 and 348,796,328 respectively
    376,132       348,796  
                 
Additional paid-in capital
    12,036,677       11,825,763  
Accumulated deficit during exploration stage
    (12,661,412 )     (12,152,179 )
                 
Total stockholders' equity/(deficit)
    (248,603 )     22,380  
                 
Total liabilities and stockholders' equity/(deficit)
  $ 735,158     $ 735,840  

The accompanying notes are an integral part of these statements

 
2

 
 
General Metals Corporation
 (An Exploration Stage Company)

Unaudited Condensed Consolidated Statements of Operations
 
                           
March 15, 2006
 
                           
(Inception)
 
   
Three months ended January 31,
   
Nine months ended January 31,
   
to January 31,
 
   
2014
   
2013
   
2014
   
2013
   
2014
 
Revenue
  $ -     $ -     $ -     $ -     $ -  
                                         
Operating expenses
                                       
Depreciation and amortization
    397       1,165       647       3,783       40,865  
General and administrative
    5,598       11,609       29,480       41,295       1,557,202  
Management and consulting
    64,101       114,235       279,618       470,425       6,732,830  
Exploration and development
    (4,645 )     24,767       88,169       80,321       3,257,874  
Professional fees
    9,191       27,493       72,642       96,821       954,108  
                                         
Total expenses
    74,642       179,269       470,556       692,645       12,542,879  
                                         
(Loss) from operations
    (74,642 )     (179,269 )     (470,556 )     (692,645 )     (12,542,879 )
                                         
Other income (expenses)
                                       
Interest expense
    (15,423 )     (1,676 )     (20,486 )     (6,417 )     (66,360 )
Other income
    2,500       4,300       2,500       4,400       49,502  
Financing costs
    (13,515 )     -       (13,515 )     -       (13,515 )
Loss on change in fair value of derivatives
    (7,176 )     -       (7,176 )     -       (7,176 )
Gain on sale of mineral properties
    -       -       -       -       1,249,072  
Realized gain/(loss) on sale of investments
    -       -       -       -       (112,204 )
Other than temporary impairment of investments
    -       -       -       -       (1,224,302 )
Gain/(loss) on foreign currency exchange
    -       -       -       -       6,450  
                                         
(Loss) before income taxes
    (108,256 )     (176,645 )     (509,233 )     (694,662 )     (12,661,412 )
                                         
Provision for income taxes
    -       -       -       -       -  
                                         
Net (loss)
  $ (108,256 )   $ (176,645 )   $ (509,233 )   $ (694,662 )   $ (12,661,412 )
                                         
Loss per common share:
                                       
Basic & Diluted
  $ (0.00 )   $ (0.00 )   $ (0.00 )   $ (0.00 )        
                                         
Weighted average shares outstanding:
                                       
Basic & Diluted
    360,972,606       332,241,886       357,407,841       315,275,423          
                                         
The accompanying notes are an integral part of these statements
 
 


 
3

 
General Metals Corporation
 (An Exploration Stage Company)
 
Unaudited Condensed Consolidated Statements of Cash Flows
               
March 15, 2006
 
   
Nine months ended January 31,
   
(Inception)
 
               
to January 31,
 
   
2014
   
2013
   
2014
 
Operating activities
                 
Net loss
  $ (509,233 )   $ (694,662 )   $ (12,661,412 )
Adjustments to reconcile net loss
                       
Stock issued for services
    119,493       295,095       3,427,663  
Stock issued for payment of interest on debt
    -       -       12,750  
Non-cash financing costs and amortization of debt discount
    29,897       -       76,131  
Realized loss on sale of investments
    -       -       112,204  
Gain on sale of mineral property
    -       -       (1,249,072 )
Depreciation and amortization
    647       3,783       40,865  
Stock-based compensation
    -       105,600       1,886,771  
Other-than-temporary impairment of investments
    -       -       1,224,302  
Impairment of long-lived assets
    -       -       17,500  
Bad debt expense
    -       -       22,387  
Gain on sale of fixed asset
    -       -       (1,250 )
Change in assets and liabilities
                       
(Increase)/decrease in other current assets
    -       -       (22,387 )
(Increase)/decrease in prepaid expenses
    (7,938 )     (7,311 )     (29,827 )
Increase/(decrease) in accounts payable
    118,990       (19,520 )     724,407  
Increase/(decrease) in accrued liabilities
    85,863       27,477       478,989  
                         
Net cash used by operating activities
    (162,281 )     (289,538 )     (5,939,979 )
                         
Investment activities
                       
Investments:
                       
Purchases
    -       -       (1,357 )
Proceeds from sales
    -       -       154,914  
Acquisition of mineral property
    -       -       (78,091 )
Investment in General Copper
    -       -       (17,500 )
Investment in Lahontan
    -       -       (2,563 )
Deposit on water rights
    -       -       (800 )
Deposit on reclamation bond
    808       -       (33,630 )
Proceeds from sale of mineral property
    -       -       12,500  
Proceeds from sale of fixed asset
    -       -       8,000  
Purchase of land
    -       -       (67,742 )
Purchase of equipment
    -       -       (17,616 )
                         
Net cash provided/(used) by investment activities
    808       -       (43,885 )
                         
Financing activities
                       
Proceeds from loans from related parties
    17,850       -       139,714  
Repayments of loans from related parties
    (5,000 )     -       (48,064 )
Proceeds from issuance of debt
    -       -       149,841  
Repayments of debt
    (2,299 )     (2,427 )     (14,815 )
Proceeds from issuance of convertible debt
    25,000       -       25,000  
Proceeds from the sale of stock
    122,250       284,584       5,733,233  
                         
Net cash provided by financing activities
    157,801       282,157       5,984,909  
                         
Net increase / (decrease) in cash
    (3,672 )     (7,381 )     1,045  
                         
Cash, beginning of period
    4,717       4,954       -  
                         
Cash (Cash overdraft), end of period
  $ 1,045     $ (2,427 )   $ 1,045  
                         
Supplemental Information:
                       
Interest paid
  $ 15,423     $ 6,417     $ 41,624  
Income taxes paid
  $ -     $ -     $ -  
                         
Non-cash activities:
                       
Stock issued for service as prepaid expenses
  $ -     $ -     $ 3,493  
Stock issued to acquire mineral property lease
  $ -     $ -     $ 783,687  
Stock issued for payment of interest on debt
  $ -     $ -     $ 12,750  
Stock issued as reduction of accrued expenses
  $ -     $ -     $ 353,539  
Stock issued as reduction of contingent liability
  $ -     $ -     $ 50,000  
Stock issued as reduction of related party loans
  $ -     $ -     $ 26,800  
Stock issued as reduction of short-term note payable
  $ -     $ -     $ 100,000  
 
The accompanying notes are an integral part of these statements

 
4

 
 
General Metals Corporation
(An Exploration Stage Company)
Notes to Consolidated Financial Statements

NOTE 1 - CONDENSED FINANCIAL STATEMENTS
 
The accompanying financial statements have been prepared by the Company without audit.  In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations, and cash flows at January 31, 2014, and for all periods presented herein, have been made.

In accordance with Article 8-03 of Regulation S-X certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted.  It is suggested that these condensed financial statements be read in conjunction with the financial statements and notes thereto included in the Company's April 30, 2013 audited financial statements.  The results of operations for the period ended January 31, 2014 are not necessarily indicative of the operating results for the full year.

The accompanying condensed consolidated financial statements include the accounts of General Metals Corporation and its wholly owned subsidiary, General Gold Corporation.  Collectively, they are referred herein as the Company.  All inter-company balances and transactions have been eliminated on consolidation.
 
The Company is considered a development (exploration) stage entity for financial reporting purposes by United States generally accepted accounting principles (US GAAP) since it has not generated material revenue from its principal business activities.
 
Use of estimates

The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the period. Actual results could differ from those estimates.

Recently Issued Accounting Pronouncements

No new accounting pronouncements have been issued since the filing of the Company’s Form 10-K on August 13, 2013 for the fiscal year ended April 30, 2013 that are likely to have a material impact on the Company’s financial position, results of operations, or cash flows.
 
NOTE 2 - GOING CONCERN

The Company's financial statements are prepared using generally accepted accounting principles in the United States of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not yet established an ongoing source of revenues sufficient to cover its operating costs and allow it to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations. 

Management's plan is to obtain such resources for the Company by obtaining capital from management and significant shareholders sufficient to meet its minimal operating expenses and seeking equity and/or debt financing. However, management cannot provide any assurances that the Company will be successful in accomplishing any of its plans.
 
The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and attain profitable operations. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
 
 

 
5

 
 
General Metals Corporation
(An Exploration Stage Company)
Notes to Consolidated Financial Statements
 
NOTE 3 – STOCKHOLDERS’ EQUITY

The following provides additional information for certain stock transactions that occurred during the six months ended January 31, 2014.  For additional details for all stock transaction please see the consolidated statement of changes in stockholders’ equity as reported in the Company’s 10-K for the period ended April 30, 2013 and filed with the Securities Exchange Commission on August 13, 2013.

During the three months ended July 31, 2013, we issued a total of 1,525,000 shares; 300,000 shares were issued for services valued at $6,000 to vendors; and 1,225,000 shares were issued for cash to investors in private placement at $0.010 per share for receipt of cash totaling $12,250.

During the three months ended October 31, 2013, we issued a total of 8,000,000 shares; 3,000,000 shares were issued for services valued at $69,000 to vendors; 3,000,000 shares were issued for cash to investors in private placement at $0.015 per share for receipt of cash totaling $45,000; and 2,000,000 shares were issued for cash to investors in private placement at $0.010 per share for receipt of cash totaling $20,000.

During the three months ended January 31, 2014, we issued a total of 17,811,017 shares; 2,811,017 shares were issued for services valued at $41,000 to vendors; 15,000,000 shares were issued for cash to investors in private placement at $0.003 per share for receipt of cash totaling $45,000.

NOTE 4 – NOTES PAYABLE

On November 27, 2013, the Company entered in a secured convertible note agreement wherein the Company received $25,000. The note may be converted at any time by the holder of the note at a 60% discount to the average of the lowest three closing prices in the previous 10 trading days immediately prior to conversion. The Company may prepay the note anytime up until the maturity date for 125% of the principal amount. The note carries a 12% per annum rate and is due and payable on May 19, 2014.

The note has an estimated fair value of $62,500 at the date of issuance and a principal notional amount of $25,000 indicating an unamortized discount of $37,500 at the date of issuance.  The Company uses the effective interest method to recognize the unamortized discount until the maturity date of the convertible note. During the three months ended January 31, 2014, the Company recognized $9,206 of debt discount.  As of January 31, 2014, the Company carries a remaining unamortized discount of $28,294 and net carrying amount of $34,206. The company will recognize the remaining unamortized discount over the remaining 5.5 months till maturity of the convertible note.

In addition, the Company recognized financing fees related to the variable element of the conversion price related to the discount to the Company’s closing price in the 10 days immediately prior to conversion.  The Company recognized $13,515 of financing fees as a derivative liability at the date of issuance. As of the January 31, 2014, the Company recognized an additional $7,176 expense related to the loss in the fair market value of the derivative due to the deterioration of the Company’s stock price since the issuance of the convertible note. As of January 31, 2014, the convertible note may be converted into 9,973,404 common shares of the Company.
 
NOTE 5 – RELATED PARTY

Forbush and Associates, of which Dan Forbush, CEO, President, and CFO, is the Principal, provides accounting support and bookkeeping services to the Company on a billed by hour incurred basis. Forbush and Associates is owed $35,432 and $23,522 relating to hours incurred at January 31, 2014 and April 30, 2013, respectively. In the nine months ended January 31, 2014, Forbush and Associates charged $20,310 for consulting services. In the nine months ended January 31, 2014, Forbush and Associates charged $21,432 for consulting services.  Services rendered are in relation to preparation of the 10-K for the periods ended April 30, 2012 and 2013 respectively and preparation of all other regulatory filings.
 
Dyer Engineering Consultants, an entity controlled by one of our Directors, provides mine permitting, engineering and leach pad design services at the Independence project. As of January 31, 2014 and April 30, 2013, Dyer Engineering Consultants is owed $34,663 for services rendered.
 
 
 
6

 
 
ITEM 2.  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 
Forward-Looking Statements
 
This quarterly report contains forward-looking statements.  These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as "may", "should", "expects", "plans", "anticipates", "believes", "estimates", "predicts", "potential" or "continue" or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks in the section entitled "Risk Factors", that may cause our or our industry's actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.

Our unaudited condensed financial statements are stated in United States Dollars (US$) and are prepared in accordance with United States Generally Accepted Accounting Principles and Article 8-03 of Regulation S-X. The following discussion should be read in conjunction with our financial statements and the related notes that appear elsewhere in this quarterly report. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward looking statements.
 
In this quarterly report, unless otherwise specified, all dollar amounts are expressed in United States dollars. All references to "common shares" refer to the common shares in our capital stock.

As used in this quarterly report, the terms "we", "us" and "our" mean General Metals Corporation and our wholly owned subsidiary General Gold Corporation, unless otherwise indicated.
 
OVERVIEW
 
We are an exploration stage company engaged in the exploration and development of mineral properties currently with an emphasis on gold and silver mineralization, presently focused on our Independence Project located in Battle Mountain, Nevada.
 
The continuation of our company is dependent upon us raising additional capital. In this regard we have raised additional capital through equity offerings and loan transactions.  We have been successful in structuring deals in which expenses are paid through the issuances of common shares.  In addition, we have raised additional funds and expect to continue to raise additional funds through private placement equity offerings sufficient to fund our current plan of operations.
 
The Independence Mine Property
 
 
We currently control a 100% undivided leasehold interest in the Independence Mine, situated in the Battle Mountain Mining District, Lander County, Nevada. The property consists of 14 whole and fractional mining claims encompassing 240 acres.  Our Due diligence shows that all claims are valid and in good standing through and for the assessment year ending August 31, 2014.
 
The Wilson-Independence project is wholly owned by General Metals through its subsidiary company General Gold Corporation under a mining lease/option agreement with Independence Gold Silver Mines, Inc. of Seattle, Washington.
 
 
 
7

 
 
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - continued
 
Accomplishments
 
The key to our future is finding funding or funding partner.  During the quarter ended January 31, 2014, our Company focused its efforts on securing that funding.  We have reviewed and examined in some detail several funding sources and raised $25,000 in the form of a convertible debenture.  We completed a confidentiality agreement with a junior mining company which began a due diligence review in our project.  To date nothing has been finalized on the funding front.

Other Accomplishments include:
1.
We initiated the updating of our independent technical report in the Canadian National Instrument 43-101 format.
2.
We paid The Office of the State Engineer, Department of Conservation and Natural Resources, Division of Water Resources of the state of Nevada the fees to secure the previously approved right to extract water from the aquifer in Buffalo Valley at our 480 acres thereby ensuring that we have enough water to process the mineralized material at that site for gold recovery.
 
Plan of Operations- Permitting and Development Program
 
During the next twelve months, subject to receipt of sufficient funding, we will complete the Independence project’s full permitting process. We anticipate securing necessary studies and permits to allow us to proceed to production.   We also intend to expand our resources and improve the grade of our project through the Preliminary Pit Infill Drilling Program and Sunshine drill Program listed in the budget below.  We will also complete an updated independent technical report.

The following budget outline presents the anticipated and necessary expenditures for the next twelve month period to accomplish the stated objectives
 
Direct exploration and development costs
     
Deep Core Relog, Sample and Assay
   
250,000
 
Preliminary Pit Infill Drilling Program
   
400,000
 
Sunshine Drill Program
   
1,100,000
 
BLM Plan of Operations Review and Permitting
   
100,000
 
Mining, Metallurgical and Process Engineering and Design
   
150,000
 
State and County Permits
   
45,000
 
Water Well
   
35,000
 
Update Independent Technical Report
   
100,000
 
Land Payments
   
250,000
 
Contingency
   
70,000
 
         
Total direct exploration and development costs
 
$
2,500,000
 
         
Indirect costs
       
Office rent and other operating expenses
   
20,000
 
Wages and salaries and payroll related expenses
   
140,000
 
Insurance expenses
   
40,000
 
Investor Awareness Consultants
   
100,000
 
Other general and administrative expenses
   
150,000
 
Legal expenses
   
50,000
 
         
Total indirect costs
   
500,000
 
         
Total budget for the next twelve months
 
$
3,000,000
 
 
 
8

 
 
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - continued
 
Liquidity and Capital Requirements
 
We anticipate that to complete our plan of operations we will require additional funds of approximately $3.0 million over the next twelve months. As we do not have the funds necessary to cover our projected operating expenses for the next twelve month period, we will be required to raise additional funds through the issuance of equity securities, through loans or through debt financing. There can be no assurance that we will be successful in raising the required capital or that actual cash requirements will not exceed our estimates. We intend to fulfill any additional cash requirement through the sale of our equity securities.
 
Nevertheless, we continue to identify parties interested in investing in mineral projects, including the Independence Project, and have hosted several at our offices and onsite. 

If we are not able to obtain the additional financing on a timely basis, if and when it is needed, we will be forced to scale down or perhaps even cease the operation of our business.
 
The issuance of additional equity securities by us could result in a significant dilution in the equity interests of our current stockholders. Obtaining commercial loans, assuming those loans would be available, will increase our liabilities and future cash commitments. There are no assurances that we will be able to obtain further funds required for our continued operations. As noted herein, we are pursuing various financing alternatives to meet our immediate and long-term financial requirements.

We continue to explore opportunities for the receipt of funding in either equity or financing transactions. As we receive these funds, the Board of Directors and Management evaluate the best use of the funding received.
 
Capital Expenditures
 
In accordance with our projected budget for the next twelve months, we do not intend to invest in capital expenditures during the twelve-month period ending January 31, 2015. If the Company were to receive significant funding to bring the Independence into production, the Board of Directors would direct funding in purchasing capital expenditures in accordance with the plan to bring the project into production.
 
General and Administrative/Management and Consulting Expenses
 
We expect to spend up to $500,000 during the twelve-month period ending January 31, 2015 on general and administrative and investor relations expenses including legal and auditing fees, rent, office equipment and other administrative related expenses.
 
Exploration and Development
 
With the receipt of the funding discussed in the budget above, the Company anticipates executing an exploration and development program that should be able to complete the following objectives within the next twelve calendar months including:
1.
Drill the remaining 50% of the project that remains undrilled to expand the shallow resource.
2.
Complete the permitting process and all relevant testing.
3.
Assay the core on the deep holes to identify additional zones of mineralization between the shallow and the deep known mineralization, if any.
4.
Infill drilling in the area of the hill zone anticipated to be included in the phase 1 pit with the goal of decreasing stripping and increasing contained ounces within the potential pit area.
5.
Complete the water well required for production.
6.
Update the Independent Technical Report in the 43-101 format.
 
Corporate Offices
 
Our principal business offices are located at 1155 West Fourth Street, Suite 210, Reno, NV  89503.  We currently obtain our space rent free.  We believe that our current arrangements provide adequate space for our foreseeable future needs.
 
 
 
9

 
 
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - continued
 
We also own a 480 acre parcel of land in Lander County Nevada which will be used for mineral processing, equipment storage and maintenance.   
 
Employees
 
We do not expect any material changes in the number of employees over the next 12 month period (although we may enter into employment or consulting agreements with our officers or directors). We do and will continue to outsource services as needed.  As at January 31, 2014, our only employee was our President, CEO, and CFO. 

Critical Accounting Estimates
 
There have been no material changes to our critical accounting estimates since the end of our 2013 fiscal year. For detailed information on our critical accounting policies and estimates, see our Annual Report on Form 10-K for the fiscal year ended April 30, 2013.
 
Results of Operations – Three Months Ended January 31, 2014 and 2013
 
The following summary of our results of operations should be read in conjunction with our financial statements for the period ended January 31, 2014 which are included herein.
 
Our operating results for the three months ended January 31, 2014 and 2013 and the changes between those periods for the respective items are summarized as follows:
 
   
Three Months Ended
January 31,
       
   
2014
   
2013
   
Change
 
Revenue
 
$
Nil
   
$
Nil
   
$
Nil
 
Operating expenses
 
$
74,642
   
$
179,269
   
$
104,627
 
Net (loss)
 
$
(108,256
)
 
$
(176,645
)
 
$
68,389
 
 
Revenues
 
We have not earned any revenues from our primary activities since our inception and we do not anticipate earning revenues in the near future.
 
Net Loss
 
The decrease in net loss from the period ended January 31, 2013 to January 31, 2014 relates primarily to decrease in funding available to the Company to further permitting and production work on the Independence Project.  We anticipate net losses in future periods as we continue to work toward our goal of production at the Independence Project.
 
Operating Expenses

Our operating expenses for the three months ended January 31, 2014 and 2013 are outlined in the table below:
 
   
Three Months Ended
January 31,
       
   
2014
   
2013
   
Change
 
Depreciation and amortization
 
$
397
   
$
1,165
   
$
768
 
General and administrative
 
$
5,598
   
$
11,609
   
$
6,011
 
Management and consulting
 
$
64,101
   
$
114,235
   
$
50,134
 
Exploration and development
 
$
(4,645
)
 
$
24,767
   
$
29,412
 
Professional fees
 
$
9,191
   
$
27,493
   
$
18,302
 
 
 
10

 
 
 
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - continued
 
The decrease in operating expenses for the three months ended January 31, 2014, compared to the same period in fiscal 2013, was mainly due to a decrease in Management and consulting expenses of $50,134 due fees paid to outside consultants.  Board of Directors and other vendors continue to receive stock for services.  Decreased general and administrative expenses for the three months in fiscal 2014 as compared to fiscal 2013 was due to a decrease in fees we paid to the Canadian TSX listing during fiscal year 2013 in anticipation of a listing on the Canadian exchange. Exploration and development activities decreased due to limited funds available to pay for further exploration work and a correction to fees.  Professional fees decreased during the three months ended January 31, 2014 as compared to the same period in fiscal 2013 due to decreased legal fees.

Results of Operations – Nine Months Ended January 31, 2014 and 2013
 
The following summary of our results of operations should be read in conjunction with our financial statements nine months ended January 31, 2014 which are included herein.
 
Our operating results for the nine months ended January 31, 2014 and 2013 and the changes between those periods for the respective items are summarized as follows:
 
   
Nine Months Ended
January 31,
       
   
2014
   
2013
   
Change
 
Revenue
 
$
Nil
   
$
Nil
   
$
Nil
 
Operating expenses
 
$
470,556
   
$
692,645
   
$
222,089
 
Net (loss)
 
$
(509,233
)
 
$
(692,662
)
 
$
183,429
 
 
Revenues
 
We have not earned any revenues from our primary activities since our inception and we do not anticipate earning revenues in the near future.
 
Net Loss
 
The decrease in net loss from the period ended January 31, 2013 to January 31, 2014 relates primarily to the stock grants issued to our officers and Board of Directors during the nine months ended January 31, 2013 and fees paid to investor relation consultants and fundraising expenses during the same period.  We anticipate net losses in future periods as we continue to work toward our goal of near term production at the Independence Project.
 
Operating Expenses

Our operating expenses for the nine months ended January 31, 2014 and 2013 are outlined in the table below:
 
   
Nine Months Ended
January 31,
       
   
2014
   
2013
   
Change
 
Depreciation and amortization
 
$
647
   
$
3,783
   
$
3,136
 
General and administrative
 
$
29,480
   
$
41,295
   
$
11,815
 
Management and consulting
 
$
279,618
   
$
470,425
   
$
190,807
 
Exploration and development
 
$
88,169
   
$
80,321
   
$
(7,848
)
Professional fees
 
$
72,642
   
$
96,821
   
$
24,179
 
 
 
11

 
 
 
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - continued
 
The decrease in operating expenses for the nine months ended January 31, 2014, compared to the same period in fiscal 2013, was mainly due to a decrease in management and consulting of $190,807. The decrease in management and consulting from nine months ended January 31, 2013 compared to January 31, 2014 relates to: $131,600 in one time stock grants issued to the CEO and the Board of Directors in fiscal 2013, a decrease of $4,000 in management related travel during fiscal 2014 compared to fiscal 2013, and a decrease of $65,000 in consulting contracts incurred in fiscal 2013 related to a potential listing on the Venture exchange a redesign of the Company’s website.  Exploration costs increased by $7,848 from the nine months ended January 31, 2013 compared to the nine months ended January 31, 2014 due to an increase in the advanced minimum royalty payment due to Independence Gold-Silver Mines, Inc. Additionally, professional fees were relatively stable in the comparative periods.

We have focused our energy during this quarter securing other potential financing sources and preparing for increased activity related to the permitting process with all charges being classified as development.
 
Liquidity and Financial Condition
 
Working Capital
   
January 31,
2014
   
April 30,
2013
   
Change
 
Current assets
 
$
19,045
   
$
18,272
   
$
773
 
Current liabilities
 
$
957,255
   
$
684,355
   
$
272,900
 
Working Capital
 
$
(938,210
)
 
$
(666,083
)
 
$
(272,127
)
 
Cashflow
 
   
Nine Months Ended
January 31
       
   
2014
   
2013
   
Change
 
Net cash used in operating activities
 
$
(162,281
)
 
$
(289,538
)
 
$
127,257
 
Net cash provided/(used) in investing activities
 
$
808
   
$
-
   
$
808
 
Net cash provided/(used) by financing activities
 
$
157,801
   
$
282,157
   
$
(124,356
)
Net increase/(decrease) in cash during period
 
$
(3,672
)
 
$
(7,381
)
 
$
3,709
 

Our total assets at January 31, 2014 were $735,158. Our financial statements report a net loss of $509,233 for the nine months ended January 31, 2014 and a net loss of $12,661,412 for the period from March 15, 2006 (date of inception) to January 31, 2014. We had a cash balance of $1,045 as of January 31, 2014.
 
We have suffered recurring losses from operations. The continuation of our company is dependent upon our company attaining and maintaining profitable operations and raising additional capital as needed. In this regard we have raised additional capital through equity offerings and loan transactions.  We have been successful in structuring deals in which expenses are paid for through the issuances of common shares.  In addition, we have raised additional funds and expect to continue to raise additional funds through private placement equity offerings sufficient to fund our current plan of operations.
 
Contractual Obligations
 
As a “smaller reporting company”, we are not required to provide tabular disclosure obligations.
 
Off-Balance Sheet Arrangements
 
We have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to stockholders.
 
 
 
12

 
 
ITEM 4.  CONTROLS AND PROCEDURES
 
Management’s Report on Disclosure Controls and Procedures
 
We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms, and that such information is accumulated and communicated to our management, including our president (also our principal executive officer) and our chief financial officer (also our principal financial officer and principal accounting officer) to allow for timely decisions regarding required disclosure.
 
As of January 31, 2014, the end of our quarter covered by this report, we carried out an evaluation, under the supervision and with the participation of our president (also our principal executive officer) and our chief financial officer (also our  principal financial and accounting officer), of the effectiveness of the design and operation of our disclosure controls and procedures. Based on the foregoing, our President (who is acting as our principal executive officer) and our Chief Financial Officer (who is acting as our principal financial officer and principle accounting officer) concluded that our disclosure controls and procedures were effective as of the end of the period covered by this quarterly report.
 
Changes in Internal Control over Financial Reporting
 
There have been no changes in our internal controls over financial reporting that occurred during our quarter ended January 31, 2014 that have materially or are reasonably likely to materially affect, our internal controls over financial reporting.

PART II
 
OTHER INFORMATION
 
ITEM 1.  LEGAL PROCEEDINGS
 
Our company is not a party to any pending legal proceeding and no legal proceeding is contemplated or threatened as of the date of this quarterly report.
 
ITEM 1A.  RISK FACTORS
 
We have had no material changes in our risk factors as disclosed in our Form 10-K for the year ended April 30, 2013 filed on August 13, 2013.
 
ITEM 2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
 
During the three months ended January 31, 2014, we issued a total of 17,811,017 shares; 2,811,017 shares were issued for services valued at $41,000 to vendors; 15,000,000 shares were issued for cash to investors in private placement at $0.003 per share for receipt of cash totaling $45,000.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES
 
None.
 
ITEM 4.  [REMOVED AND RESERVED]
  
 
 
 
13

 
 
ITEM 5.  OTHER INFORMATION
 
None.
 
ITEM 6.  EXHIBITS

Item
 
Description
(3)
 
Articles of Incorporation and By-laws
     
3.1
 
Certificate of Incorporation (incorporated by reference from our Registration Statement on Form 10-SB12G filed on August 24, 1999)
     
3.2
 
By-Laws (incorporated by reference from our Registration Statement on Form 10-SB12G filed on August 24, 1999)
     
3.3
 
Amendment to Certificate of Incorporation (incorporated by reference from our Annual Report on Form 10-KSB filed on August 15, 2006)
     
(10)
 
Material Contracts
     
10.1
 
Letter of Intent between General Gold Corporation and Gold Range, LLC dated November 14, 2004  (incorporated by reference from our Annual Report on Form 10-KSB filed on August 15, 2006)
     
10.2
 
Amendment to Letter of Intent between General Gold Corporation and Gold Range, LLC dated December 31, 2004 (incorporated by reference from our Annual Report on Form 10-KSB filed on August 15, 2006).
     
10.3
 
Assignment of Lease Agreement between General Gold Corporation and Gold Range Company, LLC dated April 29, 2005  (incorporated by reference from our Annual Report on Form 10-KSB filed on August 15, 2006)
     
10.4
 
Assignment of Lease and Consent Agreement between Independence Gold-Silver Mines Inc., Gold Range Company, LLC and General Gold Corporation dated June 29, 2005  (incorporated by reference from our Annual Report on Form 10-KSB filed on August 15, 2006)
     
10.5
 
Lease Agreement between Independence Gold-Silver Mines Inc. and Gold Range Company, LLC dated July 13, 2005  (incorporated by reference from our Annual Report on Form 10-KSB filed on August 15, 2006)
     
10.6
 
Share Purchase Agreement dated July 20, 2006 among General Gold Corporation, Recov Energy Corp. and the selling shareholders of General Gold Corporation  (incorporated by reference from our Annual Report on Form 10-KSB filed on August 15, 2006)
     
10.7
 
Share Purchase Agreement dated March 15, 2007 between our company and Sanibel Investments Ltd. (incorporated by reference from our Current Report on Form 8-K filed on March 22, 2007).
     
(14)
 
Code of Ethics
     
14.1
 
Code of Ethics  (incorporated by reference from our Annual Report on Form 10-KSB filed on August 15, 2006)
     
(21)
 
Subsidiaries
     
   
General Gold Corporation, a Nevada company (filed with this report)
     
(31)
 
Section 302 Certification
     
 
     
 
     
(32)
 
Section 906 Certification
     
 
     
 

 
 
 
14

 
 

SIGNATURES
 
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
 
 
GENERAL METALS CORPORATION
 
 
(Registrant)
 
       
       
 Dated:  March 17, 2014
 /s/ Daniel J. Forbush
 
 
 Daniel J. Forbush
 
 
 Chief Executive Officer/Chief Financial Officer
 
 
 (Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer)
 
     
 



 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
15