0000950142-13-001630.txt : 20130708 0000950142-13-001630.hdr.sgml : 20130708 20130708152546 ACCESSION NUMBER: 0000950142-13-001630 CONFORMED SUBMISSION TYPE: 20-F PUBLIC DOCUMENT COUNT: 12 CONFORMED PERIOD OF REPORT: 20130331 FILED AS OF DATE: 20130708 DATE AS OF CHANGE: 20130708 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CREAM MINERALS LTD CENTRAL INDEX KEY: 0001066130 STANDARD INDUSTRIAL CLASSIFICATION: METAL MINING [1000] IRS NUMBER: 000000000 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 20-F SEC ACT: 1934 Act SEC FILE NUMBER: 000-29870 FILM NUMBER: 13957396 BUSINESS ADDRESS: STREET 1: 890-789 WEST PENDER STREET CITY: VANCOUVER STATE: A1 ZIP: V6C 1H2 BUSINESS PHONE: 6046874622 MAIL ADDRESS: STREET 1: 890-789 WEST PENDER STREET CITY: VANCOUVER STATE: A1 ZIP: V6C 1H2 20-F 1 eh1300930_20f.htm 2013 FORM 20-F eh1300930_20f.htm
 


 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
 
FORM 20-F
 
o
REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) or 12(g) OF THE SECURITIES EXCHANGE ACT OF 1934
   
 
OR
   
x
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
   
 
For the fiscal year ended March 31, 2013 (with other information to June 27, 2013, except where noted)
   
 
OR
   
o
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
   
 
For the transition period from _____________ to _____________.
   
 
OR
   
o
SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
   
 
Date of event requiring this shell company report _____________.
 
Commission file number 0-29870
 
CREAM MINERALS LTD.
(Exact name of Registrant as specified in its charter)
 
BRITISH COLUMBIA, CANADA
(Jurisdiction of incorporation or organization)
 
890-789 West Pender Street
Vancouver, British Columbia, Canada, V6C 1H2
(Address of principal executive offices)
 
Michael O’Connor, President, CEO, and Director, (604) 687 4622, facsimile – (604) 687 4212,
Suite 890-789 West Pender Street Granville Street, Vancouver, British Columbia, Canada, V6C 1H2
(Name, telephone, e-mail and/or facsimile number and address of Company contact person)
 
Securities registered or to be registered pursuant to Section 12(b) of the Act.
   
Title of Each Class
Name of each exchange on which registered
 
None
 
Not applicable
 
Securities registered or to be registered pursuant to Section 12(g) of the Act.
 
Common Shares without Par Value
(Title of Class)
 
Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act.None 
 
Number of outstanding shares of Cream's only class of issued capital stock as at March 31, 2013:
 
155,340,582 Common Shares Without Par Value

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 þ
 

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.
 
Yes o
No þ
 
 
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 þ
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 o
No o
 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer.
 
Large Accelerated Filer ¨
Accelerated Filer ¨
Non-Accelerated Filer þ
 
Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:
 
U.S. GAAP
¨
   
International Financial Reporting Standards
as issued by the International Accounting
Standards Board
þ
   
Other
¨
 
If other has been checked in response to the previous question, indicate by check mark which financial statement item Registrant has elected to follow:
 
Item 17   ¨
Item 18 ¨

If this report is an Annual Report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
 
Yes o
No þ
 

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.
 
NOT APPLICABLE 
 




 
 

 

CAUTIONARY STATEMENT REGARDING FORWARD LOOKING INFORMATION
 
Certain statements in this Annual Report on Form 20-F (this “Annual Report”) under the captions “Item 3 - Risk Factors”, “Item 4 – “Business Overview”, Item 5 - “Operating and Financial Review and Prospects” and “Item 11 - Quantitative and Qualitative Disclosures about Market Risk” and elsewhere in this Annual Report and the documents incorporated herein by reference constitute “forward-looking statements” within the meaning of the U.S. Securities Litigation Reform Act of 1995 and "forward-looking information” under applicable Canadian securities legislation.  Some forward-looking statements may be identified by such terms as “believes”, “anticipates”, “intends” or “expects” collectively “forward-looking statements”.  Forward-looking information in this Annual Report include statements regarding the Company's plans for its projects, statements relating to mineral resources, as they are based on various assumptions that are inherently forward-looking, statements regarding the anticipated timing by which the Company will require additional funds.  These forward-looking statements are based on the Company’s current expectations and projections about future events and financial trends affecting the financial condition of its business and the industry in which it operates.  Such forward-looking statements are based on assumptions regarding future events and other matters and are subject to known and unknown risks, uncertainties and other factors including the factors set forth in other filings with the Canadian securities commissions and the United States Securities and Exchange Commission (the “Commission”), which may cause the actual results, performance or achievements of the Company or industry results to be materially different from any future results, performance, or achievements expressed or implied by such forward-looking statements.  Assumptions on which forward-looking statements are based include the assumptions underlying mineral resource estimates and in the technical reports supporting such estimates, the assumption that the Company will continue as a going concern and will continue to be able to access the capital required to advance its projects and continue operations.  Such risks and the assumptions that accompany them, uncertainties and other factors include, among others, the following: general economic and business conditions, which will, among other things, impact  the demand for gold and silver and other precious metals explored for by the Company; industry capacity; the ability of the Company to raise the capital required to implement its business strategy; changes in, or the unintentional failure to comply with, government regulations (especially safety and environmental laws and regulations); changes in the uses of gold, silver and other precious metals; silver and gold price volatility; increased competition; risks of the mining industry; exploration programs not being successful; inability to obtain financing; inability to obtain, or cancellation of, government permits; changes to regulations and mining law; increased reclamation obligations; title defects with respect to properties; risks associated with international operations; and foreign exchange and currency fluctuations.  There can be no assurance that forward-looking statements in this Annual Report will prove to be accurate and actual results and future events could vary materially from those implied by such statements.  Consequently, all of the forward-looking statements made in this Annual Report are qualified by these cautionary statements.  The Company disclaims any obligation to update or revise any written forward-looking statements whether as a result of new information, future events or otherwise except as required by applicable laws.
 
Currency and Measurement
 
All currency amounts in this Annual Report on Form 20-F are stated in Canadian dollars unless otherwise indicated.  On June 27, 2013, the Bank of Canada noon rate for Canadian Dollars was U.S. $1.00: Cdn$1.0480 (see Item 4 for further historical exchange rate information).  Conversion of metric units into imperial equivalents is as follows:
 
Metric Units
 
Multiply by
 
Imperial Units
hectares
 
2.471
 
= acres
metres
 
3.281
 
= feet
kilometres (“km”)
 
0.621
 
= miles (5,280 feet)
grams
 
0.032
 
= ounces (troy)
tonnes
 
1.102
 
= tons (short) (2,000 lbs)
grams/tonne
 
0.029
 
= ounces (troy)/ton
 


 
 

 


 
The following table sets out the U.S. dollar exchange rates, based on the noon rate at the Bank of Canada for the calendar years 2007 through 2012 and 2013  to date.

   
To March 31,
2013
   
2012
   
2011
   
2010
   
2009
   
2008
 
End of Period
    1.0160     $ 0.9975     $ 1.0009     $ 1.0054     $ 0.9555     $ 0.8166  
Average for Period
    1.0013       0.9939       1.0077       0.9710       0.8757       0.9381  
High for Period
    1.0281       1.0006       1.0583       1.0054       0.9716       1.0289  
Low for Period
    0.9783       0.9859       0.9430       0.9278       0.7692       0.7711  

   
To June 27 2013
   
May 2013
   
April 2013
   
March 2013
   
Feb 2013
   
Jan 2013
 
                                     
High
    1.0532       0.9983       0.9946       0.9857       1.0048       1.0188  
Low
    1.0170       0.9614       0.9713       0.9668       0.9696       0.9900  
 
CAUTIONARY NOTE TO U.S. INVESTORS

This Annual Report  may use the terms “measured resources” and “indicated resources.”  We advise U.S. investors that while such terms are recognized and permitted under Canadian regulations, the U.S. Securities and Exchange Commission does not recognize them.  U.S. investors are cautioned not to assume that any part or all of the mineral deposits in these categories will ever be converted into reserves.

This Annual Report may use the terms “inferred resources.”  We advise U.S. investors that while such term is recognized and permitted under Canadian regulations, the U.S. Securities and Exchange Commission does not recognize it.  “Inferred resources” have a great amount of uncertainty as to their existence, as well as to their economic and legal feasibility.  It cannot be assumed that all or any part of an inferred mineral resource will ever be upgraded to a higher category.  Under Canadian rules, estimates of inferred mineral resources may not form the basis of feasibility or other economic studies.  U.S. investors are cautioned not to assume that any part or all of an inferred resource exists, or is economically or legally mineable.


 
 
 
2

 


4
4
4
14
28
28
36
48
49
50
52
65
67
68
68
68
ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT 69
69
69
70
70
70
70
70
70
70
 

 


PART 1
 
 
A.           Directors and Senior Management

This Form 20-F is being filed as an annual report under the Securities Exchange Act of 1934, as amended and as such, there is no requirement to provide any information under this item.

B.           Advisors

This Form 20-F is being filed as an annual report under the Securities Exchange Act of 1934, as amended and as such, there is no requirement to provide any information under this item.

C.           Auditor

This Form 20-F is being filed as an annual report under the Securities Exchange Act of 1934, as amended and as such, there is no requirement to provide any information under this item.
 
 
Not applicable.
 
 
A.           Selected Financial Data
 
The selected financial data of Cream Minerals Ltd. (“Cream” or the “Company”) for the years ended March 31, 2013, 2012 and 2011 was derived from the Company’s consolidated financial statements audited by Morgan LLP, Chartered Accountants, as indicated in the audit report included elsewhere in this Annual Report.
 
The Selected Financial Data should be read in conjunction with the consolidated financial statements and other financial information included elsewhere in this Annual Report.
 
The Company has not declared any dividends on its common shares since incorporation and does not anticipate that it will do so in the foreseeable future.  The present policy of the Company is to retain future earnings for use in its operations and the expansion of its business.
 
The following table sets forth selected consolidated financial information with respect to the Company for the periods indicated and is extracted from the more detailed consolidated financial statements included herein.  The following constitutes selected financial data for Cream Minerals Ltd. for the last five fiscal years ended March 31, 2013, in Canadian dollars, presented in accordance with International Financial Reporting Standards (“IFRS”) issued by the International Accounting Standards Board (“IASB”) for the years 2013, 2012  and 2011, and with as Canadian Generally Accepted Accounting Principles (“Cdn GAAP”) for the years 2010, 2009, which differs in certain respects from Generally Accepted Accounting Principles in the United States (“US GAAP”).  Information based on previous Cdn GAAP and US GAAP is not comparable to information prepared in accordance with IFRS.  The following table should be read in conjunction with “Item 5:  Operating and Financial Review and Prospects”, and the consolidated financial statements included in Item 17.  On June 27, 2013, the noon buying rate as quoted by the Bank of Canada was 1.0480 Canadian dollars per U.S. dollar.
 

 

(Canadian Dollars in Thousands Except Per Share Amounts)

(Cdn$)
 
As at March 31,
 
Statement of Financial Position Data
 
2013
   
2012
   
2011
   
2010
 
Total assets according to financial statements (IFRS)(1)
  $ 261     $ 1,415     $ 5,633     $ 987  
Total liabilities
    479       247       446       2,290  
Share capital
    33,067       32,590       32,110       24,653  
Warrant reserve, share-based payment reserve, share subscriptions
    7,441       7,343       6,958       3,320  
Deficit (IFRS)
    (40,726 )     (38,765 )     (33,882 )     (29,276 )


(Cdn$)
 
As at March 31,
 
Statement of Financial Position Data
 
2009
 
Total assets according to financial statements (Cdn GAAP)(1)
  $ 1,013  
Total liabilities
    1,913  
Share capital
    24,609  
Contributed surplus, accumulated comprehensive income, share subscriptions and loss and warrants
    2,418  
Deficit (Cdn GAAP)
    (27,928 )


(Cdn$)
                       
Period End Balances (as at)
 
2013
   
2012
   
2011
   
2010
 
Working capital (deficiency)
  $ (252 )   $ 309     $ 4,433     $ (1,937 )
Mineral property interests (IFRS)
    --       97       484       455  
Shareholders’ equity (IFRS)
    (218 )     1,168       5,186       (1,303 )
Number of outstanding shares
    155,341       152,643       149,464       64,717  

 
(Cdn$)
     
Period End Balances (as at)
 
2009
(Cdn GAAP)
 
Working capital (deficiency)
  $ (1,697 )
Mineral property interests (Cdn GAAP), as restated
    588  
Shareholders’ equity (Cdn GAAP), as restated
    (900 )
 

 
No cash or other dividends have been declared.

   
(Canadian Dollars in Thousands Except Per Share Amounts)
 
(Cdn$)
 
As at March 31
 
Statement of Operations Data
 
2013
   
2012
   
2011
   
2010
 
 
Investment and other income
    (4 )     (41 )     (14 )     (5 )
General and administrative expenses (including Share-based payments)
    984       1,720       2,907       684  
Exploration costs
    717       2,763       1,702       379  
Write-down of mineral property interests
    97       441       13       227  
Future income tax recovery
    --       --       --       (21 )
Net loss according to financial statements (IFRS)
    (1,794 )     (4,883 )     (4,605 )     (1,265 )

       
(Cdn$)
 
As at March 31
 
Statement of Operations Data
 
2009
 
 
Investment and other income
    (1 )
General and administrative expenses (including Share-based payments)
    1,092  
Exploration costs
    953  
Write-down of mineral property interests
    418  
Future income tax recovery
    (66 )
Net loss according to financial statements (Cdn GAAP)
    (2,397 )
         
(Cdn$)
 
As at March 31
 
Statement of Operations Data
    2009  
Net loss according to financial statements (US GAAP)
    (2,397 )
 
Note:
 
(1)
Under IFRS applicable to junior mining exploration companies, mineral exploration expenditures can be deferred on prospective properties until such time as it is determined that further exploration is not warranted, at which time the property costs are written off.  During the year ended March 31, 2009, the Company retrospectively changed its accounting policy for exploration expenditures to more appropriately align itself with policies adopted by other exploration companies at a similar stage in the mining industry.  Prior to the year ended March 31, 2009, the Company capitalized all such costs to mineral property interests held directly or through an investment, and only wrote down capitalized costs when the property was abandoned or if the capitalized costs were not considered to be economically recoverable.
 
Exploration expenditures are now charged to earnings as they are incurred until the mineral property interest reaches the development stage. Significant costs related to mineral property acquisitions, including allocations for undeveloped mineral property interests, are capitalized until the viability of the mineral property interest is determined.  When it has been established that a mineral deposit is commercially mineable and an economic analysis has been completed, the costs subsequently incurred to develop a mine on the property prior to the start of mining operations are capitalized.
 
The expensing of exploration costs as incurred is now consistent with US GAAP, whereby all exploration expenditures are expensed until an independent feasibility study has determined that the property is capable of economic commercial production.
 
 
 
The tables below include the quarterly results for the years ended March 31, 2013 (“fiscal 2013”) and 2012 (“fiscal 2012”).
 
(Cdn$)
 
Year Ended March 31, 2013
       
Statement of Operations Data
 
Quarter 1
   
Quarter 2
   
Quarter 3
   
Quarter 4
   
Total
 
Investment and other income
  $ (1,194 )   $ (1,082 )   $ (365 )   $ (1,156 )   $ (3,797 )
General and administrative expenses
    263,611       246,302       304,072       166,364       980,349  
Share-based payments
    3,811       --       --       --       3,811  
Write-down of mineral property interests
    --       --       97,080       --       97,080  
Exploration costs
    145,306       208,554       137,525       225,801       717,186  
Net loss according to financial statements
    411,534       453,774       538,312       391,009       1,794,629  
Net loss from continuing operations per common share
    0.00       0.01       0.01       0.00       0.01  


(Cdn$)
 
Year Ended March 31, 2012
       
Statement of Operations Data
 
Quarter 1
   
Quarter 2
   
Quarter 3
   
Quarter 4
   
Total
 
Investment and other income
  $ (11,715 )   $ (5,947 )   $ (2,346 )   $ (20,910 )   $ (40,918 )
General and administrative expenses
    128,839       373,999       364,236       372,974       1,240,048  
Share-based payments
    335,475       64,778       34,660       45,316       480,229  
Write-down of mineral property interests
    261,974       178,838       --       --       440,812  
Exploration costs
    1,278,029       1,145,302       201,241       138,547       2,763,119  
Net loss according to financial statements
    1,992,602       1,756,970       597,791       535,927       4,883,290  
Net loss from continuing operations per common share
    0.01       0.01       0.01       0.00       0.03  

 
B.           Capitalization and Indebtedness
 
Not applicable.
 
C.           Reasons for the Offer and Use of Proceeds
 
Not applicable.

D.           Risk Factors
 
The following is a brief discussion of those distinctive or special characteristics of Cream’s operations and industry which may have a material impact on Cream’s financial performance.
 
Readers should carefully consider the risks and uncertainties described below before deciding whether to invest in shares of the Company’s common stock.
 
Financial Risk Factors
 
Cream has no source of operating cash flow, has a history of operating losses and has no assets of any significance with positive financial statement carrying values.  In addition all of the Company’s projects have a financial statement value of zero.  Cream has no revenues from operations and all of its mineral property interests are in the exploration stage.  The Company will not receive revenues from operations at any time in the near future, and Cream has no prior years’ history of earnings or cash flow.  Cream has not paid dividends on its shares at any time since incorporation and does not anticipate doing so in the foreseeable future. Cream’s consolidated financial statements have been prepared assuming Cream will continue on a going-concern basis.  Should funding not be obtained, this assumption will change and Cream’s assets may be written down to realizable values.  Cream has incurred losses since inception (deficit at March 31, 2013, is $40,725,962), which casts doubt on the ability of
 
 
 
 
Cream to continue as a going concern.  Cream has no revenue other than interest income.  A mining project can typically require ten years or more between discovery, definition, development and construction and as a result, no production revenue is expected from any of the Company’s exploration properties in the near future.  All of Cream’s short to medium-term operating and exploration expenses must be paid from its existing cash position or external financing.  At March 31, 2013, Cream had working capital deficit of $251,610 compared to a working capital surplus of $308,778 at March 31, 2012.  Working capital is defined as current assets less current liabilities.
 
Cream may be unable to obtain the funds necessary to expand exploration. Cream’s operations consist, almost exclusively, of cash consuming activities given that all of its mineral projects are in the early exploration stage. Cream has suspended exploration activities on all of its mineral properties.  Cream will need to receive additional equity capital or other funding from the joint venture of one or more properties or the sale of one or more properties for the next year, and failing that, may cease to be economically viable.  To date, the only sources of funds that have been available to the Company are the sale of equity capital or the offering by the Company of an interest in its properties to be earned by another party or parties carrying out further development thereof.
 
The Company does not have sufficient financial resources to fund operations for the balance of fiscal 2014. The Company has been successful in the past in obtaining financing through the sale of equity securities but as an exploration stage company, it is often difficult to obtain adequate financing when required, and it is not necessarily the case that the terms of such financings will be favourable.  If Cream fails to obtain additional financing on a timely basis, the Company could forfeit its mineral property interests, dilute its interests in its properties, sell one or more properties and/or reduce or terminate operations.
 
Cream is continuously reviewing strategies for private placement equity financings as well as other forms of financing that would carry the Company through the next fiscal year.  If a private equity financing were to be completed, it is expected that warrants may be included in the securities offered.  Any such financings will result in dilution of existing shareholders.

Volatile gold and silver prices and external market conditions can cause significant changes in the Company’s share price because as the prices of precious metals increase or decrease, the economic viability of the mineral properties is affected.  Cream has no history of mining or current source of revenue.  The Company is exploring for silver and gold, and historically, the prices of the common shares of junior silver and gold exploration companies are very volatile.  This volatility may be partly attributed to the volatility of silver and gold prices, and also to the success or failure of the Company’s exploration programs.  Market, financial and economic factors not directly related to mining activities can also affect the Company’s ability to raise equity financing.

Below are the annual average, high and low prices of gold and silver from the year 2002 to 2012, and year 2013 to date.

Gold1

 
Year
Average Price
per ounce (US$)
High Price
per ounce (US$)
Low Price
per ounce (US$)
2002
309.73
349.30
277.75
2003
363.38
416.25
319.90
2004
409.72
454.20
375.00
2005
444.74
536.50
411.10
2006
603.46
725.00
524.75
2007
695.39
841.10
608.40
2008
871.96
1011.25
712.50
2009
972.35
1212.50
810.00
2010
1224.53
1421.00
1058.00
2011
1,568.59
1,895.00
1,319.00
2012
1,668.98
1,791.75
1,540.00
2013 – (Jan - June)
1,525.98
1,693.75
1,232.75



1
www.kitco.com  Gold prices, London Fix US dollars per ounce
2
www.silverinstitute.org/priceuk.php Silver prices, London Fix US dollars per ounce


Silver2

 
Year
Average Price
per ounce (US$)
High Price
per ounce (US$)
Low Price
per ounce (US$)
2002
4.60
5.10
4.24
2003
4.85
5.97
4.24
2004
6.65
8.29
5.50
2005
7.22
9.23
6.39
2006
11.57
14.94
8.83
2007
13.39
15.82
11.67
2008
15.02
20.92
8.88
2009
14.66
19.18
10.51
2010
20.16
30.70
15.14
2011
35.11
48.70
26.16
2012
31.15
37.23
26.67
2013 (Jan-June)
26.59
32.23
18.61


Fluctuations in financial markets can negatively impact the Company’s ability to achieve sufficient funding.
Over the last decade there have been periods of significant volatility in world financial markets.  The volatility can negatively impact the company’s ability to raise sufficient equity financing to sustain operations.  Future financial market volatility is likely and it should not be assumed that adequate funding will be available to the Company in amounts or at times when it is required.
 
Risks Associated with Mineral Exploration
 
Cream’s exploration efforts may be unsuccessful in locating viable mineral resources.  Resource exploration is a speculative business, characterized by a number of significant risks, including, among other things, unprofitable efforts resulting not only from the failure to discover mineral deposits but also from finding mineral deposits, which, though present, are insufficient in quantity and/or quality to return a profit from production.
 
There is no certainty that expenditures to be made by the Company on the exploration of its properties and prospects as described herein will result in discoveries of mineralized material in commercial quality and quantities.
 
Mineral Resource Estimates Are Only Estimates and May Not Reflect the Actual Deposits or the Economic Viability of Gold and Silver Extraction.  Although the Company has carefully prepared its mineral resource figures, such figures are estimates only and no assurance can be given that the indicated tonnages and grade will be achieved. There is significant uncertainty in any mineral resource estimate.  Estimates of inferred resources are the least certain of the resource categories and there is no assurance that such resources can or will be upgraded to another category of resource, or that further exploration will confirm or validate such estimates.  Actual deposits encountered and the economic viability of, and returns from, a deposit (if mined) may differ materially from estimates disclosed by the Company or implied by estimates of mineral resources. The estimating of mineral resources is a subjective process and the accuracy of mineral resource estimates is a function of the quantity and quality of available data, the accuracy of statistical computations, and the assumptions used and judgments made in interpreting engineering and geological information. Mineral resource estimates are based on many things, including assumed commodity prices, continuity of mineralization, tonnage and grade of mineralization, metallurgy, estimated mineral recovery rates, cost of capital, mine development costs, operating costs and exchange rates. Changes in assumptions may result in a significant reduction in the reported mineral resources and thereby have a material adverse effect on the Company's results of operations and financial condition.
 
Estimated mineral resources may also require downward revisions based on changes in metal prices and further exploration or development activity. This could materially and adversely affect estimates of the tonnage or grade of mineralization, estimated recovery rates or other important factors that influence mineral resource and reserve of estimates.  Any reduction in estimated mineral reserves or estimated resources as a result could require material write downs in investment in the affected mining property, which could have a material and adverse effect on the Company's results of operations and financial condition.
 
 
 
The Company has not established the presence of any proven and probable reserves at any of its mineral properties. There can be no assurance that subsequent testing or future studies will establish proven and probable reserves on the Company's properties. The failure to establish proven and probable reserves could severely restrict the Company's ability to successfully implement its strategies for long-term growth.
 
There is Uncertainty Relating to Mineral Resources. Mineral resources that are not mineral reserves do not have demonstrated economic viability. Due to the uncertainty, which may attach to inferred mineral resources, there is no assurance that inferred mineral resources will be upgraded to indicated and measured mineral resources as a result of continued exploration.  If mineral resources are not upgraded to proven and probable mineral reserves, it could materially and adversely affect and/or restrict the Company's ability to successfully implement its strategies for long-term growth.
 
Cream’s projects have uncertain project realization values. Cream changed its accounting policy with respect to the deferral (capitalization) of exploration costs in fiscal 2009.  The Company continues to defer (capitalize) acquisition costs incurred in connection with its projects on its balance sheet.  Cream has written down all its properties to Nil.  Although the current financial statement carrying value of each Company’s projects is zero, in the future the Company may have projects with positive financial statement carrying values.  In such cases a diminution in the book value of shareholders’ equity would be the result.
 
Cream may not be able to market minerals if any are acquired or discovered by the Company due to factors beyond the control of the Company.  The marketability of minerals that could in the future be acquired or discovered by the Company may be affected by numerous factors which are beyond the control of the Company and which cannot be accurately predicted, such as market fluctuations, the proximity and capacity of milling facilities, mineral markets and processing equipment, and such other factors as government regulation, including regulation relating to royalties, allowable production, importing and exporting of minerals and environmental protection, the combination of which factors may result in the Company not receiving an adequate return on investment capital.

Environmental and Regulatory Risk Factors
 
Compliance with environmental regulations could affect future profitability and timeliness of operations.  The current and anticipated future operations of the Company require permits from various federal, territorial and local governmental authorities.  Companies engaged in the exploration and development of mines and related facilities must comply with applicable laws, regulations and permits.
 
The Company’s exploration activities are subject to various laws governing land use, the protection of the environment, prospecting, development, commodity prices, exports, taxes, labour standards, occupational safety and health, waste disposal, toxic substances, mine safety and other matters.  Cream believes it is in substantial compliance with all material laws and regulations which currently apply to its activities.  The Company may be unable to obtain all permits required for exploration and development, and the costs of obtaining these permits may not be commercially reasonable.  Existing laws and regulations may be modified, which could have an adverse effect on any exploration project that the Company might undertake.
 
Failure to comply with environmental and reclamation rules could result in penalties The Company’s activities are subject to laws and regulations controlling not only mineral exploration and exploitation activities but also the possible effects of such activities upon the environment.  Environmental legislation may change and make mining uneconomic or result in significant environmental or reclamation costs.  Environmental legislation provides for restrictions and prohibitions and a breach of environmental legislation may result in the imposition of fines and penalties or the suspension or closure of operations. In addition, certain types of operations require the submission of environmental impact statements and approval thereof by government authorities.  Environmental legislation is evolving in a manner that may mean stricter standards and enforcement, increased fines and penalties for non-compliance, more stringent environmental assessments of proposed projects and a heightened degree of responsibility for companies and their directors, officers and employees.  Permits from a variety of regulatory authorities are required for many aspects of mineral exploitation activities, including closure and reclamation.  Future environmental legislation could cause additional expense, capital expenditures, restrictions, liabilities and delays in the development of the Company’s properties, the extent of which cannot be predicted.  In the context of environmental permits, including the approval of closure and reclamation plans, the Company must comply with standards and laws and regulations that may entail costs and delays, depending on the nature of the activity to be
 
 
 
permitted and how stringently the regulations are implemented by the permitting authority.  The Company does not maintain environmental liability insurance.
 
Failure to comply with applicable laws, regulations and permitting requirements may result in enforcement actions, including orders issued by regulatory or judicial authorities causing operations to cease or be curtailed, and may include corrective measures requiring capital expenditures, installation of additional equipment or remedial actions.  The Company and its employees have been involved in the exploration of mineral properties for many years.  Currently, the operations of the Company have been limited to exploration, and no mining activity has yet been undertaken.  The mining industry is heavily regulated in North America, where the Company has its operations, so that permitting is required before any work is undertaken where there is any form of land disturbance.  Exploration activity undertaken in Mexico is subject to the laws and regulations established and administered by the Federal government.  To date, land disturbance has been minimal and all required reclamation has been completed.
 
Other Risk Factors
 
Cream is dependent on its ability to recruit and retain key personnel.  The success of the activities of Cream is dependent to a significant extent on the efforts and abilities of its management.  Investors must be willing to rely to a significant extent on their discretion and judgment.  Cream does not maintain key employee insurance for any of its employees.  Cream has relied on and will continue to rely on consultants and others for exploration, development and technical expertise.  The ability of the Company to retain employees and its ability to continue to pay for services are dependent upon the ability of the Company to obtain adequate financing to continue operating as a going concern.
 
Cream’s title to mineral property interests may be challenged.  Although Cream has done a review of titles to its mineral interests, it has not obtained title insurance with respect to its properties and there is no guarantee of title.  The Company has obtained a land title review and legal opinion by a Mexican law firm which affirmed Cream’s title to Nuevo Milenio.  However, the mineral properties may be subject to prior unregistered agreements or transfers or native land claims, and title may be affected by undetected defects.  Cream’s Canadian mineral property interests consist of mineral claims, which have not been surveyed, and therefore the precise area and location of such claims or rights may be in doubt.  As there are unresolved native land claim issues in British Columbia, the Company’s properties and prospects in this jurisdiction may be affected in the future.  The Company’s mineral properties in British Columbia are early stage exploration, and have no known mineral resources or reserves.
 
Cream’s directors and officers serve as directors and officers of other publicly traded junior resource companies.  Some of the directors  of Cream serve as officers and/or directors of other resource exploration companies and are engaged and will continue to be engaged in the search for additional resource opportunities on their own behalf and on behalf of other companies, and situations may arise where these directors  will be in direct competition with Cream.  Such potential conflicts, if any, will be dealt with in accordance with the relevant provisions of British Columbia corporate and common law.  In order to avoid the possible conflict of interest which may arise between the directors’ duties to Cream and their duties to the other companies on whose boards they serve, the directors and officers of Cream expect that participation in exploration prospects offered to the directors will be allocated among or between the various companies that they serve on the basis of prudent business judgement and the relative financial abilities and needs of the companies.
 
Cream may not be able to insure certain risks which could negatively impact the Company’s operating results.  In the course of exploration, development and production of mineral properties, certain risks, and in particular unanticipated geological and operating conditions as well as fires, explosions, flooding, earthquakes, power outages, labour disruptions, and the inability to obtain suitable or adequate machinery, equipment or labour may occur.  It is not always possible to fully insure against such risks and the Company may decide not to take out insurance against such risks as a result of high premiums or other reasons.  Should such liabilities arise, they could reduce or eliminate any future profitability and result in increasing costs and a decline in the value of the securities of the Company.
 
U.S. investors may not be able to enforce their civil liabilities against the Company or its directors, controlling persons and officers.  It may be difficult for U.S. investors to bring and enforce suits against the Company.  The Company is a corporation incorporated in British Columbia under the Business Corporations Act (British Columbia) and, consequently, there is a risk that Canadian courts may not enforce judgements of U.S. courts or enforce, in an original action, liabilities directly predicated upon the U.S. federal securities laws.   The Company’s directors and officers are residents of Canada and all of the Company’s assets are located outside of the United States.  Consequently, it may be difficult for United States investors to affect service of process upon those directors or
 
 
 
 
officers who are not residents of the United States, or to realize in the United States upon judgements of United States courts predicated upon civil liabilities under United States securities laws.  It is unlikely that an original action could be brought successfully in Canada against any of such persons or the Company predicated solely upon such civil liabilities under U.S. securities laws.
 
Cream has been operating in Mexico, which has different risks than those of British Columbia, or Manitoba, Canada. Cream’s activities in Mexico may be subject not only to risks common to operations in the mining industry, but also to the political and economic uncertainties of operating in foreign jurisdictions, namely Mexico.  This may result in misinterpretation of laws, unilateral modification of mining or exploration rights, operating restrictions, increased taxes or environmental regulation, any or all of which could have an adverse impact upon Cream.  Cream’s operations may also be affected to varying degrees by political and economic instability, terrorism, crime, extreme fluctuations in currency exchange rates and inflation.  Cream’s operations and exploration activities in Mexico are subject to Mexican federal and state laws and regulations governing protection of the environment.  These laws are evolving and, as a general matter, are becoming more restrictive.
 
Mineral exploration and mining activities may be affected in varying degrees by political stability and government regulations relating to the mining industry and foreign investors.  Any changes in regulations or shifts in political conditions are beyond the control of the Company and may adversely affect its business.  Operations may be affected in varying degrees by government regulations, policies or directives with respect to restrictions on production, price controls, export controls, income taxes, expropriation of property, and repatriation of income, royalties, environmental legislation and mine safety.
 
Risks Relating to an Investment in the Securities of the Company
 
Cream could be deemed a Passive Foreign Investment Company which could have negative consequences for U.S. Holders.  Potential investors who are U.S. Holders (defined below) should be aware that Cream expects to be a passive foreign investment company (“PFIC”) for the current fiscal year, may have been a PFIC in prior fiscal years and may continue to be a PFIC in subsequent years.  If Cream were to be treated as a PFIC, U.S. Holders of the Cream common shares would be subject to adverse U.S. federal income tax consequences, including a substantially increased U.S. income tax liability and an interest charge upon the sale or disposition of the Cream common shares and upon the receipt of distributions on the Cream common shares to the extent such distributions are treated as “excess distributions” under the U.S. federal income tax rules relating to PFICs.  U.S. Holders could potentially mitigate such consequences by making certain elections with respect to the Cream common shares.  U.S. Holders are urged to consult their tax advisors regarding Cream’s PFIC classification, the consequences to them if Cream is a PFIC, and the availability and the consequences of making certain elections to mitigate such consequences.  (See Item 10 Taxation -United States Tax Consequences).
 
Cream’s stock price may limit its ability to raise additional capital by issuing common shares.  The low price of Cream’s common shares also limits Cream’s ability to raise additional capital by issuing additional shares.  There are several reasons for this effect.  First, the internal policies of certain institutional investors prohibit the purchase of low-priced stocks.  Second, many brokerage houses do not permit low-priced stocks to be used as collateral for margin accounts or to be purchased on margin.  Third, some brokerage house policies and practices tend to discourage individual brokers from dealing in low-priced stocks.  Finally, broker’s commissions on low-priced stocks usually represent a higher percentage of the stock price than commissions on higher priced stocks.  As a result, Cream’s shareholders pay transaction costs that are a higher percentage of their total share value than if Cream’s share price were substantially higher.
 
The liquidity of Cream’s shares in the United States markets may be limited or more difficult to effectuate because Cream is a “Penny Stock” issuer.  Cream’s stock is subject to U.S. “Penny Stock” rules which make the stock more difficult for U.S. shareholders to trade on the open market.  The SEC has adopted rules that regulate broker-dealer practices in connection with transactions in “penny” stocks.  Penny stocks are equity securities with a price of less than US$5.00 per share, other than securities registered on certain national securities exchanges or quoted on the NASDAQ system provided that current prices and volume information with respect to transactions in such securities is provided by the exchange or system.
 
The Penny Stock Rules require a broker-dealer, prior to effecting a transaction in a penny stock not otherwise exempt from such rules, to deliver a standardized risk disclosure document prepared by the SEC that provides information about penny stocks and the nature and level of risks in the penny stock market.
 
 
 
In addition, the Penny Stock Rules require that prior to a transaction in a penny stock not otherwise exempt from such rules the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written acknowledgment of the receipt of a risk disclosure statement, a written agreement to transactions involving penny stocks, and a signed and dated copy of a written suitability statement.  At the present market prices, Cream’s common shares will (and in the foreseeable future are expected to continue to) fall within the definition of a penny stock.  Accordingly, United States broker-dealers trading in Cream’s shares will be subject to the Penny Stock Rules.  Rather than complying with those rules, some broker-dealers may refuse to attempt to sell penny stocks.  As a result, shareholders and their broker-dealers in the United States may find it more difficult to sell their shares of Cream, if a market for the shares should develop in the United States.

The market for the Company’s stock has been subject to volume and price volatility which could negatively affect a shareholder’s ability to buy or sell the Company’s shares.  The market for the common shares of the Company may be highly volatile for reasons both related to the performance of the Company or events pertaining to the industry (e.g. mineral price fluctuation/high production costs/accidents) as well as factors unrelated to the Company or its industry.

Market demand for products incorporating minerals in their manufacture fluctuates over time, resulting in a change of demand for the mineral and an attendant change in the price for the mineral.  The Company’s common shares can be expected to be subject to volatility in both price and volume arising from market expectations, announcements and press releases regarding the Company’s business, and changes in estimates and evaluations by securities analysts or other events or factors.  In the last decade, securities markets in the United States and Canada and internationally have experienced periods of high price and volume volatility, and the market prices of securities of many companies, particularly small-capitalization companies such as the Company, have experienced wide fluctuations that have not necessarily been related to the operations, performances, underlying asset values, or prospects of such companies.  For these reasons, the Company’s common shares can also be expected to be subject to volatility resulting from purely market forces over which the Company will have no control.  Further, despite the existence of a market for trading the Company’s common shares in Canada, shareholders of the Company may be unable to sell significant quantities of common shares in the public trading markets without a significant reduction in the price of the stock.  The trading price of Cream’s shares have ranged between $0.01 and $0.48 in the last five calendar years.
 
Significant potential equity dilution.  A summary of Cream’s diluted share capital at June 27, 2013 is as follows:

Number of Warrants
Exercise Price
Expiry Date
     
24,114,000
$0.10
December 20, 2013
13,036,000
$0.24
December 20, 2013
37,150,000
   

Cream had stock options outstanding (9,235,000 at March 31, 2013 and June 27, 2013), which are exercisable at prices ranging from $0.12 to $0.38 per share which are above the current market price for the Company’s shares.  In the money options could be exercised prior to expiry while the higher priced options may not be exercised before expiry.  In either case, the outstanding options could act as an upside damper on the price of Cream’s shares.   There are no shares of Cream remaining subject to hold period restrictions in Canada or the United States as of March 31, 2013 as such hold restrictions have expired.  At March 31, 2013 and at June 27, 2013 there were 37,150,000 warrants exercisable at an average price of $0.15.  The resale of outstanding shares from the exercise of dilutive securities would have a depressing effect on the market for Cream’s shares.  Dilutive securities based on the trading range of Cream’s common shares at March 31, 2013, including the warrants and the stock options noted above, collectively represent approximately 30% of Cream’s issued shares as at March 31, 2013.

In December, 2012, the Company having received all necessary regulatory approvals and the consent of all of the holders of the common share purchase warrants previously issued in connection with a private placement conducted by the Company in December, 2010 (the “Warrants”), amended the exercise price of 24,114,000 warrants from $0.24 to $0.10 and extended the exercise period from December 21, 2012 to December 20, 2013.  The expiry date of an additional 13,036,000 warrants held by insiders were extended from December 21, 2012 to December 20, 2013.  The warrant modification has been valued using the Black-Scholes model with the following assumptions:  stock price - $0.06, exercise price - $0.10, a life of 1 year, a risk-free interest rate of 1.64% and a volatility of 1.02.
 
 
 

 
A.           History and Development of the Company
 
The Company’s executive office is located at:
Suite 890-789 West Pender Street, Vancouver, British Columbia, Canada, V6C 1H2
Telephone: (604) 687-4622
Facsimile: (604) 687-4212
Email: info@creamminerals.com
Website: www.creamminerals.com
 
The contact person in Vancouver, British Columbia, is Michael O’Connor, President, CEO, and Director.
 
The mailing address of the Company is the Company’s executive office at the address noted above.  Cream operates directly and also through one wholly-owned subsidiary in Mexico, Cream Minerals de Mexico, S.A. de C.V. (“Cream de Mexico”).  References to “Cream” or to “the Company” include Cream de Mexico except where otherwise indicated.
 
The Company’s fiscal year end is March 31.
 
The Company’s common shares are listed on the TSX Venture Exchange under the symbol “CMA.”  Cream was  quoted on the Over the Counter Bulletin Board in the United States under the symbol “CRMXF”, until July 26, 2012 at which time Cream’s shares began being exclusively quoted on the OTCQB, (also under the symbol “CRMXF”)   an electronic trading platform operated by the OTC Markets Group Inc., and on the Frankfurt market under the symbol “DFL”.
 
The Company was incorporated under the laws of the Province of British Columbia, Canada as Cream Silver Mines N.P.L. on October 12, 1966, with an authorized capital of 3,000,000 shares, each having a par value of $0.50.  By Special Resolution passed on July 12, 1974, Cream cancelled its Memorandum and Articles and substituted a new Memorandum and Articles therefore providing for the limited liability of members and the increase of the authorized capital to 10,000,000 shares with a par value of $0.50 each.  By Special Resolution passed September 24, 1987, Cream again altered its Memorandum, changing its name to Cream Silver Mines Ltd. in its English form and "Mines Cream Silver Ltee." in its French form and amending its authorized share capital to 30,000,000 common shares without par value.  By Special Resolution passed September 15, 1994, Cream altered its Memorandum to consolidate its authorized and issued share capital of 30,000,000 common shares on a five-for-one basis into 6,000,000 common shares authorized, and issued common shares were consolidated from 18,707,937 common shares on a five-for-one basis into 3,741,587 common shares; to further increase its authorized capital to 50,000,000 common shares without par value (the "Common Shares"); and to change its name to Cream Minerals Ltd.  Cream has been listed on the TSX Venture Exchange (the "TSX Venture"), formerly the Vancouver Stock Exchange (“VSE”), since June 3, 1970.  The Company subsequently altered its Memorandum to increase its authorized capital to 500,000,000 common shares.
 
At Cream’s request, the VSE placed the Company on inactive status on August 12, 1994.  Cream had requested inactive status in order to reorganize its affairs after the government of the Province of British Columbia placed Cream’s Vancouver Island mineral claims adjoining those of Westmin Resources Ltd. in moratorium, and refused to grant Cream a permit to explore these claims.  The claims, in Strathcona Park on Vancouver Island, were placed in moratorium in connection with the Strathcona Park area being declared a provincial park in 1972.  These actions by the provincial government left Cream with no viable project at the time and with little working capital.  The claims currently remain in moratorium.  Throughout the early to mid-1970s, Cream initiated several court cases seeking compensation for these claims.  The matter was ultimately decided by a decision of the British Columbia Court of Appeal denying Cream’s right to compensation.  Leave to appeal this decision to the Supreme Court of Canada was refused and Cream was then advised that it was without further legal recourse with respect to its Vancouver Island claims.  The British Columbia Court of Appeal specifically overruled its previous decision in the Cream case.  The Company reviewed its legal position in the light of this development, but has been advised that it remains bound by the previous decision.
 
Following Cream’s entry into inactive status, Cream embarked on a reorganization program that included a consolidation of its issued and outstanding share capital and subsequent increase of authorized capital (as described
 
 
 
 
above); a restructuring of the board of directors and appointment of new officers; a review of its financial affairs which included completing two private placements for the issuance of a total of 680,000 units, each consisting of one common share and one warrant, at a price of $0.35 per unit, which raised a total of $231,000; and a review of its property holdings.  During Cream’s inactive period, certain of its claim groups in British Columbia were allowed to lapse, and others were sold off.  Following completion of this reorganization, Cream resumed active status on April 11, 1996.
 
Effective March 29, 2004, the Company Act (British Columbia) was replaced by the Business Corporations Act (British Columbia).  The Business Corporations Act (British Columbia) does not require a company’s Notice of Articles to contain a numerical limit on the authorized capital with respect to each class of shares.  Effective September 21, 2004, the Company altered the authorized capital of the Company from 500,000,000 shares without par value to an unlimited number of shares without par value.  By Special Resolution effective June 23, 2011, shareholders approved the adoption of new articles for Cream.  See Item 10B – Memorandum and Articles of Association.
 
Since its incorporation in 1966, the Company has been in the business of acquiring and exploring mineral properties.  For most of the past three completed years, and prior thereto, the Company has been principally attempting to locate deposits of precious metals in Mexico and the Provinces of British Columbia and Manitoba, Canada.
 
Mexico
 
The Company’s exploration project in Mexico is Nuevo Milenio, located south of Tepic in the municipality of  Xalisco, State of Nayarit, Mexico, having denounced (staked) the property in 2000 and receiving title to the property in 2001. Mineral licenses in Mexico have a term of 50 years following which an application can be made to extend the term. Carrying costs are comprised of annual taxes of approximately $50,000.  Work requirements are nominal and cash payment can be made in lieu of work requirements.
 
In 2001, Cream entered into an exploration program on Nuevo Milenio.  Cream explored the property until the year ended March 31, 2005, at which time it wrote it down by $1,523,030 to a nominal carrying value of $1.  No acquisition costs are associated with the property, as it was denounced (staked).  In 2006, the Company re-commenced exploration.
 
On July 24, 2009, the Company entered into an option agreement with Roca Mines Inc. (“Roca”) that would have allowed Roca to earn up to a 70% interest in the project.  In order to acquire a 50% legal and beneficial interest in the Nuevo Milenio, Roca was to spend a cumulative US$12,000,000 for exploration work by July 24, 2013.

On April 30, 2010, the Company signed a letter of intent (“LOI”), pursuant to which it acquired an option from an arm's length party on the Las Habas Project, comprised of 336 hectares (“Ha”) located in the State of Sinaloa, Mexico.  The LOI was for a period of three months.  The proposed option agreement outlined in the LOI called for total payments of US$1 million over a 5-year period and a 2% NSR royalty, payable out of production.  On June 1, 2010, Cream filed an application to denounce approximately 700 hectares adjoining the Las Habas property.  The Company let the LOI lapse and has not pursued title to the adjacent 700 Ha’s.  On July 22, 2010, Roca notified the Company that it was not proceeding with the option agreement and the agreement was terminated.

On December 7, 2010, Cream agreed to a bought deal financing of $5 million with the provision of an overallotment of $1 million.  The terms of the bought deal were $0.16 per unit with a full warrant exercisable at $0.24 for two years from the date of closing.  The Company subsequently closed the bought deal financing on December 21, 2010, and received gross proceeds of $6 million.

The Company initiated a 20,000 metre drill program in February 2011 which was completed in September 2011. Following completion of the drill program during calendar year 2011 (the “2011 Drill Program”), the Company engaged an independent consulting firm to prepare an independent NI 43-101-compliant resource estimate (the “2012 Report”) based on review of the Company’s previously compiled exploration data as well as exploration data collected during the 2011 Drill Program.   The 2012 Report was filed on SEDAR on October 2, 2012.

The board of directors initiated a review of Cream’s strategic alternatives intended to maximize shareholder value and a Special Committee of independent directors (the “Special Committee”) was appointed in the first quarter of the fiscal year.  Following completion of the Independent Mineral Resource the Board upon consideration of the poor market conditions and challenging financing environment for junior resource exploration companies
 
 
 
 
determined that alternatives to potentially very dilutive equity financings be considered. The review includes, but is not limited to, the sale or strategic merger of the Company, the joint venture or sale of non-core assets, or the sale or joint venture of a primary asset.

On March 25, 2013, the Company filed an independent NI 43-101 Technical Report on the Nuevo Milenio project (the “2013 Report”) co-authored by Dr. Derek McBride, P.Eng, and Al Workman of Watts, Griffis and McQuatt Limited (“WGM”). The 2013 Report replaces the 2012 Report in its entirety.  The 2013 Report addresses the concerns raised by the British Columbia Securities Commission with respect to the 2012 Report as outlined in the Company’s news release dated October 23, 2012.

The 2013 Report contains an updated independent mineral resource estimate on the Nuevo Milenio project (the “Mineral Resource Estimate”) and replaces in its entirety all previous resource estimates filed by Cream and the previous resource estimates can no longer be relied upon.
 
North America
 
British Columbia
 
The Goldsmith Property

Prior to May 6, 2013 the Company had a 100% interest in the Goldsmith Property (“Goldsmith”) (comprised of the Goldsmith and Lucky Jack Properties) located near Kaslo, British Columbia. Small scale underground mines operated on the property in the early 1900’s. Quartz veins are contained in the intrusive rocks and contain quantities of free gold. Higher grade gold mineralization was reported in the quartz veins which range in width from a few centimetres to five metres. The Company held an option to acquire a 100% interest in the Goldsmith property. The option agreement called for the issuance of 200,000 common shares (issued) and cash payments totaling $110,000 (paid) over six years. The optionors retain a 2% Net Smelter Royalty (NSR) on all metals. The Company was able to acquire 50% of the NSR for $1,000,000 upon commencement of commercial production or sooner.

The Company wrote down the carrying value of Goldsmith Property to $Nil in fiscal 2012 as there were no plans to continue exploration.  Subsequent to the year ended March 31, 2013, the Company transferred title to the Goldsmith and Lucky Jack properties to the optionors.

The Kaslo Property

The 100% owned 4,000 Ha Kaslo Silver Property (“Kaslo”), a silver target, hosts eleven historic high-grade silver mineralized zones within 14 kilometres of sub-parallel shear zones.  Nine high-grade silver-lead-zinc mines operated on Kaslo at various times from 1895 to 1966.  The property is located 12 kilometres west of Kaslo in southern British Columbia. The Company has no plans to conduct exploration work at this time.

Ms. Linda Dandy, P.Geo, of P&L Geological Services, has supervised the Company’s previous exploration programs summarized above and is the Company’s supervisor and “Qualified Person” with respect to this property for the purpose of NI 43-101.
 
Manitoba
 
The Stephens Lake and Stephens Trout Properties
 
The Company, ValGold Resources Ltd. and Sultan Minerals Inc. (the “Companies”) each hold a one third interest in two staked claims, namely the Trout and Trout 1 claims, located approximately 130 km east of Gillam, Manitoba (the “Trout Claim Group”) encompassing an area of 256 hectares.  Under the terms of the Trout Claim Group agreement, the Companies agreed to make a total cash payment of $110,000 and issue 200,001 common shares (66,667 shares in the capital of each of the three companies), all of which were issued, to the optionor over a 36-month period from July 22, 2004.  Upon earning its 75.0% interest, the Companies and the optionor would enter into a 75:25 joint venture for the further exploration and development of the Trout Claim Group.  The joint venture agreement has not yet been completed.  The Companies have reduced the claims and are reviewing their options with respect to the property.  The carrying value of the property has been written down to $Nil.
The Wine Property
 
Prior to April 22, 2013 the Company held a 100% interest in the Wine Claim (comprised of the Wine and Wine 1 claims) located approximately 60 kilometres south of Flin Flon, Manitoba.  The Wine claim is a high grade nickel-copper target.  During fiscal 2007 and in fiscal 2008, the Company entered into option agreements to acquire up to 100% interest in two mineral property interests in the Province of Manitoba, the Wine claims and the Grand Nickel Project.  In March 2006, the Company entered into an option agreement, subsequently amended, to acquire 100% interest in the Wine Claim, MB 3964 and Wine 1 Claim (the “Wine” claims), all located approximately 60 km southeast of Flin Flon, Manitoba.  The Company earned its interest by making payments totaling $105,000 (paid) and issuing 200,000 common shares over a 48-month period (issued).  The Company also incurred required exploration expenditures on the property of $5,000 annually for four years.  On completion of these obligations, the property was subject only to a 2.0% NSR royalty payable to the optionor from the production of gold, silver and all base metals and other minerals.  The Company had the right to reduce the NSR royalty to 1.0% by the payment of $1,000,000 to the optionor at any time up to and including the commencement of commercial production.
 
Subsequent to the year ended March 31, 2013 the Company sold the Wine Claim Property to the optionor for the amount of $50,000 cash.
 
In October 2007, the Company entered into an agreement to acquire 100% interest in the Grand Nickel Project, being the Cedar 1, MB7355 and MEL 324B claims (the “Cedar” claims), located in the Thompson Nickel Belt, approximately 40 km north-west of the town of Grand Rapids, Manitoba.  After a short exploration program, the Company determined that the property did not meet its expectations, returned the property to the optionor and recorded a write-down of acquisition costs of $34,250 in fiscal 2009.  The Grand Nickel project was written off in the year ended March 31, 2009.

The Blueberry Property

In November 2009, the Company entered into an option agreement to acquire the Blueberry property from W.S. Ferreira Ltd. and the Company staked additional claims which have been appended to the option agreement.  The property is located approximately 20 km north-east of Flin Flon, Manitoba.  The option agreement provided for a cash payment of $100,000 ($40,000 paid) and the issuance of 400,000 shares (160,000 issued) over five years with a down payment of $10,000 (paid).  The cash payments were to be made as follows:  $10,000 on regulatory approval (paid), $10,000 on the first anniversary (paid), and $20,000 on each of the second (paid) to the fifth anniversary dates.  The shares were to be issued as follows:  40,000 on regulatory approval (completed) and 40,000 on the first anniversary of regulatory approval (completed), and 80,000 common shares on each of the second (completed) to the fifth anniversary dates.
 
The Company was required to incur cumulative exploration expenditures totaling $30,000 following the date of regulatory approval, commencing with expenditures of $5,000 prior to the first anniversary date and a minimum of $5,000 annually by each anniversary date on or prior to the fifth anniversary.  The total incurred to March 31, 2013 was $156,411.  On completion of these obligations, the property will be subject only to a 2.0% NSR royalty payable to the optionor from the production of gold, silver and all base metals and other minerals.  The Company had the right to reduce the NSR royalty to 1.0% by the payment of $1,000,000 to the optionor at any time up to and including the commencement of commercial production.
 
In November 2012 the Company elected not to make the required $20,000 option payment and issue 80,000 common shares to the optionor. Title to the Blueberry Property has since been transferred to the optionor. In addition, title to the Blue 1 to Blue 4 claims which were staked following the optioning of the Blueberry Property have been assigned to the optionor as these claims were appended to the original option agreement.
 
 

 
B.           Business Overview
 
General
 
 
(i)
Nature of Company:
 
Cream has historically been a mineral exploration company.  The Company is currently focused on exploration and development of Silver-Gold properties. Cream has an Silver-Gold exploration property in Mexico and a portfolio of early-stage mineral exploration projects in British Columbia and Manitoba that may contain silver, gold, and other mineralization.  These properties have been explored by a number of companies over the years, with further work being completed by Cream since their acquisition.

 
(i)
Principal Markets:  Not Applicable.
 
 
(ii)
Seasonality:  Not Applicable.
 
 
(iii)
Raw Materials:  Not Applicable.
 
 
(iv)
Marketing Channels:  Not Applicable.
 
 
(v)
Dependence:  Not Applicable.
 
 
(vi)
Competitive Position: Not Applicable.
 
 
(vii)
Material Effect of Government Regulation:  The Company’s exploration activities and its potential mining and processing operations are subject to various laws governing land use, the protection of the environment, prospecting, development, production, contractor availability, commodity prices, exports, taxes, labour standards, occupational safety and health, waste disposal, toxic substances, safety and other matters.  The Company believes it is in substantial compliance with all material laws and regulations which currently apply to its activities.  There is no assurance that the Company will be able to obtain all permits required for exploration, any future development and construction of mining facilities and conduct of mining operations on reasonable terms or that new legislation or modifications to existing legislation, would not have an adverse effect on any exploration or mining project which the Company might undertake.
 
Nuevo Milenio Project, Mexico

Cream began exploring the Nuevo Milenio Silver-Gold Project in 2001.  Exploration work continued to September 2011. Since that time the property has been on care and maintenance.  Two limited drill programs were completed, one in 2003 and the second in 2006/2007.  Cream began a significant diamond drill program on February 6, 2011, which ended in September 2011.
 
The Company has obtained an independent NI 43-101 Technical Report encompassing all historical data and the data acquired during the 2011 drill program.

The Company has no plans to complete further exploration work on its properties in the immediate future.

C.           Organizational Structure

The Company has one direct subsidiary, Cream Minerals de Mexico, S.A. de C.V., incorporated in Mexico.  Unless the context otherwise requires, references herein to the “Company” or “Cream” includes the subsidiary of the Company.

D.           Property, Plant and Equipment

The Company has mineral exploration interests in two properties: the Nuevo Milenio Project (Mexico) and the Kaslo Property (British Columbia), as well as a joint interest in the Trout Claims.
 
 
 
 
The Company’s mineral property interests in Canada and Mexico are in good standing and all payments on the properties are up to date.
 
None of the Company’s projects have known reserves, and exploration work is exploratory in nature.  The Nuevo Milenio Project has an Indicated and Inferred Mineral Resource estimate in accordance with Canadian National Instrument 43-101 Standards of Disclosure for Mineral Projects ("NI 43-101").

Nuevo Milenio Project

The Nuevo Milenio Property is in Nayarit State, Mexico, and is hosted by a sequence of intermediate to felsic lithic tuff’s, ash tuffs and ash flow and breccias within a large collapsed caldera setting.  The property encompasses 2,612.50  Ha’s and is 100% owned by the Company.

History of the Property
 
In 2000, Cream entered into an exploration program on Nuevo Milenio.  Work on the property began in 2001 and until 2004 was focused on the Eastern rim of the caldera and associated areas.  In the year ended March 31, 2005, the Company determined that it was not going to conduct further exploration on the property for  the foreseeable future and as a result the property exploration costs were written down to a nominal carrying value of $1.  Nuevo Milenio originally consisted of 4 lots encompassing 6927.8482 Ha’s. and was denounced in February 2000 by Arnoldo Carrera Gamboa on behalf of Cream.  Titles to the lots were received in February 2001 with the agreements to transfer the lots to Cream signed in 2003 and registered with the Department of Mines with Cream  as beneficiary.  In June 2005, an application to reduce Nuevo Milenio Fraccion 1 and to drop CMM II was filed with the Department of Mines.  The remaining lot comprised 2,560 Ha’s of the property. Since that time small lots contained within Nuevo Milenio have been denounced as the owners let their title lapse resulting in the increase the current size of 2,612.50 Ha.’s.

Accessibility, Climate, Local Resources, Infrastructure and Physiography
 
Nuevo Milenio is located southeast of the city of Tepic in the State of Nayarit, Mexico.  Nuevo Milenio is 27 kms by road (24 kms by highway, 3 kms by dirt road) from Tepic, the capital of Nayarit State, Mexico.  Tepic has a population of approximately 300,000 people, and is an important commercial centre.  It is 150 km’s northeast of Puerto Vallarta.   A railway, airport, power lines and water are within reasonable distance of the property providing cost-effective access to infrastructure.

Regional, Local and Property Geology
 
Nuevo Milenio is located in the Sierra Madre Occidental Geological Province which extends from the United States Mexican border south to Guadalajara. Magmatic activity, which includes the emplacement of intrusions into the upper crust as well as eruptive activity, occurs as the result of the subduction of the Pacific (Faralon) Plate under the North American Plate. The Faralon Plate has been shown to be descending on an angle of approximately 50 degrees at a rate of 3-4 cm per year. The Sierra Madre Occidental Geological Province is adjoined on its south-western flank by the Jalisco Block, segment of crust bordered by the Pacific Plate to the West and a series of pull-apart basins (grabens or rifts) to the northeast and southeast. The pull-apart activity has been responsible for detaching the Jalisco Block from the North American Plate, and it now acts as a separate floating segment of crust bordered by the Colima rift to the east and the Tepci-Zacoalco rift to the north. The grabens are controlled by steeply dipping normal faults. These faults and related structures act as important controls on the development of gold and silver bearing vein systems.

The Sierra Madre Occidental Geological Province abuts the east-west trending Trans-Mexican volcanic belt which is of a similar age. The Trans-Mexican volcanic belt hosts several silver-gold deposits including the Deloro, Gammon Lake and O’Campa.

Regionally, the basement rocks seem to be vertically dipping, well bedded, deeply weathered mafic tuffs which are exposed along the western margin of the property and may be part of the Jalisco Block. They can be traced to within 200 m of the flat lying Nuevo Milenio sequence of felsic volcanic rock and appear to continue beneath it.

The Nuevo Milenio mineralized lapilli tuff-agglomerate terminates in a sinter zone and is capped by finely bedded ignimbritic units of fine-grained welded, ash fall tuffs. These two units make up the Nuevo Milenio sequence which
 
 
 
is surrounded by volcanic rocks of the San Pedro-Ceboruco Graben. These rocks are much younger and were deposited in a graben within the Sierra Madre Occidental rocks.

Major faulting has been identified in the graben, in north-south and west-northwest directions and may be present in the mineralized sequence. East-northeast faulting has been reported from the property and appears to offset sections of the mineralized structures. The extent of these faults and their displacements is unknown however, the thick ash fall tuff unit that forms the hanging wall of the deposits does not seem to be significantly displaced.

Nuevo Milenio is a low sulphidation, epithermal precious metal prospect containing silver-gold mineralization in quartz vein and quartz stock work zones.  The project is hosted by a sequence of intermediate to felsic lithic tuffs, ash tuffs, ash flows and breccias - within a large collapsed caldera setting.  The collapsed caldera is set in an area of Micocene volcanics .  Younger rhyolite domes and basalt vents define volcanic centres along the Caldera rim. Three principal northwest trending zones have been identified on the property, Veta Tomas-Dos Hornos, Once Bocas North-Once Bocas South and Chacuaco-Cafetal.

Economically interesting epithermal silver-gold mineralization of the low sulphidation type occurs in steeply dipping, laminated to vuggy quartz veins and stockworks that are exclusively hosted by a lapilli tuff-agglomerate formation.  Surface mapping has identified numerous vein-systems, Dos Hornos 1 and 2, Veta Tomas, Once Bocas, Cafetal and Chacuaco, which define three continuous structures striking northwest to southeast across the property.  The structures that control mineralization extend beyond their explored length and pass under younger volcanic tuffs and flows which have not been explored in any detail.  Disseminated mineralization occurs with variable amounts of fine-grained sulphide, mainly pyrite, which become scarcer in the upper portions of the geothermal system.  The near-surface portions of the deposits were mined during the Spanish colonial period.
 
Exploration

Historic Drilling

Drilling was first commenced in the spring of 2002. The program was comprised of five drill holes totaling 726 metres. A follow-up drill program was initiated in November 2003 and was completed in April 2004. The program consisted of 19 drill holes totaling 3,544 metres.
 
A report prepared in late 2005 recommended further work, and an additional $59,655 in exploration costs were written off  in the first half of the year ended March 31, 2006,
 
Drilling re-commenced on the Dos Hornos zone in late 2006.  In January 2007, the focus of the drill program was shifted to in-fill drilling followed by drill testing the segment between Section 5 (Trench 3) to Section 12 (Mina Santa Gertrudis).  The Company completed 31 diamond drill holes along the Dos Hornos 1 zone for a total of approximately 5,200 metres.  Diamond drilling established that additional “Inferred Mineral Resources” are located within Dos Hornos 1, Dos Hornos 2 and Veta Tomas, a newly defined and higher grade vein.
 
In May of 2009, Cream outlined a revised, staged underground development plan. The intention was to stage underground diamond drilling and begin upgrading the inferred mineral resources to the measured and indicated categories as well as to add additional inferred mineral resources.

In support of the revised underground development plan, Cream initiated the required environmental studies, including biological, hydrological and land use, as well as a survey of the proposed area for the portal.  The Company did not pursue completion of the environmental permits and negotiations to secure surface rights or commence work on a planned cross-cut due to the signing of an option agreement with Roca Mines Inc. (“Roca”) effective July 24, 2009.

In May 2009, Cream announced that a channel sample taken just inside a recently discovered historic Spanish working on Cerro Dos Pinos, which is located approximately 500 metres southeast of the high-grade silver-gold Veta Tomas vein, yielded assays of 0.95 g/t Au and 452 g/t Ag respectively.

Cerro Dos Pinos lies approximately 500 metres southeast of drill hole DDH 07 – 23 which was drilled on the Veta Tomas Structure.  The Company believes that the new discovery is a probable fault segment of the high-grade silver-gold Veta Tomas Structure that could extend the known strike length of the Veta Tomas - Dos Hornos zones
 
 
 
from 1,200 metres to approximately 1,800 metres.  The historic Spanish adit, 1.60 metres wide and caved, was driven on a quartz vein structure outcropping within a window of younger devitrified rhyolite flows.
 
On July 24, 2009, the Company entered into an option agreement with Roca that would have allowed Roca to earn up to a 70% interest in the Nuevo Milenio Project.  On July 22, 2010, Roca notified the Company that it would not be preceding with the option agreement, and the agreement was terminated.
 
Roca’s drill program consisted of approximately 1,000 metres of diamond drilling on Dos Hornos 1, Dos Hornos 2, Veta Tomas and Once Bocas.  Five holes were drilled with the intention of twinning existing Cream holes. Drill results largely confirmed the results obtained by Cream.

2011 Exploration and Drilling Program

Cream began a diamond drill program on February 6, 2011.  The 2011 drill program called for 10,000 metres of drilling with an option for a second 10,000 metres of drilling.  The first 10,000 metres of drilling was completed in mid-May. The Company elected to exercise its option for the second 10,000 metres of drilling. The Company completed the drill program at Nuevo Milenio in late September 2011.

The objective of the drill program was three fold:
 
 
1.
At Dos Hornos 1, Dos Hornos 2 and Veta Tomas conduct in-fill drilling to upgrade the reported Inferred Mineral Resources.
 
 
2.
At Once Bocas North conduct drilling to define the known 100 metre wide quartz vein - quartz stock work zone and to confirm its possible open pit potential, including in-fill drilling to delineate the potential of the higher grade vein structures.
 
 
3.
Step-out drilling to test known extensions of Once Bocas North,  Once Bocas South, the Chacuaco open pit potential and high grade quartz vein potential, and the Cafetal South vein structures.
 
Sampling and Analysis

As of September 19, 2011, 89 drill holes were completed for a total of 20,292 metres of drilling at Nuevo Milenio and completed the 2011 diamond drill program. Of the 20,292 metres drilled 13,500 were of in-fill drilling and 6,792 were of exploration drilling.
 
Quality Control and Data Verification
 
Ferdinand Holcapek, Sole Administrator and   Director General of Cream Minerals de Mexico, S.A, de C.V. is the Company's qualified person responsible for the Company's quality control and quality assurance program and has verified technical data.  Details of the Company's quality assurance and quality control program are contained in NI 43-101 Technical Report dated March 20, 2013 and filed on SEDAR on March 25, 2013.
 
All data disclosed in this document was obtained from previously issued Cream news releases and the NI-43-101 Technical Report dated March 20, 2013 and filed on SEDAR on March 25, 2013. The 2013 Report and the Mineral Resource Estimate contained herein was prepared by or under the supervision of Al Workman, P.Geo., Vice-President of WGM, who is responsible for the Current Mineral Resource estimate for the Nuevo Milenio Project.  Mr. Workman and senior WGM Associate, Mr. Derek McBride, P.Eng.,who are the Independent Qualified Persons within the meaning of NI 43-101.

Gold-Silver Mineral Resource and Mineral Reserve Estimates

Cautionary Note to U.S. Investors concerning estimates of Measured and Indicated Resources

This section uses the terms “measured” and “indicated resources.”  We advise U.S. investors that while those terms are recognized and required by Canadian regulations, the U.S. Securities and Exchange Commission does not recognize them.  U.S. investors are cautioned not to assume that any part or all of mineral deposits in these categories will ever be converted into reserves.



Cautionary Note to U.S. Investors concerning estimates of Inferred Resources

This section uses the term “inferred resources.”  We advise U.S. investors that while this term is recognized and required by Canadian regulations, the U.S. Securities and Exchange Commission does not recognize it.  “Inferred resources” have a great amount of uncertainty as to their existence, and great uncertainty as to their economic and legal feasibility.  It cannot be assumed that all or any part of an Inferred Mineral Resource will ever be upgraded to a higher category.  Under Canadian rules, estimates of Inferred Mineral Resources may not form the basis of feasibility or pre-feasibility studies, except in rare cases.  U.S. investors are cautioned not to assume that part or all of an inferred resource exists, or is economically or legally mineable.  See Page 5 of this Annual Report for information relating to Inferred Resources.

Following completion of the 2011 Drill Program, the Company engaged an independent consulting firm to prepare an independent NI 43-101-compliant resource estimate based on review of the Company’s previously compiled exploration data as well as exploration data collected during the 2011 Drill Program.   The 2012 Report was filed on SEDAR on October 2, 2012.

On March 25, 2013, the Company filed an independent NI 43-101 Technical Report on the Nuevo Milenio project co-authored by Dr. Derek McBride, P.Eng, and Al Workman of WGM. The 2013 Report replaces in entirety the 2012 Report.  The 2013 Report addresses the concerns raised by the British Columbia Securities Commission with respect to the 2012 Report as outlined in the Company’s news release dated October 23, 2012.  WGM is Canada’s longest running independent firm of geological and mining consultants providing value-added professional services to the global mineral resource industry. WGM’s expertise includes Mineral resource and reserve estimates, NI 43-101 and JORC technical reports, project management, property valuations and due diligence reviews.

The 2013 Report contains an updated independent mineral resource estimate on the Nuevo Milenio project and replaces in its entirety all previous resource estimates filed by Cream.  The previous resource estimates can no longer be relied upon.

Independent Mineral Resource Estimate Summary

The 2013 Report by WGM provides an estimate of the Mineral Resource Estimate on Cream’s Nuevo Milenio property with individual estimates for each of the Dos Hornos 1, Dos Hornos 2, Veta Tomas and Once Bocas North zones.  These estimates incorporate both gold and silver mineralization and are based on the drill hole database spanning approximately 10 years of drilling.  The estimates were prepared from a polygonal model using a C$:US$ exchange rate of par (1:1) and on the following metal prices in US dollars per ounce:  Au at $1635.00 and Ag at $31.50 as established at the close of trading on February 7, 2013.  Gold and silver assays and metal prices were also used to calculate equivalent-silver grades.  WGM’s review of the assay data indicates that extreme high-grade assays (nuggets) are rare in the assay database.  High grade silver assays were cut to 1,000 g Ag/t.  No assay cutting was required for gold values.  A minimum true thickness of 1.5 metres (5.7 feet) was imposed on intersections to qualify as Mineral Resources.  WGM’s base case estimate of the Mineral Resources used a minimum cut-off grade of $75 contained value in silver and gold.  The resources were estimated without consideration for metal recoveries and were classified in compliance with NI 43-101.  The Mineral Resources for the project in accordance with WGM’s base case cut-off are summarized as follows.
 

 



Summary of Nuevo Milenio Project Mineral Resource Estimates
(using grade cut-off equivalent to US $75/tonne Au-Ag value)

               
Average Grade
   
Equivalent Silver Grade
 
Zone and
Resource Class
 
Tonnes
   
Thickness
(avg. m.)
   
g Ag/t
   
g Au/t
   
Ageq
(g/t)
 
Dos Hornos 1
                             
Indicated Resources
    268,116       4.80       164       0.66       198  
Inferred Resources
    80,594       4.60       155       0.75       194  
Dos Hornos 2
                                       
Indicated Resources
    335,887       7.92       124       1.00       175  
Inferred Resources
    183,107       5.79       107       1.00       164  
Veta Tomas
                                       
Indicated Resources
    278,967       5.70       173       0.87       199  
Inferred Resources
    156,185       4.76       126       0.82       166  
Once Bocas North
                                       
Indicated Resources
    223,783       8.95       112       0.63       145  
Inferred Resources
    117,949       9.68       119       0.70       155  
All Zone Segments
                                       
Indicated Resources
    1,106,753       6.81       144       0.81       181  
Inferred Resources
    537,835       6.17       122       0.84       167  

Notes:
1.
Mineral Resources which are not Mineral Reserves do not have demonstrated economic viability.  Mineral Resources may be         materially affected by environmental, permitting, legal, title, taxation, socio-political, marketing, or other relevant issues.
 
2.
The quantity and grade of reported Inferred Resources in this estimation are uncertain in nature and there has been insufficient exploration to define these Inferred Resources as an Indicated or Measured Mineral Resource and it is uncertain if further exploration will result in upgrading them to an Indicated or Measured Mineral Resource category.
 
3.
The Mineral Resources were estimated using the Canadian Institute of Mining, Metallurgy and Petroleum standards on Mineral Resources and Reserves, Definitions and Guidelines prepared by the CIM Standing Committee on Reserve Definitions and adopted by CIM Council December 11, 2005.
 
4.
S.G. of 2.65 tonnes/m3 was used.
 
5.
Tonnage and contained Ag and Au are rounded to nearest thousand or thousandth.  Totals may not add up due to rounding

Sensitivity Analysis
 
Sensitivity analysis demonstrates that the Mineral Resource Estimate is not greatly affected by $10 value changes in the cut-off grade.  This is a consequence of a general lack of shoulders to the mineralization on most sections.  It is possible that a substantial reduction of the cut-off grade to, for example $50 of gold and silver value would bring additional sub-zones into Mineral Resource Estimate. However WGM believes that it would be difficult to mine such grades at a profit.  Additional resources might be forthcoming if those portions of the deposit amenable to open-cut mining were modeled  separately, however it is WGM’s view that such operations would not substantially alter the current resource total because the average true thickness of all zones contributing to the base case Mineral Resources Estimate is in excess of 6 m.

The 2013 Report and the Mineral Resource Estimate contained therein was prepared by or under the supervision of Al Workman, P.Geo., Vice-President of WGM, who is responsible for the Current Mineral Resource estimate for the Nuevo Milenio Project.  Mr. Workman and senior WGM Associate, Mr. Derek McBride, P.Eng.,who are the Independent Qualified Persons within the meaning of NI 43-101.

Measurement uncertainty and impairment assessments
 
Mineral resources estimates are inherently uncertain.  See "Item 3D - Risk Factors - Risks Associated with Mineral Exploration".
 
 
 
Cream is in the exploration stage on its mineral property interests, and has expensed its exploration costs.  The mineral property costs that are capitalized relate to mineral property acquisition costs.  At March 31, 2013, the carrying value of mineral property interests was $Nil.  To the extent that the cumulative exploration amounts expensed to date were significantly in excess of the property carrying value and in the absence of negative exploration results or a decision to abandon the property management has concluded that the fair values of the properties is at least equal to or greater than its book value.
 
In addition, the Company re-evaluates the carrying values of equipment when events or changes in circumstance indicate that carrying values may not be recoverable.  If it is determined that the estimated net recoverable amount based on non-discounted cash flows is less than the carrying value, a write-down to the estimated fair value is made by a charge to earnings.  Where estimates of future cash flows are not available and where other conditions suggest impairment, management assesses whether the carrying value can be recovered.
 
The Company completed an impairment assessment for each of its mineral property interests for the year ended March 31, 2013 and wrote down the remaining carrying value of $97,080.  Although management believes that estimates applied in these impairment assessments are reasonable, such estimates are subject to significant measurement uncertainty and judgments.

Exploration Expenditures
 
Expenditures incurred by the Company on Nuevo Milenio in fiscal 2013 (fiscal 2012 numbers in parentheses) include the following: assays and analysis - $2,624 ($142,656); drilling – $Nil ($1,997,886); geological and geophysical - $382,860 ($284,690); site activities - $302,995 ($277,023) and travel and accommodation- $17,707 ($19,537).

Project Schedule

The Company has suspended all exploration activity at Nuevo Milenio and placed the property on care and maintenance.  The Company will continue to keep the property in good standing by paying all property taxes and ensuring all State and Federal Mexican government regulations are adhered to and all required reports are filed on time.  In addition, access to the property will be maintained to facilitate site visits.

Exploration Projects, British Columbia Properties

The Company has two early-stage exploration projects in British Columbia, Canada.  The locations are shown on the map below, with details of the projects following.

Exploration activities on the Kaslo and Goldsmith properties have been planned and carried out under the supervision of Linda Dandy, P.Geo, and Perry Grunenberg, P. Geo both “Qualified Persons” for the purpose of NI 43-101, “Standards of Disclosure for Mineral Projects”.

Kaslo Property, British Columbia

Introduction

The Kaslo property is without known mineral resources and reserves and the proposed programs are exploratory in nature.  In fiscal 2012, the Company wrote down the value of the property to $nil.

Property Location and Geology
 
The 100% owned property encompasses nine former high-grade silver-lead-zinc historic small scale mines located in southeastern British Columbia, Canada.  The various mines operated at different times during the period from 1895 to 1966.  The property currently consists of 7 modified grid claims, 13 crown grants, 8 reverted crown grants, 37 two-post claims and one mining lease of three units, for a total 160 units.
 
In October 2004 Cream commenced a diamond drill program on Kaslo.  This two-hole drill program was designed to test the lateral and down dip extensions of the high grade silver mineralization found within the strongly faulted Silver Bear shear structure.  Diamond drilling was suspended after attempts to drill through the highly mineralized fault zone were unsuccessful.  The initial drill hole was abandoned at 34 metres when the drill proved incapable of coring the shear zone.  A second steeper angled drill hole was successful in intersecting the hanging wall of the
 
 
 
mineralized shear structure.  However, the second hole did not penetrate the entire width of the shear zone and did not intersect the high-grade footwall mineralization.
 
Prior drilling by Cream in 1998 returned values up to 2,271 g/t silver over 0.51 metres within a 3.25 metre interval that assayed 390.05 g/t silver from drill hole 98SB-05.  The highest silver values intersected in the previous drill program were obtained from the strongest part of the shear zone tested during that program.  These step-out holes intersected what appears to be broader and more intense shearing that may be related to higher-grade silver values.
 
Location and Access
 
The 4,000-hectare property is located 12 km west of the town of Kaslo in southern British Columbia.  Access to the property is via Highway 31A for seven km west from Kaslo, then 4.5 km southwest along Keen Creek Road to the property boundary.  The property lies along the Keen Creek Road for approximately 10 km.  Logging roads and numerous old mining roads and trails, some of which are heavily overgrown, bisect the property.  Power lines come to within 4 km of the property boundary, and water is abundant throughout.
 
GRAPHIC
 
Physiography
 
Kaslo is located in an area of rugged mountainous terrain.  Topography on the property is steep with elevations ranging from 1,050 metres along the Keen Creek valley to 2,200 metres on the Gold Cure ridge.
 
The Keen Creek valley runs along the northwest boundary of the property, with numerous tributaries crossing the property and emptying into Keen Creek.  The major tributaries, from northeast to southwest are Ben Hur, Briggs, Klawala, Kyawats and Desmond Creeks.
 
History
 
Kaslo includes nine former, small mines, which were originally discovered and worked for high-grade silver ores during the heyday of the Slocan Mining Camp at the end of the 19th century.  Intermittent exploration, development and production have taken place at various locations on the property since that time, most notably in the 1920s and 1950s.  The Cork-Province Mine was consolidated in 1914 and was the longest-lived producer in the camp when it closed in 1966.  Five former workings, the Silver Bear, Hartford, Gibson, Gold Cure, and Bismark are situated along the Gold Cure Shear zone, which has been traced northeast across the property for 7.1 km.  Five additional workings, the Black Bear, Cork, Province, Dublin and Black Fox workings lie along the parallel 4.1 km long Cork Shear zone, located in the Keen Creek valley approximately 1 km north of the Gold Cure Shear zone.  Both shears are open along strike to the north and at depth.
 
Geophysics
 
Since it acquired the property, Cream has completed 51.7 km of VLF-EM geophysical coverage over the mineralized Cork and Gold Cure Shear zones.  The geophysical surveys clearly define the location and extent of the controlling shears, as they are very conductive by nature.
 
 
 
 
In 1999, a gravity geophysical survey was conducted over the Cork North zone to define which of the several limestone beds have the best potential to host massive sulphide mineralization.  Targets generated by the gravity survey have not been drill tested.

Geochemistry
 
Soil geochemical surveys have been completed over the length of the Cork and Gold Cure Shear zones.  Linear trends of anomalous values for silver, lead and zinc in soil have been found running coincident with the shear zones.  Occasionally gold, arsenic, cadmium and other elements occur with the silver, lead and zinc anomalies.
 
Black Bear Group of Claims
 
For a description of Cream’s interest in this property, see “Kaslo Silver Property” under Item 4 above.
 
Location and Access
 
The Black Bear claims are located immediately north of and are contiguous with the Bismark Claims.  The property is composed of a three-claim mining lease and three reverted, crown-granted mineral claims situated just 600 metres along strike to the north of the former Cork-Province Mine on the adjacent Bismark Claims.  The Black Bear claims can be accessed through the Kaslo property, which is located 12 km west of the town of Kaslo in southern British Columbia.  Access to Kaslo is via Highway 31A for 7 km west from Kaslo, then 4.5 km southwest along Keen Creek Road to the property boundary.
 
History
 
The property encompasses three former silver producers, the Mastodon, Liberty, and Black Bear workings.  The Mastodon and Liberty workings were discovered and operated in the late 1890s.  The Black Bear was probably discovered at the same time but the only government reports of this occurrence are from 1920 when the mine was rehabilitated to explore a 48-centimetre wide vein that yielded 2.74 g/t gold, 181.7 g/t silver, 15.0% lead and 3.6% zinc.
 
The Liberty and Mastodon workings were on adjacent crown grants that were initially worked in 1899.  Workings consist of eight or more short adits and shafts that explore two or more fissure-vein lodes striking northeast and in part conforming with the structure of the host metasediments.  Exploration completed by Cream in 1997 on the adjacent Bismark Claims suggests that the Black Bear workings are probably hosted by the same shear structure that hosts the Cork-Province Mine.  The Liberty and Mastodon workings are believed to be on parallel structures.
 
Cream completed a preliminary program of geological mapping, geochemical surveys, VLF electro-magnetometre surveys, a reconnaissance gravity geophysical survey, excavator trenching and 110 metres of diamond drilling in three short holes over the Black Bear Claims in 1998 and 1999.  The trenching program successfully encountered several small massive sulphide bodies that were tested with three short, wide spaced, diamond drill holes.  Sulphides were primarily pyrite, arsenopyrite and sphalerite containing low-grade silver values.
 
Black Fox Claims
 
In June 1998, Cream purchased a 100% interest in the Black Fox Claims located near Kaslo, British Columbia.  The property comprises three crown-granted mineral claims:  the Daisy, Black Fox and California.  The former Black Fox mine workings are located on the Daisy Claim, immediately adjacent to the Cork-Province area on Cream’s Bismark Claims.  The claims lie on the southwest extension of the Cork Shear zone.
 
There was no material work carried out on the property in fiscal 2003 or 2004 as Cream did not have sufficient working capital to conduct a full-scale exploration program on the properties that make up Kaslo.  As a result, in 2003, Cream wrote down deferred acquisition and exploration costs to a nominal carrying value of $1 to reflect the extended period of inactivity on the property.  The claims remain in good standing and the property is considered a long-term asset of the Company.  Exploration costs incurred since the year ended March 31, 2005, to March 31, 2008 of $162,099 have been expensed.  Additional costs of $359 were expensed in fiscal 2009.  The property was written down to $Nil during fiscal 2012.


 
Proposed Exploration
 
No significant exploration work is proposed for fiscal 2014.
 
Ms. Linda Dandy, P.Geo. of P&L Geological Services, has supervised the Company’s Canadian exploration programs summarized above and is the Company’s supervisor and “Qualified Person” for the purpose of NI 43-101.
 
Goldsmith Property, British Columbia
 
Subsequent to the year ended March 31, 2013, the Company transferred title to the Goldsmith and Lucky Jack properties to the optionors.

Exploration Projects, Manitoba Properties
 
GRAPHIC
 
Blueberry Property, Manitoba
 
In November 2012 the Company elected not to make the required $20,000 option payment and issuance of 80,000 common shares to the optionor.  Title to the Blueberry Property has since been transferred to the optionor.  In addition title to the Blue 1 to Blue 4 claims which were staked following the optioning of Blueberry Property have also been assigned to the optionor as these claims were appended to the original option agreement.
 
Wine Nickel-Copper Property, Manitoba
 
Subsequent to the year ended March 31, 2013 the Company sold the Wine Claim to the optionor for the amount of $50,000 cash.
 
Stephens Lake Property (Trout Claim Group), Manitoba
 
The Trout Claim Group is situated 100 km east of Gillam, Manitoba.  In order to facilitate the exploration of the property, Sultan Minerals Inc., ValGold Resources Ltd., and the Company (the “Companies”), agreed to pool three respective and contiguous exploration licences, so that each would hold an undivided one-third interest in all three of the exploration licenses.  The Companies have since reduced the size of the property to the Trout Claim Group.  The Trout Claim Group was acquired under an option agreement whereby the Companies made combined cash payments totaling $110,000 and issued a combined 200,001 common shares.  Having earned the 75% interest, the Companies and the optionor  may enter into a 75:25 joint venture for the further exploration and development of the Trout Claim Group.  To date, a joint venture agreement has not been entered into.  The Companies formerly held additional claims in the province of Manitoba, which surrounded the Trout Claim Group.  These claims are no longer held by the Companies.  The Trout Claim group has been written down to a nominal carrying value of $1 as no exploration work is currently planned for this property.  The Company wrote-off the property during fiscal 2012.
 
Mr. Arthur Troup, P.Geo of Sultan Minerals Inc., is the Company’s project supervisor and “Qualified Person” for the purpose of NI 43-101.
 

 

 
Capital Expenditures and write-downs
 
Cream’s principal capital expenditures and write-downs over the two fiscal years ended March 31, 2013 and 2012, are as follows:
 
Year
 
Mineral Property Acquisitions
   
Equipment Acquisitions
   
Mineral Property Write-downs
 
2013
  $ --     $ --     $ 97,080  
2012
    32,687       22,069       440,812  

Amounts Expensed

Exploration expenses in the five fiscal years ended March 31:

Year
 
Nuevo
Milenio
   
Kaslo Silver Property, British Columbia
   
Goldsmith and Other Properties, British Columbia
   
Manitoba Properties
   
Casierra Property, Sierra Leone
   
Total
 
                                     
2013
  $ 706,186     $ 7,065    
$ Nil
    $ 3,935    
$ Nil
    $ 717,186  
2012
    2,721,792       39,027    
Nil
      2,300    
Nil
      2,763,119  
2011
    1,614,295       580       80,019       7,256    
Nil
      1,702,150  
2010     245,753       941       2,815       143,038       24,510       417,057  
2009
    365,729       359       44,649       77,481       464,771       952,989  

The Company’s sole source of funding has been the issuance of equity securities for cash, primarily through private placements to sophisticated investors and institutions.  The Company has issued common shares in each of the past few years, pursuant to private placement financings and the exercise of warrants and options.
 
 
Not applicable.
 

The following discussion and analysis should be read in conjunction with the audited consolidated financial statements of Cream for the years ended March 31, 2013 and 2012 and the related notes thereto.  Cream’s consolidated financial statements have been prepared in accordance with IFRS as issued by the IASB.

Overview

Cream is a mineral exploration company with no producing properties and consequently has no current operating income or cash flow.  All of Cream’s short to medium-term operating and exploration cash flow must be derived from external financing.

Critical accounting policies and changes in accounting policies

The preparation of financial statements requires management to establish accounting policies, estimates and assumptions that affect the timing and reported amounts of assets, liabilities, revenues and expenses.  These estimates are based upon historical experience and on various other assumptions that management believes to be reasonable under the circumstances, and require judgment on matters which are inherently uncertain.  A summary of the Company’s significant accounting policies is set out in Note 2 of the Company’s consolidated financial statements for the years ended March 31, 2013 and 2012.



Recent accounting pronouncements

A summary of recent accounting pronouncements issued which may affect the Company in the future are set out in Note 2 (p) of the Company’s consolidated financial statements for the years ended March 31, 2013 and 2012.

A.           Operating Results

Year Ended March 31, 2013 (“fiscal 2013”), Compared to Year Ended March 31, 2012 (“fiscal 2012”)

In fiscal 2013, Cream incurred a loss of $1,794,629, a loss per common share of $0.01, compared to a loss $4,883,290, a loss of $0.03 per common share in fiscal 2012.

Exploration costs of $717,186 were incurred in fiscal 2013, compared to $2,763,119 in fiscal 2012, contributing to the loss in each year.  Expenditures in fiscal 2013 by project area, with comparative figures for fiscal 2012 in parentheses are as follows: Kaslo, British Columbia - $7,065 ($39,027); Manitoba Properties, Manitoba - $3,935 ($2,300) and Nuevo Milenio, Mexico - $706,186 ($2,721,792).

Total expenses other than exploration costs and write-down of exploration and evaluation assets totaled $984,160 in fiscal 2013, compared to $1,720,277 in fiscal 2012.  Significant differences between the levels of expenditures in the two fiscal years include the following:

General and administrative expenses, consisting of depreciation, office and administration, travel and conferences increased from a credit of $8,828 to $134,585 in expenses.

Management, administrative, and other services were provided by Quorum Management and Administrative Services Ltd. (“Quorum”), a private company held jointly, with a one-third interest each, by the Company and two other public companies, ValGold Resources Ltd. and Emgold Mining Corporation.  Quorum provided services on a full cost recovery basis to the various entities sharing office space with the Company until August 31, 2012.  In September, the Company hired a Controller to take over the services that were provided by Quorum.   The reason for the credit balance in fiscal 2012 was due to the Company renegotiating fees related to prior periods with Quorum.  The credit received in 2012 was used to offset fiscal 2012 invoices.  The three public companies have deferred dissolving Quorum and will maintain the company as inactive.

Professional fees, which include legal, accounting and audit fees, decreased from $176,405 to $154,245 due to no audit and accounting IFRS transition related fees in fiscal 2013.  The decrease of these costs in the year ended March 31, 2013 were partially offset by higher legal fees relating to the Company’s filing of its NI 43-101 technical report.

Salaries and benefits decreased from $453,463 to $395,947 due to a decrease of services provided by Quorum and no fees paid for services of a Corporate Secretary for the year ended March 31, 2013.  These decreases were partially offset due to hiring a Controller to take over the services that were provided by Quorum.

Shareholder communications decreased from $522,007 to $193,257, due to decreases in services of an investor relations employee and consultants, website design and maintenance, printing, conference fees, (“AGM”) materials, and related shareholder awareness costs.

Share-based payments decreased from $480,229 to $3,811.  During the year ended March 31, 2013 there were no stock options granted and the only expense incurred was due to the vesting of options.  In the year ended March 31, 2012, there were 2,300,000 options granted.

Write-downs on exploration and evaluation assets decreased from $440,812 to $97,080.  During the year ended March 31, 2012 the Company wrote down the majority of its remaining Canadian properties, Goldsmith, Stephens and Wine.  The Blueberry property was the only property that was not written down until fiscal 2013, which is when the Company terminated its option.

Cream conducted most of its exploration activities in Mexico and in Canada in fiscal 2013, and as such, the Company has foreign exchange risks associated with exploration in foreign jurisdictions.  The Company had a foreign exchange loss of $1,053 in fiscal 2013, compared to a foreign exchange loss of $12,638 in fiscal 2012.  The Company’s cash balances are primarily held in Canadian dollars with nominal funds held in United States dollars and in Mexican pesos.
 
 
 
B.           Liquidity and Capital Resources

Financial Conditions for the year ended March 31, 2013

The Company’s major source of funding has been the issuance of equity securities for cash, primarily through private placements to sophisticated investors and institutions.  The Company has issued common shares in each of the past few years, pursuant to private placement financings and the exercise of warrants and options.
 
There is no assurance that the Company will be successful with any financing ventures.  Please refer to Item 3 – Key Information – section D - Risk Factors in this document.
 
At March 31, 2013, the Company had a working capital deficit of $251,610, defined as current assets less current liabilities, compared with a working capital surplus of $308,778 at March 31, 2012.  The Company’s consolidated financial statements were prepared using IFRS applicable to a going concern.  Several adverse conditions cast substantial doubt on the validity of this assumption – see “Going Concern” disclosure below.  When the Company has unused cash, it primarily invests its unused cash in guaranteed investment certificates which are redeemable in full after 30 days with interest or in treasury bills.  There have been no investments in commercial paper.  Where the initial term of the guaranteed investment certificate is greater than 90 days, it is recorded as a short-term investment.
 
Operations for the year ended March 31, 2013, have been funded primarily from the exercise of warrants and the recovery, by its subsidiary, of foreign value-added taxes.
 
Potential Restrictions on Transfer of Funds by Subsidiaries
 
The Company’s subsidiary is a Mexican incorporated corporation.  There are no currency restrictions on the transfer of funds from Mexico to Canada.  The Company has no source of operating cash flow and has a history of operating losses.  Cream has no revenue from operations and all of its mineral property interests are in the exploration or development stages.  The Company does not expect to receive significant revenue from operations at any time in the near future, and Cream has had no prior years’ history of earnings or operating cash flow.  Neither Cream nor its predecessors have paid dividends on their shares since incorporation and the Company does not anticipate doing so in the foreseeable future.
 
Investing Activities

As at March 31, 2013, Cream has capitalized $Nil (2012 - $97,080).  The 2012 balance represents costs associated with the acquisition of its mineral property interests in Manitoba.

Capital Resources

As discussed above, at March 31, 2013, Cream’s working capital deficit was $251,610 compared to a working capital surplus of $308,778 at March 31, 2012.  The Company’s continued operations are dependent upon the Company’s ability to obtain sufficient financing to carry on planned operations.  The Company does not have sufficient working capital to meet its obligations in the ordinary course of business but is attempting to generate sufficient amounts of cash and cash equivalents in the short and long term, to maintain the Company’s operations and meet obligations by reviewing all options including the sale of one or more properties, a joint venture of one or more properties, or an equity financing.  The Company will select whichever funding options are available and are in the best interest of the shareholders.

At March 31, 2013, the Company had 155,340,582 common shares issued and outstanding

Share Capital

The Company’s continued operations are dependent upon the Company’s ability to obtain sufficient financing to carry on planned operations.

2013
On April 13, 2010, the Company completed a private placement of a total of 22,963,214 units at a price of $0.07 per unit for gross proceeds of $1,607,425.  Each unit is comprised of one common share and one non-transferable share purchase warrant.  Each warrant entitles the holder to purchase one additional common share of the Company for a period of 24 months at the exercise price of $0.10 for a period of 12 months from the date of issue of the warrant and at a price of $0.15 for the remaining 12-month period.  Compensation was paid to certain eligible arms-length
 
 
 
parties in an amount equal to 10% of the total proceeds raised from the sale of the units to subscribers, and payable at their election in cash or units of the Company or a combination thereof.  A cash commission of $59,185 was paid, and a total of 144,000 finder's units were issued.  The finder's units have the same terms as the units.  The finder’s warrants and share purchase warrants were valued using a Black Scholes option pricing model using the following assumptions: weighted average risk free interest rate of 1.15%-1.98%, volatility factors of 94%-131% and an expected life of 2 years. The total value ascribed to the finder’s warrants and share purchase warrants was $659,782.

If the Company's common shares trade at or above $0.30 per share for 10 consecutive trading days, the Company may, at its discretion, accelerate the expiration of the warrants (and including the warrants forming part of the finder's units) by providing notice in writing to the holders of such securities, whereby such warrants will expire within 30 days from the date of such written notice.  Mr. Frank A. Lang, a former President and director and the former Non-Executive Chairman of the Company who resigned subsequent to the fiscal year end, acquired 5,100,000 units in the private placement for the subscription price of $357,000.

On December 21, 2010, the Company completed a bought deal financing of a total of 37,500,000 units at a price of $0.16 per unit for gross proceeds of $6,000,000.  Each unit consisted of one common share of the Company and one common share purchase warrant.  Each warrant entitles the holder thereof to acquire one common share of the Company at an exercise price of $0.24 per common share until December 21, 2012, provided that if after four months and one day following the Closing Date, the closing price of the common shares of the Company traded on the TSX Venture Exchange, close at a price in excess of $0.60 per common share for 20 consecutive days, the Company will be able to accelerate the expiry of the warrants to the date that is 30 days after notice of the new expiry date is provided to the holders of the warrants.  The share purchase warrants were valued using a Black Scholes option pricing model using the following assumptions: weighted average risk free interest rate of 1.64%, volatility factors of 102.24% and an expected life of 2 years. The total value ascribed to the share purchase warrants was $2,073,168.

Compensation was paid to certain eligible arms-length parties in an amount equal to 8% of the total proceeds raised from the sale of the units to subscribers, and payable in cash. A cash commission of $480,000 was paid, and a total of 3,750,000 finder's units were issued.  Each finder’s warrant entitles the warrant holder to acquire one common share and warrant at a price of $0.16 until December 21, 2012.  The warrant entitles the holder to acquire an additional warrant at a price of $0.24 until December 21, 2012. The finder’s warrants were valued using a Black Scholes option pricing model using the following assumptions: weighted average risk free interest rate of 1.33%-1.64%, volatility factors of 97.46%-102.24% and an expected life of 2 years. The total value ascribed to the finder’s warrants was $755,565.

The securities offered have not been registered under the United States Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an available exemption from the registration requirements.

Options and Warrants

In April 2010, the Company issued 22,963,214 share purchase warrants relating to a private placement.  Each warrant entitles the holder to subscribe for one common share for a period of 24 months following the date of issue, exercisable at $0.10 in the first 12 month period, and $0.15 in the remaining 12 month period.  Finder’s warrants totaling 144,000 were awarded in relation to the financing.  The finder’s warrants have the same terms as the warrants included in the units sold to purchasers. If the Company's common shares trade at or above $0.30 per share for 10 consecutive trading days, the Company may, at its discretion, accelerate the expiration of the warrants (and including the warrants forming part of the finder's units) by providing notice in writing to the holders of such securities, whereby such warrants will expire within 30 days from the date of such written notice. The shares and warrants issued in connection with this non-brokered private placement are subject to a minimum hold period of four months.

On December 21, 2010, the Company issued 37,500,000 share purchase warrants relating to a private placement.  Each warrant entitles the holder to subscribe for one common share for a period of 24 months following the date of issue, exercisable at $0.024. Finder’s warrants totaling 3,750,000 were awarded in relation to the financing. The finder’s warrants entitle the holder to acquire one common share and warrant at a price of $0.16 until December 21, 2012.  The warrant entitles the holder to acquire an additional warrant at a price of $0.24 until December 21, 2012. The shares and warrants issued in connection with this non-brokered private placement are subject to a minimum hold period of four months. Following expiry of the four month hold period, if the closing price of the common shares of the Company traded on the TSX Venture Exchange, close at a price in excess of $0.60 per common share
 
 
 
 
for 20 consecutive days, the Company will be able to accelerate the expiry of the warrants to the date that is 30 days after notice of the new expiry date is provided to the holders of the warrants.

During the year ended March 31, 2011, the Company granted a total of 6,575,000 incentive stock options to directors, officers, employees and consultants of the Company exercisable over a five year period expiring March 4, 2016 valued at a price of $0.38 per share using the Black-Scholes valuation model, in accordance with the Company’s 10% rolling stock option plan.

Financing Activities

Further financing will be required for general and administrative costs.  This could involve joint venture, equity financing, sale of assets, or other forms of financing.

Going Concern

At March 31, 2013, the Company has a working capital deficit.  Additional financing is required.

The Company has incurred operating losses since inception, has no source of operating cash flow, minimal income from short-term investments, and there can be no assurances that sufficient funding, including adequate financing will be available to explore its mineral properties and to cover general and administrative expenses necessary for the maintenance of a public company.  The ability of the Company to arrange additional financing in the future depends in part, on the prevailing capital market conditions and mineral property exploration success.  These factors cast substantial doubt on the Company’s ability to continue as a going concern.

The consolidated financial statements do not include any adjustments to the recoverability and classification of recorded assets, or the amounts of, and classification of liabilities that would be necessary if the going concern assumption were not appropriate.  Such adjustments could be material.

Plans for Fiscal 2013

The Board of Directors initiated a review of Cream’s strategic alternatives intended to maximize shareholder value and a Special Committee of independent directors (the “Special Committee”) was appointed in the first quarter of the fiscal year. The Company continues to review all strategic alternatives available.

The Company has suspended exploration work at its Nuevo Milenio Silver-Gold Project.  It has not determined whether its mineral property interests contain mineral reserves that are economically recoverable.  The Company’s continuing operations and the underlying value and recoverability of the amounts shown for mineral property interests are entirely dependent upon the existence of economically recoverable mineral reserves, the ability of the Company to obtain the necessary financing to complete the exploration and development of the mineral property interests and on future profitable production or proceeds from the disposition of the mineral property interests.

Contractual Obligations in 2013

See Item 5 (d) for a table of contractual obligations at March 31, 2013.
 

 

Trend information

As a mineral resource exploration company, Cream’s activities are mainly in response to metal prices and the availability of equity financings.  Recent price trends for gold and silver have exhibited substantial volatility.

The information is drawn from the summary silver market research conducted by The Silver Institute in conjunction with GFMS Limited who publish their findings in an annual report of worldwide silver supply and demand trends available at www.silverinstitute.org, the World Silver Survey 2012, ThomsonReutersGFMS and the Gold Survey 2012 ThomsonReutersGFMS. These annual surveys also include current information on prices, mine production, investment and fabrication.  While the following is believed to be reliable the Company has not and is not in a position to independently verify any such information.

Sources:     Thomson Reuters GFMS World Silver Survey 2013
    Thomson Reuters GFMS Gold Survey 2013
    The Silver Institute

See the Risk Factors section for average, high and low gold and silver prices to the date of the filing of this Annual Report on Form 20-F.
 
Silver
 
Overview
 
The average silver price in 2012 was USD31.15 per ounce. Silver price volatility continued in 2012 albeit at levels below those of 2011. The 2012 price high of USD37.23 was set in February after which the price generally trended down for the balance of the year. The price range (the difference between the high and low prices) averaged 34% for the year while the gold: silver ratio increased from 45/1 in 2011 to 54/1 in 2012 which reflected silver’s price underperformance relative to gold. Several factors influenced price volatility over the course of the year including uncertainty regarding the US Federal Reserve’s quantitative easing policies early in the year, improved demand in the physical markets combined with the influence of the European Central Bank and Federal Reserve monetary policies through the summer and fall months followed by concerns over the fiscal cliff negotiations in the late fall and winter months.
 
Demand
 
Demand for silver is comprised of fabrication (industrial applications, photography, jewelry, silverware and coins and metals), producer de-hedging and implied net silver investment.  In 2012 demand increased by 0.9% to 1,048.3 Moz up from 1,039.4 Moz in 2011.
 
Despite the small percentage increase in demand there were significant variations by category compared to 2011. Total fabrication demand fell by 6.6% to 846.8 Moz equal to 81% of total demand. Losses were recorded in each category comprising fabrication demand. Industrial demand fell by 4.5% to 465.9 Moz most of which was attributed to the challenging economic environment in many industrialized countries. Japan and Europe each recorded double digit declines in industrial demand. Industrial fabrication demand also fell in the Unites States mostly due to losses in the photovoltaic industry which was partially offset by increased demand from the chemical industry limiting the overall decline to 4%. Industrial demand in China rose by 1% to a new year over year high while demand in India rose by 4%. The increase in India is largely due to its economy’s lower exposure to western economies.
 
Photographic demand continued its secular decline due mainly to the continued substitution of digital technology in all photo related areas. The drop in photographic demand was 12.6% to 57.8 Moz which accounted for only 7% of total industrial fabrication. Demand for jewelry fabrication dropped by less than 1%. This masked declines in the industrialized western economies which were offset by gains of 6.6% and 4.15% in India and China respectively. Silverware fabrication suffered a 7.1% drop due to heavy losses in the industrialized world and price sensitive markets notably India. Demand in China rose by 3%.
 
In 2012 a 21% increase in implied net silver investments which includes physical bar investment compared to 2011. Coins and medal demand fell by 22%, though coins minting remained at high levels compared to historical levels.
 
 
 
Producer hedging was absent in 2012 with 41.4 Moz of de-hedging occurring. This was a result of few large hedges being put in place while at the same time several companies allowed hedges to mature or in some cases bought back hedges.
 
Supply
 
Silver supply is comprised of mine production, net government sales, silver recovery (scrap supply), producer hedging and implied net disinvestment. In 2012 the supply of silver rose by 0.9% to 1.048.3 Moz
 
The small increase in silver supply for 2012 masked variations in the categories comprising total supply. Mine production grew by 4% to 787 Moz. The primary silver mining sector grew output by 1% to 221.6 Moz which accounted for 28% of world silver supply. Decreased output from two significant primary producers accounted for the muted increase over 2011. These were Fresnillo which experienced lower processed grades at its Mexican operations and the shutdown of Hecla’s Lucky Friday mine in Idaho for most of 2012. The primary sector’s significant increases were offset by the negative developments at Fresnillo and Hecla. The lead/zinc sub sector of the primary sector generated the lion’s share of the silver mine supply increase with the majority of these gains coming from mines in China, India and Mexico.
 
Global scrap supply fell by 1.6% to 253 Moz. Industrial sources provided additional supply over 2011 levels which were balanced by a drop in silver recovery from silverware, jewelry, coins and the continued erosion in photographic sources. Globally there were notable variances with scrap supply from Europe growing by 5% with US supply falling by 10%. India produced a surprising near 30% increase in scrap supply due to a weaker currency that lifted prices in Rupee terms to almost record levels.
 
Net sales of government stocks fell again in 2012 dropping by 39%. The main contributor was continued declines in sales by Russia. Excluding Russia net government sales were relatively stable over year.

Gold
 
Overview
 
The average price of gold in 2012 was USD1668.98 per ounce. Gold price volatility continued in 2012 albeit at levels below that of 2011. The price high of USD1.781.00 was set in February after which price generally trended down for the balance of the year. The price range (the difference between the high and the low price) averaged 34% for the year while the gold: silver ratio increased from 45/1 in 2011 to 54/1 in 2012 which reflected gold’s price outperformance relative to silver.  The factors that influenced the price volatility of gold year over year were generally the same as factors that influenced the volatility of the price of silver.
 
Demand
 
Demand for gold is comprised of fabrication, which includes industrial applications (primarily technology), jewelry, and dental, with investment, de-hedging and official sector purchases being the other categories. In 2012 demand for gold fell by 4% to 4,405.50 tonnes (“t”).
 
Total gold fabrication demand fell across each category for an average of 5% or 2,613t. Industrial demand which is essentially technology dropped by 5% to 428.2t the majority of which was attributed to lackluster demand in key consumer markets and ongoing substitution of lower-priced inputs. Electronic sector demand fell by 5% to 302.7t. Global economic conditions are the determinant of demand for this category. Weakness in Europe was a significant drag and overall the decline in PC and ultra book sales offset strong smart phone and tablet demand. Price driven substitution of copper in place of gold used in the production of bonding wire also contributed to lower demand. Other industrial demand declined 4% or 85.7t. Weakness in India offset increased demand in China and Italy in the demand for gold plated jewelry and accessories. Dentistry demand continued to decline again driven by substitution of ceramic or metals in place of gold. Again price was the primary consideration in this market. The decline was 8% or 39.9t’s. Jewelry demand fell by 4.2% to 1,893t. India suffered a significant drop in demand. Excluding India world-wide demand fell by 2.6% with increased demand in China cushioning the overall drop.
 
Annual global investment declined in 2012. Demand for bars and coins combined dropped 17%. This was offset by demand for ETF’s and similar products increasing by 51%. The result was a 10% reduction in investment demand.
 
 
 
Adding Over the Counter (“OTC”) investment and stock flows resulted in a 3% decrease in total investment demand to 1,582.5t. De-hedging activities made a small contribution in 2012 of 22t.
 
Central bank purchases were 534.6t versus sales under the Central Bank Gold Agreement (“CBGA”) of just 5.5t for all of 2012.
 
Supply
 
Gold supply is comprised of mine production, net government sales, gold recovery (scrap supply), producer hedging and implied net disinvestment. In 2012 the supply of gold contracted by 1.4% to 4,45.3t.
 
The small decrease in supply for 2012 reflected small increases or decreases in each of the supply categories. Mine output rose 0.8% or 22t. Additional production was generated by a number of new projects achieving commercial production in 2012 as well as the ramping up of production at a number of relatively new mines. These positive developments were offset by unplanned production interruptions and delays at a number of mines.  China contributed the most to the annual increase, some 42t. At the same time supply from Indonesia fell by 31t mainly due to issues at the Grasberg mine. In addition South African production fell by 20t mainly as a result of labor issues.
 
Scrap supply fell by 2.6% or 42.9t in 2012 for a total of 1,625.6t contribution to total supply. In industrialized countries the available stocks are thought to be considerably depleted which has dampened available supply. At the same time India generated significantly higher levels of scrap supply. Hedging activity was subdued in 2012 as companies in general only put on hedges to help finance new projects. Finally central bank sales as noted above were just 5.5t under the CBGA, an inconsequential amount. Implied net disinvestment was not a material factor in 2012.
 
Cream Minerals

As a mineral resource exploration company, Cream’s activities are mainly in response to metal prices and the availability of equity financings. Historically Cream has strategically focused its exploration activities on potential silver and gold projects. Beginning in 2004 prices for both gold and silver began a sustained increase in price that has largely persisted through mid-2012. During this time the funds available to finance junior mining companies has grown dramatically as has the number of junior resource exploration companies. However, during the period from 2004 and, in particular, from the 2008 financial crisis onward, such financing has been available periodically.  The factors cited above have acted to restrict the availability of funding at certain times.
 
Cream’s Management and board of directors are not financial or commodity analysts and therefore cannot and should not forecast prices for silver and gold. Management and the directors do monitor silver and gold industry trends, specifically demand supply data and believe that the silver and gold markets should continue to experience positive fundamentals. As such Cream will continue to advance its silver-gold properties, subject to available funds.

C.           Off-statement of financial position arrangements

The Company does not have any off-statement of financial position arrangements that have or are reasonably likely to have a current or future effect on the Company’s financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.

D.           Tabular disclosure of contractual obligations
 
The following table summarizes the Company’s short-term and long-term obligations as at March 31, 2013:

 
Less than
one year
1-2 years
2-3 years
3-4 years
4-5 years
5th and subsequent years (1)
Total
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
 
(1)
Mineral property option payments are made at the option of the Company, however non-payment of mineral property leases may result in forfeiture of Cream’s rights to a particular property.
 
 

Safe Harbour
 
See above – “Cautionary Statement Regarding Forward-Looking Information.”
 

A.           Directors and Senior Management

The following table lists the directors and senior management of the Company.  The directors have served in their respective capacities since their election and/or appointment and will serve until the next AGM or until a successor is duly elected, unless the office is vacated in accordance with the Articles/By-Laws of the Company.  Mr. Michael O’Connor was appointed President and Chief Executive Officer on October 2, 2008, and  Ms. Angela Yap was appointed Chief Financial Officer on May 30, 2011.  Ms. Shannon Ross resigned as Chief Financial Officer on May 30, 2011.  Mr. Christopher Hebb, Mr. Ronald Lang and Mr. Dwayne Melrose were appointed directors on June 23, 2011.  Mr. Frank Lang resigned as a director of the Company on June 23, 2011.  Mr. Ferdinand Holcapek did not stand for re-election at the Company’s December 13, 2012 AGM.


Name and Position
Other Principal Directorships
Shares Beneficially Owned
as at June 27, 2013
Principal Business Activities
Outside the Company
Christopher H. Hebb Chairman
None
245,000
President and CEO of Cavell Capital Corporation, a Vancouver-based investment management company.
Michael O’Connor
President and Chief Executive Officer
None
630,000
 
None
Angela Yap
CFO
 
None
35,000
None
Robin H. Merrifield
Director
Acrex Ventures Ltd.
Sultan Minerals Inc.
True Gold Mining Inc. (formerly Riverstone Resources Inc.)
Alhambra Resources Ltd.
 
Nil
Executive Vice President Uranium One Inc.; Chartered Accountant providing financial and general management consulting services internationally and locally to the mining industry
Sargent H. Berner
Director
Aurizon Mines Ltd.
Emgold Mining Corporation
ValGold Resources Ltd.
Sultan Minerals Ltd.
Enterprise Energy Resources Ltd.
Olivut Resources Ltd.
Palo Duro Energy Inc.
Pacific Ridge Exploration Ltd.
Thor Explorations Ltd.
298,500
Chairman, Emgold Mining Corporation; President, Kent Avenue Consulting Ltd.
 
 


Name and Position
Other Principal Directorships
Shares Beneficially Owned
as at June 27, 2013
Principal Business Activities
Outside the Company
Gerald Feldman
Director
Augusta Industries Inc.
Latin American Minerals Inc.
X-Terra Resources Corporation
NexGen Energy Ltd.
Mooncor Oil & gas Corporation
Santa Maria Petroleum Inc.
Nil
CFO of Pinetree Capital Ltd., Mega Uranium Ltd., Brownstone Energy Inc., and a partner in DNTW Chartered Accountants LLP
Ronald Lang
Director
Interconnect Ventures Corporation
2,055,081
Businessman and consultant to companies in the junior resource sector
Dwayne Melrose
Director
 
Nil
Director, President, Chief Executive, Officer and Director of True Gold Mining Inc. (formerly Riverstone Resources Inc.)

Christopher Hebb has been Chairman of Cream since June 23, 2011.  Mr. Hebb's career includes substantial experience at a senior management level in investment management, expansion capital, private client wealth management, diamond exploration, consumer products, real estate development, steel manufacturing and fabrication, coal mining, and oil and gas exploration and production.  He is President and CEO of Cavell Capital Corporation, a Vancouver-based investment management company.

Michael E. O’Connor has been President and Chief Executive Officer since October 2008.  Mr. O’Connor has over twenty years of experience in the financial services industry including extensive experience in brokerage, banking, investor relations and corporate communications positions.  He is an experienced capital markets and communications professional with national and international contacts and has a strong background in the financing of development stage companies.  Mr. O’Connor is a graduate of the University of British Columbia where he received his B.A. in 1978.

Angela Yap was appointed Chief Financial Officer on May 30, 2011.  Ms. Yap brings over 16 years of accounting and financial management experience.  She began her career at KPMG in the resource group auditing mining and forestry companies, and then transferred to KPMG’s tax group.  In 2003 Ms. Yap moved to private industry and has held successively senior positions, most recently as Director of Corporate Accounting with Anthem Properties Group.  Ms. Yap holds a Bachelor of Commerce degree from the University of British Columbia and is a Chartered Accountant.

Robin Merrifield, Director, is a Chartered Accountant with substantial international experience, gained in Canada, USA, Southern Africa and five Central Asian countries. Subsequent to his obtaining his professional designation at Deloittes in Cape Town, South Africa, he became the local group financial manager of a large UK shipping and industrial group. He has worked in the mining industry for more than 30 years where he has held a variety of executive financial positions. His corporate and operational experience, with both precious and base metals, was gained with the Anglo American group, Cameco, Uranium One, Centerra's predecessor company and other Canadian public companies. He is a Director of a number of junior exploration mining companies, and was previously an Executive Vice President of Uranium One, having also recently served as its CFO for four years.

Sargent Berner, Director, is a graduate of the University of British Columbia where he received his B.A. in 1963 and his LL.B. in 1966, and the London School of Economics, London, England where he received the degree of Master of Laws in 1967.  From 1968 to 1976 he served as a full-time Assistant and Associate Professor of the Faculty of Law at the University of British Columbia and practiced corporate, securities and natural resources law as an associate and/or partner in the Vancouver law firm of DuMoulin Black from 1976 to 2006.  He provides consulting services to the Company through his company; Kent Avenue Consulting Ltd. Mr. Berner is a director of several junior mineral exploration companies.
 
 

Gerald Feldman, Director, is a Chartered Accountant and is the Vice-President of Corporate Development of Pinetree Capital Ltd. and the CFO of each of Pinetree Capital Ltd., Brownstone Ventures Inc. and Mega Uranium Ltd.

Ronald Lang, Director, is a businessman and consultant with over twenty years' experience working with companies in the junior resource sector.

Dwayne Melrose, Director, is a graduate of the University of Waterloo, Ontario and has over 30 years' experience as an exploration and mine geologist. He has been involved in all aspects of exploration from grass roots to the mine definition/feasibility stage and open pit mine geology. Mr. Melrose has worked globally with Cameco/Centerra's Gold companies' exploration departments spending over two decades in Canada, the USA, and Kazakhstan. He also served as Exploration Manager at the Kumtor Gold Mine in the Kyrgyz Republic where he was directly responsible for the discovery of the high grade SB Zone, significantly increasing the reserves and resources of the Kumtor Mine and extending its life of mine. Mr. Melrose served VP, Exploration, Minco Silver Corporation, where his responsibilities included managing the exploration program which increased and defined 157 million ounces of silver at the Fuwan project. Mr. Melrose then advanced Fuwan through the initial Preliminary Economic assessment stage to the completion of a successful and positive Feasibility Study. In addition Mr. Melrose also served as VP Exploration for Minco Gold Corporation, adding 1 million ounces to the resources (all categories) of the Changkeng gold property by December 31, 2008. Currently Mr. Melrose serves as the President, CEO and Director of TrueGold Mining Inc. (formerly Riverstone Resources Inc.).

Executive officers are appointed by the board of directors to serve until terminated by the board of directors or until their successors are appointed.  Certain of the directors serve as directors of other reporting companies and if a conflict of interest arises at a meeting of the board of directors, any director in a conflict will declare his interest and abstain from voting on such matter.  All directors have a term of office expiring at the next AGM.
 
Family Relationships
 
There are no family relationships among any of the persons named above.
 
Arrangements
 
There are no arrangements or understandings regarding the selection of any of the persons named above.

B.           Compensation and Discussion Analysis
 
Compensation of Executive Officers
 
“Named Executive Officer” (“NEO”) means each of the following individuals:
 
 
(a)
A Chief Executive Officer (“CEO”) or one who acted in a capacity similar to a CEO, for any part of the financial year ended March 31, 2013;
 
 
(b)
A Chief Financial Officer (“CFO”) or one who acted in a capacity similar to a CFO, for any part of the financial year ended March 31, 2013;
 
 
(c)
Each of the three most highly compensated executive officers, or the three most highly compensated individuals acting in a similar capacity, other than the CEO and CFO, at the end of the most recently completed financial year whose total compensation was, individually, more than $150,000 for that financial year; and
 
 
(d)
Each individual who would be a NEO under paragraph (c) but for the fact that the individual was neither an executive officer of the Company, nor acting in a similar capacity, as at the financial year ended March 31, 2013.
 
The Company had three NEOs during the year.  The following disclosure sets out the compensation that the Board intended to pay, make payable, award, grant, give or otherwise provide to each NEO and director for the financial year ended March 31, 2013.
 
 
 
Compensation of Directors and NEOs
 
The Company’s Corporate Governance and Compensation Committee (“CGCC”) has responsibility for reviewing compensation for the Company’s directors and senior management.  The independent directors are encouraged to meet at any time they consider necessary without any members of management including the non-independent directors being present.  The Company's auditors, legal counsel and employees may be invited to attend.  The independent directors exercise their responsibilities for independent oversight of management through a strong CGCC.  The Board has appointed Mr. Sargent H. Berner as Chairman of the Corporate Governance and Compensation Committee to assist the Board in being effective, cohesive and independent from management.
 
To determine compensation payable, the CGCC reviews compensation paid for directors and NEOs of companies of similar size and stage of development in the mineral exploration industry and determines an appropriate compensation reflecting the need to provide incentive and compensation for the time and effort expended by the directors and senior management while taking into account the financial and other resources of the Company.  In setting the compensation, the CGCC annually reviews the performance of the NEOs in light of the Company's objectives and considers other factors that may have impacted the success of the Company in achieving its objectives and financial resources.
 
The Company’s compensation policies and its stock option plan are intended to assist the Company in attracting, retaining and motivating directors, officers and employees of the Company and of its subsidiaries and to closely align the personal interests of such directors, officers and employees with those of the shareholders by providing them with the opportunity, through stock options, to acquire shares in the capital of the Company.
 
Option-Based Awards

The board of directors of the Company implemented a stock option plan, as amended (the “Plan”), effective June 23, 2011, which was approved by the TSX Venture Exchange and the shareholders of the Company on December 13, 2012, at the Company’s AGM on that date.  The number of shares which may be issued pursuant to options previously granted and those granted under the Plan is a maximum of 10% of the issued and outstanding shares at the time of the grant.  In addition, the number of shares which may be reserved for issuance to any one individual may not exceed 5% of the issued shares on a yearly basis or 2% if the optionee is engaged in investor relations activities or is a consultant.  Under the TSX Venture Exchange policy, all such rolling stock option plans which set the number of common shares issuable under the plan at a maximum of 10% of the issued and outstanding common shares must be approved and ratified by shareholders on an annual basis.
 
In accordance with good corporate governance practices and as recommended by Canadian National Policy 51-201 Disclosure Standards, the Company imposes black-out periods restricting the trading of its securities by directors, officers, employees and consultants during periods surrounding the release of annual and interim financial statements and at other times when deemed necessary by management and the Board.  In order to ensure that optionees are not prejudiced by the imposition of such black-out periods, the Plan includes a provision to the effect that any outstanding options with an expiry date that falls during a management imposed black-out period or within five days thereafter will be automatically extended to a date that is ten trading days following the end of the black-out period.
 
The Plan provides that if a change of control (as defined therein) occurs, or if the Company is subject to a take-over bid, all shares subject to stock options shall immediately become vested and may thereupon be exercised in whole or in part by the optionees.  The Board may also accelerate the expiry date of outstanding stock options in connection with a take-over bid.
 
The Plan contains a provision that, if pursuant to the operation of the plan's adjustment provisions, in respect of options granted under the Plan (the "Subject Options"), an optionee receives options to purchase securities of another company (the "New Company"), such new options shall expire on the earlier of:  (i) the expiry date of the Subject Options; (ii) if the optionee does not become an eligible person in respect of the New Company, the date that the Subject Options expire pursuant to the applicable provisions of the Plan relating to expiration of options in cases of death, disability or termination of employment discussed in the preceding paragraph above (the "Termination Provisions"); (iii) if the optionee becomes an eligible person in respect of the New Company, the date that such new options expire pursuant to the terms of the New Company's stock option plan that correspond to the Termination Provisions; and (iv) the date that is one (1) year after the Optionee ceases to be an eligible person in respect of the New Company or such shorter period as determined by the Board.
 
 
 
The Plan allows the board to impose vesting provisions and provides that, unless otherwise specified at the time of grant, all options shall vest and become exercisable in full immediately upon grant of such options.  However, as required by the policies of the Exchange, options granted to optionees performing Investor Relations Activities must vest in stages over 12 months with no more than ¼ of such options vesting in any three month period.
 
The purpose of the Plan is to allow the Company to grant options to directors, officers, employees and service providers, as an incentive for performance, and as an opportunity to participate in the success of Cream.  The granting of such options is intended to align the interests of such persons with that of the shareholders.  Options are exercisable over periods of up to ten years as determined by the board of directors of Cream and are required to have an exercise price no less than the market price as defined in the Plan prevailing on the day that the option is granted.  Pursuant to the Plan, the board of directors may from time to time authorize the issue of options to directors, officers and employees of and consultants to Cream and its subsidiaries or employees of companies providing management services to Cream or its subsidiaries.
 
At March 31, 2013, and at June 27, 2013, the maximum number of common shares which may be issued pursuant to stock options granted under the Plan is equal to 10% of the issued and outstanding common shares at the respective dates, or 15,534,058.  A total of 9,235,000 stock options were outstanding at March 31, 2013 and June 27, 2013.
 
During the year ended March 31, 2013, and subsequent to March 31, 2013, there were no options granted or exercised.
 
The board of directors generally grants options to corporate executives on the recommendation of the CGCC.  As part of its annual work plan, the CGCC reviews, among other things, executive compensation and makes appropriate recommendations to the board regarding such compensation, including but not limited to the grant of options.  Options may be granted at other times of the year to individuals commencing employment with the Company.
 
Summary Compensation Table
 
The compensation paid to the NEOs during the years ended March 31, is as set out below:
 
         
Non-Equity Incentive
Plan Compensation
($)
     
NEO Name and Principal Position
Year(1)
Salary
($)
Share-Based Awards
($)
Option-Based
Awards(2)
($)
Annual Incentive Plans
Long-term
Incentive Plans
Pension Value
($)
All Other Compensation
($(3))
Total
Compensation
($)
Frank A. Lang
Former Chairman (retired)
2013
Nil
N/A
Nil
N/A
N/A
N/A
Nil
Nil
2012
Nil
N/A
Nil
N/A
N/A
N/A
Nil
Nil
2011
Nil
N/A
117,553
N/A
N/A
N/A
Nil
117,553
Michael E. O'Connor(4)
President and CEO
2013
180,000
N/A
Nil
N/A
N/A
N/A
35,915
215,915
2012
180,000
N/A
Nil
N/A
N/A
N/A
29,743
209,743
2011
180,000
N/A
293,882
N/A
N/A
N/A
125,631(5)
599,513
Angela Yap (4)(5)
CFO and Corporate Secretary
2013
37,422
N/A
Nil
N/A
N/A
N/A
7,453
44,875
2012
66,667
N/A
104,427
N/A
N/A
N/A
19,000
190,094
 
 
 
 
         
Non-Equity Incentive
Plan Compensation
($)
     
NEO Name and Principal Position
Year(1)
Salary
($)
Share-Based Awards
($)
Option-Based
Awards(2)
($)
Annual Incentive Plans
Long-term
Incentive Plans
Pension Value
($)
All Other Compensation
($(3))
Total
Compensation
($)
Shannon M. Ross (4)(5)
Former CFO and Corporate Secretary
2012
Nil
N/A
Nil
N/A
N/A
N/A
Nil
Nil
2011
55,411
N/A
Nil
N/A
N/A
N/A
Nil
55,411
2010
30,062(6)
N/A
Nil
N/A
N/A
N/A
1,234(5)
31,296
(1)
Financial years ended March 31, 2011 , March 31, 2012 and March 31, 2013, respectively.
(2)
The "grant date fair value" of options granted during the year is determined by using the Black-Scholes model, as described below, and the following assumptions:  stock price - $0.16-$0.23, exercise price - $0.16-$0.23, an option life of 5.0 years, a risk-free interest rate of 2.09-2.30% and a volatility of 104.44-113.50%. Please see the table under "Incentive Plan Awards" for the 'in-the-money' value of these options.
(3)
Includes any health, dental, parking, group plan insurance benefits and professional fees paid by the Company on behalf of the NEO.
(4)
Represents salary paid through Quorum Management and Administrative Services Inc.
(5)
Ms. Ross resigned as CFO on May 30, 2011.  Angela Yap was hired as CFO on May 30, 2011.
 
In the year ended March 31, 2013, $308,756 (2012 - $565,319; 2011 - $529,434) in management, administrative, geological and other services were provided by Quorum on a cost recovery basis to the various entities sharing certain personnel costs, office space, and overhead with the Company until August 31, 2012.
 
As part of its annual work plan, the CGCC reviews, among other things, executive compensation and makes appropriate recommendations to the board regarding such compensation.

Incentive Plan Awards

Outstanding Share-Based Awards and Option-Based Awards

The following table sets out all share-based awards and option-based awards outstanding as at the financial year ended March 31, 2013, for each NEO:
 
 
Option-based Awards
Share-based Awards(3)
Name
Number of Securities Underlying Unexercised Options
Option Exercise Price
($)
Expiry Date
Value of Unexercised
in-the money
Options(2) ($)
Number of Shares or Units of  Shares that have not Vested
(#)
Market or Payout Value of Share-based Payments that have not Vested
($)
Frank A. Lang(1)
100,000
0.12
February 12, 2014
Nil
N/A
N/A
 
400,000
0.38
March 4, 2016
Nil
N/A
N/A
Michael E. O'Connor
1,000,000
0.12
February 12, 2014
Nil
N/A
N/A
 
1,000,000
0.38
March 4, 2016
Nil
N/A
N/A
Angela Yap
600,000
0.22
June 1, 2016
Nil
N/A
N/A
Shannon M. Ross(3)
Nil
0.50
N/A
N/A
N/A
N/A
 
(1)
Mr. Lang resigned from the Board on June 23, 2011.
 
 
 
(2)
This amount is calculated based on the difference between the market value of the shares underlying the options at March 31, 2013, the end of the most recently completed financial year, which was $0.02, and the exercise price of the options.
(3)
Ms. Ross resigned as CFO on May 30, 2011.

Incentive Plan Awards – Value Vested or Earned During the Year

The following table sets out all incentive plans (value vested or earned) during the financial year ended March 31, 2013, for each NEO:

 
 
Name
Option-based awards –
Value vested during the year (1)
($)
Share-based awards –
Value vested during the year
($)
Non-equity incentive
plan compensation –
Value earned during the year (2)
($)
Frank A. Lang
Nil(2)
N/A
N/A
Michael E. O’Connor
Nil (2)
N/A
N/A
Angela Yap
Nil(2)
N/A
N/A
Shannon M. Ross
Nil(2)
N/A
N/A
Notes:
 
(1)
The aggregate dollar value that would have been realized if the options had been exercised on the vesting date, based on the difference between the market price of the underlying securities at exercise and the exercise price of the options on the vesting date.
 
(2)
The Company does not have Incentive Plan Awards in place other than option-based awards.

Discussion

The Company accounts for stock options issued to employees at the fair value determined on the grant date using the Black-Scholes option pricing model.  The fair value of the options is recognized as an expense using the graded vesting method where the fair value of each tranche is recognized over its respective vesting period.  When stock options are forfeited prior to becoming fully vested, any expense previously recorded is reversed.

Share-based payments made to non-employees are measured at the fair value of the goods or services received or the fair value of the equity instruments issued, if it is determined that the fair value of the goods or services cannot be reliably measured.  These payments are recorded at the date the goods and services are received.

Warrants issued are recorded at estimated fair values determined on the grant date using the Black-Scholes model.  If and when the stock options or warrants are ultimately exercised, the applicable amounts of their fair values in the reserves account are transferred to share capital.
 
See “Option Based Awards” and “Securities Authorized for Issuance under Equity Compensation Plans” for further information on the Stock Option Plan.
 
The Company does not have Incentive Plan Awards, pursuant to which cash or non-cash compensation intended to serve as an incentive for performance (whereby performance is measured by reference to financial performance or the price of the Company’s securities) was paid.
 
Pension Plan Benefits
 
Defined Benefit Plan or Defined Contribution Plan
 
The Company has no pension plans for NEOs that provide for payment or benefits at, following, or in connection with retirement.
 
Deferred Compensation Plans
 
The Company has no deferred compensation plan for NEOs.
 
Termination and Change in Control Benefits
 
The Company and its subsidiaries have no contract, agreement plan or arrangement that provides for payment to a NEO at, following or in connection with any termination (whether voluntary, involuntary or constructive),
 
 
 
 
resignation, retirement, a change in control of the Company or a change in a NEO’s responsibilities, with the exception of the following:
 
The contract of Michael E. O’Connor provides for payment to Mr. O’Connor of a minimum severance allowance if the Company should terminate the employment agreement without cause or Mr. O’Connor should terminate the agreement for good cause.  The minimum severance allowance would be calculated as one year’s salary as in effect as at the termination date plus Mr. O’Connor’s average annual bonus, calculated as the average of the annual bonus, if any, paid for the three years prior to the termination date, and benefits will be covered, other than disability insurance coverage or comparable alternate benefits, for the same period as the severance.  Additionally, the contract provides for payment to Mr. O’Connor of the same severance allowance in certain circumstances in the event of an acquisition or change of control by another company or other similar form of transaction.
 
The contract of Ms. Yap provides for the same terms as Mr. O’Connor except that Ms. Yap’s contract is with both Cream and Quorum.
 
Director Compensation
 
On June 23, 2011 the board of directors approved a resolution to compensate all directors of the Company, with the exception of one non-independent director, Mr. O’Connor:

Chairman and Chair of the Audit Committee
$15,000 per year
Other Directors
$10,000 per year
Attendance at directors meetings
$     250 per meeting
 
In addition, directors are entitled to reimbursement for reasonable travel and other out-of-pocket expenses incurred in connection with attendance at meetings of the board of directors.  The board of directors may award special remuneration to any director undertaking any special services on behalf of the Company other than services ordinarily required of a director.  This is subject to recommendation by the Compensation and Corporate Governance committee.
 
Payment of directors fees have been deferred as of Q2-2013 due to the company’s cash situation.
 
Director Compensation Table
 
The following table sets out all amounts of compensation provided to the directors who are not NEOs for the Company’s most recently completed financial year:
 
Name
Fees earned
($)
Share-based
awards
($)
Option-based
awards
($)
Non-equity incentive plan compensation
($)
Pension value
($)
All other
compensation
($)
Total
($)
Robin Merrifield
17,750
Nil
Nil
Nil
Nil
Nil
17,750
Sargent H. Berner
11,750
Nil
Nil
Nil
Nil
Nil
11,750
Gerald Feldman
12,000
Nil
Nil
Nil
Nil
Nil
12,000
Christopher Hebb
18,000
Nil
Nil
Nil
Nil
Nil
18,000
Dwayne Melrose
11,250
Nil
Nil
Nil
Nil
Nil
11,250
Ronald Lang
12,750
Nil
Nil
Nil
Nil
Nil
12,750

Outstanding Share-based Awards and Option-based Awards
 
The following table sets out all option-based awards outstanding as at the financial year ended March 31, 2013 each director, excluding two directors whose awards are already provided in the disclosure for NEOs for the Company:
 
 
 
 
Option-based Awards
Share-based Awards
Name
Number of Securities Underlying Unexercised Options
(#)
Option Exercise Price
($)
Option
Expiration Date
Value of Unexercised
in-the-money
Options (1)
($)
Number of Shares or Units of Shares that
have not Vested (2)
(#)
Market or Payout Value of
Share-based Awards
that have not Vested (2)
($)
Ferdinand Holcapek
100,000
$0.12
February 12, 2014
Nil
N/A
N/A
 
800,000
0.38
March 4, 2016
Nil
   
Robin Merrifield
100,000
0.12
February 12, 2014
Nil
N/A
N/A
 
400,000
0.38
March 4, 2016
Nil
   
Sargent H. Berner
100,000
0.12
February 12, 2014
Nil
N/A
N/A
 
400,000
0.38
March 4, 2016
Nil
   
Gerald M. Feldman
400,000
0.38
March 4, 2016
Nil
N/A
N/A
Christopher Hebb
400,000
0.16
June 23, 2016
Nil
N/A
N/A
Dwayne Melrose
400,000
0.16
June 23, 2016
Nil
N/A
N/A
Ronald Lang
400,000
0.16
June 23, 2016
Nil
N/A
N/A
 
(1)
This amount is calculated based on the difference between the market value of the shares underlying the options at March 31, 2013, the end of the most recently completed financial year, which was $0.02, and the exercise price of the options.
(2)
The Company does not have incentive plan awards in place other than option-based awards.
 
Incentive Plan Awards – Value Vested or Earned During the Year
 
The following table sets out all incentive plans (value vested or earned) during the financial year ended March 31, 2013, for each director, excluding a director who is already set out in disclosure for a NEO for the Company:
 
Name
Option-based Awards – Value Vested
During the Year(1)(2)(3)
($)
Share-based Awards – Value Vested
During the Year(3)
($)
Non-equity Incentive Plan
Compensation – Value Earned During the Year (3)
($)
Robin Merrifield
Nil
N/A
N/A
Sargent H. Berner
Nil
N/A
N/A
Gerald M. Feldman
Nil
N/A
N/A
Christopher Hebb
Nil
N/A
N/A
Dwayne L. Melrose
Nil
N/A
N/A
Ronald Lang
Nil
N/A
N/A
 
(1)
The aggregate dollar value that would have been realized if the options had been exercised on the vesting date, based on the difference between the market price of the underlying securities at exercise and the exercise price of the options on the vesting date.
(2)
Under the terms of the Plan, all options vest upon the grant date.
(3)
The Company does not have incentive plan awards in place other than option-based awards.
 
 
 
 

Securities Authorized for Issuance under Equity Compensation Plans
 
Equity Compensation Plan Information
 
 
Number of securities to be issued upon exercise of outstanding options, warrants and rights
Weighted-average exercise price of outstanding options, warrants and rights
Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))
Plan Category (1)
(a)
(b)
(c)
Equity compensation plans approved by security holders (2)
9,235,000
$0.29
6,299,058
Equity compensation plans not approved by security holders
NIL
NIL
NIL
Total
9,235,000
$0.29
6,299,058
 
(1)
The only “equity compensation plan” in place is the Company’s stock option plan.  See “Option Based Awards” above.
(2)
As at March 31, 2013.
 
Indebtedness of Directors and Executive Officers
 
None of the directors, executive officers, or associates of any such person, has been indebted to the Company at any time during the most recently completed financial year.
 
Aggregated Options Exercises during the Most Recently Completed Financial Year
 
None.

C.           Board Practices
 
All directors of Cream at June 27, 2013 were elected at the December 13, 2012 AGM for a term of office expiring at the next AGM of Cream.  All officers have a term of office lasting until their removal or replacement by the board of directors.
 
An “independent” director under the TSX governance guidelines is a director who is independent from management and is free from any interest and any business or other relationship which could materially interfere with his or her ability to act in the best interest of the Company other than interests arising from shareholding.  Where a company has a significant shareholder, in addition to a majority of “independent” directors, the Board should include a number of directors who do not have interest or relationships with either the Company or the significant shareholder.  The Board currently consists of seven directors, six of whom are independent based upon the tests for independence set forth in Canadian National Instrument 52-110.  Robin M. Merrifield, Sargent H. Berner, Gerald M. Feldman, Ronald Lang, Christopher Hebb and Dwayne Melrose are independent.  Michael E. O'Connor is not independent as he is the President and CEO of the Company.  Sargent Berner has received consulting fees for services through a private company, Kent Avenue Consulting Ltd. up to August 31, 2012, of which $23,469 is outstanding as at March 31, 2013.
 
Except as set out below, no director and/or executive officer has been the subject of any order, judgment, or decree of any governmental agency or administrator or of any court of competent jurisdiction, revoking or suspending for cause any license, permit or other authority of such person or of any corporation of which he is a director and/or executive officer, to engage in the securities business or in the sale of a particular security or temporarily or permanently restraining or enjoining any such person or any corporation of which he is an officer or director from engaging in or continuing any conduct, practice or employment in connection with the purchase or sale of securities, or convicting such person of any felony, or misdemeanor involving a security or in any aspect of the securities business of theft.
 
There are no director’s services contracts with the Company providing for benefits upon termination of employment except for benefits to Mr. O’Connor as set out under “Termination and Change of Control Benefits” above.  Cream and its subsidiaries have no compensatory plan or arrangement in respect of compensation received or that may be received by the directors of the Company in its most recently completed or current financial year to compensate
 
 
 
such directors in the event of termination as director (resignation, retirement) or in the event of a change in control.  There are no arrangements or understandings with any two or more directors or executive officers pursuant to which he was selected as a director or executive officer.  Other than as disclosed in related party transactions, fees payable to directors as disclosed above under "Director Compensation", and salaries for executive officers, there is no compensation paid to outside directors other than stock-based compensation.
 
The following information is provided with respect to the Company’s directors, and members of its administrative, supervisory or management body and includes the date of expiration of the current term of office  and the period during which the person has served in that office.
 
Name
Position(s) with Company
Term of Office/Period of Service
Christopher H. Hebb
Chairman
Director
Since June 23, 2011
Since June 23, 2011
Michael E. O’Connor
President
Chief Executive Officer
Director
Since October 2, 2008
Since October 2, 2008
Since October 2, 2008
Angela Yap
Chief Financial Officer
Corporate Secretary
Since May 30, 2011
Since February 24, 2012
Ferdinand Holcapek
Director
Sole Administrator, Cream Minerals de Mexico, S.A. de C.V.
Since October 10, 2001 to December 13, 2012
Since December 1999
Robin Merrifield
Director
Chair, Audit Committee
Since September 21, 2004
Since September 21, 2004
Sargent H. Berner
Director
Chair – Corporate Governance & Compensation Committee
Since January 23, 1996
Since January 23, 1996
Gerald Feldman
Director
Since December 21, 2010
Ronald Lang
Director
Since June 23, 2011
1989 to 2005
Dwayne Melrose
Director
Since June 23, 2011
Frank A. Lang
Non-Executive Chairman
President &
Chief Executive Officer
Director
October 2, 2008 to June 23, 2011
October 12, 1966 to October 2, 2008
September 25, 2002 to October 2, 2008
October 12, 1966 to June 23, 2011
C. Douglas Lang
Director
May 30, 2006 to November 9, 2010
Arthur G. Troup
Vice President, Exploration
Director
September 24, 1987 to November 8,  2010
September 25, 1997 to November 8, 2010
Shannon M. Ross
Chief Financial Officer & Corporate Secretary
January 31, 2000 to May 30, 2011
 
Audit Committee
 
Robin Merrifield, Gerald Feldman, and Christopher Hebb are the members of Cream’s audit committee.  The audit committee is appointed annually by the directors of Cream at the first meeting of the board held after Cream’s AGM.  Its primary function is to review the financial statements of Cream before they are submitted to the board for approval.  The audit committee is also available to assist the board if required with matters relating to the appointment of Cream’s auditor and the overall scope and results of the audit, internal financial controls, and financial information for publication for various purposes.
 
 
 
Corporate Governance and Executive Compensation Committee
 
Members of the Corporate Governance and Executive Compensation Committee are Messrs. Feldman, Berner and Merrifield.  The committee was formed for making recommendations to the board with respect to developments in the area of corporate governance, the practices of the board, finding appropriate candidates for nomination to the board and for evaluating the performance of the board, and senior executives and making recommendations as to their compensation.

D.           Employees
 
At March 31, 2013, Cream had three employees, Michael O’Connor, the President and CEO, Angela Yap, the CFO, and Sherri Odribege, the Controller.  Cream Minerals de Mexico, S.A. de C.V., Cream’s subsidiary in Mexico has less than five employees and Mr. Holcapek is engaged as the Sole Administrator and  Director General providing geological and administrative services.

E.           Share Ownership
 
See Item 6A. – “Directors and Senior Management”.

The following table sets forth, as at March 31, 2013, all stock options held by the directors and members of senior management of the Company, including the number of common shares issuable upon the valid exercise of the options, the exercise price and expiration date of the options.

Name and Title of
Optionholder
Number of Shares
Underlying Options
Title of Class
Exercise Price ($)
Expiry Date
Directors and Officers of Cream and Subsidiaries
Christopher H. Hebb
Non-Executive Chairman
400,000
Common
0.16
June 23, 2016
Frank A. Lang
Former Non-Executive Chairman
100,000
Common
0.12
February 12, 2014
400,000
Common
0.38
March 4, 2016
 
500,000
     
Michael E. O’Connor
President and Chief Executive Officer
1,000,000
Common
0.12
February 12, 2014
1,000,000
Common
0.38
March 4, 2016
 
2,000,000
Common
   
Angela Yap
Chief Financial Officer
600,000
Common
0.22
June 1, 2016
Ferdinand Holcapek
Sole Administrator, Subsidiary
100,000
Common
0.12
February 12, 2014
800,000
Common
0.38
March 4, 2016
 
900,000
Common
   
Robin Merrifield
Director
100,000
Common
0.12
February 12, 2014
400,000
Common
0.38
March 4, 2016
 
500,000
Common
   
Sargent H. Berner
Director
100,000
Common
0.12
February 12, 2014
400,000
Common
0.38
March 4, 2016
 
500,000
Common
   
 
 


Name and Title of
Optionholder
Number of Shares
Underlying Options
Title of Class
Exercise Price ($)
Expiry Date
Gerald Feldman
Director
400,000
Common
0.38
March 4, 2016
Ron Lang
Director
400,000
Common
0.16
June 23, 2016
Dwayne Melrose
Director
400,000
Common
0.16
June 23, 2016
Total Directors/Officers
(10 persons)
6,600,000
Common
   
Total Employees/Consultants
(persons)
9,235,000
Common
$0.12 to $0.38
February 12, 2014 to June 23, 2016
Total Directors/Officers/
Employees/ Consultants
(17 persons)
       

 
A.           Major Shareholders
 
The Company is a publicly traded corporation, incorporated in the province of British Columbia, the registered shareholders of which include residents of the United States, residents of Canada and other foreign residents.  To the extent known by the directors and executive officers of the Company, the Company is not directly or indirectly owned or controlled by another corporation.
 
To the knowledge of the directors and executive officers of the Company as at June 27, 2012, there are no holders of 5% or more of the common shares of Cream, except as set out below:
 

Name of Shareholder
Number of Shares held,
directly and indirectly, at June 27, 2013
% of Issued and Outstanding
Shares at June 27, 2013
Sprott Asset Management
11,446,300
7.37%
Pinetree Capital Ltd.
19,414,500
12.50%
Frank A. Lang
26,582,617
17.11%
 
The above information was obtained from SEDI and SEDAR.
 
All shareholders, including major and/or controlling shareholders have the same voting rights with respect to the issued common shares.
 
Cream’s securities are recorded on the books of its transfer agent in registered form, however, the majority of such shares are registered in the name of intermediaries such as brokerage houses and clearing houses on behalf of their respective brokerage clients, and Cream does not have knowledge of or access to information about the beneficial owners thereof.  To the best of its knowledge, Cream is not directly or indirectly owned or controlled by a corporation or foreign government.  As of June 27, 2013 Cream had authorized an unlimited number of common shares without par value of which 155,340,582 were issued and outstanding.
 
As of June 27, 2013, there were 271 registered shareholders of record holding a total of 155,340,582 common shares of Cream.  To the best of Cream’s knowledge there were 82 registered shareholders of record with registered addresses in Canada, 183 shareholders of record with registered addresses in the United States and 6 shareholders of record with registered addresses in other countries holding approximately 153,592,973 (98.87%), 1,645,123(1.06 %)
 
 
 
and 102,486 (0.07%) of the outstanding common shares, respectively.  Shares registered in the name of intermediaries are assumed to be held by residents of the same country in which the clearing-house was located.

The Company is not aware of any arrangements between shareholders or other persons which may result in a change of control of the Company.
 
B.           Related Party Transactions
 
No director or senior officer, and no associate or affiliate of the foregoing persons, and no insider has or has had any material interest, direct or indirect, in any transactions, or in any other proposed transaction, during the year ended March 31, 2013, except as noted below.
 
Commencing August 1, 2001 and ending August 31, 2012, management, administrative, geological and other services were provided by Quorum on a cost recovery basis to the various public entities sharing office space with the Company.  The Company has a 1/3 interest in Quorum and is using the equity method to account for its investment.  In September, the Company hired a Controller to take over the services that were provided by Quorum.   The three public companies have deferred dissolving Quorum and will maintain the company as inactive.  All transactions were conducted in an arms-length manner.  During the years ended March 31, 2013, 2012, and 2011, $312,556, $565,319, and $529,434 were paid to Quorum, respectively.  These totals include salaries and benefits and full cost recoveries for rent and other administrative costs. Consulting fees of $Nil (2012 - $22,500; 2011 - $30,000) were paid or are payable to Kent Avenue Consulting Ltd., a private company controlled by Sargent H. Berner.  These amounts were paid to Quorum which then paid Kent Avenue Consulting Ltd. as a function of the management and administrative services provided to the Company by Quorum.
 
Fees were paid or accrued to Fred Holcapek, a director of the Company until December 13, 2012 and the Sole Administrator and Director General of the subsidiary in Mexico, for administrative and geological services, for a total of $120,000 (2012 –$120,000; 2011 - $141,838).
 
The Company  held investments in public companies comprised of  shares of Emgold Mining Corporation, Sultan Minerals Inc. (“Sultan”) and ValGold Resources Ltd. (“ValGold”), each being companies with directors and management in common with the Company.  The Company also holds interests in the Stephens Lake Property (Trout Lake Claims) jointly with Sultan and ValGold.  The marketable securities held by the Company were sold in fiscal 2012.
 
Balances payable to related parties, and balances receivable from related parties are non-interest bearing and due on demand.
 
C.           Interests of Experts and Counsel
 
Not applicable.
 
 
A.           Consolidated Statements and Other Financial Information
 
See “Item 17 - Financial Statements”.  The consolidated financial statements as required are found at Exhibit F-1 to this Annual Report.  The audit report of Morgan & Company, independent Chartered Accountants, is included immediately preceding the consolidated financial statements.
 
Legal Proceedings
 
Cream is not involved in any litigation or legal proceedings and to Cream’s knowledge no material legal or arbitration proceedings involving Cream or its subsidiary are threatened.
 
Dividend Policy
 
Cream has not paid any dividends on its outstanding common shares since its incorporation and does not anticipate that it will do so in the foreseeable future.  All funds of Cream are being retained for working capital and exploration of its projects.
 
 
 
B.           Significant Changes
 
There are no significant changes of financial condition since the most recent audited financial statements filed with this Annual Report.  Interim financial statements are incorporated into the financial statements included herein.
 
 
A.           Offer and Listing Details
 
 
i)
Trading Markets
 
The tables below list the high and low prices for common shares of the Company on the TSX Venture Exchange and the OTCBB to June 27, 2013 then the OTCQB, for the past five years on an annual basis, two years on a quarterly basis and for the six months up to the filing date of this Annual Report (June 27, 2013):
 
TSX Venture Exchange: CMA – Trading in Canadian Dollars
 
   
High
   
Low
 
   
($)
   
($)
 
Annual