INCOME TAXES PAYABLE

12 Months Ended

Dec. 31, 2013

Income Taxes Payable

8. INCOME TAXES PAYABLE

Income taxes are provided for the tax effects of transactions reported in the financial statements and consist of taxes currently due plus deferred taxes.  Deferred taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss, tax credit carry-forwards, and for taxable temporary differences.  Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases.  Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax will not be realized.

Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

The effective income tax rate for years ended December 31, 2013 and December 31, 2012 differs from the U.S. Federal statutory income tax rate due to the following:

	December 31,			December 31,
	2013			2012
US
Federal statutory income tax rate		35.00	%		35.00	%
State income taxes (average), net of federal benefit		-			-
Permanent Differences		(0.14	%)		(0.21	%)
Foreign Rate Difference		(14.66	%)		(21.25	%)
Valuation allowance		(20.20	%)		(13.54	%)
Net income tax provision (benefit)		-			-

Canada
Federal statutory income tax rate	15.00	%	15.00	%
Provincial income taxes	12.00	%	12.00	%
Valuation allowance	(27.00	%)	(27.00	%)
Net income tax provision (benefit)	-		-

The Company has a $6,288,483 (2012: $4,979,996) net operating loss carry forward that will begin to expire between 2017 and 2033.  Canadian loss carry forwards were $3,362,625 and $2,997,267  at December 31, 2013 and 2012 respectively

The cumulative components of the deferred tax assets and liabilities as of December 31, 2013 and as of December 31, 2012 are as follows:

	December 31,		December 31,
US	2013		2012
US Operating loss carry forward	$	1,065,523	$	703,074
US Capital Loss carry forward		407,869		407,869
Non-Qualified Stock Options		61,227		61,227
Canadian Operating loss carry forward		907,909		809,262
Resources pools Canada – available for expense		686,011		646,987
Resource Assets capitalized		426,094		401,856
Total	$	3,554,633	$	3,030,275

Valuation Allowance	$	(3,483,553	)	$	(2,994,618	)
Defferred Tax Assets (Net of Allowance)		71,079			35,658
Net deferred tax liabilities Accumulated Depletion		(71,079	)		(35,658	)
Total		(71,079	)		(35,658	)
Net Deferred asset/liabilities	$	-		$	-