ORGANIZATION AND BUSINESS

12 Months Ended

May 31, 2012

ORGANIZATION AND BUSINESS [Abstract]

ORGANIZATION AND BUSINESS

1. ORGANIZATION AND BUSINESS

Organization of Company

U.S. Precious Metals, Inc. (the "Company") was incorporated in the State of Delaware on January 21, 1998 as a wholly owned subsidiary of American International Ventures, Inc. ("American International"). On May 9, 2002, the board of directors of American International declared a dividend, in the form of our common stock to be issued to its shareholders of record on that date. On the record date of such dividend, American International had 274 shareholders of record. The ratio of common stock of the Company received by each American International shareholder was one share of Company common stock for each 10 shares of American International common stock held. A total of 1,961,184 shares of common stock were issued to shareholders of American International on the record date. These shares represented all of the issued and outstanding capital stock of the Company on that date. American International did not retain any shares of our common stock.

In March 2002, the Company entered into an oral arrangement with the owners of a mining property located in Mexico known as the Solidaridad mining claims. At the time, little geological information was known to American International about the property other than information collected by local residents. Based upon available information, the board of directors of American International determined that they were more interested in identifying mineral properties in the United States that had proven or probable resources, and were not interested in properties outside the United State requiring significant exploration work. Consequently, the board of directors of American International determined to separate the two companies by declaring the stock dividend discussed above so that each company could focus exclusively on its respective business.

On March 5, 2003, the Company formed a subsidiary, U.S. Precious Metals de Mexico, S.A. de C.V., a Mexican corporation (the "Mexican Sub"). Since the formation of the Mexican Sub, the Company has acquired the mineral rights to approximately 37,000 acres of property. Virtually all of our activities take place in Mexico through the Mexican Sub.

The Company's common stock began trading on the OTC Bulletin Board under the symbol "USPR" on January 15, 2006. The Company's common stock now trades on the OTC-QB under the symbol "USPR."

Business

The Company has acquired exploration or exploitation concessions to approximately 37,000 acres of land in Michoacán, Mexico. Below is a list of the concessions which the Company has acquired:

Name of Concession	Title Number	Hectares*	Date Acquired	Expiration Date
Solidaridad I	220315	174.5408	July 11, 2003	July 10, 2053
Solidaridad II	220503	2162.2311	August 14, 2003	August 13, 2053
Solidaridad II, Fraction A	220504	1.4544	August 14, 2003	August 13, 2053
Solidaridad II, Fraction B	220505	.0072	August 14, 2003	August 13, 2053
Solidaridad III	223444	294.0620	December 14, 2004	December 13, 2054
Solidaridad IV	220612	149.4244	September 4, 2003	September 3, 2053
Solidaridad V (also known as Le Ceiba)	223119	921.3201	October 19, 2004	October 18, 2054
La Sabila	227272	11,405.0000	June 2, 2006	June 1, 2056

*A Hectare is equivalent to 2.47 acres.

The above group of concessions are collectively referred to as the "Solidaridad Concessions" The Company's concessions have a term of fifty years from the date first acquired and can be renewed for another fifty years. Concessions grant the holder the right to explore and exploit all minerals found in the ground. In order to maintain the concessions, the Company must pay surface taxes semi-annually in January and July and perform minimum amounts of assessment work, on a calendar year basis. Assessment work reports are required to be filed annually in May for the preceding calendar year. The amount of surface taxes and annual assessments are set by regulation and may increase over the life of the concession and include periodic adjustments for inflation.

Mining concessions do not automatically grant the holder the right to enter or use the surface land of the property where such mining concessions are located. In order to access the surface land, the holder must obtain permission from the surface owner. The Company currently has secured access rights to the portions of the Solidaridad Property where its concessions Solidaridad I, Solidaridad III, and Solidaridad V are located by way of a written agreement entered into by and between its Mexican Subsidiary and the owners of the portions of the Solidaridad Property where these concessions are located. This agreement requires the Company to pay an annual rent to the landowner. The Company is in the process of securing, but has not yet secured, access rights to the other portions of the Solidaridad Property, which it plans to do in the future in connection with any decision to begin exploration and/or exploitation of those areas. If the Company is ultimately unable to receive access, or unable to receive access at a reasonable price, it may affect the ability of the Company to explore for, or exploit, mineralized material from those areas.

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As shown in the financial statements, the Company has no established source of revenues, experienced continuing losses, a working capital deficit of $3,070,536 accumulated losses of $24,235,453 since Inception (January 21, 1998), recurring negative cash flows from operations, and does not presently have sufficient resources to accomplish its objectives during the next twelve months. We are in default on repayment of our convertible note obligations ($840,692) and a past due liability to our former attorneys ($1,614,216) which collectively total $2,454.908. These conditions raise substantial doubt about the ability of the Company to continue as a going concern. The financial statements do not include adjustments relating to the recoverability of assets and classification of liabilities that might be necessary should the Company be unable to continue in operation. The Company's present plans, the realization of which cannot be assured, to overcome these difficulties include, but are not limited to, the continuing effort to raise capital in the public and private markets.