COMMITMENTS AND CONTINGENCIES

10 Months Ended

Aug. 31, 2011

Commitment and Contingencies

Commitments and Contingencies Disclosure [Text Block]

NOTE 10 -COMMITMENTS AND CONTINGENCIES

Employment Agreement

Randall Lanham. The Company entered into an employment contract on July 1, 2011 with Mr. Lanham as Chief Executive Officer for a period of 3 years at an annual salary of $300,000.  Mr. Lanham will however forgo 50% of his salary until the Company receives a significant portion of its financing to expand its operations and execute its business plan. Mr. Lanham is entitled to an annual bonus to equal to 1% of the Company’s EBITA for each fiscal year during the Employment Period but not to exceed $500,000.  Mr. Lanham received 1,900,000 shares of the Company’s common stock in conjunction with the reverse merger transaction.  The Company shall award an additional 52,778 shares of its "restricted stock" for each month that Mr. Lanham remains in the employ of the Company, up to a maximum of thirty-six (36) months.

Paul Smith. The Company entered into an employment contract on July 1, 2011 with Mr. Smith as our President and Chief Financial Officer for a period of 3 years at an annual salary of $300,000.  Mr. Smith will however forgo 50% of his salary until the Company receives a significant portion of its financing to expand its operations and execute its business plan. Mr. Smith is entitled to an annual bonus to equal to 1% of the Company’s EBITA for each fiscal year during the Employment Period but not to exceed $500,000.  Mr. Smith received 1,900,000 shares of the Company’s common stock in conjunction with the reverse merger transaction.   The Company shall award an additional 52,778 shares of its "restricted stock" for each month that Mr. Smith remains in the employ of the Company, up to a maximum of thirty-six (36) months.

Operating Lease Commitments

The Company's initial headquarters, operations and manufacturing facilities are located at 7432 State Road 50, Suite 101,  Groveland, FL, in a light-industrial complex 25 miles west of Orlando, FL.   The Company has leased an office / warehouse complex with a large warehouse facility for its planned Mineral Recovery Operation and Bio-Diesel Operation. The warehouse contains the completed 5,000 ton per year facility, which is already plumbed for expansion to a 10,000 concentrated ton per year facility.  The leases shall be for a period of one (1) year term commencing April 1, 2011 with annual rent of $189,390.  The Company has an option to extend the term of these leases for five successive periods of one year each with a 3.5% escalation clause upon each renewal.

Minimum lease payments are as follows:

Year ended August 31,
2012	$	110,477

Joint Venture Agreements

On April 28, 2011, the Company entered into a joint venture agreement for the purpose of acquiring fifty percent (50%) ownership of certain intellectual property.  In exchange for the fifty percent ownership, the Company is obligated to provide funding to build a facility to process mineral tailing with production of 2,000 tons per year.  Each party of the joint venture shall share in the gross proceeds on a fifty/fifty basis; gross proceeds is total sales less amounts due tailing/ore provider and operating costs estimated at $2,000 per ton.

In conjunction with the Joint Venture Agreement, the Company issued an aggregate of 5,000,000 shares of its common stock to consultants for services rendered as compensation with a fair value of $100,000, which were recorded in the current period’s operations.  In addition, each member of the joint venture shall be entitled to one board seat on the other's board of directors.

Broken Hills, LLC.

The Company entered a mining agreement to supply ore for processing with Broken Hills, LLC.  The agreement stipulates the companies will split gross receipt revenues.  The Company will retain sixty percent (60%) of gross receipt revenue, while Broken Hills, LLC. will receive forty percent (40%) of gross receipt revenue for the initial twenty-thousand (20,000) tons of raw ore processed.  Once production has reached twenty-thousand tons of ore processed, the Companies will split gross receipt revenues in a manner of ninety-five percent (95%) for the Company and five percent (5%) to Broken Hills, LLC.

Litigation

The Company is subject at times to other legal proceedings and claims, which arise in the ordinary course of its business.  Although occasional adverse decisions or settlements may occur, the Company believes that the final disposition of such matters should not have a material adverse effect on its financial position, results of operations or liquidity.  There was no outstanding litigation as of August 31, 2011.