0001137050-15-000176.txt : 20151113 0001137050-15-000176.hdr.sgml : 20151113 20151113131055 ACCESSION NUMBER: 0001137050-15-000176 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 11 CONFORMED PERIOD OF REPORT: 20150930 FILED AS OF DATE: 20151113 DATE AS OF CHANGE: 20151113 FILER: COMPANY DATA: COMPANY CONFORMED NAME: LIBERTY SILVER CORP CENTRAL INDEX KEY: 0001407583 STANDARD INDUSTRIAL CLASSIFICATION: METAL MINING [1000] IRS NUMBER: 320196442 STATE OF INCORPORATION: NV FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 333-150028 FILM NUMBER: 151228179 BUSINESS ADDRESS: STREET 1: 181 BAY STREET STREET 2: SUITE 2330 CITY: TORONTO STATE: A6 ZIP: M5J 3T3 BUSINESS PHONE: 888-749-4916 MAIL ADDRESS: STREET 1: 181 BAY STREET STREET 2: SUITE 2330 CITY: TORONTO STATE: A6 ZIP: M5J 3T3 FORMER COMPANY: FORMER CONFORMED NAME: Liberty Silver Corp DATE OF NAME CHANGE: 20100212 FORMER COMPANY: FORMER CONFORMED NAME: Lincoln Mining Corp DATE OF NAME CHANGE: 20070723 10-Q 1 libertysilverform10qseptembe.htm Form 10Q



UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


FORM 10-Q


[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2015


[    ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


Commission File Number: 333-150028


LIBERTY SILVER CORP.

 (Exact name of registrant as specified in its charter)


Nevada

 

32-0196442

(State or other jurisdiction of incorporation)

 

(IRS Employer Identification Number)

 

181 Bay Street, Suite 2330

Brookfield Place, P.O. Box 848

Toronto, Ontario, Canada, M5J 2T3

(Address of principal executive offices)

888-749-4916

Registrant’s telephone number, including area code

Copies to:

Gary S. Joiner, Esq.

Frascona, Joiner, Goodman and Greenstein, P.C.

4750 Table Mesa Drive,

Boulder, Colorado 80305

Telephone: (303) 494-3000



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 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.  

[ X ] Yes   [ ] No


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). [ X ] Yes   [ ] No


Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting Company.  See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting Company” in Rule 12b-2 of the Exchange Act.




1








Large accelerated filer [ ]

Accelerated filer [ ]

Non-accelerated filer [ ]  (Do not check if a smaller reporting Company)

Smaller reporting Company [ X ]


Indicate by check mark whether the registrant is a shell Company (as defined in Rule 12b-2 of the Exchange Act). [ ]Yes [X ] No


As of November 13, 2015 the Issuer had 12,354,497 shares of common stock issued and outstanding.



2









PART I - FINANCIAL INFORMATION


ITEM 1.

FINANCIAL STATEMENTS


The financial statements of Liberty Silver Corp., (“Liberty Silver”, the “Company”, or the “Registrant”) a Nevada corporation, included herein were prepared, without audit, pursuant to rules and regulations of the Securities and Exchange Commission.  Because certain information and notes normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America were condensed or omitted pursuant to such rules and regulations, these financial statements should be read in conjunction with the financial statements and notes thereto included in the audited financial statements of the Company in the Company's Form 10-K for the fiscal year ended June 30, 2015, and all amendments thereto.









LIBERTY SILVER CORP.

(AN EXPLORATION STAGE COMPANY)

INTERIM UNAUDITED FINANCIAL STATEMENTS

PERIOD ENDED SEPTEMBER 30, 2015



INDEX TO FINANCIAL STATEMENTS:

Page

 

 

Balance Sheets

4

 

 

Statements of Operations and Comprehensive Loss

5

 

 

Statements of Cash Flows

6

 

 


Notes to Interim Unaudited Financial Statements   


7-12






3













Liberty Silver Corp.

 

 

(An Exploration Stage Company)

 

 

Balance Sheets

 

 

As at,

September 30,

2015

June 30,

2015

$

$

 

 

(unaudited)

 

ASSETS

 

 

Current assets

 

 

 

Cash and cash equivalents

39,849

152,351

 

Deposit

9,137

9,627

 

Other assets

11,704

10,457

 

Prepaid expenses

120,156

121,565

Total current assets

180,846

294,000

Property and equipment

 

 

 

Furniture and office equipment

34,732

34,732

 

Accumulated depreciation

(26,790)

(25,052)

 

Mining interests

2,550,740

2,550,740

Total property and equipment

2,558,682

2,560,420

 

 

 

 

 Total assets

2,739,528

2,854,420

 

 

 

 

LIABILITIES

 

 

Current liabilities

 

 

 

Accounts payable

769,440

744,815

 

Accrued liabilities

55,040

50,669

 

Interest payable

85,220

56,695

 

Convertible loan payable

1,050,000

1,025,000

Total current liabilities  

1,959,700

1,877,179

 

 

 

 

Total liabilities

1,959,700

1,877,179

 

 

 

 

Commitments and contingencies (note 6)

-

-

 

 

 

 

SHAREHOLDERS' EQUITY

 

 

 

Preferred shares, $0.001 par value, 10,000,000 preferred shares authorized;

 

 

 

0 and 0 preferred shares issued and outstanding, respectively

-

-

 

Common shares, $0.001 par value, 300,000,000 common shares authorized;

 

 

 

12,354,497 and 12,354,497 common shares issued and outstanding, respectively

12,354

12,354

 

Additional paid-in-capital

13,795,674

13,777,162

 

Deficit accumulated during the exploration stage

(13,028,200)

(12,812,275)

Total shareholders’ equity

779,828

977,241

 

 

 

 

Total liabilities and shareholders’ equity  

2,739,528

2,854,420

 

 

 

 

 

Basis of presentation and going concern (note 1)

 

 

 

Subsequent events (note 7)

 

 

 

 

 

 

The accompanying notes are an integral part of these interim unaudited financial statements



4










Liberty Silver Corp.

 

 

(An Exploration Stage Company)

 

 

Statements of Operations and Comprehensive Loss

 

 

(Unaudited)

 

 

 

 

For the three months ended September 30,

2015

2014

 

 

$

$

 

 

 

 

Revenue

-

-

 

 

 

 

Operating expenses

 

 

 

Operation and administration

149,748

193,491

 

Legal and accounting

52,371

169,028

 

Exploration

9,320

9,462

 

Consulting

3,000

-

Total operating expenses

214,439

371,981

 

 

 

 

Loss from operations

(214,439)

(371,981)

 

 

 

 

Other gain or interest (expense)

 

 

 

Gain on foreign exchange

27,039

7,276

 

Interest expense

(28,525)

(33,548)

Total other gain or interest (expense)

(1,486)

(26,272)

 

 

 

 

Loss before income tax

(215,925)

(398,253)

Provision for income taxes

-

-

 

 

 

 

Net loss and comprehensive loss

(215,925)

(398,253)

Loss per common share – basic and fully diluted

(0.02)

(0.07)

Weighted average common shares – basic and fully diluted

12,354,497

5,630,281

 

 

 

 

The accompanying notes are an integral part of these interim unaudited financial statements



5








Liberty Silver Corp.

 

 

(An Exploration Stage Company)

 

 

Statements of Cash Flows

 

 

(Unaudited)

 

 

 

 

 

 

For the three months ended September 30,

2015

2014

 

 

 

$

$

 

 

 

 

 

Cash flows from operating activities

 

 

 

Net loss and comprehensive loss

(215,925)

(398,253)

 

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

 

Stock based compensation

18,512

46,075

 

 

Shares issued for services

-

261,666

 

 

Depreciation expense

1,738

1,737

 

 

 

 

 

 

Changes in operating assets and liabilities:

 

 

 

 

Decrease in deposit

490

171

 

 

Increase in other assets

(1,247)

(8,753)

 

 

(Increase) decrease in prepaid expenses

1,409

(13,580)

 

 

Increase (decrease) in accounts payable

24,625

(36,672)

 

 

Increase (decrease) in accrued liabilities

4,371

(186,191)

 

 

Increase in interest payable

28,525

33,548

Net cash used in operating activities

(137,502)

(300,252)

 

 

 

 

 

Cash flows from financing activities

 

 

 

Proceeds from convertible loan payable

25,000

25,000

Net cash from financing activities

25,000

25,000

 

 

 

 

 

Decrease in cash and cash equivalents

(112,502)

(275,252)

Cash and cash equivalents, beginning of period

152,351

320,309

 

 

 

 

 

Cash and cash equivalents, end of period

39,849

45,057

 

 

 

 

 

The accompanying notes are an integral part of these interim unaudited financial statements








6







Liberty Silver Corp.

(An Exploration Stage Company)

Notes to Interim Unaudited Financial Statements

For the Three Months Ended September 30, 2015


Note 1 – Basis of Presentation and Going Concern


The accompanying interim unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules and regulations of the United States Securities and Exchange Commission for interim financial information.  Accordingly, they do not include all the information and footnotes necessary for a comprehensive presentation of financial position, results of operations, stockholders’ equity or cash flows. It is management's opinion, however, that all material adjustments (consisting of normal recurring adjustments) have been made which are necessary for a fair financial statement presentation.  The interim unaudited financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K, which contains the annual audited financial statements and notes thereto, together with the Management’s Discussion and Analysis, for the year ended June 30, 2015. The interim results for the period ended September 30, 2015 are not necessarily indicative of the results for the full fiscal year. The interim unaudited financial statements are presented in USD, which is the functional currency.


These interim unaudited financial statements have been prepared on a going concern basis.  The Company has incurred losses since inception resulting in an accumulated deficit of $13,028,200 and further losses are anticipated in the development of its business.  The ability of the Company to emerge from the exploration stage is dependent upon, among other things, obtaining additional financing to continue operations, explore and develop the mineral properties and the discovery, development, and sale of reserves. The Company does not have sufficient working capital needed to meet its current fiscal obligations. In order to continue to meet its fiscal obligations in the current fiscal year and beyond, the Company must seek additional financing. Its ability to continue as a going concern is dependent upon the ability of the Company to generate profitable operations in the future and/or to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due.  The accompanying interim unaudited financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

Management considers various financing alternatives including, but not limited to, merger and acquisition activity, raising capital through the equity markets and debt financing. These unaudited interim financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts of and classification of liabilities that might be necessary in the event the Company cannot continue in existence.


These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern.  


On January 30, 2015, the Company completed a share consolidation of its common shares on the basis of one (1) new post-consolidation common share for every 15 pre-consolidated common shares. The number of authorized shares was not reduced as a result of this share consolidation. The 185,309,574 common shares of the Company outstanding immediately prior to consolidation were reduced to 12,354,497 common shares, as approved by shareholders at the Company’s annual general and special meeting held on December 5, 2014. No fractional shares were issued. Any fractions of a share were rounded up to the next whole common share. A new CUSIP number of 53121P206 replaced the old CUSIP number of 53121P107, to distinguish between the pre- and post-consolidated shares.  In conjunction with this share consolidation, corresponding adjustments were made in the number of options and warrants issued and outstanding, and in the exercise prices of such options and warrants. All outstanding common shares and per share amounts contained in the interim unaudited financial statements and related notes have been retroactively adjusted to reflect this share consolidation for all periods presented.





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Note 2 – Nature of Operations


Liberty Silver Corp. was incorporated under the laws of the state of Nevada, U.S.A on February 20, 2007 under the name Lincoln Mining Corp. Pursuant to a Certificate of Amendment dated February 11, 2010, the Company changed its name to Liberty Silver Corp. The Company’s registered office is located at 1802 N. Carson Street, Suite 212, Carson City Nevada 89701, and its head office is located at 181 Bay Street, Suite 2330, Toronto, Ontario, Canada, M5J 2T3, and its telephone number is 888-749-4916. As of the date of this Form 10-Q, the Company had no subsidiaries.


The Company was incorporated for the purpose of engaging in mineral exploration activities. On March 29, 2010, the Company entered into an Exploration Earn-In Agreement relating to the Trinity Project located in Pershing County, Nevada. The Company is currently engaged in the exploration of the Trinity Project, and has not yet commenced development stage activities, however, the Company intends to engage in efforts to develop the Trinity Project in the future. Subject to securing adequate financing, the plan of operation for the fiscal year ending June 30, 2016 is to conduct additional mineral exploration activities at the Trinity Silver property, which plan will extend into the fiscal year ending June 30, 2017. Subject to the availability of funding, operations at the Trinity Project will consist of (i) an effort to expand the known mineralized material through drilling, (ii) permitting for operation, if deemed economically viable, (iii) metallurgical studies aimed at enhancing the recovery of the silver and by-product lead and zinc, (iv) engineering design related to potential construction of a new mine, and (v) complete feasibility studies relating to possible re-opening of the historic mine. Exploration of the property would be conducted simultaneously with the mine development in order to locate additional mineralized materials.


Note 3 - Mineral Property

    

The Company acquired its interest in the Trinity Project through an Exploration Earn-In Agreement. On March 29, 2010, the Company entered into the Earn-In Agreement relating to the Trinity Project with AuEx, Inc., a Nevada company beneficially owned by another Nevada company AuEx Ventures, Inc. AuEx, Inc. held an exclusive interest in the Trinity Project by way of a Minerals Lease and Sublease with Newmont Mining USA Limited, a Delaware corporation who owns or leases the various unpatented mining claims and portions of private land comprising the Trinity Project. As part of a restructuring transaction by AuEx Ventures, Inc., another Nevada company Renaissance Exploration Inc. (“Renaissance”) was spun out, and on July 1, 2010 AuEx, Inc. assigned all of its interest in the Trinity Project and the Earn-In Agreement to Renaissance, who currently holds a 100% leasehold interest in the Trinity Project.  The Minerals Lease and Sublease grants to Newmont, a right of first offer on any transfer of AuEx, Inc.’s interests in the Trinity Project to any non-affiliate of AuEx, Inc., and also gives Newmont a right to either enter into a joint venture agreement covering the Trinity Project and any other real property interests that AuEx, Inc. holds or acquires within the Trinity Project, or receive a royalty on all mineral production from such properties.  Currently the rights to the Trinity Project are held 100% by Renaissance, pursuant to an assignment of such rights from AuEx, Inc.  The Company entered into the Earn-In Agreement providing the Company with a right to earn a 70% undivided interest in rights of Renaissance in the Trinity Project (the “70% Interest”).


Under the Earn-In Agreement, the Company may earn-in the 70% Interest in the Trinity Project during a 6-year period in consideration of (1) a signing payment of $25,000, which has been made, (2) an expenditure of a cumulative total of $5,000,000 in exploration and development expenses on the Trinity Project by March 29, 2016, including a minimum of $500,000 which must be expended within one year from the effective date of the Agreement, and (3) completion of a bankable feasibility study on the Trinity Project on or before the 7th anniversary date of the Agreement. Item (1) has been completed by the Company, and the Company has satisfied item (2), and has reported its compliance as of March 29, 2013, which is the end of the third year from the inception of the Earn-in Agreement.


On October 15, 2012, the Company entered into and closed a Purchase Agreement (the “Purchase Agreement”) with Primus Resources, L.C. and James A. Freeman (collectively “Seller”) to acquire unpatented mining claims, Nevada BLM Serial No. 799907, 799908, 799909, 799910, and 799911 covering approximately 100 acres of property located adjacent to the former Trinity Silver mine on the Company’s Trinity Project (the “Hi Ho Properties”). The Hi Ho Properties were previously the only acreage not controlled by the Company or its joint venture partner Renaissance Exploration Inc. in the Trinity Project. Under the terms of the Purchase Agreement, the Company provided cash consideration of US$250,000 and issued 172,222 restricted shares of common stock of the Company to Seller. In addition the Seller was granted a 2% net smelter royalty on future production from the Hi Ho Properties pursuant to the terms of a Deed with Reservation of Royalty Hi Ho Silver Claims.




8







The Trinity Project consists of a total of approximately 10,020 acres, including 5,676 acres of fee land and 253 unpatented mining claims.


The Company has completed some financing transactions, and continues to pursue additional financing opportunities in order to obtain the capital needed to fulfill its obligations under the terms of the Earn-In Agreement. There has been no mining of resources to date.


During the interim period ended September 30, 2014, the Company had incurred approximately $116,545 in exploration expenditures, which were reported under various line items on the statement of operations.  


During the interim period ended September 30, 2015, the Company had incurred approximately $62,656 in exploration expenditures, which were reported under various line items on the statement of operations.  


Note 4 – Convertible Loan Payable


On October 17, 2014, the Company amended and restated its agreement in relation to an existing $1,210,000 principal amount secured loan facility (the “Original Loan”) made available by BG Capital Group Ltd. (“BGCG”). Under the terms of the revised agreement, BGCG has made available to the Company a committed non-revolving term credit facility in the principal amount of $1,250,000 (the “New Loan”), which shall initially bear interest at a rate of 11% per annum and which shall be secured by a charge on all of the assets of the Company. The Company has also repaid the indebtedness to BGCG under the Original Loan by converting the outstanding, aggregate total sum of the principal amount of the Original Loan, together with all accrued and unpaid interest thereon, being $1,248,653 (the “Debt”), into 6,659,486 common shares of the Company (“Common Shares”) at a price of $0.1875 per Common Share, in full satisfaction of the Debt under the Original Loan.


The New Loan consists of up to $1,250,000 of new credit facilities, of which $25,000 had been advanced to the Company pursuant to a promissory note, which was superseded by the New Loan and became part of the first advance under the New Loan in the aggregate amount of $350,000.


The key terms of the New Loan are as follows:


·

a total of $1,050,000 of up to $1,250,000 was advanced to Liberty by the end of the period;


·

the outstanding principal amount bears interest at 11% per annum from date of advance and becomes due and payable in its entirety one year following the Closing Date (the “Maturity Date”). The Company has the option to extend the Maturity Date by six months, with interest payable at 15% per annum accruing on the outstanding principal amount during such extension period. On September 25, 2015, the Company exercised the option to extend the Maturity date to April 15, 2016;


·

the New Loan is secured by a charge on all of the assets of the Company; and


·

BGCG, at any time up to one business day prior to the Maturity Date, at its sole option, shall be entitled to convert all or any portion of the outstanding principal amount of the New Loan advanced to Liberty (including all deferred interest), together with all accrued interest, into Common Shares, on the basis of $0.1875 per Common Share. The conversion rights are subject to the Company having sufficient authorized capital available to satisfy the exercise of the conversion rights from time to time. To the extent there is not sufficient authorized capital at any time to permit the full exercise of all conversion rights available to BGCG at such time, the Company shall take all reasonable commercial efforts to hold, as expeditiously as possible, a shareholders’ meeting to approve the necessary increase to the authorized capital in order that the conversion rights available to BGCG may be exercised to its fullest extent.


The carrying value of the conversion option equity component of the convertible loan has been determined to be nil and the carrying value of the liability component is $1,050,000.  The effective interest rate on the liability component of the convertible loan is 11% for the period ending October 15, 2015 and 15% per annum during the extended period beginning October 15, 2015.




9







The lender pursuant to the New Loan is BGCG.  Immediately following the Closing Date, BGCG and certain of its related parties owned, directly and indirectly, 8,657,417 Common Shares, which represented approximately 70.1% of the Company’s 12,354,497 issued and outstanding Common Shares on the Closing Date. Other than pursuant to the New Loan, the Company does not have any contractual or other relationship with BGCG.


Note 5 – Capital Stock and Warrants


Authorized


The total authorized capital is as follows:

-

300,000,000 common shares with a par value of $0.001 per common share; and

-

10,000,000 preferred shares with a par value of $0.001 per preferred share


Issued and outstanding


On June 30, 2014, the Company reached an agreement with arm’s-length creditors to settle indebtedness in the aggregate amount of $226,000 by issuing 48,800 common shares, including 25,466 common shares at a price of $7.50 per share and 23,334 common shares at a price of $1.50 per share.


On September 30, 2014, the Company issued 34,889 common shares to employees of the Company, at a price of $7.50 per share, in settlement of arrears compensation obligations of $261,665.


On October 17, 2014, the Company issued 6,659,487 common shares, at a price of $0.1875 per share, in settlement of a secured loan facility, which included any unpaid and accrued interest, totaling $1,248,654. In conjunction with the issuance of these common shares, the Company incurred $40,400 in share issuance costs.


On December 31, 2014, the Company issued 11,333 common shares to employees of the Company, at a price of $7.50 per share, in settlement of arrears compensation obligations of $85,000.


For the above share issuances, the shares were not registered under the Securities Act of 1933 in reliance upon the exemptions from registration contained in Regulation S of the Securities Act of 1933. No underwriters were used, nor were any brokerage commissions paid in connection with the above share issuances.


Warrants


On November 13, 2013, 433,333 common share purchase warrants were terminated as a condition of the Loan with BGCG. The warrants were originally issued pursuant to a private placement offering of Subscription Receipts, which Subscription Receipts were converted into Units, without additional consideration, effective December 19, 2011. The Units were comprised of one common share and one common share purchase warrant. The warrants were exercisable at a price of $9.75 per common share.


On December 31, 2013, 173,833 common share purchase warrants expired. The warrants were originally issued pursuant to a private placement offering of 175,167 Units on December 19, 2011. The Units were comprised of one common share and one common share purchase warrant. The warrants were exercisable at a price of $9.75 per common share.


On April 1, 2014, 20,000 common share purchase warrants expired. The warrants were originally issued in connection with notes payable issued to related parties on April 1, 2011. The warrants were exercisable at $8.25 per common share.


As at September 30, 2015, the aggregate weighted average intrinsic value of 13,333 warrants outstanding was $0, and the weighted average grant date fair value of each warrant outstanding was CAD $11.25. The 13,333 warrants expire on August 4, 2016.




10









Stock Options


Effective December 19, 2013, 260,000 vested stock options were cancelled, and 10,000 non-vested stock options were forfeited.  Further, the Company granted 13,333 stock options at an exercise price of $1.50 each.  


Effective December 21, 2013, 20,000 vested stock options had expired.


On April 8, 2014, the Company granted a total of 333,333 stock options to purchase common shares to directors, officers and an employee of the Company, at an exercise price of $1.50 per share and for a term of 5 years.


On November 14, 2014, the vested and non-vested portion of the 400,000 stock options granted to purchase common shares by directors, officers and employees were cancelled or forfeited.


On February 17, 2015, the Company granted a total of 1,182,667 stock options to purchase common shares to directors, officers and an employee of the Company, at an exercise price of $0.1875 per share and for a term of 5 years.


Stock based compensation expense, resulting from the vesting of stock options, for the three months ended September 30, 2015 was $18,512 (2014 - $46,075), which is included in operation and administration expense on the statement of operations and comprehensive loss.


As at September 30, 2015 there were 1,229,334 stock options outstanding, exercisable at a weighted average exercise price of $0.61 per share, and expiring as follows: 46,667 options, exercisable at $11.25 per share, expiring on March 31, 2016; and, 1,182,667 options, exercisable at $0.1875 per share, expiring on February 17, 2020.


Note 6 – Commitments and Contingencies


Effective November 1, 2011, and terminating on April 28, 2016, the Company entered into a sub-lease agreement for the lease of premises in Toronto, Ontario, Canada, for a term of 54 months. The Company has its head office at these premises, which is approximately 1,400 square feet. The annual base rent commitment for the Toronto head office space is $35,851 (CAD $48,094).


Effective February 8, 2012, the Company entered into a lease agreement for the lease of premises in Sparks, Nevada, USA, for a term of 12 months, and terminating on January 31, 2013.  The lease agreement was amended such that the term was extended for a further 24 months, and terminating on January 31, 2015, and then extended for a further 12 months, terminating on January 31, 2016. The Company has its field office and warehouse at these premises, which is approximately 5,500 square feet. The annual base rent commitment for the Sparks field office space is $30,624 for the period from February 1, 2014 to January 31, 2015, and $30,624 for the period from February 1, 2015 to February 1, 2016.


As at September 30, 2015, the Company had a commitment, for the above noted leases, of $31,121 remaining.


The following table outlines the remaining lease commitment to the end of the next five fiscal years based on the leases that are currently entered into by the Company:


 

Total Lease Commitment

June 30, 2016 and thereafter

$0


On September 12, 2013, the Company and certain of its current and former officers and directors (the “Liberty Silver Parties”) were named as defendants in a proposed securities class action lawsuit filed against Robert Genovese, certain individuals alleged to have collaborated with Mr. Genovese, and an offshore investment firm allegedly controlled by Mr. Genovese (the “Action,” Case No. 9:13-cv-80923-KLR, Stanaford v. Genovese et al.). The action alleged violations of the United States Securities Exchange Act of 1934 and rules thereunder relating to anomalous trading activity and fluctuations in the Company’s share price from August through October 2012.



11








On December 8, 2014, without in any way acknowledging any fault or liability, the Company reached a settlement in principle, providing for a payment of $1 million cash, to be paid by the Company's D&O insurance carriers. On August 17, 2015, with no admission of fault or liability by the Liberty Silver Parties, the Court approved the settlement class and fully and finally dismissed with prejudice all claims against Liberty Silver, Geoffrey Browne, and William Tafuri in the litigation. Although defendants continue to deny plaintiffs' allegations, the Company believed it was in the best interests of its stockholders to focus its attention on its business and put the matter behind it.


Additionally, in the normal course of operations, certain other contingencies may arise relating to legal actions undertaken against the Company. In the opinion of management, whether the impact of such potential legal actions would have a material adverse effect on the Company's results of operations, liquidity, or its financial position, cannot be determined in advance.


Note 7 – Subsequent Events


On November 6, 2015, the Company received a further $25,000 of the outstanding balance from the final $250,000 loan advance that had originally become due on June 30, 2015, bringing the amount advanced to $75,000 from the total amount that is overdue. The remaining $175,000 portion of the final advance remains outstanding.


The Company has evaluated subsequent events for the interim period ended September 30, 2015 through the date these interim unaudited financial statements were issued, and concluded, aside from the foregoing, that there were no other events or transactions occurring during this period that required recognition or disclosure in its interim financial statements.



12








ITEM 2.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS


SPECIAL NOTE OF CAUTION REGARDING FORWARD-LOOKING STATEMENTS


CERTAIN STATEMENTS IN THIS REPORT, INCLUDING STATEMENTS IN THE FOLLOWING DISCUSSION, ARE WHAT ARE KNOWN AS "FORWARD LOOKING STATEMENTS", WHICH ARE BASICALLY STATEMENTS ABOUT THE FUTURE. FOR THAT REASON, THESE STATEMENTS INVOLVE RISK AND UNCERTAINTY SINCE NO ONE CAN ACCURATELY PREDICT THE FUTURE. WORDS SUCH AS "PLANS," "INTENDS," "WILL," "HOPES," "SEEKS," "ANTICIPATES," "EXPECTS "AND THE LIKE OFTEN IDENTIFY SUCH FORWARD LOOKING STATEMENTS, BUT ARE NOT THE ONLY INDICATION THAT A STATEMENT IS A FORWARD LOOKING STATEMENT. SUCH FORWARD LOOKING STATEMENTS INCLUDE STATEMENTS CONCERNING OUR PLANS AND OBJECTIVES WITH RESPECT TO THE PRESENT AND FUTURE OPERATIONS OF THE COMPANY, AND STATEMENTS WHICH EXPRESS OR IMPLY THAT SUCH PRESENT AND FUTURE OPERATIONS WILL OR MAY PRODUCE REVENUES, INCOME OR PROFITS. NUMEROUS FACTORS AND FUTURE EVENTS COULD CAUSE THE COMPANY TO CHANGE SUCH PLANS AND OBJECTIVES OR FAIL TO SUCCESSFULLY IMPLEMENT SUCH PLANS OR ACHIEVE SUCH OBJECTIVES, OR CAUSE SUCH PRESENT AND FUTURE OPERATIONS TO FAIL TO PRODUCE REVENUES, INCOME OR PROFITS. THEREFORE, THE READER IS ADVISED THAT THE FOLLOWING DISCUSSION SHOULD BE CONSIDERED IN LIGHT OF THE DISCUSSION OF RISKS AND OTHER FACTORS CONTAINED IN THIS REPORT ON FORM 10-Q AND IN THE COMPANY'S OTHER FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION. NO STATEMENTS CONTAINED IN THE FOLLOWING DISCUSSION SHOULD BE CONSTRUED AS A GUARANTEE OR ASSURANCE OF FUTURE PERFORMANCE OR FUTURE RESULTS.

DESCRIPTION OF BUSINESS


The Corporation


Liberty Silver Corp. was incorporated under the laws of the state of Nevada, U.S.A on February 20, 2007 under the name Lincoln Mining Corp.  Pursuant to a Certificate of Amendment dated February 11, 2010, the Company changed its name to Liberty Silver Corp.  The Company’s registered office is located at 1802 N. Carson Street, Suite 212, Carson City Nevada 89701, and its head office is located at 181 Bay Street, Suite 2330, Toronto, Ontario, Canada, M5J 2T3, and our telephone number is 888-749-4916.


Current Operations


Overview


The Company was incorporated for the purpose of engaging in mineral exploration activities, and on May 24, 2007, purchased the Zone Lode mining claim located in Elko County, Nevada, for a purchase price of $10,000. The objective was to conduct mineral exploration activities on the Zone Lode claim to assess whether it contained economic reserves of copper, gold, silver, molybdenum or zinc. The Company was not able to determine whether this property contained reserves that were economically recoverable and as a result, ceased to explore this property. The Company’s current business operations are focused on exploring and developing the Trinity Silver property located in Pershing County, Nevada (the “Trinity Project”).


The Company acquired its interest in the Trinity Project through an Exploration Earn-In Agreement with AuEx, Inc., a Nevada company (the “Earn-In Agreement”), discussed below. The Earn-In Agreement is subject to the rights and obligations of AuEx, Inc. and its successors and assigns under a Minerals Lease and Sublease between AuEx, Inc. and Newmont Mining USA Limited. As part of a restructuring transaction by AuEx Ventures, Inc., another Nevada company



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Renaissance Gold Inc. (“Renaissance”) was spun out, and on July 1, 2010 AuEx, Inc. assigned all of its interest in the Trinity Project and the Earn-In Agreement to Renaissance, who currently holds a 100% leasehold interest in the Trinity Project pursuant to the Minerals Lease and Sublease. The Company’s rights in the Trinity Project are derived from and based upon the rights of Renaissance through the Minerals Lease and Sublease.  


The Trinity Project consists of a total of approximately 10,020 acres, including 5,676 acres of fee land and 253 unpatented mining claims.  Under the Earn-In Agreement, the Company may earn-in the 70% Interest in the Trinity Project during a 6-year period in consideration of (1) a signing payment of $25,000, which has been made, (2) an expenditure of a cumulative total of $5,000,000 in exploration and development expenses on the Trinity Project by March 29, 2016, including a minimum of $500,000 which must be expended within one year from the effective date of the Agreement, and (3) completion of a bankable feasibility study on the Trinity Project on or before the 7th anniversary date of the Agreement. Item (1) has been completed by the Company, and the Company has satisfied item (2), and has reported its compliance as of March 29, 2013, which is the end of the third year from the inception of the Earn-in Agreement.


The Company’s business operations are currently focused on efforts to explore the Trinity Project. The Company has not yet commenced development stage activities, however, subject to the availability of adequate funding, the Company intends to engage in efforts to develop the Trinity Project in the future. The Company foresees future operations at the Trinity Project consisting of (i) an effort to expand the known mineralized material through drilling, (ii) permitting for operation, if deemed economically viable, (iii) metallurgical studies aimed at enhancing the recovery of the silver and by-product lead and zinc, and (iv) engineering design related to potential construction of a new mine. Exploration of the property would be conducted simultaneously with the mine development in order to locate additional mineralized materials.


Products


The Company’s anticipated product will be precious and base metal-bearing concentrates and/or precious metal bullion produced from ores from mineral deposits which it hopes to discover and exploit through exploration and acquisition. The Company anticipates such products will be silver, lead and zinc.


Trinity Project Location


The Trinity Project is located along the west flank of the Trinity Range in Pershing County, Nevada, about 25 miles by road northwest of Lovelock, NV, the county seat.   The Trinity Project consists of approximately 10,020 acres, which includes 253 unpatented lode mining claims and portions of nine sections of private land.  Each claim filed with the BLM has an associated maintenance fee of $140 per year for each assessment year (which runs from September 1 through August 31). This fee must be paid by midnight on August 31 of each year to maintain the claim's validity for the succeeding assessment year. The fees for the claims comprising the Trinity Project are paid by Renaissance in accordance with the Lease they hold with Newmont. The Company reimburses Renaissance for this expenditure. All of the fees have been paid to the BLM for the current assessment year and all filings are current.  There are 253 claims, which based upon current maintenance fees, costs approximately $35,420 per assessment year to maintain.


Infrastructure


The Trinity Project is situated in western Nevada, a locale which is host to many metal mines, mining equipment companies, drilling companies, mining and metallurgical consulting expertise, and experienced mining personnel. Its location is accessible by all-weather road through an area of very sparse population. There is no infrastructure on the property. All buildings have been removed, all wells have been properly abandoned, and there is no equipment on site. The mine site has been totally reclaimed to the satisfaction of the State of Nevada. The need for power and water would be defined by a feasibility study and mine plan both of which are premature at this point in time.


Government Regulation and Approval


The following permits will be necessary to put the Trinity Project into production.



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Permit/notification

Agency

 

 

 

 

- Mine registry

Nevada Division of Minerals

 

- Mine Opening notification

State Inspector of Mines

 

- Solid Waste Landfill

Nevada Bureau of Waste Management

 

- Hazardous Waste Management Permit

Nevada Bureau of Waste Management

 

- General Storm Water Permit

Nevada Bureau of Pollution Control

 

- Hazardous material Permit

State Fire Marshal

 

- Fire and Life Safety

State Fire Marshal

 

- Explosives Permit

Bureau of Alcohol, Tobacco, Firearms

 

- Notification of Commencement of Operations

Mine Safety and Health Administration

 

- Radio License

Federal Communications Commission


All of the Company's drilling operations to date have been on private land and, as a result, have not been subject to U.S. Bureau of Land Management jurisdiction. On private land in Nevada, the Company's activities are regulated by The Nevada Division of Environmental Protection and the Nevada Bureau of Mining Regulation and Reclamation (“NBMRR”) and no permit is needed as long as the disturbance created is less than five acres. Our total disturbance to date has been less than four acres, much of which has already been reclaimed, and as a result, we have not yet applied for a NBMRR permit. However, as a matter of courtesy, we have provided written correspondence to NBMRR to advise them of our activities.


Environmental Regulations


Our current exploration activities and any future mining operations (of which we currently have none planned), are subject to extensive laws and regulations governing the protection of the environment, waste disposal, worker safety, mine construction, and protection of endangered and protected species. We have made, and expect to make in the future, significant expenditures to comply with such laws and regulations. Future changes in applicable laws, regulations and permits or changes in their enforcement or regulatory interpretation could have an adverse impact on our financial condition or results of operations. In the event that we make a mineral discovery and decide to proceed to production, the costs and delays associated with compliance with these laws and regulations could stop us from proceeding with a project or the operation or further improvement of a mine or increase the costs of improvement or production.


We anticipate that the following environmental permits will be necessary for our anticipated operations:


§Permit for Reclamation

§Water Pollution Control Permit

§Air Quality Operating Permit

§Industrial Artificial Pond Permit

§Water Rights


The Company anticipates that, subject to the availability of funds or financing, it will begin soliciting bids for the programs necessary to obtain these permits.  The cost, timing, and work schedules are not yet available.


Competition


We compete with other mining and exploration companies in connection with the acquisition of mining claims and leases on silver and other precious metals prospects and in connection with the recruitment and retention of qualified employees. Many of these companies are much larger than we are, have greater financial resources and have been in the mining business much longer than we have. As such, these competitors may be in a better position through size, finances and experience to acquire suitable exploration properties. We may not be able to compete against these companies in acquiring new properties and/or qualified people to work on our current Trinity Project, or any other properties we may acquire in the future.


Given the size of the world market for precious metals such as silver and gold relative to the number of individual producers and consumers, we believe that no single company has sufficient market influence to significantly affect the price or supply of precious metals such as silver and gold in the world market.



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Employees


The Company currently has five employees: Manish Z. Kshatriya, the President and Chief Executive Officer, Chief Financial Officer, Secretary and Director of the Board; and, four independent directors serving on the Company’s board of directors.


Trinity Project Agreements


The Company acquired its interest in the Trinity Project through an Exploration Earn-In Agreement executed on March 29, 2010 with AuEx, Inc., a Nevada corporation.  AuEx, Inc. held an exclusive interest in the Trinity Project by way of a Minerals Lease and Sublease with Newmont Mining USA Limited. Effective as of July 1, 2010, AuEx, Inc., assigned all its rights in the Exploration Earn-In Agreement to another Nevada company, Renaissance Exploration, Inc. The terms of the Minerals Lease and Sublease Agreement and the Exploration Earn-In Agreement are discussed below.


Lease and Sublease Agreement


Renaissance’s rights in the Trinity Project are derived through a Minerals Lease and Sublease dated July 29, 2005 (the “Lease”) by and between Newmont Mining USA Limited, a Delaware corporation (“Newmont”) and AuEx, Inc., a Nevada corporation.


Consideration


The Lease was granted to Renaissance for the following consideration:


a)

Renaissance agreed to pay Newmont a claim fee reimbursement of $10,955 concurrently with the execution of the Lease (this amount was paid);

b)

Renaissance is required to expend a total of $2,000,000 in ascertaining the existence, location, quantity, quality or commercial value of a deposit of minerals within the Trinity Project on or before the seventh anniversary of the Lease;

c)

Prior to the commencement of any commercial production, Renaissance shall supply Newmont with a feasibility study with respect to the Trinity Project.


In the event the Company did not meet its minimum expenditure obligation in any year, it would have been obligated under the terms of the Earn-In Agreement to pay the amount of any deficiency to Renaissance Exploration, Inc. However, the Company exceeded its minimum expenditure obligation in each of the first three years, and by the end of the third year it had incurred a total of approximately $5,652,397 in expenses. As a result, the Company will not be obligated to pay any deficiency amounts to Renaissance for any future years.   


Joint Venture / Royalty


The Lease gives Newmont a right to either enter into a joint venture with Renaissance covering the Trinity Project and any other real property interests that Renaissance holds or acquires within the Trinity Project, or receive a royalty on all mineral production from such properties.


Joint Venture: The Lease contemplates the following schedule with respect to Newmont’s rights to enter into a joint venture with Renaissance:


a)

Before Renaissance spends $5 million and provides a feasibility study, Newmont can elect at any time to enter into a joint venture in which event Newmont would be required to pay all future joint venture expenses up to 250% of the expenditures made by Renaissance as of the date of Newmont’s election to enter into the joint venture.


b)

Upon Renaissance spending $5 million, but before the feasibility study, Renaissance shall deliver written notice to Newmont containing a summary of the expenditures made by Renaissance on the Trinity Project. Newmont may thereafter elect to enter into a joint venture by notifying Renaissance in writing of such election within 60 days of Newmont’s receipt of Renaissance’s initial notice. Under the joint venture, Newmont would be required



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to pay all future joint venture expenses up to 250% of the expenditures made by Renaissance as of the date of Newmont’s election to enter into the joint venture.


c)

After Renaissance spending $5 million, but before the feasibility study, at any time after the expiration of the 60 day period identified in section b above, Newmont can elect to enter into a joint venture in which event Newmont would be required to pay Renaissance 50% of the expenditures made in the Trinity Project up to the date of Newmont’s election to participate in a joint venture, and all future joint venture expenses up to 200% of such expenditures.


d)

At any time within 60 days after Renaissance’s delivery of feasibility study, Newmont can elect to enter into a joint venture at which time Newmont would be required to pay Renaissance 200% of expenditures made by Renaissance as of the date of Newmont’s election to enter into the joint venture. Additionally, Renaissance can elect to have Newmont finance Renaissance’s share of the joint venture expenses until the Trinity Project is put into commercial production. Following the commencement of commercial production, Newmont shall be entitled to recover such paid expenses with interest at the London Interbank Offering Rate. If Newmont fails to elect to participate in the Joint Venture within 60 days following the delivery of the feasibility study, Newmont’s right to participate in a joint venture shall terminate.


Should Newmont elect to participate in a joint venture with Renaissance, pursuant to the Lease, and its payment terms, Newmont will serve as the manager of the joint venture and own 51% of the joint venture with an option to acquire an additional 14% for additional payments to Renaissance (for a total participating interest of 65%). Pursuant to the Earn-In Agreement, we are entitled to 70% interest in the Trinity Project, subject only to the Newmont interest. Accordingly, if Newmont exercised all of its joint venture options under the Lease, we would own a 35% interest in the Trinity Project.


Royalty: In the event Newmont does not elect to participate in a joint venture, then Newmont shall have the right to receive a royalty on all mineral production from the Trinity Project. Pursuant to the Lease, if Newmont elects to not participate in the joint venture, then Renaissance shall pay to Newmont $1 million and the Lease shall terminate and Newmont shall transfer title to all property comprising the Trinity Project to Renaissance, and thereafter receive a royalty payment of up to 5% of the net smelter returns generated from the properties comprising the Trinity Project.


Buyout Option


The Lease provides Renaissance with a buyout option pursuant to which Renaissance holds the right to purchase Newmont’s rights in the Trinity Project through the payment of $1 million to Newmont. In the event Renaissance elects the buyout option, Newmont would transfer title to the Trinity Project to Renaissance through quit claim deed while retaining certain rights in the Trinity Project; such rights may include some form of joint venture or a royalty interest.


Ownership Interest – Earn-In Agreement


As noted above, the rights to the Trinity Project are held 100% by Renaissance, pursuant to an assignment of such rights from AuEx, Inc. The Company entered into the Earn-In Agreement providing the Company with a right to earn a 70% undivided interest in rights of Renaissance in the Trinity Project (the “70% Interest”), as set out below. The following is intended to be a summary of the material terms of the Earn-In Agreement, and is subject to, and qualified in its entirety, by the full text of the Earn-In Agreement.


Consideration


The exclusive right to acquire the 70% Interest in the Trinity Project was granted to the Company for the following consideration:


a)

The Company agreed to pay $25,000 upon execution of the Earn-In Agreement (this amount was paid);

b)

In order to obtain the 70% Interest in the Trinity Project, the Company is required to (i) produce a bankable feasibility study by March 29, 2017 and (ii) to expend a minimum of $5,000,000 in exploration on the Trinity Project as follows: $500,000 in the first year; $1,000,000 in the second year; $1,000,000 in the third year; $1,000,000 in the fourth year; $1,000,000 in the fifth year; and $500,000 in the sixth year.



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Any excess expenditure in any year shall be carried forward and applied to the subsequent year’s expenditure requirement, and the Company may accelerate the expenditures at its discretion. If the Company elects not to meet the minimum expenditure obligation during any year but wishes to maintain the Earn-In Agreement in full force and effect, or if it is subsequently determined that the minimum amount was not expended in any given year, the Company shall pay the amount of any deficiency to Renaissance.


Work Program


The Company shall be the operator and shall have full control over the content of work programs and annual expenditure amounts during the earn-in period, including having the authority to apply for all necessary permits, licenses and other approvals from the U.S., the State of Nevada or any other governmental or other entity having regulatory authority over any part of the Trinity Project.


Joint Venture


Upon the Company having acquired the 70% Interest in the Trinity Project by satisfying the minimum expenditure amounts and producing a bankable feasibility study, the Company and Renaissance shall enter into a formal joint venture agreement, and the Company will be the operator of the joint venture.


At such time as the Company earns the 70% Interest in the Trinity Project, the parties will thereafter participate in expenditures on the Trinity Project in accordance with their respective interests therein, or have their interest diluted in accordance with a straight-line dilution formula, as set forth in the joint venture agreement.


If through dilution the interest of a party is reduced to less than 10%, then that party’s participating interest shall automatically be converted to a 3% net smelter returns royalty interest. Should third party claims be acquired with royalties within the area of interest, the 3% royalty described above would be reduced by the amount of such royalty but not below 1%. This reduction does not apply to the royalty described under the heading “Royalty upon Termination of Interest” below.


Royalty upon Termination of Interest


If the Company elects to terminate its right to earn an interest in the Trinity Project prior to completing a bankable feasibility study by March 29, 2017, but has expended at least $3,000,000, the Company shall be entitled to a 4% net smelter returns royalty capped at twice its expenditure on the Trinity Project.


Termination


The Company may in its sole discretion terminate the Earn-In Agreement at any time by giving not less than 30 days prior written notice to that effect to Renaissance. Upon expiry of the 30-day notice period, the Earn-In Agreement will be of no further force and effect. Upon such termination, the Company shall have no further obligation to incur expenses on or for the benefit of the Trinity Project and shall have no further obligations or liabilities to Renaissance under the Earn-In Agreement or with respect to the Trinity Project (including without limitation liability for lost profits or consequential damages as a result of an election by the Company to terminate the agreement), other than (a) as set forth below, and (b) to reclaim (in accordance with applicable law) any disturbances of the Trinity Project made by the Company.


At any time the Company may, at its option, terminate its interest in some but less than all of the claims comprising the Trinity Project by written notice to Renaissance, provided that if such notice (or notice of termination of the Earn-In Agreement in its entirety) is received by Renaissance after June 30th of any year, the Company shall remain obligated to pay the claim maintenance fees (and make all filings and recordings required in connection therewith) for those claims to which such termination applies for the upcoming assessment year. To the extent the Company terminates its interest in some but less than all of the claims, the Earn-In Agreement shall remain in full force and effect with respect to the remaining claims.


In the event the Company is in default in the observance or performance of any of the Company’s covenants, agreements or obligations under the Earn-In Agreement, Renaissance may give written notice of such alleged default specifying the details of same. The Company shall have 30 days following receipt of said notice within which to remedy any such default described therein, or to diligently commence action in good faith to remedy such default. If the Company does not cure or



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diligently commence to cure such default by the end of the applicable 30-day period, then Renaissance shall have the right to terminate the Earn-In Agreement by providing 30 days advance written notice to the Company.


Confidentiality


All data and information coming into possession of Renaissance or the Company by virtue of the Earn-In Agreement with respect to the business or operations of the other party, or the Trinity Project generally, shall be kept confidential and shall not be disclosed to any person not a party thereto without the prior written consent of the other party, except: (a) as required by law, rule, regulation or policy of any stock exchange or securities commission having jurisdiction over a party; (b) as may be required by a party in the prosecution or defense of a lawsuit or other legal or administrative proceedings; (c) as required by a financial institution in connection with a request for financing relating to development or mining activities; or (d) as may be required in connection with a proposed conveyance to a third party of an interest in the Trinity Project or the Earn-In Agreement, provided such third party agrees in writing in a manner enforceable by the other party to abide by all of the applicable confidentiality provisions of the Earn-In Agreement with respect to such data and information.


To the extent either party intends to disclose data or information via press release or other similar format as may be required, the disclosing party shall provide the other party with not less than five business days’ notice of the text of the proposed disclosure, and the other party shall have the right to comment on the same.


Deed With Reservation of Royalty Hi Ho Silver Claims.


On October 15, 2012, the Company entered into and closed a Purchase Agreement (the “Purchase Agreement”) with Primus Resources, L.C. and James A. Freeman (collectively “Seller”) to acquire unpatented mining claims, Nevada BLM Serial No. 799907, 799908, 799909, 799910, and 799911 covering approximately 100 acres of property located adjacent to the former Trinity Silver mine on the Company’s Trinity Project (the “Hi Ho Properties”). The Hi Ho Properties were previously the only acreage not controlled by the Company or its joint venture partner Renaissance Exploration Inc. in the Trinity Project. Under the terms of the Purchase Agreement, the Company provided cash consideration of US$250,000 and issued 172,222 restricted shares of common stock of the Company to Seller. In addition the Seller was granted a 2% net smelter royalty on future production from the Hi Ho Properties pursuant to the terms of a Deed with Reservation of Royalty Hi Ho Silver Claims.


In conjunction with the entry into the Purchase Agreement, the Company entered into a Registration Rights Agreement (the “Registration Rights Agreement”) with Seller, pursuant to which the Company agreed to file a registration statement on Form S-1 with the United States Securities and Exchange Commission, within thirty (30) days of the closing, which registers the common stock issued to the Seller pursuant to the Purchase Agreement. Pursuant to the Registration Rights Agreement the Company paid the Seller total consideration consisting of 190,741 of its common shares.  



Trinity Project Technical Report


In the process of compiling and synthesizing information on the Trinity Project, on February 15, 2011, the Company completed an independently verified mineralized materials estimate on the Trinity Project (the “Trinity Project Technical Report”); the report was publicly released by the Company on March 2, 2011. The Technical Report for the Trinity mine project was prepared in accordance with the Canadian Securities Administrators’ National Instrument 43-101 (“NI 43-101”) by Mine Development Associates of Reno, Nevada, and has been reviewed by the Toronto Stock Exchange. The Trinity Project Technical Report may be viewed on the Company’s website at www.libertysilvercorp.com, and also on www.SEDAR.com, where it has been filed. Mineralized materials defined in the Trinity Project Technical Report are not recognized by the United States Securities and Exchange Commission.



Work Completed by Company & Plan of Operation


As of the date of this Form 10-Q, the Company has completed the following items: (a) a magnetotelluric geophysical survey has been completed; (b) the drill hole database has been digitized; (c) a mineralized material estimate for the original deposit identified in the Earn-In Agreement; in addition, environmental and permitting work has begun, and all of the past geologic data has been compiled.  




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Past exploration activities consisted of a magnetotelluric survey that was completed in August of 2010, a gravity survey that was completed in March of 2012, an induced polarization survey that was completed in May of 2012 and a drill program that was started in January of 2012 and completed in April of 2012, consisting of 20 reverse circulation holes comprising 22,565 ft of drill hole. The Magnetotelluric Survey was initiated in June of 2010 and completed in August of 2010. The Gravity survey was initiated in February of 2012 completed in March of 2012. The Induced Polarization Survey was initiated in April of 2012 completed in May of 2012. The drill program was started in January of 2012 and completed in April of 2012.


It is estimated that during the fiscal year ending June 30, 2011, the Company incurred approximately $554,145 in exploration expenses, and that during the fiscal year ending June 30, 2012, the Company incurred approximately $1,667,497 in exploration expenses, and that during the fiscal year ending June 30, 2013, the Company incurred approximately $3,299,000 in exploration expenses, and that during the fiscal year ending June 30, 2014, the Company incurred approximately $460,432 in exploration expenses, and that during the fiscal year ending June 30, 2015, the Company incurred approximately $398,975, and during the interim period ended September 30, 2015, the Company incurred approximately $62,656. These amounts include both direct exploration costs as well as various indirect costs related to exploration and the costs of acquiring mineral properties, which under the terms of the Earn-In Agreement, are included in the calculations for purposes of determining whether the Company has met its minimum annual expenditure commitment.   


It is anticipated, subject to the availability of financing, that additional exploration work will be needed, although specific plans for this additional work have not yet been finalized. It is currently anticipated that the additional exploration work to be completed will include additional drilling to upgrade the level of confidence in the mineralization and to expand the mineralized area, as well as drilling to collect metallurgical samples. The estimated budgeted cost for this additional drilling is approximately $1,500,000, which the Company currently does not have Metallurgical testing, which is budgeted to cost approximately $300,000, is expected to be undertaken for the purpose of defining the estimated silver recovery of the mineralized rock.  The Company may not be able to complete metallurgical testing with the funds currently available to it. Once adequate funding is secured, engineering design work, budgeted at approximately $500,000, is expected to be undertaken for the purpose of studying the feasibility of developing a mine, and as soon as design work is completed, permitting will need to start. The budget for permitting work is expected to be approximately $100,000. No further geophysical work is currently planned.


Subsequent Events


On November 6, 2015, the Company received a further $25,000 of the outstanding balance from the final $250,000 loan advance that had originally become due on June 30, 2015, bringing the amount advanced to $75,000 from the total amount that is overdue. The remaining $175,000 portion of the final advance remains outstanding.


The Company has evaluated subsequent events for the interim period ended September 30, 2015 through the date that these interim unaudited financial statements were issued, and concluded, aside from the forgoing, that there were no other events or transactions occurring during this period that required recognition or disclosure in its interim financial statements.


RESULTS OF OPERATIONS


The following discussion and analysis provides information that we believe is relevant to an assessment and understanding of our results of operation and financial condition for the three months ended September 30, 2015 as compared to the three months ended September 30, 2014. Unless otherwise stated, all figures herein are expressed in U.S. dollars, which is the functional currency of the Company.


Results of Operations for the three months ended September 30, 2015 compared to the three months ended September 30, 2014.


Revenue


During the three-month periods ended September 30, 2015 and 2014, the Company generated no revenue.


Operating expenses




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During the three month period ended September 30, 2015, the Company reported total operating expenses of $214,439 compared to $371,981 during the three month period ended September 30, 2014, a decrease of $157,542, or approximately 42%. The net decrease in total operating expenses is comprised of: a net decrease in legal and accounting expense of $116,657; a decrease of $43,743 in operation and administration expenses; and, a nominal decrease in direct exploration expenses of $142. The decrease in these expenses was partially offset by an increase of $3,000 in consulting expense.


Legal and accounting expense decreased by net $116,657 to an expense of $52,371 during the period ended September 30, 2015, compared to a legal and accounting expense of $169,028 reported during the period ended September 30, 2014. The primary reason for the net decrease is that during the comparative period, the Company incurred substantially higher legal fees in connection with the Class Complaint against the Company, which has since been settled and dismissed.


Operation and administration expense decreased by $43,743 to an expense of $149,748 during the period ended September 30, 2015, compared to an expense of $193,491 reported during the period ended September 30, 2014.  The net decrease was comprised of certain notable fluctuations, which are as follows: stock based compensation expense decreased by $27,563; salaries and related expenses decreased by net $17,046; public company expenses decreased by net $14,890; and, insurance expense decreased by $3,750. These examples of expenses comprising the total net decrease in the operation and administration expense amount were partially offset by an increase in Director fees of $19,500, which were accrued, but not paid, and certain other minor fluctuations in operations expenses.


For financial accounting purposes, the Company reports all direct exploration expenses under the exploration expense line item of the statement of operations. Certain indirect expenses, which are related to the exploration activities, may be reported as operation and administration expense or consulting expense on the statement of operations, as the case may be, or in certain cases, these expenses may also be capitalized to the balance sheet if they relate to costs incurred to acquire mineral properties. During the interim period ended September 30, 2015, the Company incurred a total of $62,656 of direct and indirect expenses, which related to its exploration activities, as compared to approximately $116,545 during the interim period ended September 30, 2014.


Exploration expense was virtually unchanged with a nominal decrease of $142 to and expense of $9,320 during the period ended September 30, 2015, compared to $9,462 during the comparative period.


Consulting expense increased by $3,000 during the current period ended September 30, 2015 compared to $nil during the comparative period.  The Consulting expense related to fees paid to a former employee who provides consulting services to the Company from time-to-time.


Net loss and comprehensive loss  


The Company had a net loss and comprehensive loss of $215,925 for the three months ended September 30, 2015, compared to a net loss and comprehensive loss of $398,253 for the three months ended September 30, 2014, a change of $182,328 or approximately 46%. The decrease in net loss and comprehensive loss was due to a net decrease in total operating expenses as described above and fluctuations in foreign exchange period over period, which resulted in a greater gain during the current period. The net decrease in expenses, along with the greater gain from foreign exchange, was partially offset by the increase in interest expense.


ANALYSIS OF FINANCIAL CONDITION


Liquidity and Capital Resources


The Company does not have sufficient working capital needed to meet its current fiscal obligations. In order to continue to meet its fiscal obligations in the current fiscal year and beyond the next twelve months, the Company must seek additional financing. Management is considering various financing alternatives including, but not limited to, merger and acquisition activity, raising capital through the equity markets and debt financing.


In order to acquire a 70% interest in the Trinity Project, the Company is required to incur $5,000,000 in exploration expenditures over a six-year period from March 29, 2010, the date of the Earn-In Agreement, to March 29, 2016.  In addition, by the end of March 29, 2017, the Company is required to produce a bankable feasibility study. As of March 29, 2013, the end of the third year following the date of the Earn-In Agreement, the Company had incurred approximately



21







$5,652,397 in expenditures related to the Trinity Project, and therefore had satisfied the $5,000,000 exploration expenditure commitment.  The Company is seeking financing, as described above, with the objective to raise approximately $5,000,000 to meet immediate financial obligations; to fund its near-term working capital requirements and fieldwork plans; to secure its interest in the Trinity property; and, subject to favorable commodity prices, continue additional development work on the property.  The additional work would consist of engineering and metallurgical testing, confirmation drilling, and an update of the National Instrument 43-101 compliant resource estimate.


The primary source for capital for the Company is the equity markets.  Management plans to continue its canvassing efforts of investors and financial institutions to invest capital in the Company through private placement offerings of common shares or units consisting of common shares and warrants. The terms and pricing of any such financing would be determined in the context of the markets and the Company’s financial condition. The Company has not entered into an agency agreement or arrangement with any financial institution or investor group to raise capital at this time.


In such an event where the Company is not successful at raising capital through the issuance of capital stock, the Company may consider raising capital by the issuance of debt.  However, unless the appropriate features, such as convertible options, are attached to the debt instruments, this form of financing is less desirable until such time as the Company may be in a position to reasonably foresee the generation of cash flow to service and repay debt.  


On October 17, 2014, the Company amended and restated its agreement in relation to an existing $1,210,000 principal amount secured loan facility made available by BG Capital Group Ltd. (“BGCG”) on November 14, 2013 (“Original Loan”). Under the terms of the revised agreement, BGCG has made available to the Company a committed non-revolving term credit facility in the principal amount of $1,250,000 (the “New Loan”), which shall initially bear interest at a rate of 11% per annum and which shall be secured by a charge on all of the assets of the Company. The Company has also repaid the indebtedness to BGCG under the Original Loan by converting the outstanding, aggregate total sum of the principal amount of the Original Loan, together with all accrued and unpaid interest thereon, being $1,248,654 (the “Debt”), into 6,659,487 common shares of the Company (“Common Shares”) at a price of $0.1875 per Common Share, in full satisfaction of the Debt under the Original Loan.  Details of the New Loan are provided in Note 4 to the financial statements for the period ended September 30, 2015.  


Since November 14, 2013, to sustain operations, the Company has been dependent on BGCG as the only available source of capital in the form of debt or equity. There is no assurance that such financing will continue to be available from BGCG.


Further, on an ongoing basis, management will review potential merger or acquisition targets to determine if certain synergies exist for the Company and if the potential target would strengthen the Company’s financial position. Management does not currently have any merger or acquisition target identified, and any such discussions are at the very preliminary stages.


In the event that the Company raises some funds, but, due to difficult capital market conditions or other factors, is not successful at raising all funds needed to complete the bankable feasibility study and fund ongoing working capital, subject to the availability of funds, management plans to reduce overhead and maintain the Trinity Project under a care and maintenance program, until such time as the capital markets improve for junior exploration companies.


Effective December 19, 2013, 260,000 vested stock options were cancelled, and 10,000 non-vested stock options were forfeited.  Further, the Company granted 13,333 stock options at an exercise price of $1.50 each.  


Effective December 21, 2013, 20,000 vested stock options had expired.


On April 8, 2014, the Company granted 333,333 stock options to purchase common shares to directors, officers, and an employee of the Company, at an exercise price of $1.50 per share and for a term of 5 years.


On June 30, 2014, the Company reached an agreement with arm’s-length creditors to settle indebtedness in the aggregate amount of $226,000 by issuing 48,800 common shares, including 25,467 common shares at a deemed price of $7.50 per share and 23,334 common shares at a deemed price of $1.50 per share.


On September 30, 2014, the Company issued 34,889 common shares to employees of the Company, at a deemed price of $7.50 per share, in settlement of arrears compensation obligations of $261,666.




22







On November 14, 2014, the vested and non-vested portion of the 400,000 stock options granted to purchase common shares by directors, officers and employees were cancelled or forfeited.


On December 31, 2014 the Company issued 11,333 common shares to employees of the Company, at a deemed price of $7.50 per share, in settlement of arrears compensation obligations of $85,000.


On February 17, 2015, the Company granted a total of 1,182,667 stock options to purchase common shares to directors, officers and an employee of the Company, at an exercise price of $0.1875 per share and for a term of 5 years.


As at the filing date of this Form 10-Q, there were 1,229,334 stock options outstanding, which may be exercised at various exercise prices, for gross proceeds of $746,750, however the exercise prices of the stock options exceed the market price of the Company’s shares.


As at the filing date of this Form 10-Q, there were 13,333 warrants outstanding, which may be exercised at $11.25 per common share, for gross proceeds of $150,000, however the exercise prices of these warrants exceed the market price of the Company’s shares.


Current Assets and Total Assets


As of September 30, 2015, the unaudited balance sheet reflects that the Company had: i) total current assets of $180,846, compared to total current assets of $294,000 at June 30, 2015, a decrease of $113,154, or approximately 38%; and ii) total assets of $2,739,528, compared to total assets of $2,854,420 at June 30, 2015, a decrease of $114,892, or approximately 4%. The decrease in current and total assets was primarily due to the cash used to fund working capital during the period, partially offset by the receipt of $25,000 from the new loan facility.


Total Current Liabilities and Total Liabilities


As of September 30, 2015, the unaudited balance sheet reflects that the Company had total current liabilities and total liabilities of $1,959,700, compared to total current liabilities and total liabilities of $1,877,179 at June 30, 2015, an increase of $82,521, or approximately 4%. The increase in current and total liabilities was due to: a total increase of $28,996 in accounts payable and accrued liabilities and an increase of $25,000 in convertible loan payable. Loan interest increased by $28,525 during the period.




23








Cash Flow – for the interim periods ended September 30, 2015 and 2014


During the three months ended September 30, 2015 cash was primarily used to fund working capital and operations. The Company reported a net decrease in cash of $112,502 during the three months ended September 30, 2015 compared to a net decrease in cash of $275,252 for the three months ended September 30, 2014. The following provides additional discussion and analysis of cash flow.

 

 

 

 

 



For the three months ended September 30,

 

2015

$

 

2014

$

 

 

 

 

Net cash used in operating activities

(137,502)

 

(300,252)

Net cash provided by financing activities

25,000

 

25,000

 

 

 

 

Net Change in Cash

(112,502)

 

(275,252)


During the three months ended September 30, 2015, net cash used in operating activities was $137,502, compared to net cash used in operating activities of $300,252 during the three months ended September 30, 2014. The decrease in net cash used in operating activities of $162,750 is the result of a net loss and comprehensive loss of $215,925 during the three months ended September 30, 2015, compared to a net loss and comprehensive loss of $398,253 during the three months ended September 30, 2014, and the effects of the net changes in working capital items, which contributed to an increase in cash of $58,173 during the three months ended September 30, 2015, compared to net changes in working capital items, which contributed to a decrease in cash of $211,477 during the comparative period. The decrease in net loss and comprehensive loss and the net changes in working capital items, both of which contributed to less cash being used in the current period, was partially offset by non-cash items of $20,250 being reported during the three months ended September 30, 2015, compared to $309,478 of non-cash items being reported during the comparative period.


During the three months ended September 30, 2015 and September 30, 2014, the Company did not use any cash in investing activities.


During the three months ended September 30, 2015 and September 30, 2014, the Company reported $25,000 of cash from financing activities.  During both of the comparative periods, the Company had advanced $25,000 from the convertible loan facility.

Going Concern

These interim unaudited financial statement filings have been prepared on the going concern basis, which assumes that adequate sources of financing will be obtained as required and that the Company’s assets will be realized and liabilities settled in due course of business.  Accordingly, the interim unaudited financial statements do not include any adjustments related to the recoverability of assets and classification of assets and liabilities that might be necessary should the Company not be able to continue as a going concern.  The going concern assumption is discussed in Note 1 – Basis of Presentation and Going Concern.





24








OFF BALANCE SHEET ARRANGEMENTS


The Company does not have any off-balance sheet arrangements.


ITEM 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET

RISK.


Not Applicable.


ITEM 4.

CONTROLS AND PROCEDURES.


Disclosure Controls and Procedures


The Securities and Exchange Commission defines the term “disclosure controls and procedures” to mean a Company's controls and other procedures of an issuer that are designed to ensure that information required to be disclosed in the reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Securities Exchange Act of 1934 is accumulated and communicated to the issuer’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. The Company maintains such a system of controls and procedures in an effort to ensure that all information which it is required to disclose in the reports it files under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified under the SEC's rules and forms and that information required to be disclosed is accumulated and communicated to principal executive and principal financial officers to allow timely decisions regarding disclosure.


As of the end of the period covered by this report, the Company’s sole officer carried out an evaluation of the effectiveness of the design and operation of the disclosure controls and procedures.  Based on this evaluation management identified a material weakness in the Company’s internal control over financial reporting related to the fact that the Company has not established adequate financial reporting monitoring procedures to mitigate the risk of management override. Specifically, because there is only a single officer and director with management functions there is lack of segregation of duties. Accordingly, as of September 30, 2015, management concluded that the Company's disclosure controls and procedures were not effective.


Management believes that the material weakness identified above is temporary.  The Company does not currently have the resources to fund sufficient staff to ensure a complete segregation of responsibilities within the accounting function. However, the Company is currently seeking to raise additional capital, and once adequate resources become available, the Company intends to hire additional management personnel.  


Changes in Internal Control over Financial Reporting


There was no change in the Company's internal control over financial reporting during the period ended September 30, 2015, that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting.


PART II - OTHER INFORMATION


ITEM 1.

LEGAL PROCEEDINGS.


On September 12, 2013, the Company and certain of its current and former officers and directors (the “Liberty Silver Parties”) were named as defendants in a proposed securities class action lawsuit filed against Robert Genovese, certain individuals alleged to have collaborated with Mr. Genovese, and an offshore investment firm allegedly controlled by Mr.



25







Genovese (the “Action,” Case No. 9:13-cv-80923-KLR, Stanaford v. Genovese et al.).  The action alleged violations of the United States Securities Exchange Act of 1934 and rules thereunder relating to anomalous trading activity and fluctuations in the Company’s share price from August through October 2012.


On December 8, 2014, without in any way acknowledging any fault or liability, the Company reached a settlement in principle, providing for a payment of $1 million cash, to be paid by the Company's D&O insurance carriers. On August 17, 2015, with no admission of fault or liability by the Liberty Silver Parties, the Court approved the settlement class and fully and finally dismissed with prejudice all claims against Liberty Silver, Geoffrey Browne, and William Tafuri in the litigation. Although defendants continue to deny plaintiffs' allegations, the Company believed it was in the best interests of its stockholders to focus its attention on its business and put the matter behind it.


Neither the Company nor its property is the subject of any other pending legal proceedings, and no other such proceeding is known to be contemplated by any governmental authority.  The Company is not aware of any other legal proceedings in which any director, officer or affiliate of the Company, any owner of record or beneficially of more than 5% of any class of our voting securities, or any associate of any such director, officer, affiliate or security holder of the Company, is a party adverse to the Company or any of its subsidiaries or has a material interest adverse to the Company or any of its subsidiaries.


ITEM 1A.

 RISK FACTORS.


Not Applicable.


ITEM 2.

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.


None


ITEM 3.

DEFAULTS UPON SENIOR SECURITIES.


None.


ITEM 4.

MINE SAFETY DISCLOSURES.


The recently enacted Dodd-Frank Wall Street Reform and Consumer Protection Act (“the Act”) requires the operators of mines to include in each periodic report filed with the Securities and Exchange Commission certain specified disclosures regarding the Company’s history of mine safety. The Company is currently in the exploration phase and does not operate mines at any of its properties, and as such is not subject to disclosure requirements regarding mine safety that were imposed by the Act.




26








ITEM 5.

OTHER INFORMATION.


None.


ITEM 6.

EXHIBITS.


(a)

The following exhibits are filed herewith:


31.1

Certifications pursuant to Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.


31.2

Certifications pursuant to Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.


32.1

Certifications pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.


32.2

Certifications pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.


101.

SCH XBRL Schema Document.


101

INS XBRL Instance Document.


101.

CAL XBRL Taxonomy Extension Calculation Linkbase Document.


101.

LAB XBRL Taxonomy Extension Label Linkbase Document.


101.

PRE XBRL Taxonomy Extension Presentation Linkbase Document.


101.

DEF XBRL Taxonomy Extension Definition Linkbase Document.



SIGNATURES


Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


By: /s/    Manish Z. Kshatriya

 Manish Z. Kshatriya, President and Chief Executive Officer


Date:  November 13, 2015


By: /s/    Manish Z. Kshatriya

 Manish Z. Kshatriya, Chief Financial Officer and Secretary


Date:  November 13, 2015




27




EX-31 2 ceo1exh311.htm exh311

Exhibit 31.1


CERTIFICATION


I, Manish Z. Kshatriya, certify that:

1.         I have reviewed this quarterly report on Form 10-Q of Liberty Silver Corp.;

2.         Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.         Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.         The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a+15(e) and 15d+15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a+15(f) and 15d+15(f)) for the registrant and have:

(a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.         The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):

(a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

 

 

Date: November 13, 2015

/s/ Manish Z. Kshatriya

Chief Executive Officer




EX-31 3 cfo1exh312.htm exh312


Exhibit 31.2

CERTIFICATION


I, Manish Z. Kshatriya, certify that:

1.         I have reviewed this quarterly report on Form 10-Q of Liberty Silver Corp.;

2.         Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.         Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.         The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a+15(e) and 15d+15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a+15(f) and 15d+15(f)) for the registrant and have:

(a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.         The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):

(a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

 

 

Date: November 13, 2015

/s/ Manish Z. Kshatriya

Chief Financial Officer




EX-32 4 ceo2exh321.htm exh321

Exhibit 32.1


Certification of the Principal Executive Officer

Pursuant to 18 U.S.C. Section 1350,

As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002



In connection with the quarterly report of Liberty Silver Corp. (the "Company") on Form 10-Q for the interim period ended September 30, 2015, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), Manish Z. Kshatriya, the Chief Executive Officer of the Company, hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:


(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.


/s/ Manish Z. Kshatriya
Chief Executive Officer

Date: November 13, 2015



EX-32 5 cfo2exh322.htm exh322


Exhibit 32.2



Certification of the Principal Accounting Officer

Pursuant to 18 U.S.C. Section 1350,

As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002



In connection with the quarterly report of Liberty Silver Corp. (the "Company") on Form 10-Q for the interim period ended September 30, 2015, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), Manish Z. Kshatriya, the Chief Financial Officer of the Company, hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.


/s/ Manish Z. Kshatriya
Chief Financial Officer


Date: November 13, 2015



EX-101.INS 6 lbsv-20150930.xml 10-Q 2015-09-30 false LIBERTY SILVER CORP 0001407583 --06-30 12354497 0 Smaller Reporting Company Yes No No 2016 Q1 149748 193491 52371 169028 9320 9462 3000 214439 371981 -214439 -371981 27039 7276 -28525 -33548 -1486 -26272 215925 398253 -0.02 -0.07 12354497 5630281 -215925 -398253 18512 46075 261666 1738 1737 490 171 -1247 -8753 1409 -13580 24625 -36672 4371 -186191 28525 33548 -137502 -300252 25000 25000 25000 25000 -112502 -275252 320309 45057 <!--egx--><p style='margin:0in;margin-bottom:.0001pt;text-autospace:none'><b>Note 1 &#150; Nature and Continuance of Operations and Going Concern</b></p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify;text-autospace:ideograph-other'>&nbsp;</p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify;text-autospace:ideograph-other'>The accompanying interim unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules and regulations of the United States Securities and Exchange Commission for interim financial information.&#160; Accordingly, they do not include all the information and footnotes necessary for a comprehensive presentation of financial position, results of operations, stockholders&#146; equity or cash flows.&#160; It is management's opinion, however, that all material adjustments (consisting of normal recurring adjustments) have been made which are necessary for a fair financial statement presentation. &nbsp;The interim unaudited financial statements should be read in conjunction with the Company&#146;s Annual Report on Form 10-K, which contains the annual audited financial statements and notes thereto, together with the Management&#146;s Discussion and Analysis, for the year ended June 30, 2015.&#160; The interim results for the period ended September 30, 2015 are not necessarily indicative of the results for the full fiscal year.&#160; The interim unaudited financial statements are presented in USD, which is the functional currency.</p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify;text-autospace:ideograph-other'>&nbsp;</p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify;text-autospace:ideograph-other'>These interim unaudited financial statements have been prepared on a going concern basis.&#160; The Company has incurred losses since inception resulting in an accumulated deficit of $13,028,200 and further losses are anticipated in the development of its business.&#160; The ability of the Company to emerge from the exploration stage is dependent upon, among other things, obtaining additional financing to continue operations, explore and develop the mineral properties and the discovery, development, and sale of reserves.&#160; The Company does not have sufficient working capital needed to meet its current fiscal obligations.&#160; In order to continue to meet its fiscal obligations in the current fiscal year and beyond, the Company must seek additional financing.&#160; Its ability to continue as a going concern is dependent upon the ability of the Company to generate profitable operations in the future and/or to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due.&#160; The accompanying interim unaudited financial statements do not include any adjustments that might result from the outcome of this uncertainty.</p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-autospace:ideograph-other'>&#160;</p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify;text-autospace:ideograph-other'>Management considers various financing alternatives including, but not limited to, merger and acquisition activity, raising capital through the equity markets and debt financing.&#160; These unaudited interim financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts of and classification of liabilities that might be necessary in the event the Company cannot continue in existence.</p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify;text-autospace:ideograph-other'>&nbsp;</p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify;text-autospace:ideograph-other'>These factors, among others, raise substantial doubt about the Company&#146;s ability to continue as a going concern.&#160; </p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'>&nbsp;</p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify;text-autospace:ideograph-other'>On January 30, 2015, the Company completed a share consolidation of its common shares on the basis of one (1) new post-consolidation common share for every 15 pre-consolidated common shares. The number of authorized shares was not reduced as a result of this share consolidation.&#160; The 185,309,574 common shares of the Company outstanding immediately prior to consolidation were reduced to 12,354,497 common shares, as approved by shareholders at the Company&#146;s annual general and special meeting held on December 5, 2014.&#160; No fractional shares were issued.&#160; Any fractions of a share were rounded up to the next whole common share.&#160; A new CUSIP number of 53121P206 replaced the old CUSIP number of 53121P107, to distinguish between the pre- and post-consolidated shares.&#160; In conjunction with this share consolidation, corresponding adjustments were made in the number of options and warrants issued and outstanding, and in the exercise prices of such options and warrants. &nbsp;All outstanding common shares and per share amounts contained in the interim unaudited financial statements and related notes have been retroactively adjusted to reflect this share consolidation for all periods presented.</p> <!--egx--><p style='margin:0in;margin-bottom:.0001pt;text-autospace:none'><b>Note 2 &#150; Nature of Operations </b></p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none'>&nbsp;</p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify;text-autospace:ideograph-other'>Liberty Silver Corp. was incorporated under the laws of the state of Nevada, U.S.A on February 20, 2007 under the name Lincoln Mining Corp.&#160; Pursuant to a Certificate of Amendment dated February 11, 2010, the Company changed its name to Liberty Silver Corp. The Company&#146;s registered office is located at 1802 N. Carson Street, Suite 212, Carson City Nevada 89701, and its head office is located at 181 Bay Street, Suite 2330, Toronto, Ontario, Canada, M5J 2T3, and its telephone number is 888-749-4916.&#160; As of the date of this Form 10-Q, the Company had no subsidiaries.</p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'>&nbsp;</p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'>The Company was incorporated for the purpose of engaging in mineral exploration activities.&#160; On March 29, 2010, the Company entered into an Exploration Earn-In Agreement relating to the Trinity Project located in Pershing County, Nevada.&#160; The Company is currently engaged in the exploration of the Trinity Project, and has not yet commenced development stage activities, however, the Company intends to engage in efforts to develop the Trinity Project in the future.&#160; Subject to securing adequate financing, the plan of operation for the fiscal year ending June 30, 2016 is to conduct additional mineral exploration activities at the Trinity Silver property, which plan will extend into the fiscal year ending June 30, 2017.&#160; Subject to the availability of funding, operations at the Trinity Project will consist of (i) an effort to expand the known mineralized material through drilling, (ii) permitting for operation, if deemed economically viable, (iii) metallurgical studies aimed at enhancing the recovery of the silver and by-product lead and zinc, (iv) engineering design related to potential construction of a new mine, and (v) complete feasibility studies relating to possible re-opening of the historic mine.&#160; Exploration of the property would be conducted simultaneously with the mine development in order to locate additional mineralized materials.</p> <!--egx--><p style='margin:0in;margin-bottom:.0001pt;text-autospace:none'><b>Note 3 - Mineral Property</b></p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none'>&nbsp;</p> <p style='margin:0in;margin-bottom:.0001pt;text-align:justify'><font lang="X-NONE">The Company acquired its interest in the Trinity Project through an Exploration Earn-In Agreement.&#160; On March 29, 2010, the Company entered into the Earn-In Agreement relating to the Trinity Project with AuEx, Inc., a Nevada company beneficially owned by another Nevada company AuEx Ventures, Inc.&#160; AuEx, Inc. held an exclusive interest in the Trinity Project by way of a Minerals Lease and Sublease with Newmont Mining USA Limited, a Delaware corporation who owns or leases the various unpatented mining claims and portions of private land comprising the Trinity Project.&#160; As part of a restructuring transaction by AuEx Ventures, Inc., another Nevada company Renaissance Exploration Inc. (&#147;Renaissance&#148;) was spun out, and on July 1, 2010 AuEx, Inc. assigned all of its interest in the Trinity Project and the Earn-In Agreement to Renaissance, who currently holds a 100% leasehold interest in the Trinity Project.&#160; The Minerals Lease and Sublease grants to Newmont, a right of first offer on any transfer of AuEx, Inc.&#146;s interests in the Trinity Project to any non-affiliate of AuEx, Inc., and also gives Newmont a right to either enter into a joint venture agreement covering the Trinity Project and any other real property interests that AuEx, Inc. holds or acquires within the Trinity Project, or receive a royalty on all mineral production from such properties.&#160; Currently the rights to the Trinity Project are held 100% by Renaissance, pursuant to an assignment of such rights from AuEx, Inc.&#160; The Company entered into the Earn-In Agreement providing the Company with a right to earn a 70% undivided interest in rights of Renaissance in the Trinity Project </font>(<font lang="X-NONE">the &#147;</font> <font lang="X-NONE">70%</font><font lang="X-NONE"> Interest&#148;).</font></p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'>&nbsp;</p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'>Under the Earn-In Agreement, the Company may earn-in the 70% Interest in the Trinity Project during a 6-year period in consideration of (1) a signing payment of $25,000, which has been made, (2) an expenditure of a cumulative total of $5,000,000 in exploration and development expenses on the Trinity Project by March 29, 2016, including a minimum of $500,000 which must be expended within one year from the effective date of the Agreement, and (3) completion of a bankable feasibility study on the Trinity Project on or before the 7<sup>th</sup> anniversary date of the Agreement.&#160; Item (1) has been completed by the Company, and the Company has satisfied item (2), and has reported its compliance as of March 29, 2013, which is the end of the third year from the inception of the Earn-in Agreement.</p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'>&nbsp;</p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify;text-autospace:ideograph-other'>On October 15, 2012, the Company entered into and closed a Purchase Agreement (the &#147;Purchase Agreement&#148;) with Primus Resources, L.C. and James A. Freeman (collectively &#147;Seller&#148;) to acquire unpatented mining claims, Nevada BLM Serial No. 799907, 799908, 799909, 799910, and 799911 covering approximately 100 acres of property located adjacent to the former Trinity Silver mine on the Company&#146;s Trinity Project (the &#147;Hi Ho Properties&#148;).&#160; The Hi Ho Properties were previously the only acreage not controlled by the Company or its joint venture partner Renaissance Exploration Inc. in the Trinity Project.&#160; Under the terms of the Purchase Agreement, the Company provided cash consideration of US $250,000 and issued 172,222 restricted shares of common stock of the Company to Seller.&#160; In addition the Seller was granted a 2% net smelter royalty on future production from the Hi Ho Properties pursuant to the terms of a Deed with Reservation of Royalty Hi Ho Silver Claims. </p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify;text-autospace:ideograph-other'>&nbsp;</p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify;text-autospace:ideograph-other'>The Trinity Project consists of a total of approximately 10,020 acres, including 5,676 acres of fee land and 253 unpatented mining claims.</p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify;text-autospace:ideograph-other'>&nbsp;</p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'>The Company has completed some financing transactions, and continues to pursue additional financing opportunities in order to obtain the capital needed to fulfill its obligations under the terms of the Earn-In Agreement.&#160; There has been no mining of resources to date.</p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'>&nbsp;</p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'>During the interim period ended September 30, 2014, the Company had incurred approximately $116,545 in exploration expenditures, which were reported under various line items on the statement of operations.</p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'>&nbsp;</p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'>During the interim period ended September 30, 2015, the Company had incurred approximately $62,656 in exploration expenditures, which were reported under various line items on the statement of operations.</p> <!--egx--><p style='margin:0in;margin-bottom:.0001pt;text-autospace:none'><b>Note 4 &#150; Convertible Loan Payable</b></p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none'>&nbsp;</p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify;text-autospace:ideograph-other'>On October 17, 2014, the Company amended and restated its agreement in relation to an existing $1,210,000 principal amount secured loan facility (the &#147;Original Loan&#148;) made available by BG Capital Group Ltd. (&#147;BGCG&#148;).&#160; Under the terms of the revised agreement, BGCG has made available to the Company a committed non-revolving term credit facility in the principal amount of $1,250,000 (the &#147;New Loan&#148;), which shall initially bear interest at a rate of 11% per annum and which shall be secured by a charge on all of the assets of the Company.&#160; The Company has also repaid the indebtedness to BGCG under the Original Loan by converting the outstanding, aggregate total sum of the principal amount of the Original Loan, together with all accrued and unpaid interest thereon, being $1,248,653 (the &#147;Debt&#148;), into 6,659,486 common shares of the Company (&#147;Common Shares&#148;) at a price of $0.1875 per Common Share, in full satisfaction of the Debt under the Original Loan.</p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify;text-autospace:ideograph-other'>&nbsp;</p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify;text-autospace:ideograph-other'>The New Loan consists of up to $1,250,000 of new credit facilities, of which $25,000 had been advanced to the Company pursuant to a promissory note, which was superseded by the New Loan and became part of the first advance under the New Loan in the aggregate amount of $350,000.</p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify;text-autospace:ideograph-other'>&nbsp;</p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'>The key terms of the New Loan are as follows:</p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify;text-autospace:ideograph-other'>&nbsp;</p> <ul type="disc" style='margin-top:0in'> <li style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'>a total of $1,050,000 of up to $1,250,000 was advanced to Liberty during the period;</li> </ul> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;margin-left:.5in;text-align:justify;text-autospace:ideograph-other'>&nbsp;</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:0in;margin-left:.5in;margin-bottom:.0001pt;text-autospace:none;text-align:justify;text-indent:-.25in;text-autospace:ideograph-numeric ideograph-other'><font style='font-family:Symbol'>&#183;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </font>the outstanding principal amount bears interest at 11% per annum from date of advance and becomes due and payable in its entirety one year following the Closing Date (the &#147;Maturity Date&#148;).&#160; The Company has the option to extend the Maturity Date by six months, with interest payable at 15% per annum accruing on the outstanding principal amount during such extension period.&#160; On September 25, 2015, the Company exercised the option to extend the Maturity date to April 15, 2016;</p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify;text-indent:.25in;text-autospace:ideograph-other'>&nbsp;</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:0in;margin-left:.5in;margin-bottom:.0001pt;text-autospace:none;text-align:justify;text-indent:-.25in;text-autospace:ideograph-numeric ideograph-other'><font style='font-family:Symbol'>&#183;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </font>the New Loan is secured by a charge on all of the assets of the Company; and</p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify;text-autospace:ideograph-other'>&nbsp;</p> <ul type="disc" style='margin-top:0in'> <li style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'>BGCG, at any time up to one business day prior to the Maturity Date, at its sole option, shall be entitled to convert all or any portion of the outstanding principal amount of the New Loan advanced to Liberty (including all deferred interest), together with all accrued interest, into Common Shares, on the basis of $0.1875 per Common Share.&#160; The conversion rights are subject to the Company having sufficient authorized capital available to satisfy the exercise of the conversion rights from time to time.&#160; To the extent there is not sufficient authorized capital at any time to permit the full exercise of all conversion rights available to BGCG at such time, the Company shall take all reasonable commercial efforts to hold, as expeditiously as possible, a shareholders&#146; meeting to approve the necessary increase to the authorized capital in order that the conversion rights available to BGCG may be exercised to its fullest extent.</li> </ul> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify;text-autospace:ideograph-other'>&nbsp;</p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify;text-autospace:ideograph-other'>The carrying value of the conversion option equity component of the convertible loan has been determined to be nil and the carrying value of the liability component is $1,050,000. &nbsp;The effective interest rate on the liability component of the convertible loan is 11% for the period ending October 15, 2015 and 15% per annum during the extended period beginning October 15, 2015.</p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify;text-autospace:ideograph-other'>&nbsp;</p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify;text-autospace:ideograph-other'>The lender pursuant to the New Loan is BGCG. Immediately following the Closing Date, BGCG and certain of its related parties owned, directly and indirectly, 8,657,417 Common Shares, which represented approximately 70.1% of the Company&#146;s 12,354,497 issued and outstanding Common Shares on the Closing Date.&#160; Other than pursuant to the New Loan, the Company does not have any contractual or other relationship with BGCG.</p> <!--egx--> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none'><b>Note 5 - Capital Stock and Warrants</b></p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none'>&nbsp;</p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-indent:.5in'><b>Authorized</b></p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none'>&nbsp;</p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'>The total authorized capital is as follows:</p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none'>&nbsp;</p> <ul type="disc" style='margin-top:0in'> <li style='margin:0in;margin-bottom:.0001pt;text-autospace:none'>300,000,000 common shares with a par value of $0.001 per common share; and</li> </ul> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;margin-left:.5in'>&nbsp;</p> <ul type="disc" style='margin-top:0in'> <li style='margin:0in;margin-bottom:.0001pt;text-autospace:none'>10,000,000 preferred shares with a par value of $0.001 per preferred share</li> </ul> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none'>&nbsp;</p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-indent:.5in'><b>Issued and outstanding</b></p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none'>&nbsp;</p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'>On June 30, 2014, the Company reached an agreement with arm&#146;s-length creditors to settle indebtedness in the aggregate amount of $226,000 by issuing 48,800 common shares, including 25,466 common shares at a price of $7.50 per share and 23,334 common shares at a price of $1.50 per share.</p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify;text-autospace:ideograph-numeric ideograph-other'>&nbsp;</p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'>On September 30, 2014, the Company issued 34,889 common shares to employees of the Company, at a price of $7.50 per share, in settlement of arrears compensation obligations of $261,665.</p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'>&nbsp;</p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'>On October 17, 2014, the Company issued 6,659,487 common shares, at a price of $0.1875 per share, in settlement of a secured loan facility, which included any unpaid and accrued interest, totaling $1,248,654. In conjunction with the issuance of these common shares, the Company incurred $40,400 in share issuance costs.</p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'>&nbsp;</p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'>On December 31, 2014, the Company issued 11,333 common shares to employees of the Company, at a price of $7.50 per share, in settlement of arrears compensation obligations of $85,000.</p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'>&nbsp;</p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'>For the above share issuances, the shares were not registered under the Securities Act of 1933 in reliance upon the exemptions from registration contained in Regulation S of the Securities Act of 1933.&#160; No underwriters were used, nor were any brokerage commissions paid in connection with the above share issuances.</p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-autospace:ideograph-numeric ideograph-other'>&nbsp;</p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'><b><u>Warrants</u></b></p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-autospace:ideograph-numeric ideograph-other'>&nbsp;</p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify;text-autospace:ideograph-other'>On November 13, 2013, 433,333 common share purchase warrants were terminated as a condition of the Loan with BGCG.&#160; The warrants were originally issued pursuant to a private placement offering of Subscription Receipts, which Subscription Receipts were converted into Units, without additional consideration, effective December 19, 2011.&#160; The Units were comprised of one common share and one common share purchase warrant.&#160; The warrants were exercisable at a price of $ 9.75 per common share.</p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify;text-autospace:ideograph-other'>&nbsp;</p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify;text-autospace:ideograph-other'>On December 31, 2013, 173,833 common share purchase warrants expired.&#160; The warrants were originally issued pursuant to a private placement offering of 175,167 Units on December 19, 2011. &nbsp;The Units were comprised of one common share and one common share purchase warrant.&#160; The warrants were exercisable at a price of $9.75 per common share. </p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify;text-autospace:ideograph-other'>&nbsp;</p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify;text-autospace:ideograph-other'>On April 1, 2014, 20,000 common share purchase warrants expired.&#160; The warrants were originally issued in connection with notes payable issued to related parties on April 1, 2011.&#160; The warrants were exercisable at $8.25 per common share.</p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'>&nbsp;</p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify;text-autospace:ideograph-other'>As at September 30, 2015, the aggregate weighted average intrinsic value of 13,333 warrants outstanding was $0, and the weighted average grant date fair value of each warrant outstanding was CAD $11.25. The 13,333 warrants expire on August 4, 2016. </p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-autospace:ideograph-numeric ideograph-other'>&nbsp;</p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-autospace:ideograph-numeric ideograph-other'><b><u>Stock Options</u></b></p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-autospace:ideograph-numeric ideograph-other'>&nbsp;</p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-autospace:ideograph-numeric ideograph-other'>&nbsp;</p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'>Effective December 19, 2013, 260,000 vested stock options were cancelled, and 10,000 non-vested stock options were forfeited.&#160; Further, the Company granted 13,333 stock options at an exercise price of $1.50 each.&#160; </p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'>&nbsp;</p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'>Effective December 21, 2013, 20,000 vested stock options had expired. </p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'>&nbsp;</p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'>On April 8, 2014, the Company granted a total of 333,333 stock options to purchase common shares to directors, officers and an employee of the Company, at an exercise price of $1.50 per share and for a term of 5 years.</p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'>&nbsp;</p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'>On November 14, 2014, the vested and non-vested portion of the 400,000 stock options granted to purchase common shares by directors, officers and employees were cancelled or forfeited.</p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'>&nbsp;</p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'>On February 17, 2015, the Company granted a total of 1,182,667 stock options to purchase common shares to directors, officers and an employee of the Company, at an exercise price of $0.1875 per share and for a term of 5 years.</p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'>&nbsp;</p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify;text-autospace:ideograph-other'>Stock based compensation expense, resulting from the vesting of stock options, for the three months ended September 30, 2015 was $ 18,512 (2014 - $ 46,075), which is included in operation and administration expense on the statement of operations and comprehensive loss.</p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'>&nbsp;</p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none'>As at September 30, 2015 there were 1,229,334 stock options outstanding, exercisable at a weighted average exercise price of $0.61 per share, and expiring as follows: 46,667 options, exercisable at $11.25 per share, expiring on March 31, 2016; and, 1,182,667 options, exercisable at $0.1875 per share, expiring on February 17, 2020.</p> <!--egx--><p style='margin:0in;margin-bottom:.0001pt;text-autospace:none'><b>Note 6 &#150; Commitments and Contingencies</b></p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'>&nbsp;</p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'>Effective November 1, 2011, and terminating on April 28, 2016, the Company entered into a sub-lease agreement for the lease of premises in Toronto, Ontario, Canada, for a term of 54 months.&#160; The Company has its head office at these premises, which is approximately 1,400 square feet.&#160; The annual base rent commitment for the Toronto head office space is $35,851 (CAD $48,094).</p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify;text-autospace:ideograph-numeric ideograph-other'>&nbsp;</p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'>Effective February 8, 2012, the Company entered into a lease agreement for the lease of premises in Sparks, Nevada, USA, for a term of 12 months, and terminating on January 31, 2013.&#160; The lease agreement was amended such that the term was extended for a further 24 months, and terminating on January 31, 2015, and then extended for a further 12 months, terminating on January 31, 2016.&#160; The Company has its field office and warehouse at these premises, which is approximately 5,500 square feet.&#160; The annual base rent commitment for the Sparks field office space is $30,624 for the period from February 1, 2014 to January 31, 2015, and $30,624 for the period from February 1, 2015 to February 1, 2016.</p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'>&nbsp;</p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'>As at September 30, 2015, the Company had a commitment, for the above noted leases, of $31,121 remaining.</p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify;text-autospace:ideograph-numeric ideograph-other'>&nbsp;</p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'>The following table outlines the remaining lease commitment to the end of the next five fiscal years based on the leases that are currently entered into by the Company:</p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-autospace:ideograph-numeric ideograph-other'>&nbsp;</p> <div align="center"> <table border="0" cellspacing="0" cellpadding="0" style='border-collapse:collapse'> <tr align="left"> <td width="151" valign="top" style='width:104.65pt;border:none;border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:center'>Year</p> </td> <td width="302" valign="top" style='width:208.95pt;border:none;border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:center'>Total Lease Commitment</p> </td> </tr> <tr align="left"> <td width="151" valign="top" style='width:104.65pt;background:#CCFFCC;padding:0in 5.4pt 0in 5.4pt'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:center'>June 30, 2016 and thereafter</p> </td> <td width="302" valign="top" style='width:208.95pt;background:#CCFFCC;padding:0in 5.4pt 0in 5.4pt'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:center'>$0</p> </td> </tr> <tr align="left"> <td width="151" valign="top" style='width:104.65pt;padding:0in 5.4pt 0in 5.4pt'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:center;text-autospace:ideograph-numeric ideograph-other'>&nbsp;</p> </td> <td width="302" valign="top" style='width:208.95pt;padding:0in 5.4pt 0in 5.4pt'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:center;text-autospace:ideograph-numeric ideograph-other'>&nbsp;</p> </td> </tr> </table> </div> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-autospace:ideograph-numeric ideograph-other'>&nbsp;</p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'>On September 12, 2013, the Company and certain of its current and former officers and directors (the &#147;Liberty Silver Parties&#148;) were named as defendants in a proposed securities class action lawsuit filed against Robert Genovese, certain individuals alleged to have collaborated with Mr. Genovese, and an offshore investment firm allegedly controlled by Mr. Genovese (the &#147;Action,&#148; Case No. 9:13-cv-80923-KLR, Stanaford v. Genovese et al.).&nbsp; The action alleged violations of the United States Securities Exchange Act of 1934 and rules thereunder relating to anomalous trading activity and fluctuations in the Company&#146;s share price from August through October 2012. </p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'>&nbsp;</p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'>OOn December 8, 2014, without in any way acknowledging any fault or liability, the Company reached a settlement in principle, providing for a payment of $1 million cash, to be paid by the Company's D&amp;O insurance carriers. &nbsp;On August 17, 2015, with no admission of fault or liability by the Liberty Silver Parties, the Court approved the settlement class and fully and finally dismissed with prejudice all claims against Liberty Silver, Geoffrey Browne, and William Tafuri in the litigation. &nbsp;Although defendants continue to deny plaintiffs' allegations, the Company believed it was in the best interests of its stockholders to focus its attention on its business and put the matter behind it.</p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'>&nbsp;</p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'>Additionally, in the normal course of operations, certain other contingencies may arise relating to legal actions undertaken against the Company. In the opinion of management, whether the impact of such potential legal actions would have a material adverse effect on the Company's results of operations, liquidity, or its financial position, cannot be determined in advance.</p> <!--egx--><p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'><b>Note 7 &#150; Subsequent Events</b></p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;margin-left:.25in;text-align:justify'>&nbsp;</p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'>On November 6, 2015, the Company received a further $25,000 of the outstanding balance from the final $250,000 loan advance that had originally become due on June 30, 2015, bringing the amount advanced to $75,000 from the total amount that is overdue.&#160; The remaining $175,000 portion of the final advance remains outstanding.</p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'>&nbsp;</p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'>The Company has evaluated subsequent events for the interim period ended September 30, 2015 through the date these interim unaudited financial statements were issued, and concluded, aside from the foregoing, that there were no other events or transactions occurring during this period that required recognition or disclosure in its interim financial statements.</p> <!--egx--><p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-indent:.5in'><b>Authorized</b></p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none'>&nbsp;</p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'>The total authorized capital is as follows:</p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none'>&nbsp;</p> <ul type="disc" style='margin-top:0in'> <li style='margin:0in;margin-bottom:.0001pt;text-autospace:none'>300,000,000 common shares with a par value of $0.001 per common share; and</li> </ul> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;margin-left:.5in'>&nbsp;</p> <ul type="disc" style='margin-top:0in'> <li style='margin:0in;margin-bottom:.0001pt;text-autospace:none'>10,000,000 preferred shares with a par value of $0.001 per preferred share</li> </ul> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none'>&nbsp;</p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-indent:.5in'><b>Issued and outstanding</b></p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none'>&nbsp;</p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'>On June 30, 2014, the Company reached an agreement with arm&#146;s-length creditors to settle indebtedness in the aggregate amount of $226,000 by issuing 48,800 common shares, including 25,466 common shares at a price of $7.50 per share and 23,334 common shares at a price of $1.50 per share.</p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify;text-autospace:ideograph-numeric ideograph-other'>&nbsp;</p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'>On September 30, 2014, the Company issued 34,889 common shares to employees of the Company, at a price of $7.50 per share, in settlement of arrears compensation obligations of $261,665.</p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'>&nbsp;</p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'>On October 17, 2014, the Company issued 6,659,487 common shares, at a price of $0.1875 per share, in settlement of a secured loan facility, which included any unpaid and accrued interest, totaling $1,248,654. In conjunction with the issuance of these common shares, the Company incurred $40,400 in share issuance costs.</p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'>&nbsp;</p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'>On December 31, 2014, the Company issued 11,333 common shares to employees of the Company, at a price of $7.50 per share, in settlement of arrears compensation obligations of $85,000.</p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'>&nbsp;</p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'>For the above share issuances, the shares were not registered under the Securities Act of 1933 in reliance upon the exemptions from registration contained in Regulation S of the Securities Act of 1933.&#160; No underwriters were used, nor were any brokerage commissions paid in connection with the above share issuances.</p> <!--egx--><p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'><b><u>Warrants</u></b></p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-autospace:ideograph-numeric ideograph-other'>&nbsp;</p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify;text-autospace:ideograph-other'>On November 13, 2013, 433,333 common share purchase warrants were terminated as a condition of the Loan with BGCG.&#160; The warrants were originally issued pursuant to a private placement offering of Subscription Receipts, which Subscription Receipts were converted into Units, without additional consideration, effective December 19, 2011.&#160; The Units were comprised of one common share and one common share purchase warrant.&#160; The warrants were exercisable at a price of $ 9.75 per common share.</p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify;text-autospace:ideograph-other'>&nbsp;</p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify;text-autospace:ideograph-other'>On December 31, 2013, 173,833 common share purchase warrants expired.&#160; The warrants were originally issued pursuant to a private placement offering of 175,167 Units on December 19, 2011. &nbsp;The Units were comprised of one common share and one common share purchase warrant.&#160; The warrants were exercisable at a price of $9.75 per common share. </p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify;text-autospace:ideograph-other'>&nbsp;</p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify;text-autospace:ideograph-other'>On April 1, 2014, 20,000 common share purchase warrants expired.&#160; The warrants were originally issued in connection with notes payable issued to related parties on April 1, 2011.&#160; The warrants were exercisable at $8.25 per common share.</p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'>&nbsp;</p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify;text-autospace:ideograph-other'>As at September 30, 2015, the aggregate weighted average intrinsic value of 13,333 warrants outstanding was $0, and the weighted average grant date fair value of each warrant outstanding was CAD $11.25. The 13,333 warrants expire on August 4, 2016.</p> <!--egx--><p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-autospace:ideograph-numeric ideograph-other'><b><u>Stock Options</u></b></p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-autospace:ideograph-numeric ideograph-other'>&nbsp;</p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-autospace:ideograph-numeric ideograph-other'>&nbsp;</p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'>Effective December 19, 2013, 260,000 vested stock options were cancelled, and 10,000 non-vested stock options were forfeited.&#160; Further, the Company granted 13,333 stock options at an exercise price of $1.50 each.&#160; </p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'>&nbsp;</p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'>Effective December 21, 2013, 20,000 vested stock options had expired. </p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'>&nbsp;</p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'>On April 8, 2014, the Company granted a total of 333,333 stock options to purchase common shares to directors, officers and an employee of the Company, at an exercise price of $1.50 per share and for a term of 5 years.</p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'>&nbsp;</p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'>On November 14, 2014, the vested and non-vested portion of the 400,000 stock options granted to purchase common shares by directors, officers and employees were cancelled or forfeited.</p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'>&nbsp;</p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'>On February 17, 2015, the Company granted a total of 1,182,667 stock options to purchase common shares to directors, officers and an employee of the Company, at an exercise price of $0.1875 per share and for a term of 5 years.</p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'>&nbsp;</p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify;text-autospace:ideograph-other'>Stock based compensation expense, resulting from the vesting of stock options, for the three months ended September 30, 2015 was $ 18,512 (2014 - $ 46,075), which is included in operation and administration expense on the statement of operations and comprehensive loss.</p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'>&nbsp;</p> <p style='margin:0in;margin-bottom:.0001pt;text-autospace:none'>As at September 30, 2015 there were 1,229,334 stock options outstanding, exercisable at a weighted average exercise price of $0.61 per share, and expiring as follows: 46,667 options, exercisable at $11.25 per share, expiring on March 31, 2016; and, 1,182,667 options, exercisable at $0.1875 per share, expiring on February 17, 2020.</p> <!--egx--><p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-autospace:ideograph-numeric ideograph-other'>&nbsp;</p> <div align="center"> <table border="0" cellspacing="0" cellpadding="0" style='border-collapse:collapse'> <tr align="left"> <td width="151" valign="top" style='width:104.65pt;border:none;border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:center'>Year</p> </td> <td width="302" valign="top" style='width:208.95pt;border:none;border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:center'>Total Lease Commitment</p> </td> </tr> <tr align="left"> <td width="151" valign="top" style='width:104.65pt;background:#CCFFCC;padding:0in 5.4pt 0in 5.4pt'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:center'>June 30, 2016 and thereafter</p> </td> <td width="302" valign="top" style='width:208.95pt;background:#CCFFCC;padding:0in 5.4pt 0in 5.4pt'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:center'>$0</p> </td> </tr> <tr align="left"> <td width="151" valign="top" style='width:104.65pt;padding:0in 5.4pt 0in 5.4pt'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:center;text-autospace:ideograph-numeric ideograph-other'>&nbsp;</p> </td> <td width="302" valign="top" style='width:208.95pt;padding:0in 5.4pt 0in 5.4pt'> <p align="center" style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:center;text-autospace:ideograph-numeric ideograph-other'>&nbsp;</p> </td> </tr> </table> </div> 39849 152351 9137 9627 11704 10457 120156 121565 180846 294000 34732 34732 26790 25052 2550740 2550740 2558682 2560420 2739528 2854420 769440 744815 55040 50669 85220 56695 1025000 1959700 1877179 1959700 1877179 0 0 12354 12354 13795674 13777162 -13028200 -12812275 779828 977241 2739528 2854420 0.001 10000000 0 0 0 0 0.001 300000000 12354497 12354497 12354497 12354497 0.7000 25000 5000000 250000 172222 116545 62656 1050000 0.1100 BGCG 300000000 0.001 10000000 0.001 226000 25466 7.50 23334 1.50 34889 7.50 261665 6659487 1248654 40400 11333 7.50 85000 433333 9.75 173833 9.75 20000 8.25 13333 260000 10000 13333 1.50 20000 333333 1.50 400000 1182667 0.1875 18512 46075 1229334 0.61 46667 11.25 1182667 0.1875 35851 31121 0 0001407583 2015-07-01 2015-09-30 0001407583 2014-12-31 0001407583 2015-11-13 0001407583 2015-09-30 0001407583 2015-06-30 0001407583 2014-07-01 2014-09-30 0001407583 2014-06-30 0001407583 2014-09-30 0001407583 fil:TrinitySilverPropertyMember 2010-03-31 0001407583 fil:TrinitySilverPropertyMember 2010-01-01 2010-03-31 0001407583 fil:TrinitySilverPropertyMember 2012-07-01 2013-03-31 0001407583 fil:HiHoPropertiesMember 2012-10-01 2012-12-31 0001407583 fil:TorontoOfficeMember 2015-07-01 2015-09-30 0001407583 fil:CommonStock4Member 2014-04-01 2014-06-30 0001407583 fil:CommonStock4aMember 2014-04-01 2014-06-30 0001407583 fil:CommonStock4aMember 2014-06-30 0001407583 fil:CommonStock4bMember 2014-04-01 2014-06-30 0001407583 fil:CommonStock4bMember 2014-06-30 0001407583 fil:CommonStock3Member 2014-07-01 2014-09-30 0001407583 fil:CommonStock3Member 2014-09-30 0001407583 fil:CommonStock2Member 2014-10-01 2014-12-31 0001407583 fil:CommonStock1Member 2014-10-01 2014-12-31 0001407583 fil:CommonStock1Member 2014-12-31 0001407583 fil:Warrants1Member 2013-10-01 2013-12-31 0001407583 fil:Warrants1Member 2014-04-01 2014-06-30 0001407583 fil:Warrants1Member 2016-07-01 2016-09-30 0001407583 fil:StockOptions1Member 2013-10-01 2013-12-31 0001407583 fil:StockOptions1Member 2014-04-01 2014-06-30 0001407583 fil:StockOptions1Member 2014-10-01 2014-12-31 0001407583 fil:StockOptions1Member 2015-01-01 2015-03-31 0001407583 fil:StockOptions1Member 2015-09-30 0001407583 fil:StockOptions1Member 2016-03-31 0001407583 fil:StockOptions1Member 2020-03-31 iso4217:USD shares iso4217:USD shares pure The Units were comprised of one common share and one common share purchase warrant. 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Note 5 - Capital Stock and Warrants
3 Months Ended
Sep. 30, 2015
Notes  
Note 5 - Capital Stock and Warrants

Note 5 - Capital Stock and Warrants

 

Authorized

 

The total authorized capital is as follows:

 

  • 300,000,000 common shares with a par value of $0.001 per common share; and

 

  • 10,000,000 preferred shares with a par value of $0.001 per preferred share

 

Issued and outstanding

 

On June 30, 2014, the Company reached an agreement with arm’s-length creditors to settle indebtedness in the aggregate amount of $226,000 by issuing 48,800 common shares, including 25,466 common shares at a price of $7.50 per share and 23,334 common shares at a price of $1.50 per share.

 

On September 30, 2014, the Company issued 34,889 common shares to employees of the Company, at a price of $7.50 per share, in settlement of arrears compensation obligations of $261,665.

 

On October 17, 2014, the Company issued 6,659,487 common shares, at a price of $0.1875 per share, in settlement of a secured loan facility, which included any unpaid and accrued interest, totaling $1,248,654. In conjunction with the issuance of these common shares, the Company incurred $40,400 in share issuance costs.

 

On December 31, 2014, the Company issued 11,333 common shares to employees of the Company, at a price of $7.50 per share, in settlement of arrears compensation obligations of $85,000.

 

For the above share issuances, the shares were not registered under the Securities Act of 1933 in reliance upon the exemptions from registration contained in Regulation S of the Securities Act of 1933.  No underwriters were used, nor were any brokerage commissions paid in connection with the above share issuances.

 

Warrants

 

On November 13, 2013, 433,333 common share purchase warrants were terminated as a condition of the Loan with BGCG.  The warrants were originally issued pursuant to a private placement offering of Subscription Receipts, which Subscription Receipts were converted into Units, without additional consideration, effective December 19, 2011.  The Units were comprised of one common share and one common share purchase warrant.  The warrants were exercisable at a price of $ 9.75 per common share.

 

On December 31, 2013, 173,833 common share purchase warrants expired.  The warrants were originally issued pursuant to a private placement offering of 175,167 Units on December 19, 2011.  The Units were comprised of one common share and one common share purchase warrant.  The warrants were exercisable at a price of $9.75 per common share.

 

On April 1, 2014, 20,000 common share purchase warrants expired.  The warrants were originally issued in connection with notes payable issued to related parties on April 1, 2011.  The warrants were exercisable at $8.25 per common share.

 

As at September 30, 2015, the aggregate weighted average intrinsic value of 13,333 warrants outstanding was $0, and the weighted average grant date fair value of each warrant outstanding was CAD $11.25. The 13,333 warrants expire on August 4, 2016.

 

Stock Options

 

 

Effective December 19, 2013, 260,000 vested stock options were cancelled, and 10,000 non-vested stock options were forfeited.  Further, the Company granted 13,333 stock options at an exercise price of $1.50 each. 

 

Effective December 21, 2013, 20,000 vested stock options had expired.

 

On April 8, 2014, the Company granted a total of 333,333 stock options to purchase common shares to directors, officers and an employee of the Company, at an exercise price of $1.50 per share and for a term of 5 years.

 

On November 14, 2014, the vested and non-vested portion of the 400,000 stock options granted to purchase common shares by directors, officers and employees were cancelled or forfeited.

 

On February 17, 2015, the Company granted a total of 1,182,667 stock options to purchase common shares to directors, officers and an employee of the Company, at an exercise price of $0.1875 per share and for a term of 5 years.

 

Stock based compensation expense, resulting from the vesting of stock options, for the three months ended September 30, 2015 was $ 18,512 (2014 - $ 46,075), which is included in operation and administration expense on the statement of operations and comprehensive loss.

 

As at September 30, 2015 there were 1,229,334 stock options outstanding, exercisable at a weighted average exercise price of $0.61 per share, and expiring as follows: 46,667 options, exercisable at $11.25 per share, expiring on March 31, 2016; and, 1,182,667 options, exercisable at $0.1875 per share, expiring on February 17, 2020.

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Note 4 - Convertible Loan Payable
3 Months Ended
Sep. 30, 2015
Notes  
Note 4 - Convertible Loan Payable

Note 4 – Convertible Loan Payable

 

On October 17, 2014, the Company amended and restated its agreement in relation to an existing $1,210,000 principal amount secured loan facility (the “Original Loan”) made available by BG Capital Group Ltd. (“BGCG”).  Under the terms of the revised agreement, BGCG has made available to the Company a committed non-revolving term credit facility in the principal amount of $1,250,000 (the “New Loan”), which shall initially bear interest at a rate of 11% per annum and which shall be secured by a charge on all of the assets of the Company.  The Company has also repaid the indebtedness to BGCG under the Original Loan by converting the outstanding, aggregate total sum of the principal amount of the Original Loan, together with all accrued and unpaid interest thereon, being $1,248,653 (the “Debt”), into 6,659,486 common shares of the Company (“Common Shares”) at a price of $0.1875 per Common Share, in full satisfaction of the Debt under the Original Loan.

 

The New Loan consists of up to $1,250,000 of new credit facilities, of which $25,000 had been advanced to the Company pursuant to a promissory note, which was superseded by the New Loan and became part of the first advance under the New Loan in the aggregate amount of $350,000.

 

The key terms of the New Loan are as follows:

 

  • a total of $1,050,000 of up to $1,250,000 was advanced to Liberty during the period;

 

·      the outstanding principal amount bears interest at 11% per annum from date of advance and becomes due and payable in its entirety one year following the Closing Date (the “Maturity Date”).  The Company has the option to extend the Maturity Date by six months, with interest payable at 15% per annum accruing on the outstanding principal amount during such extension period.  On September 25, 2015, the Company exercised the option to extend the Maturity date to April 15, 2016;

 

·      the New Loan is secured by a charge on all of the assets of the Company; and

 

  • BGCG, at any time up to one business day prior to the Maturity Date, at its sole option, shall be entitled to convert all or any portion of the outstanding principal amount of the New Loan advanced to Liberty (including all deferred interest), together with all accrued interest, into Common Shares, on the basis of $0.1875 per Common Share.  The conversion rights are subject to the Company having sufficient authorized capital available to satisfy the exercise of the conversion rights from time to time.  To the extent there is not sufficient authorized capital at any time to permit the full exercise of all conversion rights available to BGCG at such time, the Company shall take all reasonable commercial efforts to hold, as expeditiously as possible, a shareholders’ meeting to approve the necessary increase to the authorized capital in order that the conversion rights available to BGCG may be exercised to its fullest extent.

 

The carrying value of the conversion option equity component of the convertible loan has been determined to be nil and the carrying value of the liability component is $1,050,000.  The effective interest rate on the liability component of the convertible loan is 11% for the period ending October 15, 2015 and 15% per annum during the extended period beginning October 15, 2015.

 

The lender pursuant to the New Loan is BGCG. Immediately following the Closing Date, BGCG and certain of its related parties owned, directly and indirectly, 8,657,417 Common Shares, which represented approximately 70.1% of the Company’s 12,354,497 issued and outstanding Common Shares on the Closing Date.  Other than pursuant to the New Loan, the Company does not have any contractual or other relationship with BGCG.

XML 16 R2.htm IDEA: XBRL DOCUMENT v3.3.0.814
BALANCE SHEETS - USD ($)
Sep. 30, 2015
Jun. 30, 2015
Current Assets    
Cash and Cash Equivalents $ 39,849 $ 152,351
Deposits 9,137 9,627
Other Assets 11,704 10,457
Prepaid Expenses 120,156 121,565
Total Current Assets 180,846 294,000
Property and Equipment    
Furniture and Office Equipment 34,732 34,732
Accumulated Depreciation (26,790) (25,052)
Mining Interests 2,550,740 2,550,740
Total Property and Equipment 2,558,682 2,560,420
Total Assets 2,739,528 2,854,420
Current Liabilities    
Accounts Payable 769,440 744,815
Accrued Liabilities 55,040 50,669
Interest Payable 85,220 56,695
Convertible Loan Payable 1,050,000 1,025,000
Total Current Liabilities 1,959,700 1,877,179
Total Liabilities $ 1,959,700 $ 1,877,179
Commitments and Contingencies
Stockholders' Equity    
Preferred Stock $ 0 $ 0
Common Stock 12,354 12,354
Additional Paid-in Capital 13,795,674 13,777,162
Deficit Accumulated During the Exploration Stage (13,028,200) (12,812,275)
Total Stockholders' Equity 779,828 977,241
Total Liabilities and Stockholders' Equity $ 2,739,528 $ 2,854,420
Preferred Stock, Par Value $ 0.001 $ 0.001
Preferred Stock, Shares Authorized 10,000,000 10,000,000
Preferred Stock, Shares Issued 0 0
Preferred Stock, Shares Outstanding 0 0
Common Stock, Par Value $ 0.001 $ 0.001
Common Stock, Shares Authorized 300,000,000 300,000,000
Common Stock, Shares Issued 12,354,497 12,354,497
Common Stock, Shares Outstanding 12,354,497 12,354,497
XML 17 R6.htm IDEA: XBRL DOCUMENT v3.3.0.814
Note 2 - Nature of Operations
3 Months Ended
Sep. 30, 2015
Notes  
Note 2 - Nature of Operations

Note 2 – Nature of Operations

 

Liberty Silver Corp. was incorporated under the laws of the state of Nevada, U.S.A on February 20, 2007 under the name Lincoln Mining Corp.  Pursuant to a Certificate of Amendment dated February 11, 2010, the Company changed its name to Liberty Silver Corp. The Company’s registered office is located at 1802 N. Carson Street, Suite 212, Carson City Nevada 89701, and its head office is located at 181 Bay Street, Suite 2330, Toronto, Ontario, Canada, M5J 2T3, and its telephone number is 888-749-4916.  As of the date of this Form 10-Q, the Company had no subsidiaries.

 

The Company was incorporated for the purpose of engaging in mineral exploration activities.  On March 29, 2010, the Company entered into an Exploration Earn-In Agreement relating to the Trinity Project located in Pershing County, Nevada.  The Company is currently engaged in the exploration of the Trinity Project, and has not yet commenced development stage activities, however, the Company intends to engage in efforts to develop the Trinity Project in the future.  Subject to securing adequate financing, the plan of operation for the fiscal year ending June 30, 2016 is to conduct additional mineral exploration activities at the Trinity Silver property, which plan will extend into the fiscal year ending June 30, 2017.  Subject to the availability of funding, operations at the Trinity Project will consist of (i) an effort to expand the known mineralized material through drilling, (ii) permitting for operation, if deemed economically viable, (iii) metallurgical studies aimed at enhancing the recovery of the silver and by-product lead and zinc, (iv) engineering design related to potential construction of a new mine, and (v) complete feasibility studies relating to possible re-opening of the historic mine.  Exploration of the property would be conducted simultaneously with the mine development in order to locate additional mineralized materials.

XML 18 R22.htm IDEA: XBRL DOCUMENT v3.3.0.814
Note 6 - Commitments and Contingencies (Details)
3 Months Ended
Sep. 30, 2015
USD ($)
Operating Leases Rent Expense, net $ 31,121
Toronto Office  
Rent Expense $ 35,851
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Note 3 - Mineral Property
3 Months Ended
Sep. 30, 2015
Notes  
Note 3 - Mineral Property

Note 3 - Mineral Property

 

The Company acquired its interest in the Trinity Project through an Exploration Earn-In Agreement.  On March 29, 2010, the Company entered into the Earn-In Agreement relating to the Trinity Project with AuEx, Inc., a Nevada company beneficially owned by another Nevada company AuEx Ventures, Inc.  AuEx, Inc. held an exclusive interest in the Trinity Project by way of a Minerals Lease and Sublease with Newmont Mining USA Limited, a Delaware corporation who owns or leases the various unpatented mining claims and portions of private land comprising the Trinity Project.  As part of a restructuring transaction by AuEx Ventures, Inc., another Nevada company Renaissance Exploration Inc. (“Renaissance”) was spun out, and on July 1, 2010 AuEx, Inc. assigned all of its interest in the Trinity Project and the Earn-In Agreement to Renaissance, who currently holds a 100% leasehold interest in the Trinity Project.  The Minerals Lease and Sublease grants to Newmont, a right of first offer on any transfer of AuEx, Inc.’s interests in the Trinity Project to any non-affiliate of AuEx, Inc., and also gives Newmont a right to either enter into a joint venture agreement covering the Trinity Project and any other real property interests that AuEx, Inc. holds or acquires within the Trinity Project, or receive a royalty on all mineral production from such properties.  Currently the rights to the Trinity Project are held 100% by Renaissance, pursuant to an assignment of such rights from AuEx, Inc.  The Company entered into the Earn-In Agreement providing the Company with a right to earn a 70% undivided interest in rights of Renaissance in the Trinity Project (the “ 70% Interest”).

 

Under the Earn-In Agreement, the Company may earn-in the 70% Interest in the Trinity Project during a 6-year period in consideration of (1) a signing payment of $25,000, which has been made, (2) an expenditure of a cumulative total of $5,000,000 in exploration and development expenses on the Trinity Project by March 29, 2016, including a minimum of $500,000 which must be expended within one year from the effective date of the Agreement, and (3) completion of a bankable feasibility study on the Trinity Project on or before the 7th anniversary date of the Agreement.  Item (1) has been completed by the Company, and the Company has satisfied item (2), and has reported its compliance as of March 29, 2013, which is the end of the third year from the inception of the Earn-in Agreement.

 

On October 15, 2012, the Company entered into and closed a Purchase Agreement (the “Purchase Agreement”) with Primus Resources, L.C. and James A. Freeman (collectively “Seller”) to acquire unpatented mining claims, Nevada BLM Serial No. 799907, 799908, 799909, 799910, and 799911 covering approximately 100 acres of property located adjacent to the former Trinity Silver mine on the Company’s Trinity Project (the “Hi Ho Properties”).  The Hi Ho Properties were previously the only acreage not controlled by the Company or its joint venture partner Renaissance Exploration Inc. in the Trinity Project.  Under the terms of the Purchase Agreement, the Company provided cash consideration of US $250,000 and issued 172,222 restricted shares of common stock of the Company to Seller.  In addition the Seller was granted a 2% net smelter royalty on future production from the Hi Ho Properties pursuant to the terms of a Deed with Reservation of Royalty Hi Ho Silver Claims.

 

The Trinity Project consists of a total of approximately 10,020 acres, including 5,676 acres of fee land and 253 unpatented mining claims.

 

The Company has completed some financing transactions, and continues to pursue additional financing opportunities in order to obtain the capital needed to fulfill its obligations under the terms of the Earn-In Agreement.  There has been no mining of resources to date.

 

During the interim period ended September 30, 2014, the Company had incurred approximately $116,545 in exploration expenditures, which were reported under various line items on the statement of operations.

 

During the interim period ended September 30, 2015, the Company had incurred approximately $62,656 in exploration expenditures, which were reported under various line items on the statement of operations.

XML 21 R3.htm IDEA: XBRL DOCUMENT v3.3.0.814
STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($)
3 Months Ended
Sep. 30, 2015
Sep. 30, 2014
Operating Expenses    
Operation and Administration $ 149,748 $ 193,491
Legal and Accounting 52,371 169,028
Exploration 9,320 9,462
Consulting 3,000  
Total Operating Expenses 214,439 371,981
Loss from Operations (214,439) (371,981)
Other Gain or Interest / (Expense)    
Gain on Foreign Exchange 27,039 7,276
Interest Expense (28,525) (33,548)
Total Other Gain or Interest/(Expense) (1,486) (26,272)
Loss Before Income Tax (215,925) (398,253)
Net Loss and Comprehensive Loss $ (215,925) $ (398,253)
Net Loss Per Share Basic and Fully Diluted $ (0.02) $ (0.07)
Weighted Average Common Shares 12,354,497 5,630,281
XML 22 R17.htm IDEA: XBRL DOCUMENT v3.3.0.814
Note 3 - Mineral Property (Details) - USD ($)
3 Months Ended 9 Months Ended
Sep. 30, 2015
Sep. 30, 2014
Dec. 31, 2012
Mar. 31, 2010
Mar. 31, 2013
Mineral Extraction Processing and Marketing Costs $ 62,656 $ 116,545      
Trinity Silver Property          
Earn-in Interest       70.00%  
Payments to Acquire Mineral Rights       $ 25,000  
Mineral Extraction Processing and Marketing Costs         $ 5,000,000
Hi Ho Properties          
Payments to Acquire Mineral Rights     $ 250,000    
Business Acquisition, Equity Interest Issued or Issuable, Number of Shares     172,222    
XML 23 R1.htm IDEA: XBRL DOCUMENT v3.3.0.814
Document and Entity Information - USD ($)
3 Months Ended
Sep. 30, 2015
Nov. 13, 2015
Dec. 31, 2014
Document and Entity Information      
Entity Registrant Name LIBERTY SILVER CORP    
Document Type 10-Q    
Document Period End Date Sep. 30, 2015    
Amendment Flag false    
Entity Central Index Key 0001407583    
Current Fiscal Year End Date --06-30    
Entity Common Stock, Shares Outstanding   12,354,497  
Entity Public Float     $ 0
Entity Filer Category Smaller Reporting Company    
Entity Current Reporting Status Yes    
Entity Voluntary Filers No    
Entity Well-known Seasoned Issuer No    
Document Fiscal Year Focus 2016    
Document Fiscal Period Focus Q1    
XML 24 R18.htm IDEA: XBRL DOCUMENT v3.3.0.814
Note 4 - Convertible Loan Payable (Details) - USD ($)
3 Months Ended
Sep. 30, 2015
Jun. 30, 2015
Details    
Convertible Loan Payable $ 1,050,000 $ 1,025,000
Interest Rate 11.00%  
Short-term Debt, Lender BGCG  
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M`AX#%`````@`9&EM1]VGI!E&"@``QYL``!4`&````````0```*2!GCD``&QB M`Q0````(`&1I;4>KR#!^A!X``*.=`0`5`!@```````$```"D@3-$``!L M8G-V+3(P,34P.3,P7VQA8BYX;6Q55`4``[PG1E9U>`L``00E#@``!#D!``!0 M2P$"'@,4````"`!D:6U'=O@[[C,5``!<9P$`%0`8```````!````I($&8P`` M;&)S=BTR,#$U,#DS,%]P&UL550%``.\)T96=7@+``$$)0X```0Y`0`` M4$L!`AX#%`````@`9&EM1T%+$/?W!@``-CT``!$`&````````0```*2!B'@` M`&QB'-D550%``.\)T96=7@+``$$)0X```0Y`0``4$L% 3!@`````&``8`&@(``,I_```````` ` end XML 26 R4.htm IDEA: XBRL DOCUMENT v3.3.0.814
STATEMENTS OF CASH FLOWS - USD ($)
3 Months Ended
Sep. 30, 2015
Sep. 30, 2014
Cash Flows From Operating Activities:    
Net Loss and Comprehensive Loss $ (215,925) $ (398,253)
Adjustments to Reconcile Net Loss to Net Cash Used in Operating Activities:    
Stock Based Compensation 18,512 46,075
Common Stock Issued for Services   261,666
Depreciation Expense 1,738 1,737
Changes in Operating Assets and Liabilities    
Decrease in Deposit 490 171
Increase in Other Assets (1,247) (8,753)
(Increase) Decrease in Prepaid Expenses 1,409 (13,580)
Increase (Decrease) in Accounts Payable 24,625 (36,672)
Increase (Decrease) in Accrued Expenses 4,371 (186,191)
Increase in Interest Payable 28,525 33,548
Net Cash Used in Operating Activities (137,502) (300,252)
Cash Flows From Financing Activities:    
Proceeds from Convertible Loan Payable 25,000 25,000
Net Cash Provided by Financing Activities 25,000 25,000
Decrease in Cash and Cash Equivalents (112,502) (275,252)
Initial Cash and Cash Equivalents 152,351 320,309
Final Cash and Cash Equivalents $ 39,849 $ 45,057

XML 27 R12.htm IDEA: XBRL DOCUMENT v3.3.0.814
Note 5 - Capital Stock and Warrants: Authorized, Issued and Outstanding (Policies)
3 Months Ended
Sep. 30, 2015
Policies  
Authorized, Issued and Outstanding

Authorized

 

The total authorized capital is as follows:

 

  • 300,000,000 common shares with a par value of $0.001 per common share; and

 

  • 10,000,000 preferred shares with a par value of $0.001 per preferred share

 

Issued and outstanding

 

On June 30, 2014, the Company reached an agreement with arm’s-length creditors to settle indebtedness in the aggregate amount of $226,000 by issuing 48,800 common shares, including 25,466 common shares at a price of $7.50 per share and 23,334 common shares at a price of $1.50 per share.

 

On September 30, 2014, the Company issued 34,889 common shares to employees of the Company, at a price of $7.50 per share, in settlement of arrears compensation obligations of $261,665.

 

On October 17, 2014, the Company issued 6,659,487 common shares, at a price of $0.1875 per share, in settlement of a secured loan facility, which included any unpaid and accrued interest, totaling $1,248,654. In conjunction with the issuance of these common shares, the Company incurred $40,400 in share issuance costs.

 

On December 31, 2014, the Company issued 11,333 common shares to employees of the Company, at a price of $7.50 per share, in settlement of arrears compensation obligations of $85,000.

 

For the above share issuances, the shares were not registered under the Securities Act of 1933 in reliance upon the exemptions from registration contained in Regulation S of the Securities Act of 1933.  No underwriters were used, nor were any brokerage commissions paid in connection with the above share issuances.

XML 28 R11.htm IDEA: XBRL DOCUMENT v3.3.0.814
Note 7 - Subsequent Events
3 Months Ended
Sep. 30, 2015
Notes  
Note 7 - Subsequent Events

Note 7 – Subsequent Events

 

On November 6, 2015, the Company received a further $25,000 of the outstanding balance from the final $250,000 loan advance that had originally become due on June 30, 2015, bringing the amount advanced to $75,000 from the total amount that is overdue.  The remaining $175,000 portion of the final advance remains outstanding.

 

The Company has evaluated subsequent events for the interim period ended September 30, 2015 through the date these interim unaudited financial statements were issued, and concluded, aside from the foregoing, that there were no other events or transactions occurring during this period that required recognition or disclosure in its interim financial statements.

XML 29 R23.htm IDEA: XBRL DOCUMENT v3.3.0.814
Note 6 - Commitments and Contingencies: Schedule of Rent Expense (Details)
Sep. 30, 2015
USD ($)
Details  
June 30, 2016 and thereafter $ 0
XML 30 R19.htm IDEA: XBRL DOCUMENT v3.3.0.814
Note 5 - Capital Stock and Warrants: Authorized, Issued and Outstanding (Details) - USD ($)
3 Months Ended
Dec. 31, 2014
Sep. 30, 2014
Jun. 30, 2014
Sep. 30, 2015
Jun. 30, 2015
Common Stock, Shares Authorized       300,000,000 300,000,000
Common Stock, Par Value       $ 0.001 $ 0.001
Preferred Stock, Shares Authorized       10,000,000 10,000,000
Preferred Stock, Par Value       $ 0.001 $ 0.001
Common Stock Issued for Services   $ 261,666      
Common Stock (4)          
Common Stock Issued for Services     $ 226,000    
Common Stock (4a)          
Common Stock Issued for Services (Shares)     25,466    
Share Price     $ 7.50    
Common Stock (4b)          
Common Stock Issued for Services (Shares)     23,334    
Share Price     $ 1.50    
Common Stock (3)          
Common Stock Issued for Services   $ 261,665      
Common Stock Issued for Services (Shares)   34,889      
Share Price   $ 7.50      
Common Stock (2)          
Common Stock Issued; Loan Payable Shares 6,659,487        
Common Stock Issued; Loan Payable $ 1,248,654        
Issue Costs 40,400        
Common Stock (1)          
Common Stock Issued for Services $ 85,000        
Common Stock Issued for Services (Shares) 11,333        
Share Price $ 7.50        
XML 31 R15.htm IDEA: XBRL DOCUMENT v3.3.0.814
Note 6 - Commitments and Contingencies: Schedule of Rent Expense (Tables)
3 Months Ended
Sep. 30, 2015
Tables/Schedules  
Schedule of Rent Expense

 

Year

Total Lease Commitment

June 30, 2016 and thereafter

$0

 

 

XML 32 R13.htm IDEA: XBRL DOCUMENT v3.3.0.814
Note 5 - Capital Stock and Warrants: Warrants (Policies)
3 Months Ended
Sep. 30, 2015
Policies  
Warrants

Warrants

 

On November 13, 2013, 433,333 common share purchase warrants were terminated as a condition of the Loan with BGCG.  The warrants were originally issued pursuant to a private placement offering of Subscription Receipts, which Subscription Receipts were converted into Units, without additional consideration, effective December 19, 2011.  The Units were comprised of one common share and one common share purchase warrant.  The warrants were exercisable at a price of $ 9.75 per common share.

 

On December 31, 2013, 173,833 common share purchase warrants expired.  The warrants were originally issued pursuant to a private placement offering of 175,167 Units on December 19, 2011.  The Units were comprised of one common share and one common share purchase warrant.  The warrants were exercisable at a price of $9.75 per common share.

 

On April 1, 2014, 20,000 common share purchase warrants expired.  The warrants were originally issued in connection with notes payable issued to related parties on April 1, 2011.  The warrants were exercisable at $8.25 per common share.

 

As at September 30, 2015, the aggregate weighted average intrinsic value of 13,333 warrants outstanding was $0, and the weighted average grant date fair value of each warrant outstanding was CAD $11.25. The 13,333 warrants expire on August 4, 2016.

XML 33 R14.htm IDEA: XBRL DOCUMENT v3.3.0.814
Note 5 - Capital Stock and Warrants: Stock Options (Policies)
3 Months Ended
Sep. 30, 2015
Policies  
Stock Options

Stock Options

 

 

Effective December 19, 2013, 260,000 vested stock options were cancelled, and 10,000 non-vested stock options were forfeited.  Further, the Company granted 13,333 stock options at an exercise price of $1.50 each. 

 

Effective December 21, 2013, 20,000 vested stock options had expired.

 

On April 8, 2014, the Company granted a total of 333,333 stock options to purchase common shares to directors, officers and an employee of the Company, at an exercise price of $1.50 per share and for a term of 5 years.

 

On November 14, 2014, the vested and non-vested portion of the 400,000 stock options granted to purchase common shares by directors, officers and employees were cancelled or forfeited.

 

On February 17, 2015, the Company granted a total of 1,182,667 stock options to purchase common shares to directors, officers and an employee of the Company, at an exercise price of $0.1875 per share and for a term of 5 years.

 

Stock based compensation expense, resulting from the vesting of stock options, for the three months ended September 30, 2015 was $ 18,512 (2014 - $ 46,075), which is included in operation and administration expense on the statement of operations and comprehensive loss.

 

As at September 30, 2015 there were 1,229,334 stock options outstanding, exercisable at a weighted average exercise price of $0.61 per share, and expiring as follows: 46,667 options, exercisable at $11.25 per share, expiring on March 31, 2016; and, 1,182,667 options, exercisable at $0.1875 per share, expiring on February 17, 2020.

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Note 1 - Nature and Continuance of Operations and Going Concern (Details) - USD ($)
Sep. 30, 2015
Jun. 30, 2015
Details    
Deficit Accumulated During the Exploration Stage $ (13,028,200) $ (12,812,275)
XML 35 R21.htm IDEA: XBRL DOCUMENT v3.3.0.814
Note 5 - Capital Stock and Warrants: Stock Options (Details) - USD ($)
3 Months Ended
Sep. 30, 2015
Mar. 31, 2015
Dec. 31, 2014
Sep. 30, 2014
Jun. 30, 2014
Dec. 31, 2013
Mar. 31, 2020
Mar. 31, 2016
Valuation of Stock Option Issuance $ 18,512     $ 46,075        
Stock Options                
Stock Options Cancelled           260,000    
Non-vested Options Forfeited           10,000    
Stock Options Granted   1,182,667     333,333 13,333    
Stock Options Granted, Exercise Price   $ 0.1875     $ 1.50 $ 1.50    
Stock Options Expired           20,000    
Stock Options Forfeited and Expired     400,000          
Stock Options Outstanding 1,229,334              
Stock Options Outstanding, Exercise Price $ 0.61           $ 0.1875 $ 11.25
Stock Options Outstanding, Exercisable             1,182,667 46,667
XML 36 R5.htm IDEA: XBRL DOCUMENT v3.3.0.814
Note 1 - Nature and Continuance of Operations and Going Concern
3 Months Ended
Sep. 30, 2015
Notes  
Note 1 - Nature and Continuance of Operations and Going Concern

Note 1 – Nature and Continuance of Operations and Going Concern

 

The accompanying interim unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules and regulations of the United States Securities and Exchange Commission for interim financial information.  Accordingly, they do not include all the information and footnotes necessary for a comprehensive presentation of financial position, results of operations, stockholders’ equity or cash flows.  It is management's opinion, however, that all material adjustments (consisting of normal recurring adjustments) have been made which are necessary for a fair financial statement presentation.  The interim unaudited financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K, which contains the annual audited financial statements and notes thereto, together with the Management’s Discussion and Analysis, for the year ended June 30, 2015.  The interim results for the period ended September 30, 2015 are not necessarily indicative of the results for the full fiscal year.  The interim unaudited financial statements are presented in USD, which is the functional currency.

 

These interim unaudited financial statements have been prepared on a going concern basis.  The Company has incurred losses since inception resulting in an accumulated deficit of $13,028,200 and further losses are anticipated in the development of its business.  The ability of the Company to emerge from the exploration stage is dependent upon, among other things, obtaining additional financing to continue operations, explore and develop the mineral properties and the discovery, development, and sale of reserves.  The Company does not have sufficient working capital needed to meet its current fiscal obligations.  In order to continue to meet its fiscal obligations in the current fiscal year and beyond, the Company must seek additional financing.  Its ability to continue as a going concern is dependent upon the ability of the Company to generate profitable operations in the future and/or to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due.  The accompanying interim unaudited financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

Management considers various financing alternatives including, but not limited to, merger and acquisition activity, raising capital through the equity markets and debt financing.  These unaudited interim financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts of and classification of liabilities that might be necessary in the event the Company cannot continue in existence.

 

These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern. 

 

On January 30, 2015, the Company completed a share consolidation of its common shares on the basis of one (1) new post-consolidation common share for every 15 pre-consolidated common shares. The number of authorized shares was not reduced as a result of this share consolidation.  The 185,309,574 common shares of the Company outstanding immediately prior to consolidation were reduced to 12,354,497 common shares, as approved by shareholders at the Company’s annual general and special meeting held on December 5, 2014.  No fractional shares were issued.  Any fractions of a share were rounded up to the next whole common share.  A new CUSIP number of 53121P206 replaced the old CUSIP number of 53121P107, to distinguish between the pre- and post-consolidated shares.  In conjunction with this share consolidation, corresponding adjustments were made in the number of options and warrants issued and outstanding, and in the exercise prices of such options and warrants.  All outstanding common shares and per share amounts contained in the interim unaudited financial statements and related notes have been retroactively adjusted to reflect this share consolidation for all periods presented.

XML 37 R10.htm IDEA: XBRL DOCUMENT v3.3.0.814
Note 6 - Commitments and Contingencies
3 Months Ended
Sep. 30, 2015
Notes  
Note 6 - Commitments and Contingencies

Note 6 – Commitments and Contingencies

 

Effective November 1, 2011, and terminating on April 28, 2016, the Company entered into a sub-lease agreement for the lease of premises in Toronto, Ontario, Canada, for a term of 54 months.  The Company has its head office at these premises, which is approximately 1,400 square feet.  The annual base rent commitment for the Toronto head office space is $35,851 (CAD $48,094).

 

Effective February 8, 2012, the Company entered into a lease agreement for the lease of premises in Sparks, Nevada, USA, for a term of 12 months, and terminating on January 31, 2013.  The lease agreement was amended such that the term was extended for a further 24 months, and terminating on January 31, 2015, and then extended for a further 12 months, terminating on January 31, 2016.  The Company has its field office and warehouse at these premises, which is approximately 5,500 square feet.  The annual base rent commitment for the Sparks field office space is $30,624 for the period from February 1, 2014 to January 31, 2015, and $30,624 for the period from February 1, 2015 to February 1, 2016.

 

As at September 30, 2015, the Company had a commitment, for the above noted leases, of $31,121 remaining.

 

The following table outlines the remaining lease commitment to the end of the next five fiscal years based on the leases that are currently entered into by the Company:

 

Year

Total Lease Commitment

June 30, 2016 and thereafter

$0

 

 

 

On September 12, 2013, the Company and certain of its current and former officers and directors (the “Liberty Silver Parties”) were named as defendants in a proposed securities class action lawsuit filed against Robert Genovese, certain individuals alleged to have collaborated with Mr. Genovese, and an offshore investment firm allegedly controlled by Mr. Genovese (the “Action,” Case No. 9:13-cv-80923-KLR, Stanaford v. Genovese et al.).  The action alleged violations of the United States Securities Exchange Act of 1934 and rules thereunder relating to anomalous trading activity and fluctuations in the Company’s share price from August through October 2012.

 

OOn December 8, 2014, without in any way acknowledging any fault or liability, the Company reached a settlement in principle, providing for a payment of $1 million cash, to be paid by the Company's D&O insurance carriers.  On August 17, 2015, with no admission of fault or liability by the Liberty Silver Parties, the Court approved the settlement class and fully and finally dismissed with prejudice all claims against Liberty Silver, Geoffrey Browne, and William Tafuri in the litigation.  Although defendants continue to deny plaintiffs' allegations, the Company believed it was in the best interests of its stockholders to focus its attention on its business and put the matter behind it.

 

Additionally, in the normal course of operations, certain other contingencies may arise relating to legal actions undertaken against the Company. In the opinion of management, whether the impact of such potential legal actions would have a material adverse effect on the Company's results of operations, liquidity, or its financial position, cannot be determined in advance.

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Note 5 - Capital Stock and Warrants: Warrants (Details) - Warrants - $ / shares
3 Months Ended
Sep. 30, 2016
Jun. 30, 2014
Dec. 31, 2013
Warrants Terminated [1]     433,333
Warrants Terminated, Exercise Price     $ 9.75
Warrants Expired 13,333 20,000 173,833 [2]
Warrants Expired, Exercise Price   $ 8.25 $ 9.75
[1] The Units were comprised of one common share and one common share purchase warrant.
[2] The Units were comprised of one common share and one common share purchase warrant