OPTION ON MINERAL PROPERTY UNPROVEN MINERAL INTERESTS

3 Months Ended

Aug. 31, 2012

OPTION ON MINERAL PROPERTY UNPROVEN MINERAL INTERESTS [Text Block]

NOTE 5 – OPTION ON MINERAL PROPERTY – UNPROVEN MINERAL INTERESTS

Mineral Property Interests – State of Nevada – U.S.A.

On August 23, 2010, we entered into three agreements with TAC Gold Inc., a Canadian reporting issuer, in regards to the acquisition of certain property interests. The interests that we have acquired are as follows:

• An option to acquire a 70% interest in a mineral exploration property called the “Belleville” property in Mineral County, Nevada. TAC has an underlying option agreement with Minquest Inc. for the acquisition of a 100% interest in the property (under which agreement Minquest has retained a 3% net smelter return royalty);
• An option to acquire a 35% interest in a mineral exploration property called the “Goldfield West” property in Esmeralda County, Nevada. TAC has an underlying option agreement with Minquest Inc. for the acquisition of a 100% interest in the property. Subsequent to the end of the current quarter the option was terminated by mutual agreement between TAC and the Company as the result of poor exploration results achieved to date; and
• A right of first refusal on an additional exploration property called the “Iowa Canyon” property in Lander County, Nevada for period of 12 months; In September, 2011, we converted that right to an option to acquire a 15% interest in the property and then terminated the agreement on January 18, 2012 in order to focus on the Goldfield and Belleville prospects. TAC has an underlying option agreement with Minquest Inc. for the acquisition of a 100% interest in the property.

Pursuant to the terms of the above noted option agreements, in order to earn the 70% interest in the Belleville property we have assumed our 70% portion of the obligations of TAC Gold under their option agreements with Minquest which consist of:

• Making payments in the aggregate amount of $170,000 in payments ranging from $20,000 to $50,000, to the sixth anniversary of the underlying option agreement; and
• Incurring exploration expenditures in the aggregate amount of $1,320,000 in annual amounts ranging from $120,000 to $400,000, to the seventh anniversary of the underlying agreement.

In addition, TAC Gold is required to make certain share issuances to Minquest under the terms of their option agreements ( 700,000 shares in regards to the Belleville property, periodically over the terms of the agreements). We are obligated to reimburse TAC Gold in either cash for the fair market value of the TAC Gold shares that are issued to Minquest or in the issuance of the equivalent value of All American shares as have a market value equal to the amount of the payment then due. The common shares of TAC Gold are listed for trading on the Canadian National Stock Exchange.

The schedule of payments, stock issuances & required property expenditures under the Belleville agreements is:

All American’s Portion	70%		70%
Anniversary Date	Payment	Share Issuance	Property Expenditure
August 4, 2010	Paid by TAC	nil	Paid by TAC
August 4, 2011	$14,000 (paid)	9,804	$84,000 (paid)
August 4, 2012	$21,000	TBD	$105,500
August 4, 2013	$21,000	TBD	$140,000
August 4, 2014	$28,000	TBD	$140,500
August 4, 2015	$35,000	TBD	$175,000
August 4, 2016	$0	TBD	$280,000
TOTALS	$133,000		$995,000

As of the date of this periodic report, we are in full compliance with the terms of the option agreement on the Belleville property and are current in all payments, exploration expenditures or advances on planned exploration programs and share issuances to TAC under the option agreements.

DESERT PACIFIC – ESSEX AND BELL FLATS PROPERTIES

On April 13, 2012, we entered into a non-binding Letter of Intent (the “Desert Pacific ‘Essex’ LOI”) with Desert Pacific Exploration, Inc. (“Desert Pacific”) that set out the general terms and conditions between Desert Pacific and the Corporation for the “Essex” mineral property located in White Pine County, Nevada, which allowed us to exclusively investigate the mineral property until May 12, 2012, and whereby the Corporation had an exclusive right to enter into a mining option agreement with Desert Pacific at any time prior to May 12, 2012.

In consideration of signing the Letter of Intent, we have paid to Desert Pacific sum of $2,500 concurrently with the execution and delivery of the LOI. review historical records on the Essex property, discuss their implications with Desert Pacific and our engineers so as to determine if we wish to enter into a mining option agreement with Desert Pacific to explore the project. In early June, 2012 the decision was made not to pursue the project.

On May 7, 2012, we entered into a non-binding Letter of Intent (the “Desert Pacific ‘Bell Flats’ LOI”) with Desert Pacific Exploration, Inc. (“Desert Pacific”) that set out the general terms and conditions between Desert Pacific and the Corporation for the “Bell Flats” mineral property located in Churchill County, Nevada, which allowed us to exclusively investigate the mineral property for a forty-five (45) day period until June 22, 2012, and whereby the Corporation has an exclusive right to enter into a mining option agreement with Desert Pacific at any time prior to June 22, 2012. In consideration of signing the Letter of Intent, we paid to Desert Pacific sum of $2,500 concurrently with the execution and delivery of the LOI. On June 22, 2012, the decision was made not to pursue the project.