OPTION ON MINERAL PROPERTY UNPROVEN MINERAL INTERESTS

12 Months Ended

May 31, 2013

OPTION ON MINERAL PROPERTY UNPROVEN MINERAL INTERESTS [Text Block]

NOTE 6 – OPTION ON MINERAL PROPERTY – UNPROVEN MINERAL INTERESTS

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

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

• An option to acquire a 70% interest in a mineral exploration property called the “Belleville” property in Mineral County, Nevada. TAC had an underlying option agreement with Minquest Inc. for the acquisition of a 100% interest in the property (under which agreement Minquest retained a 3% net smelter return royalty); During the year the option was terminated by mutual agreement between TAC and the Company as the result of poor exploration results achieved to date;

• An option to acquire a 35% interest in a mineral exploration property called the “Goldfield West” property in Esmeralda County, Nevada. TAC had an underlying option agreement with Minquest Inc. for the acquisition of a 100% interest in the property. Also during the current year the option was terminated by mutual agreement between TAC and the Company as the result of poor exploration results achieved to date.

Pursuant to the terms of the above noted option agreements, in order to earn the 70% interest in the Belleville property we assumed our 70% portion of the obligations of TAC Gold under their option agreements with Minquest which consisted 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 was 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 were obligated to reimburse TAC Gold in either cash for the fair market value of the TAC Gold shares that were 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 agreement is:

All American’s Portion	70 %		70 %
Anniversary Date	Payment	Share Issuance	Property Expenditure
August 4, 2010	Paid by TAC	Paid by TAC	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

Because we mutually elected to terminate the option agreement, no further payment or share issues is required.

The schedule of payments, stock issuances & required property expenditures under the Goldfields West agreement is:

All American’s Portion	35 % of TAC		35 %
Anniversary Date	Payment	Share Issuance	Property Expenditure
September 14, 2010	$200,000 (paid)	nil	nil
November 21, 2010	$100,000 (paid)	nil	nil
January 20, 2011	$7,000 (paid) *	9,651	$70,000 (paid)
January 20, 2012	$10,500 (paid)	41,677	$70,000 (paid)
January 20, 2013	$10,500	TBD	$87,500
January 20, 2014	$14,000	TBD	$105,000
January 20, 2015	$14,000	TBD	$122,500
January 20, 2016	$17,500	TBD	$140,000
January 20, 2017	$24,500	TBD	$175,000
TOTALS	$398,000		$770,000

*        included as a credit as part of the cost of the acquisition of the option agreement and paid by TAC Gold

As of September 7, 2012, by mutual agreement with TAC, the option agreement was terminated as a result of unsuccessful exploration results to date. As a result, we are under no obligation to make further payment or share issues to TAC or Minquest.

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 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.

ALEX CLAIMS – VERNON MINING DISTRICT, B.C., CANADA

On November 1, 2012, we entered into a Mineral Property Acquisition Agreement (the “Agreement”) with James Hason (“Hason”) that set out the general terms and conditions between Hason and the Corporation in regards to the “Alex” mineral property (the “Property”) located in the Vernon Mining Division, British Columbia, Canada, which allows us an option to investigate and purchase the property until March 31, 2013, by making payment of $6,000 upon the execution of the Agreement. Hason may extend the option until October 30, 2013, by our making an additional payment of USD $2,000 on or before March 31, 2013. In consideration of signing the Agreement, we paid to Hason the sum of $6,000 concurrently with the execution and delivery of the Agreement.

After review of the underlying engineering data, it was determined that the Company would not proceed with further work on the Alex Claims; accordingly, the agreement was terminated.