Mineral Rights and Properties

3 Months Ended

Oct. 31, 2013

Mineral Rights and Properties [Abstract]

3. MINERAL RIGHTS AND PROPERTIES

On September 7, 2012 the Company entered into a mineral lease agreement with MinQuest, Inc. Pursuant to the terms of the agreement, the Company acquired 100% of the exploration and mining rights to 58 unpatented mining claims in Esmeralda County, Nevada approximately 26 miles south of Goldfield in the Tokop mining district for a period of 20 years known as the Empress Property.

Empress Property

On September 7, 2012 the Company entered into a mineral lease agreement with MinQuest. Pursuant to the terms of the agreement, MinQuest has agreed to lease the Company 100% of the exploration and mining rights to the Empress Property. As consideration, the Company is required to provide annual payments of $20,000 and commit to the following work expenditures:

·	$150,000 spent in the first year;

·	$200,000 spent in the second year;

·	$250,000 spent in the third year;

·	$300,000 spent in the fourth year;

·	$350,000 spent in the fifth year;

·	$400,000 in the sixth year; and

·	$650,000 in the seventh year.

MinQuest will also retain a 3% net smelter royalty in the event that the Company enters mineral production on the Empress Property. If the Company is unable to fulfill any of the commitments set out above, the mineral lease agreement will terminate and all property rights will revert back to MinQuest.

As of October 31, 2013, the Company has paid $20,000 the first year’s annual payment. As well the Company has incurred $150,000 in drilling work expenditures. In late 2012, our company drilled a total of five angled RC holes totaling 2,100 feet. Three holes were drilled at Wonder and two at the Empress Mine. No high-grade gold/silver was intersected and after further study and interpretation of the results, the Company subsequently decided to terminate its lease on the property.

Winnemucca Mountain Property

On September 14, 2012, the Company entered into an agreement (as amended and restated on November 15, 2012) with AHL Holdings Ltd. and Golden Sands Exploration Inc. for the exclusive option to purchase a 70% interest in and to certain mining claims from AHL Holdings and Golden Sands, which claims form the Winnemucca Mountain Property in Humboldt County, Nevada.

If the option is exercised, the option agreement provides that AHL Holdings and Golden Sands will enter into a joint venture agreement. The Company will solely be responsible for financing the joint venture and will act as sole operator in consideration of a fee.

On February 1, 2013, the option agreement was further amended and restated. This amended and restated agreement serves to defer, by 90 days, option payments of $30,000 and $200,000 that were previously due by December 31, 2012 and September 14, 2013, respectively. In addition, the Company’s obligation to incur $150,000 in exploration expense by February 15, 2013 will be deferred until July 1, 2013, and the initial $20,000 royalty advance payable to the optionors shall be deferred from December 31, 2012 until April 1, 2013. In consideration of the extended payment and expense deadlines, the Company paid a $10,000 penalty to the optionors on February 1, 2013.

On August 26, 2013 the Company entered into an amended and restated option agreement with AHL Holdings and Golden Sands which materially modifies and replaces the terms of the original option agreement (as amended). The amended and restated agreement increases the interest that the Company may purchase in the Winnemucca property to 80% from 70%, modifies the exercise price payable in respect of the option, and extends schedule for delivery of payment and performance of obligations required for exercise of the option. In that regard, the aggregate cash fee payable to exercise the option has been increased from $1,715,000 to $1,755,000 and the total number of common shares issuable to exercise the option has been increased from 100,000 to 2,100,000. The revised payment schedule also defers $1,000,000 of the total sum payable until December 31, 2017, and defers all existing exploration milestones by 1 year. Finally the agreement provides that the Canadian optionor may elect to receive shares of our common stock in lieu of any cash payments payable pursuant to the agreement at a 75% discount to the then current market price.

Therefore the Company is now required to pay $1,755,000 in aggregate as follows:

·	$50,000 on signing (the Optionors acknowledge this was paid);

·	a further $25,000 ($5,000 of which is a penalty payment) by November 15, 2012 (which is a firm commitment, paid);

·	a further $10,000 by February 1, 2013 (which is a penalty payment, paid);

·	a further $30,000 by April 17, 2013 (paid);

·	a further $20,000 on August 27, 2013 (which is a firm commitment, paid);

·	a further $20,000 by January 31, 2014;

·	a further $50,000 by December 31, 2014;

·	a further $150,000 by December 31, 2015;

·	a further $400,000 by December 31, 2016;

·	a further $1,000,000 by December 31, 2017; and

Issue and deliver 100,000 shares by September 30, 2012 (done); and

Issue and deliver shares to the Optionor Canada as follows:

·	500,000 shares by September 30, 2013;

·	500,000 shares by January 31, 2014;

·	500,000 shares by December 31, 2014;

500,000 shares by December 31, 2015; and

Incur exploration expense of at least $4,000,000 as follows:

·	incur exploration expense of at least $150,000 by July 1, 2014;

·	incur cumulative exploration expense of at least $250,000 by December 31, 2014;

·	incur cumulative exploration expense of at least $1,000,000 by December 31, 2015;

·	incur cumulative exploration expense of at least $2,000,000 by December 31, 2017;

·	incur cumulative exploration expense of at least $4,000,000 by December 31, 2017;