0001580695-18-000365.txt : 20180716 0001580695-18-000365.hdr.sgml : 20180716 20180716161054 ACCESSION NUMBER: 0001580695-18-000365 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 35 CONFORMED PERIOD OF REPORT: 20180531 FILED AS OF DATE: 20180716 DATE AS OF CHANGE: 20180716 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Texas Mineral Resources Corp. CENTRAL INDEX KEY: 0001445942 STANDARD INDUSTRIAL CLASSIFICATION: GOLD & SILVER ORES [1040] IRS NUMBER: 870294969 STATE OF INCORPORATION: DE FISCAL YEAR END: 0831 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-53482 FILM NUMBER: 18954571 BUSINESS ADDRESS: STREET 1: 539 EL PASO STREET CITY: SIERRA BLANCA STATE: TX ZIP: 79851 BUSINESS PHONE: (915) 369-2133 MAIL ADDRESS: STREET 1: 539 EL PASO STREET CITY: SIERRA BLANCA STATE: TX ZIP: 79851 FORMER COMPANY: FORMER CONFORMED NAME: Texas Rare Earth Resources Corp. DATE OF NAME CHANGE: 20110128 FORMER COMPANY: FORMER CONFORMED NAME: Standard Silver Corp. DATE OF NAME CHANGE: 20080924 10-Q 1 tmrc-10q_053118.htm QUARTERLY REPORT

 

 

UNITED STATES 

 SECURITIES AND EXCHANGE COMMISSION 

 Washington, D.C. 20549

FORM 10-Q

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
   
For the quarterly period ended May 31, 2018
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from           to       

Commission file number: 000-53482

 

TEXAS MINERAL RESOURCES CORP.
(Exact Name of Registrant as Specified in its Charter)
     
Delaware   87-0294969
(State of other jurisdiction of incorporation or organization)   (I.R.S. Employer Identification No.)
     
516 South Spring Avenue    
Tyler, Texas   75702
(Address of Principal Executive Offices)   (Zip Code)
(915) 369-2133
(Registrant’s Telephone Number, including Area Code)
 
(Former Name, Former Address and Former Fiscal
Year, if Changed Since Last Report)

 

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 past 12 months (or for such 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. 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 during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes      No  

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

   
Large accelerated filer   Accelerated filer   
Non-accelerated filer   Smaller reporting company 
Emerging growth    

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.    

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) Yes      No  

Number of shares of issuer’s common stock outstanding at June 20, 2018: 44,941,532

 

  
 

 

Table of Contents

 

  Part I   Page
       
Item 1 Financial Statements (Unaudited)   3
Item 2 Management’s Discussion and Analysis of Financial Condition and Results of Operations   11
Item 3 Quantitative and Qualitative Disclosures About Market Risk   15
Item 4 Controls and Procedures   15
       
  Part II    
       
Item 1 Legal Proceedings   16
Item 1A. Risk Factors   16
Item 2 Unregistered Sales of Equity Securities and Use of Proceeds   16
Item 3 Defaults upon Senior Securities   17
Item 4 Mine Safety Disclosures   17
Item 5 Other Information   17
Item 6 Exhibits   18
       
Signatures   19

 

 2 
 

 

Texas Rare Earth Resources Corp

BALANCE SHEETS

(Unaudited)

 

   May 31, 2017  August 31, 2017
       
ASSETS   
       
CURRENT ASSETS      
Cash and cash equivalents  $4,956   $1,080 
Prepaid expenses and other current assets   5,834    6,667 
Total current assets   10,790    7,747 
           
Property and equipment, net   922    5,421 
Mineral properties   358,594    358,594 
Deposits   24,000    24,000 
           
TOTAL ASSETS  $394,306   $395,762 
           
LIABILITIES AND SHAREHOLDERS' EQUITY      
           
CURRENT LIABILITIES          
Accounts payable and accrued liabilities  $1,092,808   $916,468 
Accounts payable - related party  $77,000   $87,000 
Notes payable - related party   321,415    246,165 
Current portion of note payable   260,387    260,387 
Total current liabilities   1,751,610    1,510,020 
Note payable - net of current portion and discount   —      —   
Total liabilities   1,751,610    1,510,020 
           
COMMITMENTS AND CONTINGENCIES          
           
SHAREHOLDERS' EQUITY          
Preferred stock, par value $0.001; 10,000,000 shares authorized, no shares issued and outstanding as of May 31, 2018 and August 31, 2017, respectively   —      —   
Common stock, par value $0.01; 100,000,000 shares authorized, 44,941,533 and 44,941,533 shares issued and outstanding as of May 31, 2018 and August 31, 2017, respectively   449,416    449,416 
           
Additional paid-in capital   33,133,834    33,068,309 
Accumulated deficit   (34,940,554)   (34,631,983)
Total shareholders' equity   (1,357,304)   (1,114,258)
           
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY  $394,306   $395,762 

   

The accompanying notes are an integral part of these financial statements.

 

 3 
 

 

 

TEXAS RARE EARTH RESOURCES CORP

UNAUDITED STATEMENTS OF OPERATIONS

 

 

   Nine Months Ended May 31,  Three Months Ended May 31,
   2018  2017  2018  2017
OPERATING EXPENSES            
Exploration costs  $13,042   $9,378   $792   $—   
General and administrative expenses   226,193    362,199    61,955    139,047 
                     
Total operating expenses   239,235    371,577    62,747    139,047 
                     
LOSS FROM OPERATIONS   (239,235)   (371,577)   (62,747)   (139,047)
                     
OTHER INCOME (EXPENSE)                    
Interest and other income   —      2    —      1 
Interest and other expense   (69,336)   (37,980)   (22,261)   (13,274)
Total other income (expense)   (69,336)   (37,978)   (22,261)   (13,273)
                     
NET LOSS  $(308,571)  $(409,555)  $(85,008)  $(152,320)
                     
Net loss per share:                    
Basic and diluted net loss per share  $(0.01)  $(0.01)  $—     $—   
                     
Weighted average shares outstanding:                    
Basic and diluted   44,941,533    44,941,533    44,941,533    44,941,533 

 

The accompanying notes are an integral part of these financial statements.

 

 4 
 

 

 

TEXAS RARE EARTH RESOURCES CORP

UNAUDITED STATEMENTS OF CASH FLOWS

 

 

   Nine Months Ended May 31,
   2018  2017
CASH FLOWS FROM OPERATING ACTIVITIES      
Net loss  $(308,571)  $(409,555)
Adjustments to reconcile net loss to net cash used in operating activities:          
Discount on notes payable       $23,650 
Depreciation expense   4,498    8,256 
Cashless Compensation for related party advances   53,474      
Stock based compensation   12,051    12,285 
Changes in current assets and liabilities:          
Prepaid expenses and other assets   834    711 
Accounts payable and accrued expenses   176,340    79,363 
Accounts payable related party   (10,000)   198,452 
Net cash used in operating activities   (71,374)   (86,838)
           
CASH FLOWS FROM FINANCING ACTIVITIES          
Proceeds from notes payable - related party   75,250    87,500 
           
Net cash provided in financing activities   75,250    87,500 
NET CHANGE IN CASH AND CASH EQUIVALENTS   3,876    662 
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD   1,080    5,164 
CASH AND CASH EQUIVALENTS, END OF PERIOD  $4,956   $5,826 
           
           
SUPPLEMENTAL INFORMATION          
Interest paid  $—     $—   
Taxes paid  $—     $—   

  

The accompanying notes are an integral part of these financial statements.

 

 5 
 

 

Texas Mineral Resources Corp. 

Notes to Interim Financial Statements

May 31, 2018

(Unaudited)

NOTE 1 – BASIS OF PRESENTATION

The accompanying unaudited interim financial statements of Texas Mineral Resources Corp. (“we”, “us”, “our”, the “Company”) have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission (“SEC”), and should be read in conjunction with the audited financial statements and notes thereto contained in our annual report on Form 10-K, for the year ended August 31, 2017, dated December 14, 2017 as filed with the SEC. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the financial statements which would substantially duplicate the disclosures contained in the audited financial statements for the most recent fiscal year ended August 31, 2017 as reported in our annual report on Form 10-K, have been omitted.

The financial statements have been prepared on a going concern basis which assumes the Company will not be able to realize its assets and discharge its liabilities in the normal course of business for the foreseeable future. The Company has incurred losses since inception resulting in an accumulated deficit of approximately $34,940,554 as of May 31, 2018 and further losses are anticipated in the development of its business raising substantial doubt about the Company’s ability to continue as a going concern. The ability to continue as a going concern is dependent upon the Company generating 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. Management intends to finance operating costs over the next twelve months with existing cash on hand and or private placement of common stock.

On March 14, 2016, the Company filed a Certificate of Amendment with the Secretary of State of the State of Delaware to amend its Certificate of Incorporation to change the name of the Company from “Texas Rare Earth Resources Corp” to “Texas Mineral Resources Corp”. The amendment was effective at 9:00 am EST on March 21, 2016. The Certificate of Amendment did not make any other amendments to the Company’s Certificate of Incorporation.

Reclassification of prior year balances

For comparability, certain prior period amounts have been reclassified, where appropriate, to conform to the financial statement presentation as of May 31, 2018.

NOTE 2 – MINERAL PROPERTIES

September 2011 Lease

On September 2, 2011, we entered into a new mining lease with the Texas General Land Office covering Sections 7 and 18 of Township 7, Block 71 and Section 12 of Block 72, covering approximately 860 acres at Round Top Mountain in Hudspeth County, Texas. The mining lease issued by the Texas General Land Office gives us the right to explore, produce, develop, mine, extract, mill, remove, and market beryllium, uranium, rare earth elements, all other base and precious metals, industrial minerals and construction materials and all other minerals excluding oil, gas, coal, lignite, sulfur, salt, and potash. The term of the lease is nineteen years so long as minerals are produced in paying quantities.

Under the lease, we will pay the State of Texas a lease bonus of $142,518; $44,718 of which was paid upon the execution of the lease, and $97,800 which will be due when we submit a supplemental plan of operations to conduct mining. Upon the sale of minerals removed from Round Top, we will pay the State of Texas a $500,000 minimum advance royalty.

Thereafter, we will pay the State of Texas a production royalty equal to eight percent (8%) of the market value of uranium and other fissionable materials removed and sold from Round Top and six and one quarter percent (61/4%) of the market value of all other minerals removed and sold from Round Top.

Assuming production of paying quantities has not been obtained, we may pay additional delay rental fees to extend the term of the lease for successive one (1) year periods pursuant to the following schedule:

 

   Per Acre
Amount
  Total
Amount
September 2, 2015 – 2019  $75   $67,077 
September 2, 2020 – 2024  $150   $134,155 
September 2, 2025 – 2029  $200   $178,873 

 

 6 
 

NOTE 2 – MINERAL PROPERTIES (Continued)

In August 2017, we paid a delay rental to the State of Texas in the amount of $67,077.

November 2011 Lease

On November 1, 2011, we entered into a mining lease with the State of Texas covering 90 acres, more or less, of land that we purchased in September 2011 near our Round Top site. The deed was recorded with Hudspeth County on September 16, 2011. Under the lease, we paid the State of Texas a lease bonus of $20,700 which was paid upon the execution of the lease. Upon the sale of minerals removed from Round Top, we will pay the State of Texas a $50,000 minimum advance royalty. Thereafter, we will pay the State of Texas a production royalty equal to eight percent (8%) of the market value of uranium and other fissionable materials removed and sold from Round Top and six and one quarter percent (6 1/4%) of the market value of all other minerals sold from Round Top.

Assuming production of paying quantities has not been obtained, we may pay additional delay rental fees to extend the term of the lease for successive one (1) year periods pursuant to the following schedule:

 

   Per Acre
Amount
  Total
Amount
November 1, 2015 – 2019  $75   $6,750 
November 1, 2020 – 2024  $150   $13,500 
November 1, 2025 – 2029  $200   $18,000 

 

In October 2017, we paid a delay rental to the State of Texas of $6,750.

March 2013 Lease

On March 6, 2013, we purchased the surface lease at the Round Top Project, known as the West Lease, from the Southwest Wildlife and Range Foundation (the “Foundation”) for $500,000 cash and 1,063,830 shares of our common stock. We also agreed to support the Foundation through an annual payment of $45,000 for ten years to support conservation efforts within the Rio Grande Basin and in particular engaging in stewardship of Lake Amistad, a large and well-known fishing lake near Del Rio, Texas. The West Lease comprises approximately 54,990 acres. Most importantly, the purchase of the surface lease gave us unrestricted surface access for the potential development and mining of our Round Top Project. As of the date of this filing the $45,000 payments due in June 2016, 2017 and June 2018 have not been paid; consequently, we have expensed the value of the West Lease during fiscal 2017. We fully intend to continue with the evaluation of the mineral potential of the property, to ultimately mine the property, and to bring the lease current when funds are available. Expensing the value of the West Lease does not restrict our access to the mineral leases.

October 2014 Surface Option

In October 2014, we executed an agreement with the Texas General Land Office securing the option to purchase the surface rights covering the potential Round Top project mine and plant areas, and separately a lease to develop the water necessary for the potential Round Top project mine operations.

The option to purchase the surface rights covers approximately 5,670 acres over the mining lease and the additional acreage adequate to site all potential heap leaching and processing operations as currently anticipated by the Company. We may exercise the option for all or part of the option acreage at any time during the sixteen year primary term of the mineral lease. The option can be kept current by an annual payment of $10,000, which have not been paid for 2017 or 2018 as of the date of this filing. The purchase price will be the appraised value of the surface at the time of exercising the option.

The ground water lease secures our right to develop the ground water within a 13,120 acre lease area located approximately 4 miles from the Round Top deposit. The lease area contains five existing water wells. It is anticipated that all potential water needs for the Round Top project mine operations would be satisfied by the existing wells covered by this water lease. This lease has an annual minimum production payment of $5,000 prior to production of water for the operation, which have not been paid for 2017 or 2018, as of the date of this filing. After initiation of production we will pay $0.95 per thousand gallons or $20,000 annually, whichever is greater. This lease remains effective as long as the mineral lease is in effect.

 

 7 
 

The Pagnotti Enterprises Inc. Memorandum of Understanding

On June 28, 2016 TMRC executed a Memorandum of understanding with Pagnotti Enterprises Inc. (“PEI”) of Wilkes Barre, Pennsylvania, owners of the Jeddo Coal Co., whereby under specified terms TMRC could lease one or more of Jeddo’s deposits located in the anthracite region of northeast Pennsylvania. Research by the Department of Energy (DOE) has shown that these coal deposits and the sandstones and siltstones immediately associated with them contain anomalously high values of rare earth and on particular interest, Scandium. The DOE research to date has indicated that the rare earth can be efficiently extracted from pulverized rock using ammonium sulfate as the lixiviant. TMRC is in the process of preparing an application for a federal grant to design and construct a continuous ion exchange/continuous ion chromatography (CIX/CIC) pilot plant to be delivered to a designated project area in the Appalachian coal province. TMRC and its co-applicants, K-Tech, Inventure Renewables, of Tuscaloosa, Alabama and Penn State University are proposing to plan, develop, design and install the CIX/CIC pilot plant at one of the Jeddo Coal properties. The grant was awarded in March 2017 to the consortium consisting of Inventure Renewables, Penn State, K-Tech and TMRC with Inventure being the principal investigator in the consortium. Funding began in September 2017.

Under the terms of the Memorandum of Understanding (MOU) signed 28 June 2016, TMRC had a six-month term to perform the necessary due diligence and to technically and economically evaluate the properties. Upon execution of the MOU TMRC and PEI had six months to draft and execute a formal lease agreement containing all the standard terms of mining lease agreements. Upon execution of a lease, TMRC will be obligated to pay a $5,000 per month rental or a 12% royalty whichever is greater. As of the date of this filing, no lease has been executed.

 8 
 

NOTE 3 – NOTES PAYABLE

As part of our surface lease with the Rio Grande Foundation (formerly referred to as the Southwest Wildlife Foundation), the Company recorded a note payable for an amount for the initial $45,000 due upon signing of lease and the nine (9) future payments due of $45,000 which has been recorded at its present value discounted with an imputed interest rate of 5% for a total note payable of $364,852. As of the date of this filing, we have not paid the June 2016, 2017 or June 2018 installment of our surface lease, in the amount of $45,000 each, to the Southwest Wildlife Foundation. As a result, the full amount of the note payable has been classified as currently due. The note payable balance as of May 31, 2018 is $260,000. The Company has also accrued interest expense as of May 31, 2018 of $44,000. This unpaid interest is included in accrued liabilities.

The Foundation has not given notice of default or made any demand for payment as of the date of this filing. However, based upon the Company being in default on the Note Payable there is no guarantee that the Foundation will allow the Company to bring the lease payments current without requiring the Company to provided additional consideration to the Foundation. Consequently, since the Company cannot be guaranteed the ability to utilize the lease due to its current default status, the Company has written off the value of this lease ($1,394,852) as of August 31, 2017. The Company intends to continue with the evaluation of the mineral potential of the property, to ultimately mine the property, and to bring this note payable and its accrued interest current when the funds are available.

Related Party Notes Payable and Advances

On July 1, 2016 the Company received two loans for $2,500 each from two directors of the Company. The loans are non-interest accruing, unsecured and due upon demand. As additional consideration for the loans, we issued 5,000 common stock purchase warrants to each individual. The warrants have an exercise price of $0.10 and term of five years. The warrants had a fair value of $1,185 at the date of issuance determined using the Black-Scholes option-pricing model. The assumptions used to calculate the fair market value are as follows: (i) risk-free interest rate of 1.00% (ii) estimated volatility of 185% (iii) dividend yield of 0.00% and (iv) expected life of the warrants of five years. The notes payable balance as of May 31, 2018 and August 31, 2017 was a total of $5,000. The value of the warrants was expensed as interest expense at the time of issuance due to no stated term on the advances.

On September 1, 2016, the Company entered into five loans totaling $71,500 from five directors of the Company. The loans were due March 1, 2017, are non-interest bearing, and unsecured. As of this filing the loans are in default and due upon demand. As additional consideration for the loans, we issued in total 147,000 common stock purchase warrants. The warrants have an exercise price of $0.10 and term of five years. The loans have a relative fair value of $57,414 and the warrants have a relative fair value of $14,086 at the date of issuance determined using the Black-Scholes option-pricing model. The assumptions used to calculate the fair market value are as follows: (i) risk-free interest rate of 1.180% (ii) estimated volatility of 245% (iii) dividend yield of 0.00% and (iv) expected life of the warrants of five years. The notes payable balance as of May 31, 2018 and August 31, 2017 was $71,500. The value of the warrant was amortized to interest expense over the term of the note payable.

On November 1, 2016 the Company entered into two loans for $4,000 and $1,000 from two directors of the Company. The loans are non-interest bearing, unsecured and due upon demand. As additional consideration for the loans, we issued 8,000 and 2,000 common stock purchase warrants to each individual. The warrants have an exercise price of $0.10 and term of five years. The warrants had a fair value of $1,057 at the date of issuance determined using the Black-Scholes option-pricing model. The assumptions used to calculate the fair market value are as follows: (i) risk-free interest rate of 1.30% (ii) estimated volatility of 181% (iii) dividend yield of 0.00% and (iv) expected life of the warrants of five years. The notes payable balance as of May 31, 2018 and August 31, 2017 was $5,000. The value of the warrants was expensed as interest expense at the time of issuance due to no stated term on the advance.

On December 12, 2016, the Company entered into a loan for $15,000 a director of the Company. The loan is due June 12, 2017, is non-interest accruing, and unsecured. As of this filing the loan is in default and due upon demand. As additional consideration for the loan, we issued 60,000 common stock purchase warrants to the individual. The warrants have an exercise price of $0.10 and term of five years. The loan has a relative fair value of $10,437 and the warrants have a relative fair value of $4,563 at the date of issuance determined using the Black-Scholes option-pricing model. The assumptions used to calculate the fair market value are as follows: (i) risk-free interest rate of 1.90% (ii) estimated volatility of 241% (iii) dividend yield of 0.00% and (iv) expected life of the warrants of five years. The notes payable balance as of May 31, 2018 and August 31, 2017 was $15,000. The value of the warrant was amortized to interest expense over the term of the note payable.

On January 12, 2017 the Company entered into two loans totaling $20,000 from a director and an officer of the Company. The loans are due July 12, 2017, are non-interest accruing, and unsecured. As of this filing the loans are in default and due upon demand. As additional consideration for the loans, we issued 40,000 common stock purchase warrants to each individual. The warrants have an exercise price of $0.10 and term of five years. The loans have a relative fair value of $13,542 and the warrants have a relative fair value of $6,458 at the date of issuance determined using the Black-Scholes option-pricing model. The assumptions used to calculate the fair market value are as follows: (i) risk-free interest rate of 1.87% (ii) estimated volatility of 240% (iii) dividend yield of 0.00% and (iv) expected life of the warrants of five years. The notes payable balance as of May 31, 2018 and August 31, 2017 was $20,000. The value of the warrant was amortized to interest expense over the term of the note payable.

 9 
 

NOTE 3 – NOTES PAYABLE (Continued)

During the three months ended May 31, 2017 the Company entered into eight loans totaling $47,500 from two directors of the Company. The loans are non-interest accruing, unsecured and due upon demand. As additional consideration for the loans, we issued in total 190,000 common stock purchase warrants. The warrants have an exercise price of $0.17 - $0.21 and a term of five years. The warrants had a fair value of $39,557 at the date of issuance determined using the Black-Scholes option-pricing model. The assumptions used to calculate the fair market value are as follows: (i) risk-free interest rate of 1.75% (ii) estimated volatility of 234% (iii) dividend yield of 0.00% and (iv) expected life of the warrants of five years. The notes payable balance as of May 31, 2018 and August 31, 2017 was $47,500. The value of the warrants was expensed as interest expense at the time of issuance due to no stated term on the advance.

During the three months ended August 31, 2017 the Company entered into seven loans totaling $82,165 from two directors of the Company. The loans are non-interest accruing, unsecured and due upon demand. As additional consideration for the loans, we issued in total 328,660 common stock purchase warrants. The warrants have an exercise price of $0.20 - $0.23 and a term of five years. The warrants have a fair value of $65,137 at the date of issuance determined using the Black-Scholes option-pricing model. The assumptions used to calculate the fair market value are as follows: (i) risk-free interest rate of 1.75% (ii) estimated volatility of 169% (iii) dividend yield of 0.00% and (iv) expected life of the warrants of five years. The notes payable balance as of May 31, 2018 and August 31, 2017 was $82,165. The value of the warrants was expensed as interest expense at the time of issuance due to no stated term on the advance.

During the three months ended November 30, 2017 the Company received two advances totaling $16,750 from a director and an officer of the Company. The loans are non-interest accruing, unsecured and due upon demand. As additional consideration for the loans, we issued a total of 67,000 common stock purchase warrants. The warrants have an exercise price of $0.21 - 0.22 and a term of five years. The warrants have a fair value of $12,518 at the date of issuance determined using the Black-Scholes option-pricing model. The assumptions used to calculate the fair market value are as follows: (i) risk-free interest rate of 2.88% (ii) estimated volatility of 122% (iii) dividend yield of 0.00% and (iv) expected life of the warrants of five years. The note payable balance as of May 31, 2018 was $16,750. The value of the warrants was expensed as interest expense at the time of issuance due to no stated term on the advance.

During the three months ended February 28, 2018 the Company received five advances totaling $34,500 from two directors, one of whom is also an officer of the Company. The loans are non-interest accruing, unsecured and due upon demand. As additional consideration for the loans, we issued a total of 138,000 common stock purchase warrants. The warrants have an exercise price of $0.15 - 0.21 and a term of five years. The warrants have a fair value of $24,520 at the date of issuance determined using the Black-Scholes option-pricing model. The assumptions used to calculate the fair market value are as follows: (i) risk-free interest rate of 2.88% (ii) estimated volatility of 122% (iii) dividend yield of 0.00% and (iv) expected life of the warrants of five years. The note payable balance as of May 31, 2018 was $34,500. The value of the warrants was expensed as interest expense at the time of issuance due to no stated term on the advance.

During the three months ended May 31, 2018 the Company received four advances totaling $24,000 from a director. The loans are non-interest accruing, unsecured and due upon demand. As additional consideration for the loans, we issued a total of 96,000 common stock purchase warrants. The warrants have an exercise price of $0.17 - 0.19 and a term of five years. The warrants have a fair value of $16,436 at the date of issuance determined using the Black-Scholes option-pricing model. The assumptions used to calculate the fair market value are as follows: (i) risk-free interest rate of 2.88% (ii) estimated volatility of 224% (iii) dividend yield of 0.00% and (iv) expected life of the warrants of five years. The note payable balance as of May 31, 2018 was $24,000. The value of the warrants was expensed as interest expense at the time of issuance due to no stated term on the advance.

NOTE 4 – SHAREHOLDERS’ EQUITY

Capital Stock

Our authorized capital stock consists of 100,000,000 shares of common stock, with a par value of $0.01 per share, and 10,000,000 preferred shares with a par value of $0.001 per share.

All shares of common stock have equal voting rights and, when validly issued and outstanding, are entitled to one non-cumulative vote per share in all matters to be voted upon by shareholders. The shares of common stock have no pre-emptive, subscription, conversion or redemption rights and may be issued only as fully paid and non-assessable shares. Holders of the common stock are entitled to equal ratable rights to dividends and distributions with respect to the common stock, as may be declared by our Board of Directors (our “Board”) out of funds legally available. In the event of a liquidation, dissolution or winding up of the affairs of the Corporation, the holders of common stock are entitled to share ratably in all assets remaining available for distribution to them after payment or provision for all liabilities and any preferential liquidation rights of any preferred stock then outstanding.

During the nine months ended May 31, 2018, we recognized approximately $12,051 in stock compensation expense for 90,000 stock options issued to outside consultants for services and approximately $53,000 in interest expense for warrants issued to directors related to advances, one of whom is also an officer of the Company.

We had 44,941,533 shares of our common stock outstanding as of May 31, 2018.

 

NOTE 5 – RELATED PARTY TRANSACTIONS

The Company has received advances from certain Directors and Officers. The advances totaled approximately $321,400 as of May 31, 2018. The Company rents office space on a month to month basis of $1,600 from a former director. This space is currently subleased to a tenant.

The Company has historically paid the CEO of a consulting company a monthly consulting fee and stock option grants of 10,000 options per month. As of May 31, 2018 the Company owes the consulting firm $77,000.

During the nine months ended May 31, 2018, we recognized approximately $12,051 in stock compensation expense for 90,000 stock options issued to outside consultants for services and approximately $53,000 in interest expense for warrants issued to directors related to advances, one of whom is also an officer of the Company.

NOTE 6 – SUBSEQUENT EVENTS

In June, 2018, Mr. Mathers, our CFO, was granted 500,000 options to purchase the Registrant’s shares of common stock, vesting immediately with a term of 10 years and at an exercise price of $0.19. These options will be valued using the Black-Scholes pricing model in the quarter ending August 31, 2018.

 10 
 

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

In this Quarterly Report on Form 10-Q, unless the context requires otherwise, references to “Texas Mineral Resources Corp,” “the Company” “we,” “our” or “us” refer to Texas Mineral Resources Corp. You should read the following discussion and analysis of our financial condition and results of operations together with our financial statements and related notes appearing elsewhere in this quarterly report. This Quarterly Report on Form 10-Q may also contain statistical data and estimates we obtained from industry publications and reports generated by third parties. Although we believe that the publications and reports are reliable, we have not independently verified their data.

Forward-Looking Statements

This Quarterly Report on Form 10-Q and the exhibits attached hereto contain “forward-looking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995 (collectively, “forward-looking statements”). Such forward-looking statements concern our anticipated results and developments in our operations in future periods, planned exploration and development of our properties, plans related to our business and other matters that may occur in the future. These statements relate to analyses and other information that are based on forecasts of future results, estimates of amounts not yet determinable and assumptions of management. Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance (often, but not always, using words or phrases such as “expects” or “does not expect”, “is expected”, “anticipates” or “does not anticipate”, “plans”, “estimates” or “intends”, or stating that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved) are not statements of historical fact and may be forward-looking statements. Forward-looking statements in this Quarterly Report on Form 10-Q, include, but are not limited to:

 

  the progress, potential and uncertainties of our 2017-2018 rare-earth exploration plans at our Round Top project in Hudspeth County, Texas (the “Round Top Project”);
  timing for a completed feasibility study for our Round Top Project;
  the success of getting the necessary permits for future drill programs and future project development;
  expectations regarding our ability to raise capital and to continue our exploration plans on our properties;
  plans regarding anticipated expenditures at the Round Top Project; and
  plans outlined under the section heading “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Plan of Operation”.

 

Forward-looking statements are subject to a variety of known and unknown risks, uncertainties and other factors which could cause actual events or results to differ from those expressed or implied by the forward-looking statements, including, without limitation:

 

  risks associated with our history of losses and need for additional financing;
  risks associated with our limited operating history;
  risks associated with our properties all being in the exploration stage;
  risks associated with our lack of history in producing metals from our properties;
  risks associated with our need for additional financing to develop a producing mine, if warranted;
  risks associated with our exploration activities not being commercially successful;
  risks associated with increased costs affecting our financial condition;
  risks associated with a shortage of equipment and supplies adversely affecting our ability to operate;

 

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  risks associated with mining and mineral exploration being inherently dangerous;
  risks associated with mineralization estimates;
  risks associated with changes in mineralization estimates affecting the economic viability of our properties;
  risks associated with uninsured risks;
  risks associated with mineral operations being subject to market forces beyond our control;
  risks associated with fluctuations in commodity prices;
  risks associated with permitting, licenses and approval processes;
  risks associated with the governmental and environmental regulations;
  risks associated with future legislation regarding the mining industry and climate change;
  risks associated with potential environmental lawsuits;
  risks associated with our land reclamation requirements;
  risks associated with rare earth and beryllium mining presenting potential health risks;
  risks related to title in our properties
  risks related to competition in the mining and rare earth elements industries;
  risks related to economic conditions;
  risks related to our ability to manage growth;
  risks related to the potential difficulty of attracting and retaining qualified personnel;
  risks related to our dependence on key personnel;
  risks related to our United States Securities and Exchange Commission (the “SEC”) filing history; and
  risks related to our securities.

This list is not exhaustive of the factors that may affect our forward-looking statements. Some of the important risks and uncertainties that could affect forward-looking statements are described further under the section heading “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations” of this Quarterly Report and “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended August 31, 2017, filed with the SEC on December 14, 2017. Although we have attempted to identify important factors that could cause actual results to differ materially from those described in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated, believed, estimated or expected. We caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. Except as required by law, we disclaim any obligation subsequently to revise any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events. We qualify all the forward-looking statements contained in this Quarterly Report by the foregoing cautionary statements.

Overview

We are a mining company engaged in the business of the acquisition, exploration and, if warranted, development of mineral properties. We currently hold two nineteen year leases, executed in September 2011 and November 2011, to explore and develop a 950 acre rare earths project located in Hudspeth County, Texas known as the Round Top Project and prospecting permits covering an adjacent 9,345 acres. Our principal focus will be on developing a metallurgical process to concentrate or otherwise extract the metals from the Round Top rhyolite, although we will continue to examine other opportunities in the region as they develop. We currently have limited operations and have not established that any of our projects or properties contain any Proven or Probable Reserves under SEC Industry Guide 7. Our operations are exploratory in nature.

We currently do not have any producing properties and consequently, we have no current operating income or cash flow and have not generated any revenues. Further exploration will be required before a final evaluation as to the economic and practical feasibility of any of our properties is determined.

On December 23, 2013, we published a revised version of the June 2012 Preliminary Economic Assessment (the “Revised PEA”) on the Round Top Project based on a 20,000 tonne per day heap leach operation using a conventional element separation plant. The mineralized material estimate was recalculated to include uranium, niobium, tantalum and tin. The revised PEA assesses the potential economic viability of the simplified and “scaled down” operation which we believe is a much better fit with the present rare earth market.

On September 8, 2014, we announced that we had completed an internal analysis suggesting that there is a reasonable possibility to adapt a lower volume staged growth approach to development of our Round Top project. The analysis indicated that an operation designed to produce a selected group of separated REE products in the range of 350-450 tonnes per year range, could potentially yield favorable mine economics. The goal of the proposed staged approach would be to increase mining rates if and when our products gained acceptability. The analysis suggested that capital needs in the Revised PEA could be proportionally reduced in relation to the lower volume initial stage. We are currently conducting a more detailed analysis of the relative capital expenses and operating expenses requirements of a scaled down processing plant with both solvent extraction and ion exchange processes under evaluation. We believe the lower capital requirements of a staged startup could offset any marginal increase in unit operating costs. 

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Our current management and Board are stockholder-centric, and receive either no cash compensation or compensation that has been accrued. We will require definitive scientific documentation, rigorous economic studies, consideration of a wide range of alternatives and meticulous oversight of any cash outlays of stockholder funds.

Current Plan of Operations

Continued Work Program on Round Top Project

See “Properties – Current and Planned Metallurgical Activities” in our 10-K filing for the year ended August 31, 2017 for a description of our current work activities and budget for the Round Top Project.

Exploration Potential of the Round Top Property

Although we have no plans in the next 24 months to conduct more physical exploration, we do believe, as stated in our 2010 presentations, that there are untested exploration targets present. They are:

 

1. Uranium-beryllium mineralization at the lower contact of the rhyolite and the underlying sedimentary rock. This class of mineralization was the target of the successful exploration program conducted in the late 1980’s by Cabot Corporation and Cyprus Exploration. It appears to be structurally controlled and associated with a later phase of hydrothermal or gas phase deposition that occurred sometime after the emplacement of the rhyolite. This fluorite-beryllium replacement mineralization in what is termed the West Side Fault under the north side of Round Top was the topic of a 1988 in-house feasibility study by Cyprus Minerals to historical standards (not NI 43-101 compliant under today’s Canadian regulations, not an SEC Industry Guide 7 compliant feasibility study) to produce beryllium. This zone is the location of the intact decline and lateral mine workings developed by Cyprus Minerals in 1988-89. Sampling and analysis by TMRC indicates the presence of uranium mineralization occurring adjacent to and likely associated with these beryllium bearing structures. This “Contact Zone” mineralization is not restricted to Round Top and is present under the Sierra Blanca rhyolite and there is some evidence in drill holes on Little Blanca that this style of mineralization may also be present there.

    

2. Uranium-beryllium-rare earth and other rare metals hosted as structurally controlled fluorite replacements in the limestones at depth below the known deposits. Geologic and geochemical conditions are thought to be conducive for the emplacement of replacement type deposits within the same fault zones that hosted the known beryllium-uranium deposits at depth where favorable host limestones are present. We believe that careful compilation and analysis of existing surface geologic mapping and of the drill data may better define these targets.

 

We believe that using the existing data we can improve our understanding of the exploration potential of the area without resorting to such expensive techniques such as drilling.

Actively Seeking Project Partners

In addition to pursuing the exploration of our Round Top Project, we are actively seeking industry partners to assist the Company in financing the exploration and, if warranted, development of the Round Top Project. While we do not currently have any agreements and do not anticipate any agreements in the near future, we are actively engaged in pursuing partners for the Round Top Project for a range of participation, including but not limited to, joint-venture arrangements, project sale, significant investment in the Company, back-end processing and product sales arrangements and other financing arrangements to assist in the Round Top Project.

Operation and support of the DoE Grant.

Approximately 25% of TMRC’ efforts will be allocated to completing its share of the Phase 1 of the DoE grant. Our role in this grant is to acquire the samples, evaluate the primary and alternate sites, conduct the economic evaluation and co-ordinate the project.

Operation of American Minerals Reclamation

Absent the securing of feasibility financing for Round Top, the remainder of TMRC plans to actively pursue the development of American Minerals Reclamation (AMR). We have set no geographical limitations on this project but we are currently basing our efforts in the Pennsylvania coal producing region because of the excellent opportunities present there and existence of the network of people and institutions that have been developed during the grant application process.

 

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Liquidity and Capital Resources

As of May 31, 2018, we had a working capital deficit of $1,740,821 and will need to raise additional funding to implement our business strategy.

During the fiscal year ended August 31, 2017, we completed Stage 1of our metallurgical activities as discussed in the section heading “ITEM 2. PROPERTIES” of this Annual Report. Our budget for this stage of activity was approximately $134,502. To date we have expended approximately that amount on Stage 1 which is now complete. Estimated cost of Stage 2 is $2,015,454, $336,454 of which has been spent; this phase, called milestone 1, of Stage 2 has been modified and augmented by the Defense Logistical Agency. There is no guarantee that we will be able to raise the working capital necessary for balance of Stage 2 activities. After completion of Stage 1, we will use any remaining available capital to begin work on Stage 2 of our metallurgical activities.

The audit opinion and notes that accompany our financial statements for the year ended August 31, 2017, disclose a ‘going concern’ qualification to our ability to continue in business. The accompanying financial statements have been prepared under the assumption that we will continue as a going concern. We are an exploration stage company and we have incurred losses since our inception. We do not have sufficient cash to fund normal operations and meet debt obligations for the next 12 months without deferring payment on certain current liabilities and raising additional funds. We believe that the going concern condition cannot be removed with confidence until the Company has entered into a business climate where funding of its activities is more assured.

We currently do not have funds to pursue exploration or development work on any of our properties, which means that we will be required to raise additional capital, enter into joint venture relationships, or find alternative means to finance our properties in order to place them into commercial production, if warranted, or evaluate the possibility of selling one or more of our projects or the Company in its entirety. Failure to obtain sufficient financing may result in the delay or indefinite postponement of exploration and, if warranted, development or production on one or more of our properties and any properties we may acquire in the future or even a loss of property interests. This includes our leases over claims covering the principal deposits on our properties, which may expire unless we expend minimum levels of expenditures over the terms of such leases. We cannot be certain that additional capital or other types of financing will be available if needed or that, if available, the terms of such financing will be favorable or acceptable to us. Our ability to arrange additional financing in the future will depend, in part, on the prevailing capital market conditions as well as our business performance.

Results of Operations

Nine months ended May 31, 2018 and May 31, 2017

General & Revenue 

We had no operating revenues during the nine months ended May 31, 2018 and May 31, 2017. We are not currently profitable. As a result of ongoing operating losses, we had an accumulated deficit of approximately $34.9 million as of May 31, 2018.

Operating expenses and resulting losses from Operations.

We incurred exploration costs for the nine months ended May 31, 2018 and May 31, 2017, in the amount of approximately $13,000 and $9,000, respectively. Expenditures for the nine months ended May 31, 2018 and May 31, 2017 were primarily for lease payments to the GLO and property taxes for our Round Top project.

Our general and administrative expenses for the nine months ended May 31, 2018 and May 31, 2017, respectively, were approximately $226,000 and $362,000, respectively. For the nine months ended May 31, 2018 and May 31, 2017, this amount included approximately $12,000 and $12,000, respectively, in stock-based compensation to consultants. The remaining expenditures totaling approximately $214,000 and $350,000, respectively, were primarily for payroll and related taxes and benefits, professional fees and other general and administrative expenses necessary for our operations. 

We had losses from operations for the nine months ended May 31, 2018 and May 31, 2017 totaling approximately $239,000 and $372,000, respectively, and net losses for the nine months ended May 31, 2018 and May 31, 2017 totaling approximately $308,000 and $410,000, respectively. For the nine ended May 31, 2018 and May 31, 2017, the Company has recorded approximately $69,000 and $38,000, respectively, for interest expense on notes payable and stock warrant expenses. 

Three months ended May 31, 2018 and May 31, 2017

General & Revenue

We had no operating revenues during the three months ended May 31, 2018 and May 31, 2017. We are not currently profitable. As a result of ongoing operating losses, we had an accumulated deficit of approximately $34.9 million as of May 31, 2018. 

 

 14 
 

  

Operating expenses and resulting losses from Operations

We incurred minimal exploration costs for the three months ended May 31, 2018 and May 31, 2017.

Our general and administrative expenses for the three months ended May 31, 2018 and May 31, 2017 were approximately $62,000 and $139,000, respectively. For the three months ended May 31, 2018 and May 31, 2017, this amount included approximately $5,500 and $0, respectively, in stock-based compensation to a consultant. The remaining expenditures totaling approximately $56,500 and $139,000 were primarily for payroll and related taxes and benefits, professional fees and other general and administrative expenses necessary for our operations. 

We had losses from operations for the three months ended May 31, 2018 and May 31, 2017 totaling approximately $62,000 and $139,000, respectively, and net losses for the three months ended May 31, 2018 and May 31, 2017 totaling approximately $85,000 and $152,000, respectively. For the three months ended May 31, 2018 and May 31, 2017, the Company has recorded approximately $22,000 and $13,000, respectively, for interest expense on notes payable and stock warrant expenses.

Off-Balance Sheet Arrangements

We do not have any off balance sheet arrangements that are reasonably likely to have a current or future effect on our financial condition, revenues, and results of operations, liquidity or capital resources.

Critical Accounting Estimates

Management’s discussion and analysis of financial condition and results of operations is based on our financial statements, which have been prepared in accordance with GAAP. Preparation of financial statements requires management to make assumptions, estimates and judgments that affect the reported amounts of assets, liabilities, revenues, costs and expenses, and the related disclosures of contingencies. Management bases its estimates on various assumptions and historical experience, which are believed to be reasonable; however, due to the inherent nature of estimates, actual results may differ significantly due to changed conditions or assumptions. On a regular basis, management reviews the accounting policies, assumptions, estimates and judgments to ensure that our financial statements are fairly presented in accordance with GAAP. However, because future events and their effects cannot be determined with certainty, actual results could differ from our assumptions and estimates, and such differences could be material. Management believes that the following critical accounting estimates and judgments have a significant impact on our financial statements; Valuation of options granted to Directors, Officers and consultants using the Black-Scholes model.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Not applicable.

Item 4. Controls and Procedures

Disclosure Controls and Procedures

At the end of the period covered by this Quarterly Report on Form 10-Q, an evaluation was carried out under the supervision of and with the participation of our management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operations of our disclosure controls and procedures (as defined in Rule 13a – 15(e) and Rule 15d – 15(e) under the Exchange Act). Based on that evaluation the CEO and CFO have concluded that as of the end of the period covered by this Quarterly Report, our disclosure controls and procedures were not effective in ensuring that: (i) information required to be disclosed by us in our reports that we file or submit to the SEC under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in applicable rules and forms and (ii) material information required to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to our management, including our CEO and CFO, as appropriate, to allow for accurate and timely decisions regarding required disclosure.

Management determined that our disclosure controls and procedures were not effective during the period covered by this report because during the period the Company held its annual meeting of stockholders on February 24, 2016, but failed to include in its proxy statement for the meeting prepared under Regulation 14A of the Securites Exchange Act of 1934, as amended (the “Exchange Act”), an advisory vote to approve the compensation of our named executive officers as was required under Rule 14a-21(a) under the Exchange Act. The omission was inadvertent and the Company intends to include the advisory vote to approve the compensation of its named executive officers in its proxy statement under Regulation 14A for its next annual meeting of stockholders. The Company is implementing additional internal procedures, to ensure that all requirements, including the requirements of Rule 14a-21, are met in future filings.

 15 
 

 

 

Changes in Internal Control over Financial Reporting

There were no changes to our internal control over financial reporting that occurred during our most recent fiscal quarter that have materially affected, or are reasonably likely to materially effect, our internal controls over financial reporting.

PART II.  OTHER INFORMATION

Item 1. Legal Proceedings 

None.

Item 1A. Risk Factors

Except as set forth below, there have been no material changes from the risk factors as previously disclosed in our Form 10-K for the year ended August 31, 2017 as filed with the SEC on December 14, 2017.

We have not sought an advisory stockholder vote to approve the compensation of our named executive officers.

Rule 14a-21 under the Exchange Act requires us to seek a separate stockholder advisory vote at our annual meeting at which directors are elected to approve the compensation of our named executive officers, not less frequently than once every three years (say-on-pay vote). At our annual meeting in February of 2016, we did not submit to our stockholders a say-on-pay vote to approve an advisory resolution regarding our compensation program for our named executive officers. Consequently, the Board of Directors has not considered the outcome of our say-on-pay vote results when determining future compensation policies and pay levels for our named executive officers. At our 2017 annual meeting of stockholders, we will be asking our stockholders to vote on a proposal to approve an advisory resolution regarding our compensation program for our named executive officers. Following such annual meeting, the Board of Directors will consider the outcome of our say-on-pay vote results when determining future compensation policies and pay levels for our named executive officers, and will report on the results of the say-on-pay vote as required by applicable SEC rules. In our quarterly report on Form 10-Q for the quarter ended February 29, 2016, we disclosed that our disclosure controls and procedures did not lead to our identification of the requirement to provide this advisory say-on-pay vote, and we are adjusting our disclosure controls and procedures processes accordingly.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Except as set forth below, all unregistered sales of equity securities during the period covered by this Quarterly Report were previously disclosed in our current reports on Form 8-K or quarterly reports on Form 10-Q.

Date Description Number Purchaser Proceeds ($) Consideration Exemption (C)
March 2018 Common Stock Purchase Options 10,000(A) Consultant $Nil Advisory Services Sec. 4(a)(2)
March 2018 Common Stock Purchase Warrants 10,000(B) Director $Nil Advances Sec. 4(a)(2)
April 2018 Common Stock Purchase Options 10,000(A) Consultant $Nil Advisory Services Sec. 4(a)(2)
April 2018 Common Stock Purchase Warrants 56,000(B) Director $Nil Advances Sec. 4(a)(2)
May 2018 Common Stock Purchase Options 10,000(A) Consultant $Nil Advisory Services Sec. 4(a)(2)
May 2018 Common Stock Purchase Warrants 30,000(B) Director $Nil Advances Sec. 4(a)(2)

 

(A) Common Stock Purchase Options were issued pursuant to a consulting agreement. Options vested immediately. Each option is exercisable for a 5-year term at an exercise price of $0.30. The options were issued outside of the Company’s 2008 Stock Incentive Plan.
   
(B) Common Stock Purchase Warrants were issued pursuant to advances made to the Company from certain Directors and an Officers.  Each warrant is exercisable for a 5-year term at an exercise price of $0.17 - $0.19.
   
(C) With respect to sales designated by “Sec. 4(a)(2),” these shares were issued pursuant to the exemption from registration contained in to Section 4(a)(2) of the Securities Act as privately negotiated, isolated, non-recurring transactions not involving any public offer or solicitation. Each purchaser represented that such purchaser’s intention to acquire the shares for investment only and not with a view toward distribution. None of the securities were sold through an underwriter and accordingly, there were no underwriting discounts or commissions involved.

 

We did not repurchase any of our securities during the quarter covered by this report.

 16 
 

Item 3. Defaults upon Senior Securities

None.

Item 4. Mine Safety Disclosure

Pursuant to Section 1503(a) of the recently enacted Dodd-Frank Wall Street Reform and Consumer Protection Act (The “Dodd-Frank Act”), issuers that are operators, or that have a subsidiary that is an operator, of a coal or other mine in the United States are required to disclose in their periodic reports filed with the SEC information regarding specified health and safety violations, orders and citations, related assessments and legal actions, and mining-related fatalities. During the quarter ended November 30, 2016, our U.S. exploration properties were not subject to regulation by the Federal Mine Safety and Health Administration under the Federal Mine Safety and Health Act of 1977.

Item 5. Other Information

None.

 

 17 
 

Item 6. Exhibits

 

Exhibit
Number
  Description
     
2.1   Plan of Conversion, dated August 24, 2012, incorporated by reference to Exhibit 2.1 of our Form 8-K filed with the SEC on August 29, 2012.
3.1   Delaware Certificate of Conversion, incorporated by reference to Exhibit 3.1 of our Form 8-K filed with the SEC on August 29, 2012.
3.2   Delaware Certificate of Incorporation, incorporated by reference to Exhibit 3.2 of our Form 8-K filed with the SEC on August 29, 2012.
3.3   Delaware Bylaws, incorporated by reference to Exhibit 3.3 of our Form 8-K filed with the SEC on August 29, 2012.
3.4   Certificate of Amendment to the Company’s Certificate of Incorporation, incorporated by reference to Exhibit 3.1 of our Form 8-K filed with the SEC on March 18, 2016.
4.1   Form of Common Stock Certificate, incorporated by reference to Exhibit 4.1 of our Form 10-K for the period ended August 31, 2009 filed with the SEC on February 8, 2011.
4.2   Form of Rights Certificate, incorporated by reference to Exhibit 4.2 of our Form S-1/A filed with the SEC on December 10, 2014.
4.3   Form of Warrant Indenture, incorporated by reference to Exhibit 4.3 of our Form S-1/A filed with the SEC on December 10, 2014.
4.4   Form of Class A Warrant, included as Schedule A in Exhibit 4.3
4.5   Form of Class B Warrant, included as Schedule B in Exhibit 4.3
4.6   Form of Private Placement Warrant, incorporated by reference to Exhibit 4.1 to the Company’s Form 8-K as filed with the Commission on December 11, 2015.
31.1(1)   Certification of Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a)
31.2(1)   Certification of Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a)
32.1(1)   Certification of Chief Executive Officer Pursuant to Section 18 U.S.C. Section 1350, adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2(1)   Certification of Chief Financial Officer Pursuant to Section 18 U.S.C. Section 1350, adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS(1)    XBRL Instance Document
101.SCH(1)   XBRL Taxonomy Extension — Schema
101.CAL(1)    XBRL Taxonomy Extension — Calculations
101.DEF(1)    XBRL Taxonomy Extension — Definitions
101.LAB(1)    XBRL Taxonomy Extension — Labels
101.PRE(1)   XBRL Taxonomy Extension — Presentations

 

  (1) Submitted Electronically Herewith.

 

 

 18 
 

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.

TEXAS MINERAL RESOURCES CORP.

 

Date: July 16, 2018  
   
/s/ Daniel E. Gorski  
Daniel E. Gorski, duly authorized officer  
Chief Executive Officer and Principal  
Executive Officer  
   
Date: July 16, 2018  
   
/s/ Wm Chris Mathers  
Wm Chris Mathers, Chief Financial Officer and  
Principal Financial and Accounting Officer  

 

 

 19 

 

EX-31.1 2 ex31-1.htm CERTIFICATION OF CHIEF EXECUTIVE OFFICER
 

Texas Mineral Resources Corp. - 10-Q

Exhibit 31.1.   Certification by Chief Executive Officer

I, Daniel E. Gorski, certify that:

 

1. I have reviewed this quarterly report on Form 10-Q of Texas Mineral Resources 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 the 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: July 16, 2018  
   
/s/ Daniel E. Gorski  
Daniel E. Gorski, Chief Executive Officer,
Principal Executive Officer
 

 

 

 

 

EX-31.2 3 ex31-2.htm CERTIFICATION OF CHIEF FINANCIAL OFFICER

 

Texas Mineral Resources Corp. - 10-Q

Exhibit 31.2.   Certification by Chief Financial Officer

I, Wm Chris Mathers, certify that:

 

1. I have reviewed this quarterly report on Form 10-Q of Texas Mineral Resources 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 the 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: July 16, 2018  
   
/s/ Wm Chris Mathers  
Wm Chris Mathers, Chief Financial Officer,
Principal Financial and Accounting Officer
 

  

 

 

 

 

EX-32.1 4 ex32-1.htm CERTIFICATION OF CHIEF EXECUTIVE OFFICER

 

Texas Mineral Resources Corp. - 10-Q

Exhibit 32.1.   Section 1350 Certification by Chief Executive Officer

CERTIFICATION 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 Texas Mineral Resources Corp. (the “Company”) on Form 10-Q for the quarter ending May 31, 2018, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Daniel E. Gorski, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge and belief: (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/ Daniel E. Gorski  
Daniel E. Gorski, Chief Executive Officer  
   
July 16, 2018  

 

The foregoing certification is being furnished solely pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Section 1350 of Chapter 63 of Title 18 of the United States Code) and is not being filed as part of the Report or as a separate disclosure document.

 

 

 

EX-32.2 5 ex32-2.htm CERTIFICATION OF CHIEF FINANCIAL OFFICER

 

Texas Mineral Resources Corp. - 10-Q

Exhibit 32.2.   Section 1350 Certification by Chief Financial Officer

CERTIFICATION 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 Texas Mineral Resources Corp. (the “Company”) on Form 10-Q for the quarter ending May 31, 2018, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Wm Chris Mathers, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge and belief: (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/ Wm Chris Mathers  
Wm Chris Mathers, Chief Financial Officer  
   
July 16, 2018  

 

The foregoing certification is being furnished solely pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Section 1350 of Chapter 63 of Title 18 of the United States Code) and is not being filed as part of the Report or as a separate disclosure document.

 

 

 

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The warrants have an exercise price of $0.10 and term of five years. The warrants had a fair value of $1,185 at the date of issuance determined using the Black-Scholes option-pricing model. The assumptions used to calculate the fair market value are as follows: (i) risk-free interest rate of 1.00% (ii) estimated volatility of 185% (iii) dividend yield of 0.00% and (iv) expected life of the warrants of five years. The notes payable balance as of May 31, 2018 and August 31, 2017 was a total of $5,000. The value of the warrants was expensed as interest expense at the time of issuance due to no stated term on the advances.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 8pt; text-align: justify">On September 1, 2016, the Company entered into five loans totaling $71,500 from five directors of the Company. The loans were due March 1, 2017, are non-interest bearing, and unsecured. As of this filing the loans are in default and due upon demand. As additional consideration for the loans, we issued in total 147,000 common stock purchase warrants. The warrants have an exercise price of $0.10 and term of five years. The loans have a relative fair value of $57,414 and the warrants have a relative fair value of $14,086 at the date of issuance determined using the Black-Scholes option-pricing model. The assumptions used to calculate the fair market value are as follows: (i) risk-free interest rate of 1.180% (ii) estimated volatility of 245% (iii) dividend yield of 0.00% and (iv) expected life of the warrants of five years. The notes payable balance as of May 31, 2018 and August 31, 2017 was $71,500. The value of the warrant was amortized to interest expense over the term of the note payable.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 8pt; text-align: justify">On November 1, 2016 the Company entered into two loans for $4,000 and $1,000 from two directors of the Company. The loans are non-interest bearing, unsecured and due upon demand. As additional consideration for the loans, we issued 8,000 and 2,000 common stock purchase warrants to each individual. The warrants have an exercise price of $0.10 and term of five years. The warrants had a fair value of $1,057 at the date of issuance determined using the Black-Scholes option-pricing model. The assumptions used to calculate the fair market value are as follows: (i) risk-free interest rate of 1.30% (ii) estimated volatility of 181% (iii) dividend yield of 0.00% and (iv) expected life of the warrants of five years. The notes payable balance as of May 31, 2018 and August 31, 2017 was $5,000. The value of the warrants was expensed as interest expense at the time of issuance due to no stated term on the advance.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 8pt; text-align: justify">On December 12, 2016, the Company entered into a loan for $15,000 a director of the Company. The loan is due June 12, 2017, is non-interest accruing, and unsecured. As of this filing the loan is in default and due upon demand. As additional consideration for the loan, we issued 60,000 common stock purchase warrants to the individual. The warrants have an exercise price of $0.10 and term of five years. The loan has a relative fair value of $10,437 and the warrants have a relative fair value of $4,563 at the date of issuance determined using the Black-Scholes option-pricing model. The assumptions used to calculate the fair market value are as follows: (i) risk-free interest rate of 1.90% (ii) estimated volatility of 241% (iii) dividend yield of 0.00% and (iv) expected life of the warrants of five years. The notes payable balance as of May 31, 2018 and August 31, 2017 was $15,000. The value of the warrant was amortized to interest expense over the term of the note payable.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 7pt; text-align: justify">On January 12, 2017 the Company entered into two loans totaling $20,000 from a director and an officer of the Company. The loans are due July 12, 2017, are non-interest accruing, and unsecured. As of this filing the loans are in default and due upon demand. As additional consideration for the loans, we issued 40,000 common stock purchase warrants to each individual. The warrants have an exercise price of $0.10 and term of five years. The loans have a relative fair value of $13,542 and the warrants have a relative fair value of $6,458 at the date of issuance determined using the Black-Scholes option-pricing model. The assumptions used to calculate the fair market value are as follows: (i) risk-free interest rate of 1.87% (ii) estimated volatility of 240% (iii) dividend yield of 0.00% and (iv) expected life of the warrants of five years. The notes payable balance as of May 31, 2018 and August 31, 2017 was $20,000. The value of the warrant was amortized to interest expense over the term of the note payable.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 8pt; text-align: justify">During the three months ended May 31, 2017 the Company entered into eight loans totaling $47,500 from two directors of the Company. The loans are non-interest accruing, unsecured and due upon demand. As additional consideration for the loans, we issued in total 190,000 common stock purchase warrants. The warrants have an exercise price of $0.17 - $0.21 and a term of five years. The warrants had a fair value of $39,557 at the date of issuance determined using the Black-Scholes option-pricing model. The assumptions used to calculate the fair market value are as follows: (i) risk-free interest rate of 1.75% (ii) estimated volatility of 234% (iii) dividend yield of 0.00% and (iv) expected life of the warrants of five years. The notes payable balance as of May 31, 2018 and August 31, 2017 was $47,500. The value of the warrants was expensed as interest expense at the time of issuance due to no stated term on the advance.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 8pt; text-align: justify"><font style="letter-spacing: -0.05pt">During the three months ended August 31, 2017 the Company entered into seven loans totaling $82,165 from two directors of the Company. The loans are non-interest accruing, unsecured and due upon demand. As additional consideration for the loans, we issued in total 328,660 common stock purchase warrants. The warrants have an exercise price of $0.20 - $0.23 and a term of five years. The warrants have a fair value of $65,137 at the date of issuance determined using the Black-Scholes option-pricing model. The assumptions used to calculate the fair market value are as follows: (i) risk-free interest rate of 1.75% (ii) estimated volatility of 169% (iii) dividend yield of 0.00% and (iv) expected life of the warrants of five years. The notes payable balance as of May 31, 2018 and August 31, 2017 was $82,165. The value of the warrants was expensed as interest expense at the time of issuance due to no stated term on the advance.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 8pt; text-align: justify">During the three months ended November 30, 2017 the Company received two advances totaling $16,750 from a director and an officer of the Company. The loans are non-interest accruing, unsecured and due upon demand. As additional consideration for the loans, we issued a total of 67,000 common stock purchase warrants. The warrants have an exercise price of $0.21 - 0.22 and a term of five years. The warrants have a fair value of $12,518 at the date of issuance determined using the Black-Scholes option-pricing model. The assumptions used to calculate the fair market value are as follows: (i) risk-free interest rate of 2.88% (ii) estimated volatility of 122% (iii) dividend yield of 0.00% and (iv) expected life of the warrants of five years. The note payable balance as of May 31, 2018 was $16,750. The value of the warrants was expensed as interest expense at the time of issuance due to no stated term on the advance.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 8pt; text-align: justify">During the three months ended February 28, 2018 the Company received five advances totaling $34,500 from two directors, one of whom is also an officer of the Company. The loans are non-interest accruing, unsecured and due upon demand. As additional consideration for the loans, we issued a total of 138,000 common stock purchase warrants. The warrants have an exercise price of $0.15 - 0.21 and a term of five years. The warrants have a fair value of $24,520 at the date of issuance determined using the Black-Scholes option-pricing model. The assumptions used to calculate the fair market value are as follows: (i) risk-free interest rate of 2.88% (ii) estimated volatility of 122% (iii) dividend yield of 0.00% and (iv) expected life of the warrants of five years. The note payable balance as of May 31, 2018 was $34,500. The value of the warrants was expensed as interest expense at the time of issuance due to no stated term on the advance.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 8pt; text-align: justify">During the three months ended May 31, 2018 the Company received four advances totaling $24,000 from a director. The loans are non-interest accruing, unsecured and due upon demand. As additional consideration for the loans, we issued a total of 96,000 common stock purchase warrants. The warrants have an exercise price of $0.17 - 0.19 and a term of five years. The warrants have a fair value of $16,436 at the date of issuance determined using the Black-Scholes option-pricing model. The assumptions used to calculate the fair market value are as follows: (i) risk-free interest rate of 2.88% (ii) estimated volatility of 224% (iii) dividend yield of 0.00% and (iv) expected life of the warrants of five years. The note payable balance as of May 31, 2018 was $24,000. The value of the warrants was expensed as interest expense at the time of issuance due to no stated term on the advance.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 8pt; text-align: justify"><b>NOTE&#160;4 &#8211; SHAREHOLDERS&#8217; EQUITY</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 8pt; text-align: justify"><i>Capital Stock</i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 4pt; text-align: justify">Our authorized capital stock consists of 100,000,000 shares of common stock, with a par value of $0.01 per share, and 10,000,000 preferred shares with a par value of $0.001 per share.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 4pt; text-align: justify">All shares of common stock have equal voting rights and, when validly issued and outstanding, are entitled to one non-cumulative vote per share in all matters to be voted upon by shareholders. The shares of common stock have no pre-emptive, subscription, conversion or redemption rights and may be issued only as fully paid and non-assessable shares. Holders of the common stock are entitled to equal ratable rights to dividends and distributions with respect to the common stock, as may be declared by our Board of Directors (our &#8220;Board&#8221;) out of funds legally available. In the event of a liquidation, dissolution or winding up of the affairs of the Corporation, the holders of common stock are entitled to share ratably in all assets remaining available for distribution to them after payment or provision for all liabilities and any preferential liquidation rights of any preferred stock then outstanding.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 4pt; text-align: justify">During the nine months ended May 31, 2018, we recognized approximately $12,051 in stock compensation expense for 90,000 stock options issued to outside consultants for services and approximately $53,000 in interest expense for warrants issued to directors related to advances, one of whom is also an officer of the Company.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 4pt">We had 44,941,533 shares of our common stock outstanding as of May 31, 2018.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 4pt">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 4pt"><b>NOTE 5 &#8211; RELATED PARTY TRANSACTIONS</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 8pt; text-align: justify"><font style="letter-spacing: -0.1pt">The Company has received advances from certain Directors and Officers. The advances totaled approximately $321,400 as of May 31, 2018. The Company rents office space on a month to month basis of $1,600 from a former director. This space is currently subleased to a tenant.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 8pt; text-align: justify"><font style="letter-spacing: -0.1pt">The Company has historically paid the CEO of a consulting company a monthly consulting fee and stock option grants of 10,000 options per month. As of May 31, 2018 the Company owes the consulting firm $77,000.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 8pt; text-align: justify">During the nine months ended May 31, 2018, we recognized approximately $12,051 in stock compensation expense for 90,000 stock options issued to outside consultants for services and approximately $53,000 in interest expense for warrants issued to directors related to advances, one of whom is also an officer of the Company.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 8pt; text-align: justify"><b>NOTE 6 &#8211; SUBSEQUENT EVENTS </b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 8pt">In June, 2018, Mr. Mathers, our CFO, was granted 500,000 options to purchase the Registrant&#8217;s shares of common stock, vesting immediately with a term of 10 years and at an exercise price of $0.19. 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Consultant [Member] Legal right to explore, extract, and retain some or all portions of the benefits from mining or mineral deposits and properties used for mining. Information pertaining to leases held in Hudspeth County, TX. Legal right to explore, extract, and retain some or all portions of the benefits from mining or mineral deposits and properties used for mining. Information regarding mineral leases. Legal right to explore, extract, and retain some or all portions of the benefits from mining or mineral deposits and properties used for mining. Information regarding mineral leases. Water Lease [Member] The option to purchase surface lease per agreement. Number of acres of mining lease. Number of acres of surface rights agreement. Number of acres of gorund water lease. The number of miles the lease is from the deposit. The value of a lease bonus to be paid. The cash outflow for lease bonus. 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Document and Entity Information - shares
9 Months Ended
May 31, 2018
Jun. 20, 2018
Document And Entity Information    
Entity Registrant Name Texas Mineral Resources Corp.  
Entity Central Index Key 0001445942  
Document Type 10-Q  
Document Period End Date May 31, 2018  
Amendment Flag false  
Current Fiscal Year End Date --08-31  
Entity a Well-known Seasoned Issuer No  
Entity a Voluntary Filer No  
Entity's Reporting Status Current Yes  
Entity Filer Category Smaller Reporting Company  
Document Fiscal Period Focus Q3  
Document Fiscal Year Focus 2018  
Entity Common Stock, Shares Outstanding   44,941,532
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BALANCE SHEETS (Unaudited) - USD ($)
May 31, 2018
Aug. 31, 2017
CURRENT ASSETS    
Cash and cash equivalents $ 4,956 $ 1,080
Prepaid expenses and other current assets 5,834 6,667
Total current assets 10,790 7,747
Property and equipment, net 922 5,421
Mineral properties 358,594 358,594
Deposits 24,000 24,000
TOTAL ASSETS 394,306 395,762
CURRENT LIABILITIES    
Accounts payable and accrued liabilities 1,092,808 916,468
Accounts payable - related party 77,000 87,000
Notes payable - related party 321,415 246,165
Current portion of note payable 260,387 260,387
Total current liabilities 1,751,610 1,510,020
Total liabilities 1,751,610 1,510,020
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' DEFICIT    
Common stock, par value $0.01; 100,000,000 shares authorized, 44,941,533 and 44,941,533 shares issued and outstanding as of May 31, 2018 and August 31, 2017, respectively 449,416 449,416
Additional paid-in capital 33,133,834 33,068,309
Accumulated deficit (34,940,554) (34,631,983)
Total shareholders' deficit (1,357,304) (1,114,258)
TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIT $ 394,306 $ 395,762
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BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares
May 31, 2018
Aug. 31, 2017
Statement of Financial Position [Abstract]    
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 $ 0.01 $ 0.01
Common stock, shares authorized 100,000,000 100,000,000
Common stock, shares issued 44,941,533 44,941,533
Common stock, shares outstanding 44,941,532 44,941,532
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STATEMENTS OF OPERATIONS (Unaudited) - USD ($)
3 Months Ended 9 Months Ended
May 31, 2018
May 31, 2017
May 31, 2018
May 31, 2017
OPERATING EXPENSES        
Exploration costs $ 792   $ 13,042 $ 9,378
General and administrative expenses 61,955 $ 139,047 226,193 362,199
Total operating expenses 62,747 139,047 239,235 371,577
LOSS FROM OPERATIONS (62,747) (139,047) (239,235) (371,577)
OTHER INCOME (EXPENSE)        
Interest and other income 1   2
Interest and other expense (22,261) (13,274) (69,336) (37,980)
Total other income (expense) (22,261) (13,273) (69,336) (37,978)
NET LOSS $ (85,008) $ (152,320) $ (308,571) $ (409,555)
Net loss per share:        
Basic and diluted net loss per share     $ 0.01 $ .01
Weighted average shares outstanding:        
Basic and diluted 44,941,533 44,941,533 44,941,533 44,941,533
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STATEMENTS OF CASH FLOWS (Unaudited) - USD ($)
9 Months Ended
May 31, 2018
May 31, 2017
CASH FLOWS FROM OPERATING ACTIVITIES    
Net loss $ (308,571) $ (409,555)
Adjustments to reconcile net loss to net cash used in operating activities:    
Discount on notes payable   23,650
Depreciation expense 4,498 8,256
Cashless compensation for related party advances 53,474  
Stock based compensation 12,051 12,285
Changes in current assets and liabilities:    
Prepaid expenses and other assets 834 711
Accounts payable and accrued expenses 176,340 79,363
Accounts payable related party (10,000) 198,452
Net cash used in operating activities (71,374) (86,838)
CASH FLOWS FROM FINANCING ACTIVITIES    
Proceeds from notes payable - related party 75,250 87,500
Net cash provided by financing activities 75,250 87,500
NET CHANGE IN CASH AND CASH EQUIVALENTS 3,876 662
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 1,080 5,164
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 4,956 $ 5,826
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BASIS OF PRESENTATION
9 Months Ended
May 31, 2018
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
BASIS OF PRESENTATION

NOTE 1 – BASIS OF PRESENTATION

The accompanying unaudited interim financial statements of Texas Mineral Resources Corp. (“we”, “us”, “our”, the “Company”) have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission (“SEC”), and should be read in conjunction with the audited financial statements and notes thereto contained in our annual report on Form 10-K, for the year ended August 31, 2017, dated December 14, 2017 as filed with the SEC. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the financial statements which would substantially duplicate the disclosures contained in the audited financial statements for the most recent fiscal year ended August 31, 2017 as reported in our annual report on Form 10-K, have been omitted.

The financial statements have been prepared on a going concern basis which assumes the Company will not be able to realize its assets and discharge its liabilities in the normal course of business for the foreseeable future. The Company has incurred losses since inception resulting in an accumulated deficit of approximately $34,940,554 as of May 31, 2018 and further losses are anticipated in the development of its business raising substantial doubt about the Company’s ability to continue as a going concern. The ability to continue as a going concern is dependent upon the Company generating 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. Management intends to finance operating costs over the next twelve months with existing cash on hand and or private placement of common stock.

On March 14, 2016, the Company filed a Certificate of Amendment with the Secretary of State of the State of Delaware to amend its Certificate of Incorporation to change the name of the Company from “Texas Rare Earth Resources Corp” to “Texas Mineral Resources Corp”. The amendment was effective at 9:00 am EST on March 21, 2016. The Certificate of Amendment did not make any other amendments to the Company’s Certificate of Incorporation.

Reclassification of prior year balances

For comparability, certain prior period amounts have been reclassified, where appropriate, to conform to the financial statement presentation as of May 31, 2018.

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MINERAL PROPERTIES
9 Months Ended
May 31, 2018
Mineral Industries Disclosures [Abstract]  
MINERAL PROPERTIES

NOTE 2 – MINERAL PROPERTIES

September 2011 Lease

On September 2, 2011, we entered into a new mining lease with the Texas General Land Office covering Sections 7 and 18 of Township 7, Block 71 and Section 12 of Block 72, covering approximately 860 acres at Round Top Mountain in Hudspeth County, Texas. The mining lease issued by the Texas General Land Office gives us the right to explore, produce, develop, mine, extract, mill, remove, and market beryllium, uranium, rare earth elements, all other base and precious metals, industrial minerals and construction materials and all other minerals excluding oil, gas, coal, lignite, sulfur, salt, and potash. The term of the lease is nineteen years so long as minerals are produced in paying quantities.

Under the lease, we will pay the State of Texas a lease bonus of $142,518; $44,718 of which was paid upon the execution of the lease, and $97,800 which will be due when we submit a supplemental plan of operations to conduct mining. Upon the sale of minerals removed from Round Top, we will pay the State of Texas a $500,000 minimum advance royalty.

Thereafter, we will pay the State of Texas a production royalty equal to eight percent (8%) of the market value of uranium and other fissionable materials removed and sold from Round Top and six and one quarter percent (61/4%) of the market value of all other minerals removed and sold from Round Top.

Assuming production of paying quantities has not been obtained, we may pay additional delay rental fees to extend the term of the lease for successive one (1) year periods pursuant to the following schedule:

 

   Per Acre
Amount
  Total
Amount
September 2, 2015 – 2019  $75   $67,077 
September 2, 2020 – 2024  $150   $134,155 
September 2, 2025 – 2029  $200   $178,873 

 

In August 2017, we paid a delay rental to the State of Texas in the amount of $67,077.

November 2011 Lease

On November 1, 2011, we entered into a mining lease with the State of Texas covering 90 acres, more or less, of land that we purchased in September 2011 near our Round Top site. The deed was recorded with Hudspeth County on September 16, 2011. Under the lease, we paid the State of Texas a lease bonus of $20,700 which was paid upon the execution of the lease. Upon the sale of minerals removed from Round Top, we will pay the State of Texas a $50,000 minimum advance royalty. Thereafter, we will pay the State of Texas a production royalty equal to eight percent (8%) of the market value of uranium and other fissionable materials removed and sold from Round Top and six and one quarter percent (6 1/4%) of the market value of all other minerals sold from Round Top.

Assuming production of paying quantities has not been obtained, we may pay additional delay rental fees to extend the term of the lease for successive one (1) year periods pursuant to the following schedule:

 

   Per Acre
Amount
  Total
Amount
November 1, 2015 – 2019  $75   $6,750 
November 1, 2020 – 2024  $150   $13,500 
November 1, 2025 – 2029  $200   $18,000 

 

In October 2017, we paid a delay rental to the State of Texas of $6,750.

March 2013 Lease

On March 6, 2013, we purchased the surface lease at the Round Top Project, known as the West Lease, from the Southwest Wildlife and Range Foundation (the “Foundation”) for $500,000 cash and 1,063,830 shares of our common stock. We also agreed to support the Foundation through an annual payment of $45,000 for ten years to support conservation efforts within the Rio Grande Basin and in particular engaging in stewardship of Lake Amistad, a large and well-known fishing lake near Del Rio, Texas. The West Lease comprises approximately 54,990 acres. Most importantly, the purchase of the surface lease gave us unrestricted surface access for the potential development and mining of our Round Top Project. As of the date of this filing the $45,000 payments due in June 2016, 2017 and June 2018 have not been paid; consequently, we have expensed the value of the West Lease during fiscal 2017. We fully intend to continue with the evaluation of the mineral potential of the property, to ultimately mine the property, and to bring the lease current when funds are available. Expensing the value of the West Lease does not restrict our access to the mineral leases.

October 2014 Surface Option

In October 2014, we executed an agreement with the Texas General Land Office securing the option to purchase the surface rights covering the potential Round Top project mine and plant areas, and separately a lease to develop the water necessary for the potential Round Top project mine operations.

The option to purchase the surface rights covers approximately 5,670 acres over the mining lease and the additional acreage adequate to site all potential heap leaching and processing operations as currently anticipated by the Company. We may exercise the option for all or part of the option acreage at any time during the sixteen year primary term of the mineral lease. The option can be kept current by an annual payment of $10,000, which have not been paid for 2017 or 2018 as of the date of this filing. The purchase price will be the appraised value of the surface at the time of exercising the option.

The ground water lease secures our right to develop the ground water within a 13,120 acre lease area located approximately 4 miles from the Round Top deposit. The lease area contains five existing water wells. It is anticipated that all potential water needs for the Round Top project mine operations would be satisfied by the existing wells covered by this water lease. This lease has an annual minimum production payment of $5,000 prior to production of water for the operation, which have not been paid for 2017 or 2018, as of the date of this filing. After initiation of production we will pay $0.95 per thousand gallons or $20,000 annually, whichever is greater. This lease remains effective as long as the mineral lease is in effect. 

The Pagnotti Enterprises Inc. Memorandum of Understanding

On June 28, 2016 TMRC executed a Memorandum of understanding with Pagnotti Enterprises Inc. (“PEI”) of Wilkes Barre, Pennsylvania, owners of the Jeddo Coal Co., whereby under specified terms TMRC could lease one or more of Jeddo’s deposits located in the anthracite region of northeast Pennsylvania. Research by the Department of Energy (DOE) has shown that these coal deposits and the sandstones and siltstones immediately associated with them contain anomalously high values of rare earth and on particular interest, Scandium. The DOE research to date has indicated that the rare earth can be efficiently extracted from pulverized rock using ammonium sulfate as the lixiviant. TMRC is in the process of preparing an application for a federal grant to design and construct a continuous ion exchange/continuous ion chromatography (CIX/CIC) pilot plant to be delivered to a designated project area in the Appalachian coal province. TMRC and its co-applicants, K-Tech, Inventure Renewables, of Tuscaloosa, Alabama and Penn State University are proposing to plan, develop, design and install the CIX/CIC pilot plant at one of the Jeddo Coal properties. The grant was awarded in March 2017 to the consortium consisting of Inventure Renewables, Penn State, K-Tech and TMRC with Inventure being the principal investigator in the consortium. Funding began in September 2017.

Under the terms of the Memorandum of Understanding (MOU) signed 28 June 2016, TMRC had a six-month term to perform the necessary due diligence and to technically and economically evaluate the properties. Upon execution of the MOU TMRC and PEI had six months to draft and execute a formal lease agreement containing all the standard terms of mining lease agreements. Upon execution of a lease, TMRC will be obligated to pay a $5,000 per month rental or a 12% royalty whichever is greater. As of the date of this filing, no lease has been executed.

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NOTES PAYABLE
9 Months Ended
May 31, 2018
Debt Disclosure [Abstract]  
NOTES PAYABLE

NOTE 3 – NOTES PAYABLE

As part of our surface lease with the Rio Grande Foundation (formerly referred to as the Southwest Wildlife Foundation), the Company recorded a note payable for an amount for the initial $45,000 due upon signing of lease and the nine (9) future payments due of $45,000 which has been recorded at its present value discounted with an imputed interest rate of 5% for a total note payable of $364,852. As of the date of this filing, we have not paid the June 2016, 2017 or June 2018 installment of our surface lease, in the amount of $45,000 each, to the Southwest Wildlife Foundation. As a result, the full amount of the note payable has been classified as currently due. The note payable balance as of May 31, 2018 is $260,000. The Company has also accrued interest expense as of May 31, 2018 of $44,000. This unpaid interest is included in accrued liabilities.

The Foundation has not given notice of default or made any demand for payment as of the date of this filing. However, based upon the Company being in default on the Note Payable there is no guarantee that the Foundation will allow the Company to bring the lease payments current without requiring the Company to provided additional consideration to the Foundation. Consequently, since the Company cannot be guaranteed the ability to utilize the lease due to its current default status, the Company has written off the value of this lease ($1,394,852) as of August 31, 2017. The Company intends to continue with the evaluation of the mineral potential of the property, to ultimately mine the property, and to bring this note payable and its accrued interest current when the funds are available.

Related Party Notes Payable and Advances

On July 1, 2016 the Company received two loans for $2,500 each from two directors of the Company. The loans are non-interest accruing, unsecured and due upon demand. As additional consideration for the loans, we issued 5,000 common stock purchase warrants to each individual. The warrants have an exercise price of $0.10 and term of five years. The warrants had a fair value of $1,185 at the date of issuance determined using the Black-Scholes option-pricing model. The assumptions used to calculate the fair market value are as follows: (i) risk-free interest rate of 1.00% (ii) estimated volatility of 185% (iii) dividend yield of 0.00% and (iv) expected life of the warrants of five years. The notes payable balance as of May 31, 2018 and August 31, 2017 was a total of $5,000. The value of the warrants was expensed as interest expense at the time of issuance due to no stated term on the advances.

On September 1, 2016, the Company entered into five loans totaling $71,500 from five directors of the Company. The loans were due March 1, 2017, are non-interest bearing, and unsecured. As of this filing the loans are in default and due upon demand. As additional consideration for the loans, we issued in total 147,000 common stock purchase warrants. The warrants have an exercise price of $0.10 and term of five years. The loans have a relative fair value of $57,414 and the warrants have a relative fair value of $14,086 at the date of issuance determined using the Black-Scholes option-pricing model. The assumptions used to calculate the fair market value are as follows: (i) risk-free interest rate of 1.180% (ii) estimated volatility of 245% (iii) dividend yield of 0.00% and (iv) expected life of the warrants of five years. The notes payable balance as of May 31, 2018 and August 31, 2017 was $71,500. The value of the warrant was amortized to interest expense over the term of the note payable.

On November 1, 2016 the Company entered into two loans for $4,000 and $1,000 from two directors of the Company. The loans are non-interest bearing, unsecured and due upon demand. As additional consideration for the loans, we issued 8,000 and 2,000 common stock purchase warrants to each individual. The warrants have an exercise price of $0.10 and term of five years. The warrants had a fair value of $1,057 at the date of issuance determined using the Black-Scholes option-pricing model. The assumptions used to calculate the fair market value are as follows: (i) risk-free interest rate of 1.30% (ii) estimated volatility of 181% (iii) dividend yield of 0.00% and (iv) expected life of the warrants of five years. The notes payable balance as of May 31, 2018 and August 31, 2017 was $5,000. The value of the warrants was expensed as interest expense at the time of issuance due to no stated term on the advance.

On December 12, 2016, the Company entered into a loan for $15,000 a director of the Company. The loan is due June 12, 2017, is non-interest accruing, and unsecured. As of this filing the loan is in default and due upon demand. As additional consideration for the loan, we issued 60,000 common stock purchase warrants to the individual. The warrants have an exercise price of $0.10 and term of five years. The loan has a relative fair value of $10,437 and the warrants have a relative fair value of $4,563 at the date of issuance determined using the Black-Scholes option-pricing model. The assumptions used to calculate the fair market value are as follows: (i) risk-free interest rate of 1.90% (ii) estimated volatility of 241% (iii) dividend yield of 0.00% and (iv) expected life of the warrants of five years. The notes payable balance as of May 31, 2018 and August 31, 2017 was $15,000. The value of the warrant was amortized to interest expense over the term of the note payable.

On January 12, 2017 the Company entered into two loans totaling $20,000 from a director and an officer of the Company. The loans are due July 12, 2017, are non-interest accruing, and unsecured. As of this filing the loans are in default and due upon demand. As additional consideration for the loans, we issued 40,000 common stock purchase warrants to each individual. The warrants have an exercise price of $0.10 and term of five years. The loans have a relative fair value of $13,542 and the warrants have a relative fair value of $6,458 at the date of issuance determined using the Black-Scholes option-pricing model. The assumptions used to calculate the fair market value are as follows: (i) risk-free interest rate of 1.87% (ii) estimated volatility of 240% (iii) dividend yield of 0.00% and (iv) expected life of the warrants of five years. The notes payable balance as of May 31, 2018 and August 31, 2017 was $20,000. The value of the warrant was amortized to interest expense over the term of the note payable.

During the three months ended May 31, 2017 the Company entered into eight loans totaling $47,500 from two directors of the Company. The loans are non-interest accruing, unsecured and due upon demand. As additional consideration for the loans, we issued in total 190,000 common stock purchase warrants. The warrants have an exercise price of $0.17 - $0.21 and a term of five years. The warrants had a fair value of $39,557 at the date of issuance determined using the Black-Scholes option-pricing model. The assumptions used to calculate the fair market value are as follows: (i) risk-free interest rate of 1.75% (ii) estimated volatility of 234% (iii) dividend yield of 0.00% and (iv) expected life of the warrants of five years. The notes payable balance as of May 31, 2018 and August 31, 2017 was $47,500. The value of the warrants was expensed as interest expense at the time of issuance due to no stated term on the advance.

During the three months ended August 31, 2017 the Company entered into seven loans totaling $82,165 from two directors of the Company. The loans are non-interest accruing, unsecured and due upon demand. As additional consideration for the loans, we issued in total 328,660 common stock purchase warrants. The warrants have an exercise price of $0.20 - $0.23 and a term of five years. The warrants have a fair value of $65,137 at the date of issuance determined using the Black-Scholes option-pricing model. The assumptions used to calculate the fair market value are as follows: (i) risk-free interest rate of 1.75% (ii) estimated volatility of 169% (iii) dividend yield of 0.00% and (iv) expected life of the warrants of five years. The notes payable balance as of May 31, 2018 and August 31, 2017 was $82,165. The value of the warrants was expensed as interest expense at the time of issuance due to no stated term on the advance.

During the three months ended November 30, 2017 the Company received two advances totaling $16,750 from a director and an officer of the Company. The loans are non-interest accruing, unsecured and due upon demand. As additional consideration for the loans, we issued a total of 67,000 common stock purchase warrants. The warrants have an exercise price of $0.21 - 0.22 and a term of five years. The warrants have a fair value of $12,518 at the date of issuance determined using the Black-Scholes option-pricing model. The assumptions used to calculate the fair market value are as follows: (i) risk-free interest rate of 2.88% (ii) estimated volatility of 122% (iii) dividend yield of 0.00% and (iv) expected life of the warrants of five years. The note payable balance as of May 31, 2018 was $16,750. The value of the warrants was expensed as interest expense at the time of issuance due to no stated term on the advance.

During the three months ended February 28, 2018 the Company received five advances totaling $34,500 from two directors, one of whom is also an officer of the Company. The loans are non-interest accruing, unsecured and due upon demand. As additional consideration for the loans, we issued a total of 138,000 common stock purchase warrants. The warrants have an exercise price of $0.15 - 0.21 and a term of five years. The warrants have a fair value of $24,520 at the date of issuance determined using the Black-Scholes option-pricing model. The assumptions used to calculate the fair market value are as follows: (i) risk-free interest rate of 2.88% (ii) estimated volatility of 122% (iii) dividend yield of 0.00% and (iv) expected life of the warrants of five years. The note payable balance as of May 31, 2018 was $34,500. The value of the warrants was expensed as interest expense at the time of issuance due to no stated term on the advance.

During the three months ended May 31, 2018 the Company received four advances totaling $24,000 from a director. The loans are non-interest accruing, unsecured and due upon demand. As additional consideration for the loans, we issued a total of 96,000 common stock purchase warrants. The warrants have an exercise price of $0.17 - 0.19 and a term of five years. The warrants have a fair value of $16,436 at the date of issuance determined using the Black-Scholes option-pricing model. The assumptions used to calculate the fair market value are as follows: (i) risk-free interest rate of 2.88% (ii) estimated volatility of 224% (iii) dividend yield of 0.00% and (iv) expected life of the warrants of five years. The note payable balance as of May 31, 2018 was $24,000. The value of the warrants was expensed as interest expense at the time of issuance due to no stated term on the advance.

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SHAREHOLDERS' EQUITY
9 Months Ended
May 31, 2018
Equity [Abstract]  
SHAREHOLDERS' EQUITY

NOTE 4 – SHAREHOLDERS’ EQUITY

Capital Stock

Our authorized capital stock consists of 100,000,000 shares of common stock, with a par value of $0.01 per share, and 10,000,000 preferred shares with a par value of $0.001 per share.

All shares of common stock have equal voting rights and, when validly issued and outstanding, are entitled to one non-cumulative vote per share in all matters to be voted upon by shareholders. The shares of common stock have no pre-emptive, subscription, conversion or redemption rights and may be issued only as fully paid and non-assessable shares. Holders of the common stock are entitled to equal ratable rights to dividends and distributions with respect to the common stock, as may be declared by our Board of Directors (our “Board”) out of funds legally available. In the event of a liquidation, dissolution or winding up of the affairs of the Corporation, the holders of common stock are entitled to share ratably in all assets remaining available for distribution to them after payment or provision for all liabilities and any preferential liquidation rights of any preferred stock then outstanding.

During the nine months ended May 31, 2018, we recognized approximately $12,051 in stock compensation expense for 90,000 stock options issued to outside consultants for services and approximately $53,000 in interest expense for warrants issued to directors related to advances, one of whom is also an officer of the Company.

We had 44,941,533 shares of our common stock outstanding as of May 31, 2018.

 

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RELATED PARTY TRANSACTIONS
9 Months Ended
May 31, 2018
Related Party Transactions [Abstract]  
RELATED PARTY TRANSACTIONS

NOTE 5 – RELATED PARTY TRANSACTIONS

The Company has received advances from certain Directors and Officers. The advances totaled approximately $321,400 as of May 31, 2018. The Company rents office space on a month to month basis of $1,600 from a former director. This space is currently subleased to a tenant.

The Company has historically paid the CEO of a consulting company a monthly consulting fee and stock option grants of 10,000 options per month. As of May 31, 2018 the Company owes the consulting firm $77,000.

During the nine months ended May 31, 2018, we recognized approximately $12,051 in stock compensation expense for 90,000 stock options issued to outside consultants for services and approximately $53,000 in interest expense for warrants issued to directors related to advances, one of whom is also an officer of the Company.

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SUBSEQUENT EVENTS
9 Months Ended
May 31, 2018
Subsequent Events [Abstract]  
SUBSEQUENT EVENTS

NOTE 6 – SUBSEQUENT EVENTS

In June, 2018, Mr. Mathers, our CFO, was granted 500,000 options to purchase the Registrant’s shares of common stock, vesting immediately with a term of 10 years and at an exercise price of $0.19. These options will be valued using the Black-Scholes pricing model in the quarter ending August 31, 2018.

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MINERAL PROPERTIES (Tables)
9 Months Ended
May 31, 2018
Mineral Industries Disclosures [Abstract]  
Schedule of future minimum lease payments

September 2011 Lease

 

Assuming production of paying quantities has not been obtained, we may pay additional delay rental fees to extend the term of the lease for successive one (1) year periods pursuant to the following schedule:

 

   Per Acre
Amount
  Total
Amount
September 2, 2015 – 2019  $75   $67,077 
September 2, 2020 – 2024  $150   $134,155 
September 2, 2025 – 2029  $200   $178,873 

 

November 2011 Lease

Assuming production of paying quantities has not been obtained, we may pay additional delay rental fees to extend the term of the lease for successive one (1) year periods pursuant to the following schedule:

 

   Per Acre
Amount
  Total
Amount
November 1, 2015 – 2019  $75   $6,750 
November 1, 2020 – 2024  $150   $13,500 
November 1, 2025 – 2029  $200   $18,000 

 

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BASIS OF PRESENTATION (Details Narrative) - USD ($)
May 31, 2018
Aug. 31, 2017
Organization, Consolidation and Presentation of Financial Statements [Abstract]    
Accumulated deficit $ (34,940,554) $ (34,631,983)
XML 25 R14.htm IDEA: XBRL DOCUMENT v3.10.0.1
MINERAL PROPERTIES (Details Narrative)
1 Months Ended
Sep. 02, 2011
USD ($)
a
Oct. 31, 2017
USD ($)
Aug. 31, 2017
USD ($)
Jun. 28, 2016
USD ($)
Oct. 31, 2014
USD ($)
a
Miles
$ / gal
Mar. 06, 2013
USD ($)
a
shares
Nov. 01, 2011
USD ($)
a
Jun. 01, 2018
USD ($)
Jun. 01, 2017
USD ($)
Jun. 01, 2016
USD ($)
Pagnotti Enterprises - MOU [Member]                    
Periodic lease payment       $ 5,000            
Royalty percentage       12.00%            
Texas General Land Office - Hudspeth County, TX [Member] | September 2011 Mineral Properties Lease [Member]                    
Mining lease - acres | a 860                  
Lease bonus $ 142,518                  
Lease bonus paid 44,718                  
Lease bonus due upon filing of supplemental plan of operations to conduct mining 97,800                  
Minimum advance royalty due upon sale of minerals $ 500,000                  
Production royalty of market value of uranium and other fissionable materials removed 8.00%                  
Production royalty of market value of other minerals removed 6.25%                  
Payment of delay rental     $ 67,077              
Texas General Land Office - Hudspeth County, TX [Member] | October 2014 Surface Option - Water Lease [Member]                    
Ground water lease - acres | a         13,120          
Distance from project mine | Miles         4          
Annual minimum production payment         $ 5,000          
Production payment, amount per thousand gallons | $ / gal         0.95          
Production payment, annual amount         $ 20,000          
Texas General Land Office - Hudspeth County, TX [Member] | October 2014 Surface Option [Member]                    
Surface rights - acres | a         5,670          
Periodic option annual payment due         $ 10,000          
State of Texas - Hudspeth County, TX [Member] | November 2011 Mineral Properties Lease [Member]                    
Mining lease - acres | a             90      
Lease bonus paid             $ 20,700      
Minimum advance royalty due upon sale of minerals             $ 50,000      
Production royalty of market value of uranium and other fissionable materials removed             8.00%      
Production royalty of market value of other minerals removed             6.25%      
Payment of delay rental   $ 6,750                
Southwest Range and Wildlife Foundation, Inc. [Member] | March 2013 Surface Lease [Member]                    
Surface rights - acres | a           54,990        
Periodic payment for conservation efforts           $ 45,000        
Term of periodic payment for conservation efforts           10 years        
Cash paid for lease assignment           $ 500,000        
Shares issued for lease | shares           1,063,830        
Lease payments payable               $ 45,000 $ 45,000 $ 45,000
XML 26 R15.htm IDEA: XBRL DOCUMENT v3.10.0.1
MINERAL PROPERTIES (Details)
Aug. 31, 2017
USD ($)
September 2, 2015 - 2019 [Member]  
Per Acre Amount $ 75
Total Lease Amount 67,077
September 2, 2020 - 2024 [Member]  
Per Acre Amount 150
Total Lease Amount 134,155
September 2, 2025 - 2029 [Member]  
Per Acre Amount 200
Total Lease Amount 178,873
November 1, 2015 - 2019 [Member]  
Per Acre Amount 75
Total Lease Amount 6,750
November 1, 2020 - 2024 [Member]  
Per Acre Amount 150
Total Lease Amount 13,500
November 1, 2025 - 2029 [Member]  
Per Acre Amount 200
Total Lease Amount $ 18,000
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NOTES PAYABLE (Details Narrative)
3 Months Ended 9 Months Ended 12 Months Ended
Jan. 12, 2017
USD ($)
$ / shares
shares
Dec. 12, 2016
USD ($)
$ / shares
shares
Nov. 01, 2016
USD ($)
$ / shares
shares
Sep. 02, 2016
USD ($)
$ / shares
shares
Jul. 01, 2016
USD ($)
$ / shares
shares
Mar. 06, 2013
USD ($)
Number
May 31, 2018
USD ($)
$ / shares
shares
Feb. 28, 2018
USD ($)
$ / shares
shares
Nov. 30, 2017
USD ($)
$ / shares
shares
Aug. 31, 2017
USD ($)
$ / shares
shares
May 31, 2017
USD ($)
$ / shares
shares
May 31, 2017
USD ($)
$ / shares
Aug. 31, 2017
USD ($)
$ / shares
Debt Instrument [Line Items]                          
Current portion of note payable             $ 260,387     $ 260,387     $ 260,387
Amortization of debt discount                       $ 23,650  
Impairment of mineral properties                         1,394,852
Foundation Lease Note Payable [Member]                          
Debt Instrument [Line Items]                          
Periodic payment           $ 45,000              
Number of payments | Number           9              
Imputed interest rate           5.00%              
Note payable face amount           $ 364,852              
Current portion of note payable             260,000            
Accrued interest payable             44,000            
Amount of lease payment in default             45,000            
Director Loans 7/1/2016 [Member]                          
Debt Instrument [Line Items]                          
Number of loans         2                
Number of directors         2                
Note payable face amount         $ 2,500                
Notes payable - related party, net of discounts             5,000     5,000     5,000
Common stock warrants granted | shares         5,000                
Warrants, exercise price | $ / shares         $ 0.10                
Warrant term         5 years                
Fair value of warrants         $ 1,185                
Expected life         5 years                
Expected volatility         185.00%                
Risk-free interest rate         1.00%                
Expected dividend yield         0.00%                
Director Loans 9/1/2016 [Member]                          
Debt Instrument [Line Items]                          
Number of loans       5                  
Number of directors       5                  
Note payable face amount       $ 71,500                  
Notes payable - related party, net of discounts             71,500     71,500     71,500
Common stock warrants granted | shares       147,000                  
Warrants, exercise price | $ / shares       $ 0.10                  
Warrant term       5 years                  
Fair value of debt       $ 57,414                  
Fair value of warrants       $ 14,086                  
Expected life       5 years                  
Expected volatility       245.00%                  
Risk-free interest rate       1.18%                  
Expected dividend yield       0.00%                  
Director Loan 11/1/2016 #1 [Member]                          
Debt Instrument [Line Items]                          
Note payable face amount     $ 4,000                    
Common stock warrants granted | shares     8,000                    
Director Loan 11/1/2016 #2 [Member]                          
Debt Instrument [Line Items]                          
Note payable face amount     $ 1,000                    
Common stock warrants granted | shares     2,000                    
Director Loans 11/1/2016 [Member]                          
Debt Instrument [Line Items]                          
Number of loans     2                    
Number of directors     2                    
Notes payable - related party, net of discounts             5,000     5,000     5,000
Warrants, exercise price | $ / shares     $ 0.10                    
Warrant term     5 years                    
Fair value of warrants     $ 1,057                    
Expected life     5 years                    
Expected volatility     181.00%                    
Risk-free interest rate     1.30%                    
Expected dividend yield     0.00%                    
Director Loan 12/12/2016 [Member]                          
Debt Instrument [Line Items]                          
Note payable face amount   $ 15,000                      
Notes payable - related party, net of discounts             15,000     15,000     15,000
Maturity date   Jun. 12, 2017                      
Common stock warrants granted | shares   60,000                      
Warrants, exercise price | $ / shares   $ 0.10                      
Warrant term   5 years                      
Fair value of debt   $ 10,467                      
Fair value of warrants   $ 4,563                      
Expected life   5 years                      
Expected volatility   241.00%                      
Risk-free interest rate   1.90%                      
Expected dividend yield   0.00%                      
Director and Officer Loans 1/12/2017 [Member]                          
Debt Instrument [Line Items]                          
Number of loans 2                        
Note payable face amount $ 20,000                        
Notes payable - related party, net of discounts             20,000     20,000     20,000
Maturity date Jul. 12, 2017                        
Common stock warrants granted | shares 40,000                        
Warrants, exercise price | $ / shares $ 0.10                        
Warrant term 5 years                        
Fair value of debt $ 13,542                        
Fair value of warrants $ 6,458                        
Expected life 5 years                        
Expected volatility 240.00%                        
Risk-free interest rate 1.87%                        
Expected dividend yield 0.00%                        
Director Loans Qtr 5/31/2017 [Member]                          
Debt Instrument [Line Items]                          
Number of loans                     8 8  
Number of directors                     2 2  
Note payable face amount                     $ 47,500 $ 47,500  
Notes payable - related party, net of discounts             47,500     $ 47,500     $ 47,500
Common stock warrants granted | shares                     190,000    
Warrant term                     5 years    
Fair value of warrants                     $ 39,557 $ 39,557  
Expected life                     5 years    
Expected volatility                     234.00%    
Risk-free interest rate                     1.75%    
Expected dividend yield                     0.00%    
Director Loans Qtr 5/31/2017 [Member] | Lower Range [Member]                          
Debt Instrument [Line Items]                          
Warrants, exercise price | $ / shares                     $ 0.17 $ 0.17  
Director Loans Qtr 5/31/2017 [Member] | Upper Range [Member]                          
Debt Instrument [Line Items]                          
Warrants, exercise price | $ / shares                     $ 0.21 $ 0.21  
Director Loans Qtr 8/31/2017 [Member]                          
Debt Instrument [Line Items]                          
Number of loans                   7     7
Number of directors                   2     2
Note payable face amount                   $ 82,165     $ 82,165
Notes payable - related party, net of discounts             $ 82,165     $ 82,165     82,165
Common stock warrants granted | shares                   328,660      
Warrant term                   5 years      
Fair value of warrants                   $ 65,137     $ 65,137
Expected life                   5 years      
Expected volatility                   169.00%      
Risk-free interest rate                   1.75%      
Expected dividend yield                   0.00%      
Director Loans Qtr 8/31/2017 [Member] | Lower Range [Member]                          
Debt Instrument [Line Items]                          
Warrants, exercise price | $ / shares                   $ 0.20     $ 0.20
Director Loans Qtr 8/31/2017 [Member] | Upper Range [Member]                          
Debt Instrument [Line Items]                          
Warrants, exercise price | $ / shares                   $ 0.23     $ 0.23
Advances - Director and Officer [Member]                          
Debt Instrument [Line Items]                          
Number of loans             5            
Number of directors             2            
Note payable face amount             $ 34,500            
Notes payable - related party, net of discounts             34,500            
Common stock warrants granted | shares               138,000          
Warrant term               5 years          
Expected life               5 years          
Expected volatility               122.00%          
Risk-free interest rate               2.88%          
Expected dividend yield               0.00%          
Advances - Director and Officer [Member] | Lower Range [Member]                          
Debt Instrument [Line Items]                          
Warrants, exercise price | $ / shares               $ 0.15          
Fair value of warrants               $ 24,520          
Advances - Director and Officer [Member] | Upper Range [Member]                          
Debt Instrument [Line Items]                          
Warrants, exercise price | $ / shares               $ .21          
Advances - Director and Officer [Member]                          
Debt Instrument [Line Items]                          
Number of loans                 2        
Note payable face amount                 $ 16,750        
Notes payable - related party, net of discounts             $ 16,750   $ 16,750        
Common stock warrants granted | shares                 67,000        
Warrant term                 5 years        
Fair value of warrants                 $ 12,518        
Expected life                 5 years        
Expected volatility                 122.00%        
Risk-free interest rate                 2.88%        
Expected dividend yield                 0.00%        
Advances - Director and Officer [Member] | Lower Range [Member]                          
Debt Instrument [Line Items]                          
Warrants, exercise price | $ / shares                 $ 0.21        
Advances - Director and Officer [Member] | Upper Range [Member]                          
Debt Instrument [Line Items]                          
Warrants, exercise price | $ / shares                 $ 0.22        
Advances - Director [Member]                          
Debt Instrument [Line Items]                          
Number of loans             4            
Note payable face amount             $ 24,000            
Notes payable - related party, net of discounts             $ 24,000            
Common stock warrants granted | shares             96,000            
Warrant term             5 years            
Fair value of warrants             $ 16,436            
Expected life             5 years            
Expected volatility             224.00%            
Risk-free interest rate             2.88%            
Expected dividend yield             0.00%            
Advances - Director [Member] | Lower Range [Member]                          
Debt Instrument [Line Items]                          
Warrants, exercise price | $ / shares             $ .17            
Advances - Director [Member] | Upper Range [Member]                          
Debt Instrument [Line Items]                          
Warrants, exercise price | $ / shares             $ .19            
XML 28 R17.htm IDEA: XBRL DOCUMENT v3.10.0.1
SHAREHOLDERS' EQUITY (Details Narrative) - USD ($)
9 Months Ended
May 31, 2018
May 31, 2017
Aug. 31, 2017
Common stock, shares authorized 100,000,000   100,000,000
Common stock, par value $ 0.01   $ 0.01
Preferred stock, shares authorized 10,000,000   10,000,000
Preferred stock, par value $ 0.001   $ 0.001
Common stock, shares outstanding 44,941,532   44,941,532
Stock based compensation - options $ 12,051 $ 12,285  
Interest expense - related party 53,000    
Consultant [Member]      
Stock based compensation - options $ 12,051    
Stock options issued to outside consultant (shares) 90,000    
XML 29 R18.htm IDEA: XBRL DOCUMENT v3.10.0.1
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($)
1 Months Ended 9 Months Ended
May 31, 2018
May 31, 2018
Aug. 31, 2017
Advances - related party $ 321,415 $ 321,415 $ 246,165
Director [Member]      
Monthly rent paid to director   1,600  
Chief Executive Officer of Consulting Company [Member]      
Stock options granted (shares) 10,000    
Due to related party $ 77,000 $ 77,000  
XML 30 R19.htm IDEA: XBRL DOCUMENT v3.10.0.1
SUBSEQUENT EVENTS (Details Narrative) - Subsequent Event [Member] - Chief Financial Officer [Member]
1 Months Ended
Jun. 30, 2018
$ / shares
shares
Stock options granted (shares) | shares 500,000
Term of stock options 10 years
Exercise price of stock options | $ / shares $ .19
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