false
--12-31
Q1
2013
2013-03-31
10-Q
0001464830
952199195
15865419
Smaller Reporting Company
Silver Falcon Mining, Inc.
2016-06-04
2016-06-04
2016-01-12
54079.20
52360
3000000
3500000
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<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN-BOTTOM: 11pt; MARGIN-TOP: 0pt; text-align: justify"> NOTE 9 - GOING CONCERN</p> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN-BOTTOM: 11pt; MARGIN-TOP: 0pt; text-align: justify"> These financial statements have been prepared in accordance with generally accepted accounting principles applicable to a going concern, which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. However, we incurred a net loss of ($2,028,153) for the three months ended March 31, 2013. We have remained in business primarily through the deferral of salaries by management, the issuance of stock to compensate employees and consultants, and raising funds from the sale of two year convertible notes. We intend on financing our future development activities from the same sources, until such time that funds provided by operations are sufficient to fund working capital requirements.</p> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN-BOTTOM: 11pt; MARGIN-TOP: 0pt; text-align: justify"> These factors, among others, raise substantial doubt about our ability to continue as a going concern for a reasonable period of time.</p> <!--EndFragment--></div> </div>
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<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN-BOTTOM: 11pt; MARGIN-TOP: 0pt; text-align: justify"> <strong><em>Proven and Probable Ore Reserves</em></strong></p> <p style="LINE-HEIGHT: 13pt; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 11pt; FONT-SIZE: 11pt"> At least annually, management will review the reserves used to estimate the quantities and grades of ore at our mines which we believe can be recovered and sold economically. Management's calculations of proven and probable ore reserves are based on engineering and geological estimates, including future metals prices and operating costs. From time to time, management will obtain external audits of reserves. To date, we have not obtained any third party report regarding potential reserves on our owned and leased property at War Eagle Mountain, and accordingly we have not estimated that there are any proven or probable reserves on our property.</p> <p style="LINE-HEIGHT: 13pt; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 11pt; FONT-SIZE: 11pt"> Reserve estimates will change as existing reserves are depleted through production and as production costs and/or metals prices change. A significant drop in metals prices may reduce reserves by making some portion of such ore uneconomic to develop and produce. Changes in reserves may also reflect that actual grades of ore processed may be different from stated reserve grades because of variation in grades in areas mined, mining dilution and other factors. Estimated reserves, particularly for properties that have not yet commenced production, may require revision based on actual production experience. It is reasonably possible that certain of our estimates of proven and probable ore reserves will change in the near term, which could result in a change to estimated future cash flows, associated carrying values of the asset and amortization rates in future reporting periods, among other things.</p> <p style="LINE-HEIGHT: 13pt; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 11pt; FONT-SIZE: 11pt"> Declines in the market prices of metals, increased production or capital costs, reduction in the grade or tonnage of the deposit or an increase in the dilution of the ore or reduced recovery rates may render ore reserves uneconomic to exploit unless the utilization of forward sales contracts or other hedging techniques are sufficient to offset such effects. If our realized price for the metals we produce were to decline substantially below the levels set for calculation of reserves for an extended period, there could be material delays in the development of new projects, net losses, reduced cash flow, restatements or reductions in reserves and asset write-downs in the applicable accounting periods. Reserves should not be interpreted as assurances of mine life or of the profitability of current or future operations. No assurance can be given that the estimate of the amount of metal or the indicated level of recovery of these metals will be realized.</p> <p style="LINE-HEIGHT: 13pt; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 11pt; FONT-SIZE: 11pt"> To date, we have not obtained any third party report regarding potential reserves on our owned and leased property at War Eagle Mountain, and accordingly we have not estimated that there are any proven or probable reserves on our property.</p> <!--EndFragment--></div> </div>
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<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN-BOTTOM: 11pt; MARGIN-TOP: 0pt; text-align: justify"> <strong><em>Reclamation and Remediation Costs (Asset Retirement Obligations)</em></strong></p> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN-BOTTOM: 11pt; MARGIN-TOP: 0pt; text-align: justify"> We accrue costs associated with environmental remediation obligations in accordance with Accounting Standards Codification 410, "Asset Retirement and Environmental Obligations." ASC No. 410 requires us to record a liability for the present value of our estimated environmental remediation costs, and the related asset created with it, in the period in which the liability is incurred. The liability will be accreted and the asset will be depreciated over the life of the related assets. Adjustments for changes resulting from the passage of time and changes to either the timing or amount of the original present value estimate underlying the obligation will be made.</p> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN-BOTTOM: 11pt; MARGIN-TOP: 0pt; text-align: justify"> Future closure, reclamation and environmental-related expenditures are difficult to estimate, in many circumstances, due to the early stage nature of investigations, and uncertainties associated with defining the nature and extent of environmental contamination and the application of laws and regulations by regulatory authorities and changes in reclamation or remediation technology. We periodically review accrued liabilities for such reclamation and remediation costs as evidence becomes available indicating that our liabilities have potentially changed. Changes in estimates at our non-operating properties are reflected in current period net income (loss). We had no accruals for closure costs, reclamation and environmental matters for operating and non-operating properties at March 31, 2013.</p> <!--EndFragment--></div> </div>
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<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN-BOTTOM: 11pt; MARGIN-TOP: 0pt; text-align: justify"> <strong><em>Cash and Cash Equivalents</em></strong></p> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN-BOTTOM: 11pt; MARGIN-TOP: 0pt; text-align: justify"> Cash and cash equivalents consist of all cash balances and highly liquid investments with an original maturity of three months or less. Because of the short maturity of these investments, the carrying amounts approximate their fair value.</p> <!--EndFragment--></div> </div>
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<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN-BOTTOM: 11pt; MARGIN-TOP: 0pt; text-align: justify"> NOTE 7 - COMMITMENTS AND CONTINGENCIES</p> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN-BOTTOM: 11pt; MARGIN-TOP: 0pt; text-align: justify"> On October 11, 2007, we entered into a lease agreement with GoldLand, under which we leased its mineral rights on War Eagle Mountain. Under the lease, we are responsible for all mining activities on War Eagle Mountain, and we are obligated to pay GoldLand annual lease payments of $1,000,000, payable on a monthly basis, a monthly non-accountable expense reimbursement of $10,000 during any month in which ore is mined from the leased premises, and a royalty of 15% of all amounts we receive from the processing of ore mined from tailing piles on the premises or through shafts or adits located on the premises. The lease currently expires on October 1, 2026, although we have the right to extend the lease for an additional five years upon payment of a lease extension fee of $1,000,000.</p> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN-BOTTOM: 11pt; MARGIN-TOP: 0pt; text-align: justify"> On June 4, 2012, we issued a convertible promissory note to JMJ Financial in the original principal amount of $315,000 (the "June Note"). On July 12, 2012, we issued a convertible promissory note to JMJ Financial in the original principal amount of $525,000 (the "July Note" and with the June Note, the "Notes"). The Notes are convertible into Class A Common Stock at a conversion price equal to 80% of the three lowest daily average trading prices of the Common Stock during the 15 trading days preceding the conversion. On November 30, 2012, JMJ submitted a conversion request for $54,079.20 of indebtedness under the June Note, which by JMJ's calculations would have required us to issue JMJ 3,000,000 shares of Class A Common Stock. On December 12, 2012, JMJ submitted another conversion request for $52,360 of indebtedness under the June Note, which by JMJ's calculations would have required us to issue JMJ 3,500,000 shares of Class A Common Stock. We did not honor either conversion request because of our belief that JMJ was impermissibly shorting our Class A Common Stock, and was improperly manipulating the market price of our Class A Common Stock. On December 17, 2012, JMJ issued us a notice of default. On December 18, 2012, JMJ sent us a Notice of Acceleration for immediate payment of all amounts due under both Notes. On December 21, 2012, JMJ filed a lawsuit against us and Pierre Quilliam, our chief executive officer. The lawsuit seeks a judgment against us for all amounts due under both Notes. The lawsuit also seeks a judgment against Mr. Quilliam for amounts due under both Notes on the theory of fraudulent inducement and/or fraudulent misrepresentation. We are defending the lawsuit vigorously.</p> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN-BOTTOM: 11pt; MARGIN-TOP: 0pt; text-align: justify"> In July 2012, we filed a lawsuit against Earll Excavations, Inc. ("EEI") and William Earll ("Earll") in Owyhee County, Idaho seeking damages of $2,000,000. In the lawsuit, we contend that EEI failed to complete improvements to the Sinker Tunnel and construction of our metallurgical laboratory complex in accordance with the contracts. Our lawsuit also seeks damages for Earll's and EEI's breach of a confidentiality agreement, breach of an implied covenant of good faith and fair dealing, and for slander. At about the same time that we filed our lawsuit, EEI filed suit against us in Owyhee County, Idaho. EEI's lawsuit seeks damages of $477,783 for amounts that EEI contends it is owed for construction services performed on the Sinker Tunnel, construction services performed on the Diamond Creek Mill, hauling services, and road maintenance, as well as managerial services provided to Diamond Creek Mill. We dispute the claims of EEI and intend to defend its suit, and prosecute our claims, vigorously.</p> <!--EndFragment--></div> </div>
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<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN-BOTTOM: 11pt; MARGIN-TOP: 0pt; text-align: justify"> NOTE 3 - NOTES PAYABLE</p> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN-BOTTOM: 11pt; MARGIN-TOP: 0pt; text-align: justify"> <em>7% Two Year Notes</em></p> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN-BOTTOM: 11pt; MARGIN-TOP: 0pt; text-align: justify"> As of March 31, 2013, we had outstanding $2,050,219 of two-year promissory notes that we have issued to various investors starting in 2011. Interest accrues on the notes at the rate of 7% per year, and is payable monthly, except for notes issued to New Vision Financial, Ltd., which provide that interest is payable annually. Principal and interest due on the notes is convertible into shares of Class A Common Stock at the election of the holder at conversion prices ranging from $0.012 to $0.275 per share. The conversion price of the notes is set at the market price of the Class A Common Stock on the date of issuance. The notes mature at various dates ranging from July 22, 2013 to March 28, 2015. During the three months ended March 31, 2013, we issued $301,741 of new notes.</p> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN-BOTTOM: 11pt; MARGIN-TOP: 0pt; text-align: justify"> During the three months ended March 31, 2013, we issued 4,000,000 shares of our Class A Common Stock upon conversion of notes payable with an aggregate principal amount of $40,000.</p> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN-BOTTOM: 11pt; MARGIN-TOP: 0pt; text-align: justify"> During the three months ended March 31, 2013, we issued 8,603,937 shares of our Class A Common Stock upon conversion of notes payable with an aggregate principal amount of $135,000. These conversions were at prices lower than the conversion price at the date of issuance. The conversion of the notes at discounts to their stated conversion prices resulted in the recognition of an additional expense of $91,271 and a corresponding increase to paid in capital.</p> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN-BOTTOM: 11pt; MARGIN-TOP: 0pt; text-align: justify"> <em>8% Notes</em></p> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN-BOTTOM: 11pt; MARGIN-TOP: 0pt; text-align: justify"> As of March 31, 2013, we had outstanding $339,682 of two-year promissory notes that we have issued to various investors starting in 2012. Interest accrues on the notes at the rate of 8% per year, and is payable monthly. Principal and interest due on the notes is convertible into shares of Class A Common Stock at the election of the holder at conversion prices ranging from $0.0162 to $0.031 per share. The conversion price of the notes is set at the market price of the Class A Common Stock on the date of issuance. The notes mature at various dates ranging from June 9, 2014 to September 6, 2014. $301,182 of the notes were issued in 2012 and mature two years after the date of issuance. During the three months ended March 31, 2013, we issued $38,500 of new notes that mature one year after the date of issuance. The notes issued in the three months ended March 31, 2013 are also convertible into gold at the market price at the option of the lender.</p> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN-BOTTOM: 11pt; MARGIN-TOP: 0pt; text-align: justify"> The maturities of 7% and 8% notes payable are as follows:</p> <div style="text-align: center"> <table style="FONT-SIZE: 10pt" cellspacing="0"> <tr> <td width="111"> </td> <td width="20"> </td> <td width="94"> </td> </tr> <tr> <td valign="bottom" width="148"> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN: 0pt; text-align: justify"> 2013</p> </td> <td valign="bottom" width="26"> </td> <td valign="bottom" width="126"> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN: 0pt; text-align: right"> $ 314,000</p> </td> </tr> <tr> <td valign="bottom" width="148"> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN: 0pt; text-align: justify"> 2014</p> </td> <td valign="bottom" width="26"> </td> <td valign="bottom" width="126"> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN: 0pt; text-align: right"> 1,887,660</p> </td> </tr> <tr> <td valign="bottom" width="148"> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN: 0pt; text-align: justify"> 2015</p> </td> <td valign="bottom" width="26"> </td> <td valign="bottom" width="126"> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN: 0pt; text-align: right"> 188,241</p> </td> </tr> <tr> <td valign="bottom" width="148"> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN: 0pt; text-align: justify"> Total</p> </td> <td valign="bottom" width="26"> </td> <td style="BORDER-BOTTOM: #000000 0.5pt solid; BORDER-TOP: #000000 0.5pt solid" valign="bottom" width="126"> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN: 0pt; text-align: right"> 2,389,901</p> </td> </tr> <tr> <td valign="bottom" width="148"> </td> <td valign="bottom" width="26"> </td> <td valign="bottom" width="126"> </td> </tr> <tr> <td valign="bottom" width="148"> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN: 0pt; text-align: justify"> Less current maturities</p> </td> <td valign="bottom" width="26"> </td> <td valign="bottom" width="126"> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN: 0pt; text-align: right"> (2,241,660)</p> </td> </tr> <tr> <td valign="bottom" width="148"> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN: 0pt; text-align: justify"> Long term debt</p> </td> <td valign="bottom" width="26"> </td> <td style="BORDER-BOTTOM: #000000 3pt double; BORDER-TOP: #000000 0.5pt solid" valign="bottom" width="126"> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN: 0pt; text-align: right"> $ 148,241</p> </td> </tr> </table> </div> <p style="MARGIN-BOTTOM: 11pt; MARGIN-TOP: 0pt; text-align: justify"> <br /> </p> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN-BOTTOM: 11pt; MARGIN-TOP: 0pt; text-align: justify"> <em>Land Purchase Note</em></p> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN-BOTTOM: 11pt; MARGIN-TOP: 0pt; text-align: justify"> On December 3, 2009, we executed a promissory note for $225,000 as partial consideration for the purchase of land in Idaho. The promissory note is payable without interest in ten annual installments of $22,500 each, with the first installment being due on January 1, 2010. The balance due on the note at March 31, 2013 was $157,485.</p> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN-BOTTOM: 11pt; MARGIN-TOP: 0pt; text-align: justify"> <em>Iliad Research & Trading, LP Convertible Note</em></p> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN-BOTTOM: 11pt; MARGIN-TOP: 0pt; text-align: justify"> On March 30, 2012 we issued a convertible promissory note to Iliad Research & Trading, LP ("Iliad") in the original principal amount of $566,500. Our net proceeds were $500,000, after deducting original issue discount of $51,500 and attorney's fees and costs of the investor of $15,000. The note bears interest at 8% per annum, and is payable in twelve monthly installments beginning on October 1, 2012 and continuing for each of the next eleven calendar months. Each monthly payment will be equal to $47,208.33, plus any accrued and unpaid interest as of the installment date. Any installment payment may be either cash or shares of common stock, at our election, except that we may not pay less than six of the twelve installments in shares of common stock. Also, of the first six installment payments not less than three must be in shares of common stock, and of the last six installment payments not less than three must be in shares of common stock. If we make an installment payment in cash that we are required to make in shares of common stock, then we will be required to pay a 25% penalty on the amount of the installment payment. The note is convertible into shares of Class A Common Stock at $0.04 per share, subject to adjustment downward under certain circumstances defined in the note.</p> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN-BOTTOM: 10.1pt; MARGIN-TOP: 0pt; text-align: justify"> <em>JMJ Financial Convertible Note</em></p> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN-BOTTOM: 10.1pt; MARGIN-TOP: 0pt; text-align: justify"> On June 4, 2012, we issued a convertible promissory note in the original principal amount of $315,000 to JMJ Financial. The note bears interest at the rate of 5% per annum. All principal and accrued interest is due and payable under the note on December 4, 2013. The note is convertible into shares of Class A Common Stock at any time at the option of the holder. The conversion price is equal to 80% of the three lowest daily average trading prices of our Class A Common Stock during the 15 trading days preceding any conversion. We received gross proceeds of $300,000, which was net of original issue discount of $15,000. We cannot prepay any part of the note without the prior consent of the holder. The note is subject to standard default provisions.</p> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN-BOTTOM: 10.1pt; MARGIN-TOP: 0pt; text-align: justify"> We also issued the holder a warrant to purchase 10,000,000 shares of Class A Common Stock for $0.03 per share at any time until June 4, 2016. The warrant must be exercised for cash, unless after the earlier of (i) the six (6) month anniversary of the date of the note and (ii) the completion of the then-applicable holding period required by Rule 144, there is no effective registration statement registering shares issuable upon exercise of the warrant, in which event the holder may exercise the warrant on a "cashless basis." In October 2012, we obtained approval of a registration statement covering the shares issuable upon exercise of the warrant, and therefore the warrant may not be exercised on a cashless basis.</p> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN-BOTTOM: 10.1pt; MARGIN-TOP: 0pt; text-align: justify"> The holder has the right to loan us up to $1,000,000 more in multiple transactions on the same or better terms for a three year period following the date of this transaction. We also granted the holder piggyback registration rights, under which we are required to include all shares issuable upon conversion of the Note in any future registration statement filed by the us, other than a registration statement filed on Form S-8 or a registration statement that is a post-effective amendment to a registration statement that is in effect on the date of the Purchase Agreement.</p> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN-BOTTOM: 10.1pt; MARGIN-TOP: 0pt; text-align: justify"> In connection with the loan from JMJ Financial, we also issued to Iliad a warrant to 16,666,667 shares of Common Stock at an exercise price of $0.03 per share until June 4, 2016. The form of warrant issued to Iliad is the same as the form of warrant issued to JMJ.</p> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN-BOTTOM: 10.1pt; MARGIN-TOP: 0pt; text-align: justify"> On July 12, 2012, we issued a convertible promissory note in the original principal amount of $525,000 to JMJ Financial. The note bears interest at the rate of 5% per annum. All principal and accrued interest is due and payable under the note on January 12, 2014. The note is convertible into shares of Class A Common Stock at any time at the option of the holder. The conversion price is equal to 80% of the three lowest daily average trading prices of the Common Stock during the 15 trading days preceding any conversion. We received gross proceeds of $500,000, which was net of original issue discount of $25,000. We cannot prepay any part of the note without the prior consent of the holder. The note is subject to standard default provisions.</p> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN-BOTTOM: 10.1pt; MARGIN-TOP: 0pt; text-align: justify"> We also issued the holder a warrant to purchase 16,666,667 shares of Common Stock for $0.03 per share at any time until January 12, 2016. The form of the warrant is the same as the warrant that was issued in connection with the June 4, 2012 loan from JMJ Financial.</p> <!--EndFragment--></div> </div>
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2013-07-22
2015-03-28
2014-06-09
2014-09-06
2013-12-04
2014-01-12
2013-07-22
2015-03-28
22500
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15000
25000
105000
96343
1236849
193813
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1534585
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN-BOTTOM: 11pt; MARGIN-TOP: 0pt; text-align: justify"> <strong><em>Depreciation, Depletion and Amortization</em></strong></p> <p style="LINE-HEIGHT: 13pt; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 11pt; FONT-SIZE: 11pt"> Capitalized costs are depreciated or depleted using the straight-line method or unit-of-production method at rates sufficient to depreciate such costs over the shorter of estimated productive lives of such facilities or the useful life of the individual assets. Productive lives do not exceed the useful life of the individual asset. Determination of expected useful lives for amortization calculations are made on a property-by-property or asset-by-asset basis at least annually. Our estimates for mineral reserves are a key component in determining our units of production depreciation rates. Our estimates of proven and probable ore reserves may change, possibly in the near term, resulting in changes to depreciation, depletion and amortization rates in future reporting periods.</p> <p style="LINE-HEIGHT: 13pt; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 11pt; FONT-SIZE: 11pt"> Undeveloped mineral interests are amortized on a straight-line basis over their estimated useful lives taking into account residual values. At such time as an undeveloped mineral interest is converted to proven and probable reserves, the remaining unamortized basis is amortized on a unit-of-production basis as described above.</p> <!--EndFragment--></div> </div>
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<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN-BOTTOM: 11pt; MARGIN-TOP: 0pt; text-align: justify"> <strong><em>Basic and Diluted Per Common Share</em></strong></p> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN-BOTTOM: 11pt; MARGIN-TOP: 0pt; text-align: justify"> Basic earnings per common share is computed by dividing income available to common stockholders by the weighted average number of common shares assumed to be outstanding during the period of computation. Diluted earnings per share is computed similar to basic earnings per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. Because we have incurred net losses, basic and diluted loss per share are the same since additional potential common shares would be anti-dilutive.</p> <!--EndFragment--></div> </div>
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271575
4649584
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN-BOTTOM: 11pt; MARGIN-TOP: 0pt; text-align: justify"> <strong><em>Goodwill</em></strong></p> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN-BOTTOM: 11pt; MARGIN-TOP: 0pt; text-align: justify"> We evaluate, on at least an annual basis during the fourth quarter, the carrying amount of goodwill to determine whether current events and circumstances indicate that such carrying amount may no longer be recoverable. To accomplish this, we compare the estimated fair value of our reporting units to their carrying amounts. If the carrying value of a reporting unit exceeds its estimated fair value, we compare the implied fair value of the reporting unit's goodwill to its carrying amount, and any excess of the carrying value over the fair value is charged to earnings.</p> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN-BOTTOM: 11pt; MARGIN-TOP: 0pt; text-align: justify"> Our fair value estimates are based on numerous assumptions and it is possible that actual fair value will be significantly different than the estimates, as actual future quantities of recoverable minerals, gold and other commodity prices, production levels and operating costs of production and capital are each subject to significant risks and uncertainties.</p> <!--EndFragment--></div> </div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN-BOTTOM: 11pt; MARGIN-TOP: 0pt; text-align: justify"> <strong><em>Impairment of Long-Lived Assets</em></strong></p> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN-BOTTOM: 11pt; MARGIN-TOP: 0pt; text-align: justify"> We review and evaluate our long-lived assets for impairment when events or changes in circumstances indicate that the related carrying amounts may not be recoverable. An impairment is considered to exist if the total estimated future cash flows on an undiscounted basis are less than the carrying amount of the assets, including goodwill, if any. An impairment loss is measured and recorded based on discounted estimated future cash flows. Future cash flows are estimated based on quantities of recoverable minerals, expected gold and other commodity prices (considering current and historical prices, price trends and related factors), production levels and operating costs of production and capital, all based on life-of-mine plans. Existing proven and probable reserves and value beyond proven and probable reserves, including mineralization other than proven and probable reserves and other material that is not part of the measured, indicated or inferred resource base, are included when determining the fair value of mine site reporting units at acquisition and, subsequently, in determining whether the assets are impaired. The term "recoverable minerals" refers to the estimated amount of gold or other commodities that will be obtained after taking into account losses during ore processing and treatment. Estimates of recoverable minerals from such exploration stage mineral interests are risk adjusted based on management's relative confidence in such materials. In estimating future cash flows, assets are grouped at the lowest level for which there are identifiable cash flows that are largely independent of future cash flows from other asset groups. Our estimates of future cash flows are based on numerous assumptions and it is possible that actual future cash flows will be significantly different than the estimates, as actual future quantities of recoverable minerals, gold and other commodity prices, production levels and operating costs of production and capital are each subject to significant risks and uncertainties.</p> <!--EndFragment--></div> </div>
-8496
-329188
1238265
-119468
1289296
703776
46718
59583
1728781
164024
14946
294601
246704
2618655
-66829
-61929
640849
1457177
953032
91271
1467926
2180270
271058
64431
1354209
120873
74199
2538929
2618655
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN-BOTTOM: 11pt; MARGIN-TOP: 0pt; text-align: justify"> <strong><em>Inventories</em></strong></p> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN-BOTTOM: 11pt; MARGIN-TOP: 0pt; text-align: justify"> Inventories are stated at the lower of average costs incurred or estimated net realizable value. Inventories include metals product inventory, which is determined by the stage at which the ore is in the production process (stockpiled ore, work in process and finished goods).</p> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN-BOTTOM: 11pt; MARGIN-TOP: 0pt; text-align: justify"> Stockpiled ore inventory represents ore that has been hauled our mill site for further processing. Stockpiles are measured by estimating the number of tons added and removed from the stockpile, the number of contained metal ounces or pounds (based on assay data) and the estimated metallurgical recovery rates (based on the expected processing method). Stockpile ore tonnages are verified by periodic surveys. Costs are allocated to a stockpile based on relative values of material stockpiled and processed using current mining costs incurred up to the point of stockpiling the ore, including applicable overhead, depreciation, depletion and amortization relating to mining operations, and removed at each stockpile's average cost per recoverable unit.</p> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN-BOTTOM: 11pt; MARGIN-TOP: 0pt; text-align: justify"> Work in process inventory represents materials that are currently in the process of being converted to a saleable product and includes inventories in our milling process. In-process material is measured based on assays of the material fed into the process and the projected recoveries of the respective plants. In-process inventories are valued at the average cost of the material fed into the process attributable to the source material coming from the mines and stockpiles, plus the in-process conversion costs, including applicable depreciation relating to the process facilities incurred to that point in the process.</p> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN-BOTTOM: 11pt; MARGIN-TOP: 0pt; text-align: justify"> Finished goods inventory includes bullion doré and concentrates at our operations, bullion doré in transit to refiners and bullion dore in our accounts at refineries. Inventories are valued at the lower of full cost of production or net realizable value based on current metals prices.</p> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN-BOTTOM: 11pt; MARGIN-TOP: 0pt; text-align: justify"> At the present time, our inventories consist of the historical cost of transporting raw ore from our mine site to our mill site for further processing and a proportionate amount of our direct mill operating expenses based on the amount of time that the mill is operational in the period. All other direct mill operating expenses are expensed as incurred.</p> <!--EndFragment--></div> </div>
367111
1241038
20998929
119446
104644
2896628
250000
250000
1500000
2026-10-01
4714451
4511630
7988396
7599609
4566210
4104402
2010-01-01
2012-10-01
1000000
3675480
2389901
2050219
339682
157485
2241660
314000
188241
1887660
148241
148241
407228
10000
477783
2850073
2842253
265741
928137
11253617
-42376
-60085
-4188017
-226506
-840776
-7065600
-2028153
-3893514
-44805193
-2028153
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN-BOTTOM: 11pt; MARGIN-TOP: 0pt; text-align: justify"> <strong><em>Significant Recent Accounting Pronouncements</em></strong></p> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN-BOTTOM: 9.15pt; MARGIN-TOP: 0pt; text-align: justify"> In May 2011, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2011-04, "Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and International Financial Reporting Standards ("IFRS")." This pronouncement was issued to provide a consistent definition of fair value and ensure that the fair value measurement and disclosure requirements are similar between U.S. GAAP and IFRS. ASU 2011-04 changes certain fair value measurement principles and changes the disclosure requirements to include quantitative information about unobservable inputs used for level 3 fair value measurements. This pronouncement is effective for reporting periods beginning on or after December 15, 2011 (early adoption is prohibited). The Company is evaluating the potential impact of adopting this guidance on its consolidated financial position, results of operations, cash flows, and disclosures.</p> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN-BOTTOM: 9.15pt; MARGIN-TOP: 0pt; text-align: justify"> In June 2011, the FASB issued ASU No. 2011-05, "Presentation of Comprehensive Income." ASU 2011-05 eliminates the option to report other comprehensive income and its components in the statement of changes in stockholders' equity and requires an entity to present the total of comprehensive income, the components of net income and the components of other comprehensive income either in a single continuous statement or in two separate but consecutive statements. This pronouncement is effective for fiscal years, and interim periods within those years, beginning after December 15, 2011 (early adoption is permitted). The Company is evaluating the potential impact of adopting this guidance on its consolidated financial position, results of operations, cash flows, and disclosures.</p> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN-BOTTOM: 9.15pt; MARGIN-TOP: 0pt; text-align: justify"> In December 2011, the FASB issued ASU No. 2011-12, "Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05." ASU 2011-12 indefinitely defers certain provisions of ASU 2011-05 relating to the presentation of reclassification adjustments out of accumulated other comprehensive income by component. This pronouncement is effective for fiscal years, and interim periods within those years, beginning after December 15, 2011.</p> <!--EndFragment--></div> </div>
3283517
2906605
575001
1665824
2420156
41609817
-1665824
-2361157
-41270714
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN-BOTTOM: 11pt; MARGIN-TOP: 0pt; text-align: justify"> NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS</p> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN-BOTTOM: 11pt; MARGIN-TOP: 0pt; text-align: justify"> Silver Falcon Mining, Inc. (the "Company," "we" or "us") was formed in the State of Delaware on October 11th, 2007. On October 15, 2007, we completed a holding company reorganization with Dicut, Inc. ("Dicut") pursuant to Section 251(g) of the Delaware General Corporation Law. Dicut previously operated in the information technology business, but ceased operations in 2005.</p> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN-BOTTOM: 11pt; MARGIN-TOP: 0pt; text-align: justify"> On October 11, 2007, GoldLand Holdings Co. ("Goldland") leased its mineral rights on War Eagle Mountain to us. Under the lease, we are responsible for all mining activities on War Eagle Mountain, and we are obligated to pay GoldLand annual lease payments of $1,000,000, payable on a monthly basis, a monthly non-accountable expense reimbursement of $10,000 during any month in which ore is mined from the leased premises, and a royalty of 15% of all amounts we receive from the processing of ore extracted from tailing piles on Goldland's land or through shafts or adits located on its land. The lease provides that lease payments must commence April 1, 2008, but because we were unable to commence operations according to our original schedule, we agreed with Goldland to extend the commencement date several times, to January 1, 2012, and extended the lease term by an equal amount each time. The lease currently expires on October 1, 2026.</p> <!--EndFragment--></div> </div>
22797
9900
294000
1534854
1951979
7697
12511
203992
63000
15000
7820
59326
2095985
34556
759
2131812
953032
312183
500000
300000
500000
65667
140667
301741
935700
11435708
338113
75001
320419
1164780
16796987
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN-BOTTOM: 11pt; MARGIN-TOP: 0pt; text-align: justify"> NOTE 4 - MILL EQUIPMENT</p> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN-BOTTOM: 11pt; MARGIN-TOP: 0pt; text-align: left"> The following table summarizes the Company's equipment as of March 31, 2013.</p> <div style="text-align: center"> <table style="FONT-SIZE: 10pt" cellspacing="0"> <tr> <td width="164"> </td> <td width="53"> </td> <td width="73"> </td> </tr> <tr> <td valign="bottom" width="218"> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN: 0pt; text-align: justify"> Mill equipment</p> </td> <td valign="bottom" width="70"> </td> <td valign="bottom" width="97"> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN: 0pt; text-align: right"> $ 1,979,321</p> </td> </tr> <tr> <td valign="bottom" width="218"> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN: 0pt; text-align: justify"> Vehicles</p> </td> <td valign="bottom" width="70"> </td> <td valign="bottom" width="97"> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN: 0pt; text-align: right"> 177,317</p> </td> </tr> <tr> <td valign="bottom" width="218"> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN: 0pt; text-align: justify"> Accumulated depreciation</p> </td> <td valign="bottom" width="70"> </td> <td valign="bottom" width="97"> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN: 0pt; text-align: right"> (1,236,849)</p> </td> </tr> <tr> <td valign="bottom" width="218"> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN: 0pt; text-align: justify"> Net</p> </td> <td valign="bottom" width="70"> </td> <td style="BORDER-BOTTOM: #000000 3pt double; BORDER-TOP: #000000 0.5pt solid" valign="bottom" width="97"> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN: 0pt; text-align: right"> $ 919,789</p> </td> </tr> </table> </div> <!--EndFragment--></div> </div>
1979321
177317
919789
990233
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN-BOTTOM: 11pt; MARGIN-TOP: 0pt; text-align: justify"> <strong><em>Property, Plant and Equipment</em></strong></p> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN-BOTTOM: 11pt; MARGIN-TOP: 0pt; text-align: justify"> Expenditures for new facilities or equipment and expenditures that extend the useful lives of existing facilities or equipment are capitalized and recorded at cost. The facilities and equipment are depreciated using the straight-line method at rates sufficient to depreciate such costs over the estimated productive lives.</p> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN-BOTTOM: 11pt; MARGIN-TOP: 0pt; text-align: justify"> Costs are capitalized when it has been determined an ore body can be economically developed as a result of establishing proven and probable reserves. The development stage begins at new projects when our management and/or Board of Directors makes the decision to bring a mine into commercial production, and ends when the production stage, or exploitation of reserves, begins. Expenditures incurred during the development and production stages for new facilities, new assets or expenditures that extend the useful lives of existing facilities and major mine development expenditures are capitalized, including primary development costs such as costs of building access ways, shaft sinking, lateral development, drift development, ramps and infrastructure developments.</p> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN-BOTTOM: 11pt; MARGIN-TOP: 0pt; text-align: justify"> Costs for exploration, secondary development at operating mines, and maintenance and repairs on capitalized property, plant and equipment are charged to operations as incurred. Exploration costs include those relating to activities carried out (a) in search of previously unidentified mineral deposits, (b) at undeveloped concessions, or (c) at operating mines already containing proven and probable reserves, where a determination remains pending as to whether new target deposits outside of the existing reserve areas can be economically developed. Secondary development costs are incurred for preparation of an ore body for production in a specific ore block, stope or work area, providing a relatively short-lived benefit only to the mine area they relate to, and not to the ore body as a whole.</p> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN-BOTTOM: 11pt; MARGIN-TOP: 0pt; text-align: justify"> When assets are retired or sold, the costs and related allowances for depreciation and amortization are eliminated from the accounts and any resulting gain or loss is reflected in current period net income (loss). Idle facilities placed on standby basis are carried at the lower of net carrying value or estimated net realizable value.</p> <!--EndFragment--></div> </div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN-BOTTOM: 11pt; MARGIN-TOP: 0pt; text-align: left"> The following table summarizes the Company's equipment as of March 31, 2013.</p> <div style="text-align: center"> <table style="FONT-SIZE: 10pt" cellspacing="0"> <tr> <td width="164"> </td> <td width="53"> </td> <td width="73"> </td> </tr> <tr> <td valign="bottom" width="218"> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN: 0pt; text-align: justify"> Mill equipment</p> </td> <td valign="bottom" width="70"> </td> <td valign="bottom" width="97"> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN: 0pt; text-align: right"> $ 1,979,321</p> </td> </tr> <tr> <td valign="bottom" width="218"> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN: 0pt; text-align: justify"> Vehicles</p> </td> <td valign="bottom" width="70"> </td> <td valign="bottom" width="97"> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN: 0pt; text-align: right"> 177,317</p> </td> </tr> <tr> <td valign="bottom" width="218"> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN: 0pt; text-align: justify"> Accumulated depreciation</p> </td> <td valign="bottom" width="70"> </td> <td valign="bottom" width="97"> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN: 0pt; text-align: right"> (1,236,849)</p> </td> </tr> <tr> <td valign="bottom" width="218"> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN: 0pt; text-align: justify"> Net</p> </td> <td valign="bottom" width="70"> </td> <td style="BORDER-BOTTOM: #000000 3pt double; BORDER-TOP: #000000 0.5pt solid" valign="bottom" width="97"> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN: 0pt; text-align: right"> $ 919,789</p> </td> </tr> </table> </div> <!--EndFragment--></div> </div>
703776
823244
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN-BOTTOM: 11pt; MARGIN-TOP: 0pt; text-align: justify"> NOTE 6 - RELATED PARTY TRANSACTIONS</p> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN-BOTTOM: 11pt; MARGIN-TOP: 0pt; text-align: justify"> We are obligated to pay Goldland $83,333 per month as rent under a lease of Goldland's interest in War Eagle Mountain dated October 11, 2007, plus a monthly non-accountable expense reimbursement of $10,000 during any month in which ore is mined from the leased premises, and a royalty of 15% of all amounts we receive from the processing of ore mined from the properties. The lease currently expires on October 1, 2026, although we have the right to extend the lease for an additional five years upon payment of a lease extension fee of $1,000,000. All of the officers and directors of GoldLand are also officers and directors of us. Instead of paying the rent in cash, we have, since January 1, 2012, satisfied our rental obligation by reductions in the amount that Goldland owes us, as discussed below.</p> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN-BOTTOM: 11pt; MARGIN-TOP: 0pt; text-align: justify"> During the three months ended March 31, 2013, we issued 12,000,000 shares valued at $294,000 to various officers of Goldland (who are also our officers) to pay compensation that will be owed to them by Goldland for the 2013 fiscal year. The value of the shares issued by us was recorded as an amount due to us by Goldland.</p> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN-BOTTOM: 11pt; MARGIN-TOP: 0pt; text-align: justify"> As of March 31, 2013 and December 31, 2012, Goldland owed us $1,232,447 and $1,187,282 respectively. The amounts are non-interest bearing, unsecured demand loans.</p> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN-BOTTOM: 11pt; MARGIN-TOP: 0pt; text-align: justify"> Pierre Quilliam, our chairman and chief executive officer, has made loans to us from time to time. The loans are non-interest bearing, unsecured demand loans. The amount outstanding to Mr. Quilliam at March 31, 2013 and December 31, 2012 was $215,181 and $156,713, respectively. The loans represent amounts paid by Mr. Quilliam on our behalf for expenses relating to various mill operating costs. In addition, we owe Bisell Investments of Florida, Inc. $243,987. Mr. Quilliam is President of Bisell Investments of Florida, Inc.</p> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN-BOTTOM: 11pt; MARGIN-TOP: 0pt; text-align: justify"> Thomas C. Ridenour, our chief financial officer and a director, has made loans to us from time to time. The loans are non-interest bearing, unsecured demand loans. The amount outstanding to Mr. Ridenour at March 31, 2013 and December 31, 2012 was $69,503 and $45,378, respectively.</p> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN-BOTTOM: 11pt; MARGIN-TOP: 0pt; text-align: justify"> Paul Parliament, one of our directors, has invested an aggregate $575,001 in our 7% two year notes, of which $75,001 was invested in the quarter ending March 31, 2013.</p> <!--EndFragment--></div> </div>
36000
73230
259758
338113
-44805193
-42777040
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN-BOTTOM: 11pt; MARGIN-TOP: 0pt; text-align: justify"> <strong><em>Revenue Recognition</em></strong></p> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN-BOTTOM: 11pt; MARGIN-TOP: 0pt; text-align: justify"> Sales of all metals products sold directly to refiners, including by-product metals, are recorded as revenues when title and risk of loss transfer to the refiner. Revenue is recognized, net of treatment and refining charges, from a sale when persuasive evidence of an arrangement exists, the price is determinable, the product has been delivered, the title has been transferred to the customer and collection of the sales price is reasonably assured. Upon delivery of our bullion dore to the refiner, we agree on a price based on assay results performed by our lab and the refiner.</p> <!--EndFragment--></div> </div>
58999
339103
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN-BOTTOM: 11pt; MARGIN-TOP: 0pt; text-align: justify"> The maturities of 7% and 8% notes payable are as follows:</p> <div style="text-align: center"> <table style="FONT-SIZE: 10pt" cellspacing="0"> <tr> <td width="111"> </td> <td width="20"> </td> <td width="94"> </td> </tr> <tr> <td valign="bottom" width="148"> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN: 0pt; text-align: justify"> 2013</p> </td> <td valign="bottom" width="26"> </td> <td valign="bottom" width="126"> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN: 0pt; text-align: right"> $ 314,000</p> </td> </tr> <tr> <td valign="bottom" width="148"> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN: 0pt; text-align: justify"> 2014</p> </td> <td valign="bottom" width="26"> </td> <td valign="bottom" width="126"> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN: 0pt; text-align: right"> 1,887,660</p> </td> </tr> <tr> <td valign="bottom" width="148"> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN: 0pt; text-align: justify"> 2015</p> </td> <td valign="bottom" width="26"> </td> <td valign="bottom" width="126"> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN: 0pt; text-align: right"> 188,241</p> </td> </tr> <tr> <td valign="bottom" width="148"> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN: 0pt; text-align: justify"> Total</p> </td> <td valign="bottom" width="26"> </td> <td style="BORDER-BOTTOM: #000000 0.5pt solid; BORDER-TOP: #000000 0.5pt solid" valign="bottom" width="126"> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN: 0pt; text-align: right"> 2,389,901</p> </td> </tr> <tr> <td valign="bottom" width="148"> </td> <td valign="bottom" width="26"> </td> <td valign="bottom" width="126"> </td> </tr> <tr> <td valign="bottom" width="148"> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN: 0pt; text-align: justify"> Less current maturities</p> </td> <td valign="bottom" width="26"> </td> <td valign="bottom" width="126"> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN: 0pt; text-align: right"> (2,241,660)</p> </td> </tr> <tr> <td valign="bottom" width="148"> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN: 0pt; text-align: justify"> Long term debt</p> </td> <td valign="bottom" width="26"> </td> <td style="BORDER-BOTTOM: #000000 3pt double; BORDER-TOP: #000000 0.5pt solid" valign="bottom" width="126"> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN: 0pt; text-align: right"> $ 148,241</p> </td> </tr> </table> </div> <!--EndFragment--></div> </div>
428129
458575
9821014
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN-BOTTOM: 11pt; MARGIN-TOP: 0pt; text-align: justify"> <strong><em>Stock Based Compensation</em></strong></p> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN-BOTTOM: 11pt; MARGIN-TOP: 0pt; text-align: justify"> We have issued and may issue stock in lieu of cash for certain transactions. The fair value of the stock, which is based on comparable cash purchases, third party quotations, or the value of services, whichever is more readily determinable, is used to value the transaction in accordance with Accounting Standards Codification 718, "Stock Compensation".</p> <!--EndFragment--></div> </div>
444000
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13050
9000000
480000
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN-BOTTOM: 11pt; MARGIN-TOP: 0pt; text-align: justify"> NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES</p> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN-BOTTOM: 11pt; MARGIN-TOP: 0pt; text-align: justify"> <strong><em>Revenue Recognition</em></strong></p> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN-BOTTOM: 11pt; MARGIN-TOP: 0pt; text-align: justify"> Sales of all metals products sold directly to refiners, including by-product metals, are recorded as revenues when title and risk of loss transfer to the refiner. Revenue is recognized, net of treatment and refining charges, from a sale when persuasive evidence of an arrangement exists, the price is determinable, the product has been delivered, the title has been transferred to the customer and collection of the sales price is reasonably assured. Upon delivery of our bullion dore to the refiner, we agree on a price based on assay results performed by our lab and the refiner.</p> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN-BOTTOM: 11pt; MARGIN-TOP: 0pt; text-align: justify"> <strong><em>Cash and Cash Equivalents</em></strong></p> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN-BOTTOM: 11pt; MARGIN-TOP: 0pt; text-align: justify"> Cash and cash equivalents consist of all cash balances and highly liquid investments with an original maturity of three months or less. Because of the short maturity of these investments, the carrying amounts approximate their fair value.</p> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN-BOTTOM: 11pt; MARGIN-TOP: 0pt; text-align: justify"> <strong><em>Inventories</em></strong></p> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN-BOTTOM: 11pt; MARGIN-TOP: 0pt; text-align: justify"> Inventories are stated at the lower of average costs incurred or estimated net realizable value. Inventories include metals product inventory, which is determined by the stage at which the ore is in the production process (stockpiled ore, work in process and finished goods).</p> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN-BOTTOM: 11pt; MARGIN-TOP: 0pt; text-align: justify"> Stockpiled ore inventory represents ore that has been hauled our mill site for further processing. Stockpiles are measured by estimating the number of tons added and removed from the stockpile, the number of contained metal ounces or pounds (based on assay data) and the estimated metallurgical recovery rates (based on the expected processing method). Stockpile ore tonnages are verified by periodic surveys. Costs are allocated to a stockpile based on relative values of material stockpiled and processed using current mining costs incurred up to the point of stockpiling the ore, including applicable overhead, depreciation, depletion and amortization relating to mining operations, and removed at each stockpile's average cost per recoverable unit.</p> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN-BOTTOM: 11pt; MARGIN-TOP: 0pt; text-align: justify"> Work in process inventory represents materials that are currently in the process of being converted to a saleable product and includes inventories in our milling process. In-process material is measured based on assays of the material fed into the process and the projected recoveries of the respective plants. In-process inventories are valued at the average cost of the material fed into the process attributable to the source material coming from the mines and stockpiles, plus the in-process conversion costs, including applicable depreciation relating to the process facilities incurred to that point in the process.</p> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN-BOTTOM: 11pt; MARGIN-TOP: 0pt; text-align: justify"> Finished goods inventory includes bullion doré and concentrates at our operations, bullion doré in transit to refiners and bullion dore in our accounts at refineries. Inventories are valued at the lower of full cost of production or net realizable value based on current metals prices.</p> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN-BOTTOM: 11pt; MARGIN-TOP: 0pt; text-align: justify"> At the present time, our inventories consist of the historical cost of transporting raw ore from our mine site to our mill site for further processing and a proportionate amount of our direct mill operating expenses based on the amount of time that the mill is operational in the period. All other direct mill operating expenses are expensed as incurred.</p> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN-BOTTOM: 11pt; MARGIN-TOP: 0pt; text-align: justify"> <strong><em>Property, Plant and Equipment</em></strong></p> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN-BOTTOM: 11pt; MARGIN-TOP: 0pt; text-align: justify"> Expenditures for new facilities or equipment and expenditures that extend the useful lives of existing facilities or equipment are capitalized and recorded at cost. The facilities and equipment are depreciated using the straight-line method at rates sufficient to depreciate such costs over the estimated productive lives.</p> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN-BOTTOM: 11pt; MARGIN-TOP: 0pt; text-align: justify"> Costs are capitalized when it has been determined an ore body can be economically developed as a result of establishing proven and probable reserves. The development stage begins at new projects when our management and/or Board of Directors makes the decision to bring a mine into commercial production, and ends when the production stage, or exploitation of reserves, begins. Expenditures incurred during the development and production stages for new facilities, new assets or expenditures that extend the useful lives of existing facilities and major mine development expenditures are capitalized, including primary development costs such as costs of building access ways, shaft sinking, lateral development, drift development, ramps and infrastructure developments.</p> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN-BOTTOM: 11pt; MARGIN-TOP: 0pt; text-align: justify"> Costs for exploration, secondary development at operating mines, and maintenance and repairs on capitalized property, plant and equipment are charged to operations as incurred. Exploration costs include those relating to activities carried out (a) in search of previously unidentified mineral deposits, (b) at undeveloped concessions, or (c) at operating mines already containing proven and probable reserves, where a determination remains pending as to whether new target deposits outside of the existing reserve areas can be economically developed. Secondary development costs are incurred for preparation of an ore body for production in a specific ore block, stope or work area, providing a relatively short-lived benefit only to the mine area they relate to, and not to the ore body as a whole.</p> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN-BOTTOM: 11pt; MARGIN-TOP: 0pt; text-align: justify"> When assets are retired or sold, the costs and related allowances for depreciation and amortization are eliminated from the accounts and any resulting gain or loss is reflected in current period net income (loss). Idle facilities placed on standby basis are carried at the lower of net carrying value or estimated net realizable value.</p> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN-BOTTOM: 11pt; MARGIN-TOP: 0pt; text-align: justify"> <strong><em>Proven and Probable Ore Reserves</em></strong></p> <p style="LINE-HEIGHT: 13pt; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 11pt; FONT-SIZE: 11pt"> At least annually, management will review the reserves used to estimate the quantities and grades of ore at our mines which we believe can be recovered and sold economically. Management's calculations of proven and probable ore reserves are based on engineering and geological estimates, including future metals prices and operating costs. From time to time, management will obtain external audits of reserves. To date, we have not obtained any third party report regarding potential reserves on our owned and leased property at War Eagle Mountain, and accordingly we have not estimated that there are any proven or probable reserves on our property.</p> <p style="LINE-HEIGHT: 13pt; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 11pt; FONT-SIZE: 11pt"> Reserve estimates will change as existing reserves are depleted through production and as production costs and/or metals prices change. A significant drop in metals prices may reduce reserves by making some portion of such ore uneconomic to develop and produce. Changes in reserves may also reflect that actual grades of ore processed may be different from stated reserve grades because of variation in grades in areas mined, mining dilution and other factors. Estimated reserves, particularly for properties that have not yet commenced production, may require revision based on actual production experience. It is reasonably possible that certain of our estimates of proven and probable ore reserves will change in the near term, which could result in a change to estimated future cash flows, associated carrying values of the asset and amortization rates in future reporting periods, among other things.</p> <p style="LINE-HEIGHT: 13pt; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 11pt; FONT-SIZE: 11pt"> Declines in the market prices of metals, increased production or capital costs, reduction in the grade or tonnage of the deposit or an increase in the dilution of the ore or reduced recovery rates may render ore reserves uneconomic to exploit unless the utilization of forward sales contracts or other hedging techniques are sufficient to offset such effects. If our realized price for the metals we produce were to decline substantially below the levels set for calculation of reserves for an extended period, there could be material delays in the development of new projects, net losses, reduced cash flow, restatements or reductions in reserves and asset write-downs in the applicable accounting periods. Reserves should not be interpreted as assurances of mine life or of the profitability of current or future operations. No assurance can be given that the estimate of the amount of metal or the indicated level of recovery of these metals will be realized.</p> <p style="LINE-HEIGHT: 13pt; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 11pt; FONT-SIZE: 11pt"> To date, we have not obtained any third party report regarding potential reserves on our owned and leased property at War Eagle Mountain, and accordingly we have not estimated that there are any proven or probable reserves on our property.</p> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN-BOTTOM: 11pt; MARGIN-TOP: 0pt; text-align: justify"> <strong><em>Depreciation, Depletion and Amortization</em></strong></p> <p style="LINE-HEIGHT: 13pt; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 11pt; FONT-SIZE: 11pt"> Capitalized costs are depreciated or depleted using the straight-line method or unit-of-production method at rates sufficient to depreciate such costs over the shorter of estimated productive lives of such facilities or the useful life of the individual assets. Productive lives do not exceed the useful life of the individual asset. Determination of expected useful lives for amortization calculations are made on a property-by-property or asset-by-asset basis at least annually. Our estimates for mineral reserves are a key component in determining our units of production depreciation rates. Our estimates of proven and probable ore reserves may change, possibly in the near term, resulting in changes to depreciation, depletion and amortization rates in future reporting periods.</p> <p style="LINE-HEIGHT: 13pt; MARGIN-TOP: 0pt; MARGIN-BOTTOM: 11pt; FONT-SIZE: 11pt"> Undeveloped mineral interests are amortized on a straight-line basis over their estimated useful lives taking into account residual values. At such time as an undeveloped mineral interest is converted to proven and probable reserves, the remaining unamortized basis is amortized on a unit-of-production basis as described above.</p> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN-BOTTOM: 11pt; MARGIN-TOP: 0pt; text-align: justify"> <strong><em>Impairment of Long-Lived Assets</em></strong></p> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN-BOTTOM: 11pt; MARGIN-TOP: 0pt; text-align: justify"> We review and evaluate our long-lived assets for impairment when events or changes in circumstances indicate that the related carrying amounts may not be recoverable. An impairment is considered to exist if the total estimated future cash flows on an undiscounted basis are less than the carrying amount of the assets, including goodwill, if any. An impairment loss is measured and recorded based on discounted estimated future cash flows. Future cash flows are estimated based on quantities of recoverable minerals, expected gold and other commodity prices (considering current and historical prices, price trends and related factors), production levels and operating costs of production and capital, all based on life-of-mine plans. Existing proven and probable reserves and value beyond proven and probable reserves, including mineralization other than proven and probable reserves and other material that is not part of the measured, indicated or inferred resource base, are included when determining the fair value of mine site reporting units at acquisition and, subsequently, in determining whether the assets are impaired. The term "recoverable minerals" refers to the estimated amount of gold or other commodities that will be obtained after taking into account losses during ore processing and treatment. Estimates of recoverable minerals from such exploration stage mineral interests are risk adjusted based on management's relative confidence in such materials. In estimating future cash flows, assets are grouped at the lowest level for which there are identifiable cash flows that are largely independent of future cash flows from other asset groups. Our estimates of future cash flows are based on numerous assumptions and it is possible that actual future cash flows will be significantly different than the estimates, as actual future quantities of recoverable minerals, gold and other commodity prices, production levels and operating costs of production and capital are each subject to significant risks and uncertainties.</p> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN-BOTTOM: 11pt; MARGIN-TOP: 0pt; text-align: justify"> <strong><em>Reclamation and Remediation Costs (Asset Retirement Obligations)</em></strong></p> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN-BOTTOM: 11pt; MARGIN-TOP: 0pt; text-align: justify"> We accrue costs associated with environmental remediation obligations in accordance with Accounting Standards Codification 410, "Asset Retirement and Environmental Obligations." ASC No. 410 requires us to record a liability for the present value of our estimated environmental remediation costs, and the related asset created with it, in the period in which the liability is incurred. The liability will be accreted and the asset will be depreciated over the life of the related assets. Adjustments for changes resulting from the passage of time and changes to either the timing or amount of the original present value estimate underlying the obligation will be made.</p> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN-BOTTOM: 11pt; MARGIN-TOP: 0pt; text-align: justify"> Future closure, reclamation and environmental-related expenditures are difficult to estimate, in many circumstances, due to the early stage nature of investigations, and uncertainties associated with defining the nature and extent of environmental contamination and the application of laws and regulations by regulatory authorities and changes in reclamation or remediation technology. We periodically review accrued liabilities for such reclamation and remediation costs as evidence becomes available indicating that our liabilities have potentially changed. Changes in estimates at our non-operating properties are reflected in current period net income (loss). We had no accruals for closure costs, reclamation and environmental matters for operating and non-operating properties at March 31, 2013.</p> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN-BOTTOM: 11pt; MARGIN-TOP: 0pt; text-align: justify"> <strong><em>Goodwill</em></strong></p> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN-BOTTOM: 11pt; MARGIN-TOP: 0pt; text-align: justify"> We evaluate, on at least an annual basis during the fourth quarter, the carrying amount of goodwill to determine whether current events and circumstances indicate that such carrying amount may no longer be recoverable. To accomplish this, we compare the estimated fair value of our reporting units to their carrying amounts. If the carrying value of a reporting unit exceeds its estimated fair value, we compare the implied fair value of the reporting unit's goodwill to its carrying amount, and any excess of the carrying value over the fair value is charged to earnings.</p> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN-BOTTOM: 11pt; MARGIN-TOP: 0pt; text-align: justify"> Our fair value estimates are based on numerous assumptions and it is possible that actual fair value will be significantly different than the estimates, as actual future quantities of recoverable minerals, gold and other commodity prices, production levels and operating costs of production and capital are each subject to significant risks and uncertainties.</p> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN-BOTTOM: 11pt; MARGIN-TOP: 0pt; text-align: justify"> <strong><em>Stock Based Compensation</em></strong></p> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN-BOTTOM: 11pt; MARGIN-TOP: 0pt; text-align: justify"> We have issued and may issue stock in lieu of cash for certain transactions. The fair value of the stock, which is based on comparable cash purchases, third party quotations, or the value of services, whichever is more readily determinable, is used to value the transaction in accordance with Accounting Standards Codification 718, "Stock Compensation".</p> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN-BOTTOM: 11pt; MARGIN-TOP: 0pt; text-align: justify"> <strong><em>Use of Estimates</em></strong></p> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN-BOTTOM: 11pt; MARGIN-TOP: 0pt; text-align: justify"> Our Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of our Consolidated Financial Statements requires that we make estimates and assumptions that affect the reported amounts of assets and liabilities and the related disclosure of contingent assets and liabilities at the date of the Consolidated Financial Statements and the reported amounts of revenues and expenses during the reporting period. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. Accordingly, actual results may differ significantly from these estimates under different assumptions or conditions.</p> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN-BOTTOM: 11pt; MARGIN-TOP: 0pt; text-align: justify"> <strong><em>Basic and Diluted Per Common Share</em></strong></p> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN-BOTTOM: 11pt; MARGIN-TOP: 0pt; text-align: justify"> Basic earnings per common share is computed by dividing income available to common stockholders by the weighted average number of common shares assumed to be outstanding during the period of computation. Diluted earnings per share is computed similar to basic earnings per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. Because we have incurred net losses, basic and diluted loss per share are the same since additional potential common shares would be anti-dilutive.</p> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN-BOTTOM: 11pt; MARGIN-TOP: 0pt; text-align: justify"> <strong><em>Significant Recent Accounting Pronouncements</em></strong></p> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN-BOTTOM: 9.15pt; MARGIN-TOP: 0pt; text-align: justify"> In May 2011, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2011-04, "Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and International Financial Reporting Standards ("IFRS")." This pronouncement was issued to provide a consistent definition of fair value and ensure that the fair value measurement and disclosure requirements are similar between U.S. GAAP and IFRS. ASU 2011-04 changes certain fair value measurement principles and changes the disclosure requirements to include quantitative information about unobservable inputs used for level 3 fair value measurements. This pronouncement is effective for reporting periods beginning on or after December 15, 2011 (early adoption is prohibited). The Company is evaluating the potential impact of adopting this guidance on its consolidated financial position, results of operations, cash flows, and disclosures.</p> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN-BOTTOM: 9.15pt; MARGIN-TOP: 0pt; text-align: justify"> In June 2011, the FASB issued ASU No. 2011-05, "Presentation of Comprehensive Income." ASU 2011-05 eliminates the option to report other comprehensive income and its components in the statement of changes in stockholders' equity and requires an entity to present the total of comprehensive income, the components of net income and the components of other comprehensive income either in a single continuous statement or in two separate but consecutive statements. This pronouncement is effective for fiscal years, and interim periods within those years, beginning after December 15, 2011 (early adoption is permitted). The Company is evaluating the potential impact of adopting this guidance on its consolidated financial position, results of operations, cash flows, and disclosures.</p> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN-BOTTOM: 9.15pt; MARGIN-TOP: 0pt; text-align: justify"> In December 2011, the FASB issued ASU No. 2011-12, "Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05." ASU 2011-12 indefinitely defers certain provisions of ASU 2011-05 relating to the presentation of reclassification adjustments out of accumulated other comprehensive income by component. This pronouncement is effective for fiscal years, and interim periods within those years, beginning after December 15, 2011.</p> <!--EndFragment--></div> </div>
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<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN-BOTTOM: 11pt; MARGIN-TOP: 0pt; text-align: justify"> NOTE 8 - CAPITAL STOCK</p> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN-BOTTOM: 11pt; MARGIN-TOP: 0pt; text-align: justify"> We are authorized to issue 10,000,000,000 shares of Class A Common Stock with a par value of $0.0001 per share, and 250,000,000 shares of Class B Common Stock with a par value of $0.0001 per share. Class A Common Stock and Class B Common Stock have equal rights to dividends and distributions. However, each outstanding share of Class A Common Stock is entitled to one vote on all matters that may be voted upon by the owners thereof at meetings of the stockholders, while each outstanding share of Class B Common Stock is entitled to forty votes on all matters that may be voted upon by the owners thereof at meetings of the stockholders. As of March 31, 2013, there were 914,394,199 and 15,865,419 shares of Class A Common Stock and Class B Common Stock issued and outstanding, respectively.</p> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN-BOTTOM: 11pt; MARGIN-TOP: 0pt; text-align: justify"> During the three months ended March 31, 2013, we issued shares of Class A Common Stock in the following transactions:</p> <p style="font-family: Symbol; FONT-FAMILY: Symbol; FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN-BOTTOM: -13pt; MARGIN-TOP: 0pt; PADDING-LEFT: 36pt; text-align: justify; TEXT-INDENT: -18pt"> ·</p> <p style="font-family: Times New Roman; FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN-BOTTOM: 11pt; MARGIN-TOP: 0pt; PADDING-LEFT: 36pt; text-align: justify"> 25,175,615 shares of Class A Common Stock upon conversion of promissory notes with a principal balance of $316,624.</p> <p style="font-family: Symbol; FONT-FAMILY: Symbol; FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN-BOTTOM: -13pt; MARGIN-TOP: 0pt; PADDING-LEFT: 36pt; text-align: justify; TEXT-INDENT: -18pt"> ·</p> <p style="font-family: Times New Roman; FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN-BOTTOM: 11pt; MARGIN-TOP: 0pt; PADDING-LEFT: 36pt; text-align: justify"> 18,579,497 shares of Class A Common Stock were issued to various vendors for consulting services valued at $367,111.</p> <p style="font-family: Symbol; FONT-FAMILY: Symbol; FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN-BOTTOM: -13pt; MARGIN-TOP: 0pt; PADDING-LEFT: 36pt; text-align: justify; TEXT-INDENT: -18pt"> ·</p> <p style="font-family: Times New Roman; FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN-BOTTOM: 11pt; MARGIN-TOP: 0pt; PADDING-LEFT: 36pt; text-align: justify"> 43,309,499 shares of Class A Common Stock valued at $1,100,061 were issued in payment of compensation.</p> <p style="font-family: Symbol; FONT-FAMILY: Symbol; FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN-BOTTOM: -13pt; MARGIN-TOP: 0pt; PADDING-LEFT: 36pt; text-align: justify; TEXT-INDENT: -18pt"> ·</p> <p style="font-family: Times New Roman; FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN-BOTTOM: 11pt; MARGIN-TOP: 0pt; PADDING-LEFT: 36pt; text-align: justify"> 12,000,000 shares of Class A Common Stock valued at $294,000 were issued in payment of compensation for GoldLand Officers.</p> <p style="font-family: Symbol; FONT-FAMILY: Symbol; FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN-BOTTOM: -13pt; MARGIN-TOP: 0pt; PADDING-LEFT: 36pt; text-align: justify; TEXT-INDENT: -18pt"> ·</p> <p style="font-family: Times New Roman; FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN-BOTTOM: 11pt; MARGIN-TOP: 0pt; PADDING-LEFT: 36pt; text-align: justify"> 320,731 shares of Class A Common Stock valued at $7,697 were issued in payment of interest.</p> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN-BOTTOM: 11pt; MARGIN-TOP: 0pt; text-align: justify"> As of March 31, 2013, the Company had outstanding notes payable to various investors in the original principal amount of $3,675,480. All of the notes are convertible into shares of Class A Common Stock at election of the holder at conversion prices ranging from $0.012 to $0.275 per share. Maturity dates range from July 22, 2013 to March 28, 2015. At March 31, 2013, an aggregate of 138,847,233 shares of Class A Common Stock were issuable upon conversion of the notes.</p> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN-BOTTOM: 11pt; MARGIN-TOP: 0pt; text-align: justify"> Shares issued for services are valued at the market price on the date of the invoice for the services. Shares issues for prepaid services are valued at the market price on the date of the contract for the services. Shares issued for services which specify that a specific number of shares be issued are valued at the market price on the date of the contract. The conversion prices on all convertible notes were set at the market price on the date on the issuance of the convertible note.</p> <!--EndFragment--></div> </div>
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3845375
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN-BOTTOM: 11pt; MARGIN-TOP: 0pt; text-align: justify"> NOTE 10 - SUBSEQUENT EVENTS</p> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN-BOTTOM: 11pt; MARGIN-TOP: 0pt; text-align: justify"> During April and May 2013, we issued shares of Class A Common Stock in the following transactions:</p> <p style="font-family: Symbol; FONT-FAMILY: Symbol; FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN-BOTTOM: -13pt; MARGIN-TOP: 0pt; PADDING-LEFT: 36pt; text-align: justify; TEXT-INDENT: -18pt"> ·</p> <p style="font-family: Times New Roman; FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN-BOTTOM: 11pt; MARGIN-TOP: 0pt; PADDING-LEFT: 36pt; text-align: justify"> 14,006,979 shares of Class A Common Stock to various vendors for consulting services valued at $202,869.</p> <p style="font-family: Symbol; FONT-FAMILY: Symbol; FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN-BOTTOM: -13pt; MARGIN-TOP: 0pt; PADDING-LEFT: 36pt; text-align: justify; TEXT-INDENT: -18pt"> ·</p> <p style="font-family: Times New Roman; FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN-BOTTOM: 11pt; MARGIN-TOP: 0pt; PADDING-LEFT: 36pt; text-align: justify"> 12,744,954 shares of Class A Common Stock upon conversion of notes payable with a aggregate principal amount of at $158,038.</p> <p style="font-family: Symbol; FONT-FAMILY: Symbol; FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN-BOTTOM: -13pt; MARGIN-TOP: 0pt; PADDING-LEFT: 36pt; text-align: justify; TEXT-INDENT: -18pt"> ·</p> <p style="font-family: Times New Roman; FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN-BOTTOM: 11pt; MARGIN-TOP: 0pt; PADDING-LEFT: 36pt; text-align: justify"> 11,053,063 shares of Class A Common Stock valued at $221,061 were issued in payment of compensation.</p> <!--EndFragment--></div> </div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN-BOTTOM: 11pt; MARGIN-TOP: 0pt; text-align: justify"> NOTE 5 - PREPAID EXPENSES</p> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN-BOTTOM: 11pt; MARGIN-TOP: 0pt; text-align: justify"> On October 1, 2010, we entered into a four year Commercial Lease Agreement, under which we leased office space in New York, New York. Under the Commercial Lease Agreement, we issued the lessor 9,000,000 shares of our Class A Common Stock at the inception of the lease in full payment of lease payments under the lease totaling $444,000. We capitalized the lease payment as a prepaid expense, and are amortizing the amount on a monthly basis over the life of the lease.</p> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN-BOTTOM: 11pt; MARGIN-TOP: 0pt; text-align: justify"> We also lease office space at 641-2 Chrislea Road, Woodbridge, Ontario Canada, under a lease that runs from January 1, 2012 to December 31, 2013 at a rate of $400 per month. Under the lease, we issued the lessor 480,000 shares of our common stock valued at $9,600. We capitalized the lease payment as a prepaid expense, and are amortizing the amount on a monthly basis over the life of the lease.</p> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN-BOTTOM: 11pt; MARGIN-TOP: 0pt; text-align: justify"> During the three months ended March 31, 2013, we issued 43,309,499 shares of our common stock to our officers for compensation totaling $1,100,061 for the year 2013. We capitalized these payments as a prepaid expense, and amortize the amounts over the life of the employment contracts of the officers, which is for the twelve months ended December 31, 2013.</p> <!--EndFragment--></div> </div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" --><div> <div><!--StartFragment--> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN-BOTTOM: 11pt; MARGIN-TOP: 0pt; text-align: justify"> <strong><em>Use of Estimates</em></strong></p> <p style="FONT-SIZE: 11pt; LINE-HEIGHT: 13pt; MARGIN-BOTTOM: 11pt; MARGIN-TOP: 0pt; text-align: justify"> Our Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of our Consolidated Financial Statements requires that we make estimates and assumptions that affect the reported amounts of assets and liabilities and the related disclosure of contingent assets and liabilities at the date of the Consolidated Financial Statements and the reported amounts of revenues and expenses during the reporting period. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. Accordingly, actual results may differ significantly from these estimates under different assumptions or conditions.</p> <!--EndFragment--></div> </div>
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