Capital Stock

6 Months Ended

Jun. 30, 2012

Capital Stock [Abstract]

Capital Stock

7. Capital Stock

a) Common Stock

During the three months ended June 30, 2012, the Company issued 826,315 shares of common stock pursuant to private placement transactions at prices of $0.095 per share and for total cash proceeds of $40,000 and stock subscription receivable of $38,500.

During the three months ended June 30, 2012, the Company issued 2,310,631 shares of common stock to directors of the Company for services rendered. These transactions have been recorded as stock-based compensation with a total value of $219,509.95.

b) Stock To Be Issued

As of June 30, 2012, the Company has yet to issue the 1,000,000 shares to Shining Tree (note 4). During the six months ended June 30, 2012, the Company issued the 3,000,000 to 2214098 Ontario Ltd. and Firelake Resources Inc. (note 4).

As of June 30, 2012, the Company was obligated to issue 5,102,591 shares of common stock to directors and employees for services rendered. The Company has recorded stock-based compensation and stock to be issued of $484,746.15 in respect of these obligations.

c) Subscriptions receivable

During the six months ended June 30, 2012, the Company has received payments of $10,000 related to subscriptions receivable, and recorded additional $38,500 subscriptions receivable for shares issued.

d) Warrants

The below table summarizes the Company’s activity with respect to warrants:

	Number of Warrants		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term
Balance – December 31, 2010		—		—		—
Granted		3,723,397		0.129		0.915
Cancelled		—		—		—
Exercised		—		—		—
Balance – December 31, 2011		3,723,397		0.129		0.915
Granted		2,370,593		0.126		0.819
Cancelled		—		—		—
Exercised		—		—		—
Balance – June 30, 2012		6,093,990	$	0.128		0.707

On various dates between October 18, 2011 and June 30, 2012, the Company issued 6,093,990 warrants in connection with its private placements of common stock. Each warrant entitles the holder to purchase one (1) share of common stock of the Company at exercise prices ranging from $0.10 to $0.20 per share for a term of one (1) year from the issue date.

e) Stock-Based Compensation

The Company incurred stock-based compensation expense in connection with its compensation agreements for its directors, management, and employees. Under these agreements, common stock may be issued as a signing bonus or at certain benchmark dates within an individual’s period of service. Stock-based compensation is calculated as the fair value of the stock issued or to be issued to an individual and is recorded at the time the stock becomes owing to the individual. Stock issued to a director, manager, or employee is deferred in the event that their contract requires the individual to remain employed with the Company for a specified time period after issuance. During the six months ended June 30, 2012, the Company issued 2,310,631 shares of common stock and no other shares became issuable in connection with stock-based compensation arrangements. These shares were valued at $0.095 per share and resulted in compensation expense of $219,509.95 as a component of consulting fees on the statement of operations.