Note 8- Capital Stock

12 Months Ended

Dec. 31, 2011

Note 8- Capital Stock [Abstract]

Note 8- Capital Stock

Note 8- Capital Stock

a)Common Stock

For the year ended December 31, 2011, the Company issued 5,930,262 shares of common stock pursuant to private placement transactions at prices between $0.075 to $0.10 per share and for total cash proceeds of $349,827.

For the year ended December 31, 2011, the Company issued 7,459,000 shares of common stock to directors and employees of the Company as signing bonuses and for services rendered. These transactions have been recorded as stock-based compensation having a total value of $565,612.

b)Stock To Be Issued

On December 23, 2010, the Company entered into an agreement to issue 1,000,000 shares of common stock to 2214098 Ontario Ltd. in connection with its acquisition of the mineral rights to the Carson Lake Property. As of December 31, 2011, these shares remained to be issued and are shown as stock to be issued for $98,450.

On June 25, 2011, the Company entered into an agreement to issue 2,000,000 shares of common stock to Firelake Resources Inc. in connection with its acquisition of the mineral rights to the Garrett Property. As of December 31, 2011, the shares had not yet been issued, and accordingly the Company recorded stock to be issued for $151,659.

As of December 31, 2011, the Company was obligated to issue 700,000 shares of common stock to directors and employees as signing bonuses and for services rendered. The Company has recorded stock-based compensation and stock to be issued of $53,081 in respect of these obligations.

c)Preferred Stock

The Company has authorized Class A preferred stock available to be issued for $1.00 per share, are non-participating and non-voting and accrue cumulative dividends at the rate of 10% per annum. The Company may retract the stock at any time upon the payment of $1.00 per share plus any unpaid dividends. In the event of any wind-up of the Company, the Class A preferred stock has a priority distribution of $1.00 per share plus any unpaid dividends before any distribution to the common stockholders.

On June 4, 2010 the Company issued 240,000 shares of Class A preferred stock to directors and advisors in exchange for services rendered. Stock-based compensation of $240,000 was recorded in respect of this issuance and has been classified as consulting fees on the statement of operations.

d)Dividends

On December 31, 2011, the Company declared dividends of $38,825 at a cumulative rate of 10% per annum on the preferred stock for the period from the date of issuance, June 4, 2010 to December 31, 2011. As of December 31, 2011, there are no amounts remaining in arrears in respect of the preferred stock.

e)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 – July 10, 2009	-	$                 -	-
Balance – December 31, 2009	-	-	-
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

On various dates between October 18, 2011 and December 31, 2011, the Company issued 3,723,397 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.

f)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. For the year ended December 31, 2011, the Company issued 7,459,000 shares of common stock and a further 700,000 shares became issuable in the year in connection with stock-based compensation arrangements. These shares were valued at $0.075 per share and resulted in compensation expense of $348,816 as a component of management fees and $269,877 as a component of consulting fees on the statement of operations.