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Note 4- Mineral Interests
12 Months Ended
Dec. 31, 2011
Mineral Industries Disclosures [Abstract]  
Note 4- Mineral Interests

Note 4- Mineral Interests

 

Carson Property

 

On December 23, 2010, the Company entered into a mineral property acquisition agreement with 2214098 Ontario Ltd. pursuant to which the Company acquired the mining lease to the Carson Property. Under the acquisition agreement, the Company is required to pay:

 

1.        Cash consideration of $99,060 ($100,000 CAD) to be paid according to an installment schedule between April 30, 2011 and September 30, 2015;

2.        Equity consideration of 1,000,000 shares of common stock to be issued on or before March 30, 2011; and

3.        Royalty of 3% of all net smelter returns upon commencement of commercial production of the property.

 

The Carson Property is 1,812 acres in area and is located north-north-west of the City of Yellowknife, in the Northwest Territories, Canada. The Company’s interest in the property consists of a 21 year mining lease, which expires on June 30, 2024 and for which the Company is responsible for making annual lease payment of $1,141, in order to keep the lease in good standing.

 

In accordance with the Company’s accounting policy, the only costs related to the property that can be capitalized are the costs of acquisition of a mineral interest from a third party. As such, annual lease payments are expensed as incurred. The capital cost of the lease is amortized on the straight-line basis over the remaining term of the lease. For the year ended December 31, 2011, amortization on the Carson Property totaled $14,978. As of December 31, 2011, management determined that there were no events or changes in circumstances which may have impaired the carrying value of the Carson Property.

 

 

 

Garrett Property

 

On June 25, 2011 the Company entered into a mineral property acquisition agreement with Firelake Resources Inc. whereby it acquired certain mineral interests in the Garrett Property. Consideration for the mineral interests is as follows:

 

1.                    Cash consideration of $50,765 ($50,000 CAD) to be paid in two equal installments of $25,383 ($25,000 CAD) on January 31, 2012 and January 31, 2013.

2.                    Equity consideration of 2,000,000 shares of common stock to be issued on or before January 31, 2012

3.                    Royalty of 2% of all net smelter returns upon commencement of commercial production at the property.

 

As of December 31, 2011, the Company paid $6,240 ($6,000 CAD) of the balance due on the Garrett Property.

 

The Garrett Property is 8,900 acres in area and is located north of the City of Sudbury, in Ontario, Canada. The Company’s interest in the property consists of 157 mineral claim units staked by a prospector. Mining cannot take place until the claims are brought to lease. In order to keep the claims in good standing, the Company is required to perform $32,800 of exploration work before November 2012 and $30,000 of exploration work before October 2013.

 

In accordance with the Company’s accounting policy, the only costs related to the property that can be capitalized are the costs of acquisition of a mineral interest from a third party. As such, claim staking and exploration work has been expensed as incurred. As of December 31, 2011, management determined that there were no events or changes in circumstances which may have impaired the carrying value of the Garrett Property.