The accompanying notes are an integral part of these financial statements.
TUNDRA GOLD CORP.
The accompanying notes are an integral part of these financial statements.
TUNDRA GOLD CORP.
The accompanying notes are an integral part of these financial statements.
TUNDRA GOLD CORP.
The accompanying notes are an integral part of these financial statements.
TUNDRA GOLD CORP.
Tundra Gold Corp. (“the Company”) was incorporated under the name Titan Gold Corp. on September 16, 2009 under the laws of the State of Nevada. On February 25, 2010 the Company amended its articles of incorporation to change its name to Tundra Gold Corp. The accompanying financial statements have been prepared in U.S. dollars and in accordance with accounting principles generally accepted in the United States on a going concern basis.
The unaudited financial information furnished herein reflects all adjustments, which in the opinion of management are necessary to fairly state the financial position of the CompanyTundra Gold Corp. and the results of its operations for the periods presented. This report on Form 10-Q should be read in conjunction with the Company’s financial statements and notes thereto included in the Company’s Form 10-K for the fiscal year ended April 30, 2011.2012. The Company assumes that the users of the interim financial information herein have read or have access to the audited financial statements for the preceding fiscal year and that the adequacy of additional disclosure needed for a fair presentation may be determined in that context. Accordingly, footnote disclosure, which would substantially duplicate the disclosure contained in the Company’s Form 10-K for the fiscal year ended April 30, 2011,2012, has been omitted. The results of operations for the three and nine-month periodsmonth period ended JanuaryJuly 31, 2012 areis not necessary indicative of results for the entire year ending April 30, 2012.2013.
The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. The Company has incurred a net loss of $189,568$250,071 for the period from September 16, 2009 (inception) to JanuaryJuly 31, 2012, and has no sales.
The Company's ability to continue as a going concern is dependent on its ability to develop its natural resource propertiesproperty and ultimately achieve profitable operations and to generate sufficient cash flow from financing and operations to meet its obligations as they become payable. The Company currently expects that it will need approximately $241,000$84,000 to fund its operations during the next twelve months which will include property lease and option payments, undertaking a drill program onexploration of its Crescent Fault Property,property, costs associated with maintaining an office, and professional, legal and accounting expenses associated with ourthe Company being a reporting issuer under the Securities Act of 1934. The Company has raised a total of $399,000 since inception. The Company does not currently havehas sufficient cash to fund all of its planned operations for the next twelve months. InHowever, in order to continue to develop its properties,property, the Company will need to obtain additional financing.financing in the future. Management may in the future seek additional capital through private placements and public offerings of its common stock althoughstock. Although there are no assurances that management’s plans will be realized.realized, management believes that the Company will be able to continue operations in the future. Accordingly, no adjustment relating to the recoverability and classification of recorded asset amounts and the classification of liabilities has been made to the accompanying financial statements in anticipation of the Company not being able to continue as a going concern.
If the Company were unable to continue as a going concern, then substantial adjustments would be necessary to the carrying values of assets, the reported amounts of its liabilities, the reported expenses, and the balance sheet classifications used.
The preparation of financial statements in conformity with generally accepted accounting principles requires the Company’s management to make estimates and assumptions that affect the amounts reported in these financial statements and notes. Significant areas requiring the use of estimates relate to the write down of mineral property acquisition costs and accrued liabilities. Management believes the estimates utilized in preparing these financial statements are reasonable and prudent and are based on management’s best knowledge of current events and actions the Company may undertake in the future. Actual results could differ from those estimates.
For purposes of the statement of cash flows, the Company considers all highly liquid debt instruments purchased with a maturity of three months or less to be cash equivalents to the extent the funds are not being held for investment purposes.
The Company’s functional currency is the U.S. dollar and to date has undertaken the majority of its transactions in U.S. dollars. Any transaction gains and losses that may occur will be included in the statement of operations as they occur.
The Company has no off-balance-sheet concentrations of credit risk such as foreign exchange contracts, options contracts or other foreign hedging arrangements. The Company maintains all of its cash balances with one financial institution in the form of a demand deposit.
Net income (loss) per share is computed by dividing the net income by the weighted average number of shares outstanding during the period. As of JanuaryJuly 31, 2012 and 2011, the Company had no outstanding common stock options or warrants.
The Company has adopted ASC 220 (formerly SFAS No. 130, “Reporting Comprehensive Income”), which establishes standards for reporting and display of comprehensive income, its components and accumulated balances. The Company has disclosed this information on its Statement of Operations. Comprehensive income is comprised of net income (loss) and all changes to capital deficit except those resulting from investments by owners and distribution to owners.
The Company has implemented Accounting Standards Codification ("ASC") Section 718-10-25 (formerly Statement of Financial Accounting Standards ("SFAS") 123R, Accounting for Stock-Based Compensation) requiring the Company to provide compensation costs for the Company's stock options determined in accordance with the fair value based method prescribed in ASC Section 718-20-25. The Company estimates the fair value of each stock option at the grant date by using the Black-Scholes option-pricing model and provides for expense recognition over the service period, if any, of the stock option.
Holding costs to maintain a property on a care and maintenance basis are expensed in the period they are incurred. These costs include security and maintenance expenses, lease and claim fees payments, and environmental monitoring and reporting costs.
Exploration and Development Costs
Mineral property interests include optioned, leased, and acquired mineral development and exploration stage properties. The amount capitalized related to a mineral property interest represents its fair value at the time it was optioned or acquired, either as an individual asset or as a part of a business combination. The value of such assets is primarily driven by the nature and amount of mineralized material believed to be contained in such properties. Exploration costs are expensed as incurred and development costs are capitalized if proven and probable reserves exist and the property is a commercially minable property. Mine development costs incurred either to develop new ore deposits, expand the capacity of operating mines, or to develop mine areas substantially in advance of current production are capitalized. Costs incurred to maintain assets on a standby basis are charged to operations. Costs of abandoned projects are charged to operations upon abandonment. The Company evaluates, at least quarterly, the carrying value of capitalized mineral interests costs and related property, plant and equipment costs, if any, to determine if these costs are in excess of their net realizable value and if a permanent impairment needs to be recorded. The periodic evaluation of carrying value of capitalized costs and any related property, plant and equipment costs are based upon expected future cash flows and/or estimated salvage value.
Fair Value of Financial Instruments
The book values of cash, prepaid expenses, and accounts payable and accrued liabilities approximate their respective fair values due to the short-term nature of these instruments. The fair value hierarchy under GAAP distinguishes between assumptions based on market data (observable inputs) and an entity’s own assumptions (unobservable inputs). The hierarchy consists of three levels:
·• | Level one — inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities; |
·• | Level two — inputs are inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly such as interest rates, foreign exchange rates, and yield curves that are observable at commonly quoted intervals; and |
·• | Level three — Unobservable inputs developed using estimates and assumptions, which are developed by the reporting entity and reflect those assumptions that a market participant would use. |
Determining which category an asset or liability falls within the hierarchy requires significant judgment. We evaluate our hierarchy disclosures each quarter.
NOTE 4 – MINERAL PROPERTY INTERESTS
Marietta Property
On May 18, 2010, the Company executed a property lease agreement with MinQuest, Inc. (“MinQuest”) whereby the Company leased certain unpatented mineral claims from MinQuest collectively referred to as the Marietta Property..Property (the “Marietta”). The Marietta Property is located in Mineral County, Nevada and currently consists of five unpatented claims. The lease agreement is for a period of 20 years with annual lease payments of $5,000 due on May 15 of each year. There are no minimum annual exploration expenditures required under the agreement. However, any exploration programs undertaken by the Company during the lease period shall carryforward and be credited against any future property option agreement should such a property option agreement be executed between the Company and MinQuest. Upon execution of the Marietta agreement,Agreement, the Company paid MinQuest $5,000 as well as reimbursed MinQuest $756 relating to property holding costs. The Company made the second $5,000 lease payment on May 15, 2011. As a result of the Marietta Propertyproperty not containing any known resource, the Company has written down its aggregate $10,000 inrespective $5,000 property lease paymentspayment in the statement of operations and comprehensive loss.loss at July 31, 2012 and 2011.
Under the agreement with MinQuest, all of our payment obligations are non-refundable. If we do not make any payments under the agreement we will lose any payments made and all our rights to the property. MinQuest has retained a 3% royalty of the aggregate proceeds received by the Company from any smelter or other purchaser of any ores, concentrates, metals or other material of commercial value produced from the property, minus the cost of transportation of the ores, concentrates or metals, including related insurance, and smelting and refining charges, including penalties. All of the annual lease payments under the agreement shall be treated as advance royalty payments and will be an offset to the production royalty due until the total amount paid to MinQuest has been recouped.
The Company may use MinQuest for its mineral exploration expertise on the property. Furthermore, both the Company and MinQuest have the right to assign, sell, mortgage or pledge their rights in the agreement or on the property.
The agreement will terminate if the Company fails to comply with any of its obligations under either agreement and fails to cure such alleged breach. If the Company gives notice that it denies a default has occurred, the matter shall be determined finally through such means of dispute resolution as such matter has been subjected to by either party. The agreement can be terminated by the Company by providing MinQuest with 60 days written notice.
Crescent Fault Property
On April 4, 2011,August 15, 2012 the Company executed a property option agreementgave notice of termination to MinQuest pursuant to the terms of the Crescent Fault Property Agreement (the “Agreement”) with MinQuest grantingdated April 4, 2011. The Agreement, which was filed as an exhibit to the Company's Form 8-K filed on April 7, 2011, had granted the Company the right to acquire 100% of the mining interests of a Nevada mineral exploration property currently controlled by MinQuest. The property known as the Crescent Fault Property is located in Eureka County, Nevada and currently consists of 33 unpatented claims (the ‘Property”).controlled by MinQuest. The Company has determined that the Crescent Fault Property no longer fits with its business parameters.
Annual option payments and minimum annual exploration expenditures under Agreement are as noted below:
| | Property | | | Work | |
| | Payments | | | Expenditures | |
Upon Execution of the Agreement | | $ | 20,000 | | | $ | - | |
By April 4, 2012 | | | 20,000 | | | | 200,000 | |
By April 4, 2013 | | | 65,000 | | | | 200,000 | |
By April 4, 2014 | | | 45,000 | | | | 200,000 | |
By April 4, 2015 | | | 60,000 | | | | 250,000 | |
By April 4, 2016 | | | 70,000 | | | | 250,000 | |
By April 4, 2017 | | | 80,000 | | | | 300,000 | |
By April 4, 2018 | | | 90,000 | | | | 300,000 | |
By April 4, 2019 | | | 100,000 | | | | 350,000 | |
By April 4, 2020 | | | 100,000 | | | | 400,000 | |
By April 4, 2021 | | | 250,000 | | | | 750,000 | |
| | $ | 900,000 | | | $ | 3,200,000 | |
Upon execution of the Agreement the Company paid MinQuest $20,000 as well as reimbursed MinQuest for the Crescent Fault’s holdings and related property costs in the amount of $7,920. As a result of such termination, the Crescent Fault property not containing any known resource,Property has been returned to MinQuest and the Company has written down its initial $20,000is responsible to pay all claim fees, payments and expenses in order to maintain the property lease payment in the statementgood standing until August 2013. It is estimated that such fees and expenses will not exceed an aggregate of operations and comprehensive loss at April 30, 2011.approximately $5,000.
Since the Company’s payment obligations are non-refundable, if the Company does not make any payments under the Agreement it will lose any payments made and all its rights to the Property. If all said payments under the Agreement are made, then the Company will acquire all mining interests in the Property. If the Company fails to make any payment when due the Agreement gives the Company a 60-day grace period to pay the amount of the deficiency. MinQuest retained a 3% royalty of the aggregate proceeds received by the Company from any smelter or other purchaser of any ores, concentrates, metals or other material of commercial value produced from the Property, minus the cost of transportation of the ores, concentrates or metals, including related insurance, and smelting and refining charges, including penalties. The Company shall have the one time right exercisable for 90 days following completion of a bankable feasibility study to buy up to two thirds (66.7%) of MinQuest’s royalty (i.e. an amount equal to 2% of the royalty) for $4,000,000. The right to purchase the said royalty interest shall be exercised by the Company providing MinQuest with notice of the purchase accompanied by payment in the amount of $4,000,000.
The Company may use MinQuest for its mineral exploration expertise on the Property. Furthermore, both the Company and MinQuest have the right to assign, sell, mortgage or pledge their rights in each respective Agreement or on each respective Property. In addition, any mineral interests staked, located, granted or acquired by either the Company or MinQuest which are located within a 1 mile radius of the Property will be included in the option granted to the Company. The Agreement will terminate if the Company fails to comply with any of its obligations in the Agreement and fails to cure such alleged breach. The Company also has the right to terminate the Agreement by giving notice to MinQuest.
NOTE 5 – RECLAMATION DEPOSIT
The Company has paid a $10,330 reclamation deposit on its LB/VixenCrescent Fault property. The reclamation deposit is refundable upon completion of the required remediation of the property at the completion of the Company’s planned drill program. As a result of the Company having terminated the Crescent Fault Property Option Agreement (note 4), the Company has applied for a refund of the reclamation deposit.
NOTE 6 – RELATED PARTY TRANSACTIONS
During the nine-month periodthree months ended JanuaryJuly 31, 2012 the Company paid $4,500$1,500 (2011 - $4,250)$1,500) in directors’ fees to one of ourits directors.
NOTE 7 – SHARE CAPITAL
Stock Split
On November 15, 2011 the Company’s Board of Directors approved a resolution to split the Company’s common stock on a 3:1 forward stock split basis. The record and payment dates of the forward split were November 29, 2011 and December 12, 2011 respectively. All of the common shares issued and outstanding on November 29, 2011 were split effective December 12, 2011. All references to share and per share amounts have been restated in these financial statements to reflect the split.
Stock Options
On January 25, 2012 the Company adopted its 2012 Stock Option Plan (“the 2012 Plan”). The 2012 Plan provides for the granting of up to 5,000,000 stock options to key employees, directors and consultants, of common shares of the Company. Under the 2012 Plan, the granting of stock options, the exercise prices, and the option terms are determined by the Company's Board of Directors or a committee designated by the Board to administer the 2012 Plan. For incentive options, the exercise price shall not be less than the fair market value of the Company's common stock on the grant date. (In the case of options granted to an employee who owns stock possessing more than 10% of the voting power of all classes of the Company's stock on the date of grant, the option price must not be less than 110% of the fair market value of common stock on the grant date.). Options granted are not to exceed terms beyond five years.
In order to exercise an option granted under the Plan, the optionee must pay the full exercise price of the shares being purchased. Payment may be made either: (i) in cash; or (ii) at the discretion of the Board, by delivering shares of common stock already owned by the optionee that have a fair market value equal to the applicable exercise price; or (iii) with the approval of the Board, with monies borrowed from us.
Subject to the foregoing, the Committee has broad discretion to describe the terms and conditions applicable to options granted under the Plan. The Board may at any time discontinue granting options under the Plan or otherwise suspend, amend or terminate the Plan and may, with the consent of an optionee, make such modification of the terms and conditions of such optionee’s option as the Board shall deem advisable. No stock options have been granted under the 2012 Plan.
Share Cancellation
On January 30, 2012, the Company’s controlling shareholder, Gurpartap Singh Basrai returned 30,000,000 shares of common stock to the Company for cancellation. Mr. Basrai returned the shares for cancellation in order to reduce the number of shares issued and outstanding. Subsequent to the cancellation, the Company had 47,820,000 shares issued and outstanding; a number that Mr. Basrai, who is also an officer and director of the Company considers more in line with the Company’s business plans.
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.Operations
The following discussion should be read in conjunction with the financial statements of Tundra Gold Corp. (an exploration stage company) (the “Company”), which are included elsewhere in this Form 10-Q. Certain statements contained in this report, including statements regarding the anticipated development and expansion of the Company's business, the intent, belief or current expectations of the Company, its directors or its officers, primarily with respect to the future operating performance of the Company and the products it expects to offer and other statements contained herein regarding matters that are not historical facts, are "forward-looking" statements. Future filings with the Securities and Exchange Commission, future press releases and future oral or written statements made by or with the approval of the Company, which are not statements of historical fact, may contain forward-looking statements. Because such statements include risks and uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements. For a more detailed listing of some of the risks and uncertainties facing the Company, please see the Form 10-K for the fiscal year ended April 30, 20112012 filed by the Company with the Securities and Exchange Commission.
All forward-looking statements speak only as of the date on which they are made. The Company undertakes no obligation to update such statements to reflect events that occur or circumstances that exist after the date on which they are made.
Business OperationsGeneral
During the next twelve months our objective is to continue to explore the properties subject to our mineral claims. The funds in our treasury are not sufficient to meet all planned activities as outlined below. The Company currently expects that it will need approximately $241,000 to fund its operations during the next twelve months which will include property lease and option payments, undertaking a drill program on its Crescent Fault Property, costs associated with maintaining an office, and professional, legal and accounting expenses associated with our being a reporting company under the Securities Act of 1934. In order to undertake its operating plans the Company will need to obtain additional financing. Management may in the future seek additional capital through the sale of its common stock although there are no assurances that management’s plans will be realized.
We continue to run our operations with the use of contract operators, and as such do not anticipate a change to our company staffing levels. We remain focused on keeping a minimal staff level, which currently consists of our two directors, one of which is also our sole executive officer, to conserve capital. We believe outsourcing of necessary operations continues to be the most cost effective and efficient manner of conducting the business of the Company.
We are a natural resource exploration company with an objective of acquiring, exploring, and if warranted and feasible, exploiting natural resource properties. Our primary focus in the natural resource sector is gold. We do not consider ourselves a “blank check” company required to comply with Rule 419 of the Securities and Exchange Commission, because we were not organized for the purpose of effecting, and our business plan is not to effect, a merger with or acquisition of an unidentified company or companies, or other entity or person. We do not intend to merge with or acquire another company in the next 12 months.
Though we have the expertise on our board of directors to take a resource property that hosts a viable ore deposit into mining production, the costs and time frame for doing so are considerable, and the subsequent return on investment for our shareholders would be very long term. We therefore anticipate optioning or selling any ore bodies that we may discover to a major mining company. Many major mining companies obtain their ore reserves through the purchase of ore bodies found by junior exploration companies. Although these major mining companies do some exploration work themselves, many of them rely on the junior resource exploration companies to provide them with future deposits for them to mine. We believe that optioning or selling a deposit found by us to these major mining companies, would provide an immediate return to our shareholders without the long time frame and cost of putting a mine into operation ourselves, and would also provide future capital for the Company to continue operations.
The search for valuable natural resources as a business is extremely risky. We can provide investors with no assurance that the property we have in Nevada contains commercially exploitable reserves. Exploration for natural reserves is a speculative venture involving substantial risk. Few properties that are explored are ultimately developed into producing commercially feasible reserves. Problems such as unusual or unexpected geological formations and other conditions are involved in mineral exploration and often result in unsuccessful exploration efforts. In such a case, we would be unable to complete our business plan and any money spent on exploration would be lost.
Natural resource exploration and development requires significant capital and our assets and resources are limited. Therefore, we anticipate participating in the natural resource industry through the purchase or option of early stage property. To dateproperties. Currently, we have one property under option.lease. We have not yet conducted significant exploration on the property but we have initiated the development of a budget that is expected to include mapping, sampling, and surveying on our property over the next 12 months.property. There has been no indication as yet that any mineral deposits exist on theour property, and there is no assurance that a commercially viable mineral deposit exists on our property. Further exploration will be required before a final evaluation as to the economic and legal feasibility can beis determined.
Crescent Fault Property11
In the following discussion, there are references to “unpatented” mining claims. An unpatented mining claim on U.S. government lands establishes a claim to the locatable minerals (also referred to as stakeable minerals) on the land and the right of possession solely for mining purposes. No title to the land passes to the claimant. If a proven economic mineral deposit is developed, provisions of federal mining laws permit owners of unpatented mining claims to patent (to obtain title to) the claim. If you purchase an unpatented mining claim that is later declared invalid by the U.S. government, you could be evicted.
InPlan of Operation
During the last three monthstwelve-month period ending July 31, 2013, our objective is to continue to explore the Company has beenMarietta Property. We continue to run our operations with the use of contract operators, and as such do not anticipate a change to our company staffing levels. We remain focused on its Crescent Fault Property. The Company has completedkeeping the staff compliment, which currently consists of our two directors and one officer, at a compilationminimum to conserve capital. We believe outsourcing of necessary operations continues to be the most cost effective and efficient manner of conducting the business of the available historical dataCompany.
We do not anticipate any equipment purchases in the twelve months ending July 31, 2013.
The following is an overview of the project work to date, as well as anticipated work for the next twelve months. Specific dates when work will begin, and a budget proposal submitted by MinQuest was approved by the Company’s Board of Directors in August 2011. The budget includes a 3,000 foot, reverse-circulation drill program and an archeological survey. The Company has completed the archeological survey and has submitted a bond proposalhow long it will take to complete each step is subject to change due to the Bureauvariables of Land Management (“BLM”) in the amountweather, availability of $10,330. The timingwork crews for a particular type of the planned drill program will depend on weather, the Company’s ability to raise additional fundswork, and the approvalresults of work that is planned, the bond proposal tooutcome of which will determine what the BLM. Access to the property is weather dependent so the timing of the drilling is not known for certain.next step on that project will be.
Marietta Property
MinQuest has provided a work plan for the first year that will includeincluded scanning all currently available data, georeferencing all maps in order to digitize drill hole locations, geology and geochemistry. However,A spread sheet of drill hole information has been compiled from the known historical drilling. All drill hole coordinates, drill hole assays, oxidation boundaries and lithology have been entered into a spread sheet allowing the development of cross-sections in electronic form using industry software. While the initial work on the Marietta has been completed, the Company is currentlyhad been focusing on the Crescent Fault Property and asthat resulted in a result is not currently undertaking anyreduction in work being done on the Marietta Property. The Company is now working with MinQuest to re-start the exploration program on the Marietta.
13
On August 15, 2012 the Company gave notice of termination to MinQuest pursuant to the terms of the Crescent Fault Property Agreement (the “Agreement”) dated April 4, 2011. The Agreement, which was filed as an exhibit to the Company's Form 8-K filed on April 7, 2011, had granted the Company the right to acquire 100% of the mining interests of a Nevada mineral exploration property known as the Crescent Fault Property controlled by MinQuest. The Company has determined that the Crescent Fault Property no longer fits with its business parameters.
As a result of such termination, the Crescent Fault Property has been returned to MinQuest and the Company is responsible to pay all claim fees, payments and expenses in order to maintain the property in good standing until August 2013. It is estimated that such fees and expenses will not exceed an aggregate of approximately $5,000
The Company has paid a $10,330 reclamation deposit on its Crescent Fault property. The reclamation deposit is refundable upon completion of the required remediation of the property at the completion of the Company’s planned drill program. As a result of the Company having terminated the Crescent Fault Property Option Agreement the Company has applied for a refund of the reclamation deposit.
Results of Operations
We did not earn any revenues during the three or nine-monthsthree-months ended JanuaryJuly 31, 2012 or2012or July 31, 2011. The Company is in the exploration stage and we will be in the exploration stage of our business for an extended period of time. As a result we do not anticipate earning revenues until we have developed an exploration property. We can provide no assurance that we will discover commercially exploitable levels of mineral resources on our property, or if such resources are discovered, that we will enter into commercial production of our mineral property.
For the three-monthsthree months ended JanuaryJuly 31, 2012 we had a net loss of $22,149$27,385 compared to a net loss of $13,996 in$35,309 for the corresponding period inthree months ended July 31, 2011. The increasedecrease in the net loss was largely due to the Company not incurring $18,849any mineral property exploration expenses in the three months ended July 31, 2012 compared to $14,214 in the three months ended July 31, 2011. Partially offsetting the reduction in mineral property exploration expenditures was an increase in general and administrative expenses compared to $10,239 during$22,385 for the corresponding three month period inmonths ended July 31, 2012 from $16,095 for the three months ended July 31, 2011. The increase was largely due to higher professional fees as well as higher filing and transfer feesCompany did not incur any mineral property exploration expenditures in the quarter ended January 31, 2012 compared to the corresponding period in 2011.
For the nine-months ended January 31, 2012 we had a net loss of $90,084 compared to a net loss of $50,193 in the corresponding period in 2011. The increase in the net loss was largely due to the Company incurring $31,302 in mineralterminating the Crescent Fault property explorationoption agreement. In 2011 the Company incurred expenses relatedrelating to the archeological survey and mapping of its Crescent Fault Property. Only $6,440 in property expenses was incurred in 2011 relating to the Marietta Property. General and administrative expenses increased to $53,782were $22,385 for the nine-monthsthree months ended JanuaryJuly 31, 2012 from $38,753compared to $16,095 for the same period in 2011. The increase was due to costs associated with engaging a transfer agentincreases in audit fees and generally higher administration costs as the Company’s overall level of activity has increased in 2012 compared to 2011.accounting expenses.
Liquidity and Capital Resources
We had cash of $199,484$146,427 and working capital of $199,102$138,599 as of JanuaryJuly 31, 2012. We anticipate that we will incur the following expenses over the next twelve months:
· | $25,0005,000 in connection with property lease and option payments under the Company’s Marietta and Crescent Fault property agreements;agreement; |
· | $173,00036,000 in property exploration expenses and property holding costsclaim payments in order to meet the requirements of the Company’s property option agreements;lease agreement; |
· | $43,000 for operating expenses, including working capital and general, legal, accounting and administrative expenses associated with reporting requirements under the Securities Exchange Act of 1934. |
Net cash used in operating activities during the nine-monthsthree months ended JanuaryJuly 31, 2012 was $88,476$14,510 compared to $46,593$18,964 during the nine-monthsthree months ended JanuaryJuly 31, 2011. The cash used in operating activities increased largelydecreased partly due to an increasea decrease in the net loss to $90,084$27,385 in 2012 compared to $50,193$35,309 in 2011. The impact of the lower net loss was partially offset by an increase in outflows from prepaids of $3,209 for the three-month ended July 31, 2012 compared to an outflow of $483 for the three months ended July 31, 2011. For the ninethree months ended JanuaryJuly 31, 2012, cash received from financing activities was $0 compared to $100,000 in the three months ended July 31, 2011 which was received from the collection of subscriptions receivable while in 2011, $35,000 was collected from subscriptions receivable and $62,000 was received from the sale of common stock.receivable. Investing activities in 2012 included $10,330 paid for the reclamation bond on the Crescent Fault Property. Also, forthree months ended July 31, 2012 and July 31, 2011 investing activities consisted of $5,000 in each period related to the annual Marietta Propertyproperty lease payments.
The Company currently expects that it will need approximately $241,000 to fund its operations during the next twelve months which will include property lease and option payments, exploration of its Crescent Fault Property as well as the costs associated with maintaining an office. Even though the Company completed a financingCurrent cash on April 4, 2011hand is sufficient for total proceeds of $300,000, the cash received from this financing is not sufficient to fund all of its planned operationsthe Company’s commitments for the next twelve months. In order to continue to explore its properties,However, the Company will need additional funding to obtain additional financing. Management mayexplore and develop its property in the future seekfuture. We anticipate that the additional capital through private placements and public offeringsfunding that we require will be in the form of itsequity financing from the sale of our common stock. However, we cannot provide investors with any assurance that we will be able to raise sufficient funding from the sale of our common stock although there are no assurancesto fund additional phases of the exploration program, should we decide to proceed. We currently believe that management’s plansdebt financing will not be an alternative for funding any further phases in our exploration program. The risky nature of this enterprise and lack of tangible assets places debt financing beyond the credit-worthiness required by many banks or typical investors of corporate debt until such time as an economically viable mine can be demonstrated. We do not have any arrangements in place for any future equity financing
We cannot be certain that the required additional financing will be realized.available or available on terms favorable to us. If additional funds are raised by the issuance of our equity securities, such as through the issuance and exercise of warrants, then existing stockholders will experience dilution of their ownership interest. If additional funds are raised by the issuance of debt or other equity instruments, we may be subject to certain limitations in our operations, and issuance of such securities may have rights senior to those of the then existing holders of common stock. If adequate funds are not available or not available on acceptable terms, we may be unable to fund expansion, develop or enhance services or respond to competitive pressures or continue our operations.
Going Concern Consideration
As shown in the accompanying financial statements, the Company has incurred a net loss of $189,568 for$250,071for the period from September 16, 2009 (inception) to JanuaryJuly 31, 2012, and has no revenues.sales. The future of the Company is dependent upon its ability to obtain financing and upon future profitable operations from the development of its mineral property. On April 4, 2011Management may in the Company completedfuture seek additional capital through a financing for total proceedsprivate placement and public offering of $300,000. However, the funds from this financing are not sufficient to fund the Company’s current expected operational requirements of $241,000 for the next twelve months. We currently have no agreements, arrangements or understandings with any person or entity to obtain funds through bank loans, lines of credit or any other sources.its common stock. The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts of and classification of liabilities that might be necessary in the event the Company cannot continue in existence.
There is substantial doubt about our ability to continue as a going concern. Accordingly, our independent auditors included an explanatory paragraph in their report on the April 30, 20112012 financial statements regarding concerns about our ability to continue as a going concern. Our financial statements contain additional note disclosures describing the circumstances that lead to this disclosure by our independent auditors.
Off-Balance Sheet Arrangements
We have no off-balance sheet arrangements.
Item 3. Quantitative and Qualitative Disclosure About Market Risk.Risk
Smaller reporting companies are not required to provide the information required by this Item.
Item 4. Controls and Procedures.Procedures
EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES
Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, the Company conducted an evaluation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) and Rule 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended (Exchange Act), as of JanuaryJuly 31, 2012. Based on this evaluation, our principal executive officer and principal financial officer have concluded that the Company’s disclosure controls and procedures were effective to ensure that information required to be disclosed by the Company in the reports filed or submitted under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms and that the Company’s disclosure and controls are designed to ensure that information required to be disclosed by the Company in the reports that we file or submit under the Exchange Act is accumulated and communicated to management, including our principal executive officer and principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING
There were no changes in our internal controls over financial reporting that occurred during our last fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.Proceedings
There are no pending legal proceedings to which the Company is a party or in which any director, officer or affiliate of the Company, any owner of record or beneficially of more than 5% of any class of voting securities of the Company, or security holder is a party adverse to the Company or has a material interest adverse to the Company. The Company’s property is not the subject of any pending legal proceedings.
Item 1A. Risk Factors.Factors
Smaller reporting companies are not required to provide the information required by this Item 1A.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.Proceeds
None.
Item 3. Defaults upon Senior Securities.Securities
None.
Item 4. (Removed and Reserved)Mining Safety Disclosures
The Company does not have any mining operations.
Item 5. Other information.information
None.
Item 6. Exhibits.
Exhibit 31 - Certification of Principal Executive and Financial Officer pursuant to Rule 13a-14 of the Securities and Exchange Act of 1934 as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
Exhibit 32 – Certification of Principal Executive and Financial Officer Pursuant to 18 U.S.C Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.Exhibits
Exhibit 31 | Certification of Principal Executive and Financial Officer pursuant to Rule 13a-14 of the Securities and Exchange Act of 1934 as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
Exhibit 32 | Certification of Principal Executive and Financial Officer Pursuant to 18 U.S.C Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
101.INS ** | | XBRL Instance Document |
101.SCH ** | | XBRL Taxonomy Extension Schema Document |
101.CAL ** | | XBRL Taxonomy Extension Calculation Linkbase Document |
101.DEF ** | | XBRL Taxonomy Extension Definition Linkbase Document |
101.LAB ** | | XBRL Taxonomy Extension Label Linkbase Document |
101.PRE ** | | XBRL Taxonomy Extension Presentation Linkbase Document |
** XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Actact of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Date: March 8,September 5, 2012 TUNDRA GOLD CORP. By: /s/ Gurpartap Singh Basrai Gurpartap Singh Basrai President, Chief Executive Officer, Secretary, Treasurer and TreasurerDirector (Principal Executive, Financial, and Accounting Officer) |
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