UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_______________________---------------------------------
FORM 10-Q
(Mark One)
| | |
[X] | | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. |
For the quarterly period ended August 31,November 30, 2011
| | |
[ ] | | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. |
For the transition period from _______ to ______
Commission file number: 0-29392
CALAIS RESOURCES INC.
(Exact name of registrant as specified in its charter)
| | |
British Columbia (State or other jurisdiction of incorporation or organization) | | 98-0434111 (IRS Employer Identification No.) |
| | |
4415 Caribou Road P.O. Box 653 Nederland, Colorado (Address of principal executive offices) | | 80466-0653 (Zip Code) |
Registrant’s telephone number, including area code: (303) 258-3806
Not applicable
(Former name, former address and former fiscal year, if changed since last report)
Indicate by checkmark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ]
Indicate by checkmark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes[ ]X] No [ ] (not required)
Indicate by checkmark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer [ ] Accelerated filer [ ] Non-accelerated filer [ ] Smaller reporting company [X]
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).
Yes [ ] No [X]
As of October 14, 2011January 13, 2012 the registrant had 157,811,422163,446,422 shares of common stock outstanding.
TABLE OF CONTENTS
| | Page |
Part I – Financial Information | |
| Item 1. Financial Statements. | 3 |
| Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations. | 1213 |
| Item 3. Quantitative and Qualitative Disclosures About Market Risk. | 1517 |
| Item 4. Controls and Procedures. | 1517 |
| | |
Part II – Other Information | |
| Item 1. Legal Proceedings. | 1819 |
| Item 1A. Risk Factors. | 1819 |
| Item 2. Unregistered Sales of Equity Securities and Use of ProceedsProceeds. | 1819 |
| Item 3. Defaults Upon Senior Securities. | 1920 |
| Item 4. (Removed and Reserved). | 1920 |
| Item 5. Other Information. | 1920 |
| Item 6. Exhibits. | 20 |
| | |
| Signatures | 21 |
PART I – FINANCIAL INFORMATION.
CALAIS RESOURCES INC.
(A Mining Company in the Exploration Stage)
CONSOLIDATED BALANCE SHEETS
| | As of | |
| | 11/30/2011 | | | 5/31/2011 | |
ASSETS | | (unaudited) | | | | |
Current assets | | | | | | |
Cash and cash equivalents | | $ | 91,869 | | | $ | 913,182 | |
Inventories | | | 18,894 | | | | - | |
Prepaid expenses and other assets | | | 39,898 | | | | 39,961 | |
Total current assets | | | 150,661 | | | | 953,143 | |
| | | | | | | | |
Restricted cash | | | 15,400 | | | | 15,400 | |
Note receivable | | | 60,000 | | | | 60,000 | |
Fixed assets, net | | | 28,870 | | | | 15,313 | |
Total assets | | $ | 254,931 | | | $ | 1,043,856 | |
| | | | | | | | |
LIABILITIES | | | | | | | | |
Current Liabilities | | | | | | | | |
Accounts payable and accrued liabilities | | $ | 1,265,566 | | | $ | 1,631,568 | |
Convertible debentures, current portion | | | - | | | | 702,964 | |
Notes payable and current portion of long-term debt | | | 10,253,878 | | | | 10,253,878 | |
Total current liabilities | | | 11,519,444 | | | | 12,588,410 | |
| | | | | | | | |
Royalty interest | | | 150,000 | | | | 150,000 | |
Convertible debentures, long-term | | | 724,399 | | | | - | |
Environmental remediation liabilities | | | 50,000 | | | | 50,000 | |
Total liabilities | | | 12,443,843 | | | | 12,788,410 | |
| | | | | | | | |
Shareholders' Deficit | | | | | | | | |
Common stock, no par value, unlimited shares authorized, 162,196,422 and 149,184,986 shares issued and outstanding as of November 30, 2011 and May 31, 2011, respectively | | | 37,503,729 | | | | 35,866,729 | |
Deficit accumulated in the exploration stage | | | (49,485,477 | ) | | | (47,371,579 | ) |
Accumulated other comprehensive loss | | | (207,164 | ) | | | (239,704 | ) |
Total Shareholders' Deficit | | | (12,188,912 | ) | | | (11,744,554 | ) |
| | | | | | | | |
Total Liabilities and Shareholders' Deficit | | $ | 254,931 | | | $ | 1,043,856 | |
| | As of | |
| | August 31, 2011 | | | May 31, 2011 | |
ASSETS | | (unaudited) | | | | |
Current Assets | | | | | | |
Cash and cash equivalents | | $ | 94,351 | | | $ | 913,182 | |
Prepaid expenses and other assets | | | 81,226 | | | | 39,961 | |
Total current assets | | | 175,577 | | | | 953,143 | |
| | | | | | | | |
Restricted cash | | | 15,400 | | | | 15,400 | |
Note receivable | | | 60,000 | | | | 60,000 | |
Fixed assets, net | | | 15,213 | | | | 15,313 | |
Total assets | | $ | 266,190 | | | $ | 1,043,856 | |
| | | | | | | | |
LIABILITIES | | | | | | | | |
Current Liabilities | | | | | | | | |
Accounts payable and accrued liabilities | | $ | 926,458 | | | $ | 1,631,568 | |
Convertible debenture | | | 676,256 | | | | 702,964 | |
Notes payable | | | 10,253,878 | | | | 10,253,878 | |
Total current liabilities | | | 11,856,592 | | | | 12,588,410 | |
| | | | | | | | |
Royalty interest | | | 150,000 | | | | 150,000 | |
Environmental remediation liabilities | | | 50,000 | | | | 50,000 | |
Total liabilities | | | 12,056,592 | | | | 12,788,410 | |
| | | | | | | | |
Shareholders' Deficit | | | | | | | | |
Common stock, no par value, unlimited shares authorized, 153,844,986, and 149,184,986 shares issued and outstanding as of August 31, 2011 and May 31, 2011, respectively | | | 36,645,229 | | | | 35,866,729 | |
Deficit accumulated in the exploration stage | | | (48,194,361 | ) | | | (47,371,579 | ) |
Accumulated other comprehensive loss | | | (241,270 | ) | | | (239,704 | ) |
Total Shareholders' Deficit | | | (11,790,402 | ) | | | (11,744,554 | ) |
Total Liabilities and Shareholders' Deficit | | $ | 266,190 | | | $ | 1,043,856 | |
See accompanying notes to the unaudited consolidated financial statements.
CALAIS RESOURCES, INC.
(A Mining Company in the Exploration Stage)
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
| | Three Months Ended August 31, | | | December 30, 1986 (inception) through | |
| | 2011 | | | 2010 | | | August 31, 2011 | |
| | | | | | | | | |
Sales | | $ | - | | | $ | - | | | $ | - | |
| | | | | | | | | | | | |
Operating Costs and Expenses | | | | | | | | | | | | |
Costs applicable to sales | | | 307,820 | | | | - | | | | 307,820 | |
General and administrative expense | | | 444,893 | | | | 184,599 | | | | 12,759,870 | |
Exploration and business development expenses | | | 18,937 | | | | 15,937 | | | | 12,400,890 | |
Depreciation and amortization expense | | | 100 | | | | - | | | | 202,802 | |
Total operating costs and expenses | | | 771,750 | | | | 200,536 | | | | 25,671,382 | |
| | | | | | | | | | | | |
Loss from Operations | | | (771,750 | ) | | | (200,536 | ) | | | (25,671,382 | ) |
| | | | | | | | | | | | |
Other (income) and expenses | | | | | | | | | | | | |
Loss on impairment | | | - | | | | - | | | | 9,808,572 | |
(Gain) loss on settlement of debts | | | - | | | | (20,214 | ) | | | (3,388,742 | ) |
Interest and financing fees | | | 207,160 | | | | 213,531 | | | | 14,646,505 | |
Foreign currency transaction loss | | | 407 | | | | - | | | | 1,368,278 | |
Other (income) expense | | | (156,535 | ) | | | - | | | | 88,366 | |
Total other (income) and expenses | | | 51,032 | | | | 193,317 | | | | 22,522,979 | |
| | | | | | | | | | | | |
Loss before income taxes | | | (822,782 | ) | | | (393,853 | ) | | | (48,194,361 | ) |
Income tax expense (benefit) | | | - | | | | - | | | | - | |
Net loss | | $ | (822,782 | ) | | $ | (393,853 | ) | | $ | (48,194,361 | ) |
| | | | | | | | | | | | |
Other comprehensive loss (income) - foreign currency translation adjustments | | | 1,566 | | | | 12,431 | | | | 241,270 | |
| | | | | | | | | | | | |
Comprehensive loss | | $ | (824,348 | ) | | $ | (406,284 | ) | | $ | (48,435,631 | ) |
| | | | | | | | | | | | |
Basic and diluted weighted-average number of common shares outstanding | | | 151,608,139 | | | | 85,410,751 | | | | | |
Basic and diluted loss per common share | | $ | (0.01 | ) | | $ | (0.00 | ) | | | | |
See accompanying notes to the unaudited consolidated financial statements.
CALAIS RESOURCES INC.
(A Mining Company in the Exploration Stage)
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
| | | | | | | | December 30, 1986 | |
| | Three Months Ended November 30, | | | Six Months Ended November 30, | | | (inception) through | |
| | 2011 | | | 2010 | | | 2011 | | | 2010 | | | November 30, 2011 | |
| | | | | | | | | | | | | | | |
Revenues | | $ | 76,023 | | | $ | - | | | $ | 76,023 | | | $ | - | | | $ | 76,023 | |
| | | | | | | | | | | | | | | | | | | | |
Operating Costs and Expenses | | | | | | | | | | | | | | | | | | | | |
Costs applicable to sales | | | 239,383 | | | | - | | | | 547,203 | | | | - | | | | 547,203 | |
General and administrative | | | 789,598 | | | | 449,430 | | | | 1,234,491 | | | | 634,027 | | | | 13,549,468 | |
Exploration and mine development | | | 21,189 | | | | 42,238 | | | | 40,126 | | | | 58,176 | | | | 12,422,079 | |
Depreciation and amortization | | | 2,478 | | | | 99 | | | | 2,578 | | | | 99 | | | | 205,280 | |
Total operating costs and expenses | | | 1,052,648 | | | | 491,767 | | | | 1,824,398 | | | | 692,302 | | | | 26,724,030 | |
| | | | | | | | | | | | | | | | | | | | |
Loss from Operations | | | (976,625 | ) | | | (491,767 | ) | | | (1,748,375 | ) | | | (692,302 | ) | | | (26,648,007 | ) |
| | | | | | | | | | | | | | | | | | | | |
Other (income) and expenses | | | | | | | | | | | | | | | | | | | | |
Loss on impairment | | | - | | | | - | | | | - | | | | - | | | | 9,808,572 | |
Loss (gain) on settlement of debts | | | 107,685 | | | | (292,718 | ) | | | 107,685 | | | | (312,932 | ) | | | (3,281,057 | ) |
Interest and financing fees | | | 203,738 | | | | 209,891 | | | | 410,898 | | | | 423,423 | | | | 14,850,243 | |
Foreign currency transaction loss | | | 3,078 | | | | 110 | | | | 3,485 | | | | 110 | | | | 1,371,356 | |
Other (income) expense | | | (10 | ) | | | (156 | ) | | | (156,545 | ) | | | (155 | ) | | | 88,356 | |
Total other (income) and expenses | | | 314,491 | | | | (82,873 | ) | | | 365,523 | | | | 110,446 | | | | 22,837,470 | |
| | | | | | | | | | | | | | | | | | | | |
Loss before income taxes | | | (1,291,116 | ) | | | (408,894 | ) | | | (2,113,898 | ) | | | (802,748 | ) | | | (49,485,477 | ) |
Income tax expense (benefit) | | | - | | | | - | | | | - | | | | - | | | | - | |
Net loss | | | (1,291,116 | ) | | | (408,894 | ) | | | (2,113,898 | ) | | | (802,748 | ) | | | (49,485,477 | ) |
| | | | | | | | | | | | | | | | | | | | |
Other comprehensive income (loss) - foreign | | | | | | | | | | | | | | | | | | | | |
currency translation adjustments | | | 34,106 | | | | (153,850 | ) | | | 32,540 | | | | (166,282 | ) | | | (207,164 | ) |
| | | | | | | | | | | | | | | | | | | | |
Comprehensive loss | | | (1,257,010 | ) | | | (562,744 | ) | | | (2,081,358 | ) | | | (969,030 | ) | | | (49,692,641 | ) |
| | | | | | | | | | | | | | | | | | | | |
Basic and diluted weighted-average number of | | | | | | | | | | | | | | | | | | | | |
common shares outstanding | | | 155,926,235 | | | | 100,618,432 | | | | 154,801,699 | | | | 92,973,040 | | | | | |
Basic and diluted loss per common share | | $ | (0.01 | ) | | $ | (0.00 | ) | | $ | (0.01 | ) | | $ | (0.01 | ) | | | | |
See accompanying notes to the unaudited consolidated financial statements.
CALAIS RESOURCES INC.
(A Mining Company in the Exploration Stage)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
| | Three Months Ended August 31, | | | Three Months Ended August 31, | | | December 30, 1986 (inception) through | | |
| | 2011 | | | 2010 | | | August 31, 2011 | | | Six Months Ended November 30, | | | December 30, 1986 (inception) through November 30, | |
| | | | | | | | | | | 2011 | | | 2010 | | | 2011 | |
Cash flows from operating activities: | | | | | | | | | | | | | | | | | | |
Net loss | | $ | (822,782 | ) | | $ | (393,853 | ) | | $ | (48,194,361 | ) | | $ | (2,113,898 | ) | | $ | (802,748 | ) | | $ | (49,485,477 | ) |
Adjustments to reconcile net loss to net cash used in operating activities: | | | | | | | | | | | | | | | | | | | | | | | | |
Accretion expense | | | - | | | | - | | | | 105,655 | | | | - | | | | - | | | | 105,655 | |
Amortization of deferred financing costs | | | - | | | | - | | | | 3,369,936 | | | | - | | | | - | | | | 3,369,936 | |
Depreciation and depletion | | | 100 | | | | - | | | | 201,135 | | | | 2,578 | | | | 99 | | | | 203,613 | |
Non-cash interest expense | | | 206,763 | | | | 207,073 | | | | 12,046,663 | | | | 209,031 | | | | 411,639 | | | | 12,048,931 | |
Loss on impairment of mineral properties | | | - | | | | - | | | | 8,824,989 | | | | - | | | | - | | | | 8,824,989 | |
Loss on impairment of investment | | | - | | | | - | | | | 983,583 | | | | - | | | | - | | | | 983,583 | |
Common shares issued in connection with trust deed modification | | | - | | | | - | | | | 90,000 | | | | - | | | | - | | | | 90,000 | |
Common shares issued in connection with debt settlement | | | - | | | | - | | | | 1,048,053 | | | | - | | | | - | | | | 1,048,053 | |
Common shares issued for services | | | - | | | | 50,000 | | | | 1,524,441 | | | | 138,500 | | | | 50,000 | | | | 1,662,941 | |
Warrants cancelled for services | | | - | | | | - | | | | (18,173 | ) | | | - | | | | - | | | | (18,173 | ) |
Warrants issued in connection with debt restructure | | | - | | | | - | | | | 155,007 | | | | - | | | | - | | | | 155,007 | |
Losses (gains) recognized in connection with debt settlement | | | - | | | | (20,214 | ) | | | (3,098,846 | ) | |
Loss (gain) recognized in connection with debt settlement | | | | 107,685 | | | | (314,877 | ) | | | (2,991,161 | ) |
Gain on sale of property, plant and equipment | | | (156,500 | ) | | | - | | | | (151,627 | ) | | | (156,500 | ) | | | - | | | | (151,627 | ) |
Loss on disposal of property, plant and equipment | | | - | | | | - | | | | 8,040,143 | | | | - | | | | - | | | | 8,040,143 | |
Loss on abandonment of mineral properties | | | - | | | | - | | | | 300,600 | | | | - | | | | - | | | | 300,600 | |
Loss on default of exploration development agreement | | | - | | | | - | | | | 456,090 | | | | - | | | | - | | | | 456,090 | |
Loss on foreign exchange | | | 407 | | | | - | | | | 1,687,048 | | | | 3,485 | | | | 110 | | | | 1,690,126 | |
Environmental remediation liability | | | - | | | | - | | | | 50,000 | | | | - | | | | - | | | | 50,000 | |
Changes in operating assets and liabilities: | | | | | | | | | | | | | | | | | | | | | | | | |
(Increase) decrease in prepaid expenses | | | (41,265 | ) | | | (28,582 | ) | | | (122,568 | ) | |
Increase (decrease) in accounts payable and other current liabilities | | | (911,873 | ) | | | 112,779 | | | | 1,606,156 | | |
(Increase) decrease in other operating assets and liabilities | | | - | | | | 10,321 | | | | (202,667 | ) | |
Net cash (used in) operating activities | | | (1,725,150 | ) | | | (62,476 | ) | | | (11,298,742 | ) | |
Increase in inventories | | | | (18,894 | ) | | | - | | | | (18,894 | ) |
Decrease (increase) in prepaid expenses | | | | 63 | | | | (36,205 | ) | | | (81,240 | ) |
(Decrease) increase in accounts payable and other current liabilities | | | | (575,035 | ) | | | 94,122 | | | | 1,942,994 | |
Decrease (increase) in other operating assets and liabilities | | | | - | | | | 11,082 | | | | (202,668 | ) |
Net cash used in operating activities | | | | (2,402,985 | ) | | | (586,778 | ) | | | (11,976,579 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Cash flows from investing activities: | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | |
Purchase of mineral properties & equipment | | | - | | | | - | | | | (17,481,692 | ) | | | - | | | | - | | | | (17,481,692 | ) |
Dispositions of equipment | | | 156,500 | | | | - | | | | 317,852 | | | | 156,500 | | | | - | | | | 317,852 | |
Net additions to equipment | | | - | | | | - | | | | (183,542 | ) | | | (16,135 | ) | | | (5,464 | ) | | | (199,677 | ) |
Deferred exploration expenditures | | | - | | | | - | | | | (143,071 | ) | | | - | | | | - | | | | (143,071 | ) |
Deposit on equipment | | | - | | | | - | | | | (17,880 | ) | | | - | | | | - | | | | (17,880 | ) |
Acquisition of shares of subsidiary | | | - | | | | - | | | | (715,932 | ) | | | - | | | | - | | | | (715,932 | ) |
Advance to subsidiary | | | - | | | | - | | | | (177,875 | ) | | | - | | | | - | | | | (177,875 | ) |
Payable under option agreement | | | - | | | | - | | | | 716,481 | | | | - | | | | - | | | | 716,481 | |
Refundable deposit on purchase of shares of subsidiary | | | - | | | | - | | | | (73,847 | ) | | | - | | | | - | | | | (73,847 | ) |
Net cash provided by (used in) investing activities | | | 156,500 | | | | - | | | | (17,759,506 | ) | |
Net cash (used in) provided by investing activities | | | | 140,365 | | | | (5,464 | ) | | | (17,775,641 | ) |
See accompanying notes to the unaudited consolidated financial statements.
CALAIS RESOURCES INC.
(A Mining Company in the Exploration Stage)
CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)
(UNAUDITED)
| | Six Months Ended November 30, | | | December 30, 1986 (inception) through November 30, | |
| | 2011 | | | 2010 | | | 2011 | |
| | | | | | | | | |
Cash flows from financing activities: | | | | | | | | | |
Proceeds from sale of common shares | | $ | 1,498,500 | | | $ | 1,806,300 | | | $ | 23,303,579 | |
Proceeds from sale of private equity | | | - | | | | - | | | | 345,000 | |
Proceeds from borrowings long term-debt | | | - | | | | - | | | | 17,029,960 | |
Proceeds from borrowing on shareholder note | | | - | | | | - | | | | 282,000 | |
Repayments of long term debt | | | - | | | | - | | | | (11,902,794 | ) |
Repayments of debt - convertible debentures | | | (57,193 | ) | | | (45,500 | ) | | | (529,817 | ) |
Advances to affiliated companies, shareholders and directors | | | - | | | | - | | | | (106,730 | ) |
Restricted cash | | | - | | | | - | | | | (31,789 | ) |
Share subscriptions received in advance | | | - | | | | - | | | | 518,415 | |
Net cash provided by financing activities | | | 1,441,307 | | | | 1,760,800 | | | | 28,907,824 | |
| | | | | | | | | | | | |
Effect of foreign exchange | | | - | | | | - | | | | 936,263 | |
| | | | | | | | | | | | |
Net change in cash and cash equivalents | | | (821,313 | ) | | | 1,168,558 | | | | 91,869 | |
Cash at beginning of period | | | 913,182 | | | | 27,919 | | | | - | |
Cash at end of period | | $ | 91,869 | | | $ | 1,196,477 | | | $ | 91,869 | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
Supplemental Cash Flow Information | | | | | | | | | | | | |
Interest expense paid in cash | | $ | 201,866 | | | $ | 11,783 | | | $ | 1,405,199 | |
Interest received | | $ | - | | | $ | - | | | $ | 3,999 | |
Non-cash financing and investing activity: | | | | | | | | | | | | |
Debt restructuring - warrants issued | | $ | - | | | $ | - | | | $ | 412,407 | |
Common shares issued in connection with debt restructuring and settlement of accrued liabilities | | $ | - | | | $ | 1,216,049 | | | $ | 4,987,140 | |
Common shares issued for acquisition of property | | $ | - | | | $ | - | | | $ | 32,500 | |
Shares issued for mineral property development | | $ | - | | | $ | - | | | $ | 96,315 | |
Shares issued for repayment of shareholder advances | | $ | - | | | $ | - | | | $ | 9,240,146 | |
| | Three Months Ended August 31, | | | Three Months Ended August 31, | | | December 30, 1986 (inception) through | |
| | 2011 | | | 2010 | | | August 31, 2011 | |
| | | | | | | | | |
Cash flows from financing activities: | | | | | | | | | |
Proceeds from sale of common shares | | $ | 778,500 | | | $ | 52,000 | | | $ | 22,583,579 | |
Proceeds from sale of private equity | | | - | | | | - | | | | 345,000 | |
Proceeds from borrowings long term-debt | | | - | | | | - | | | | 17,029,960 | |
Proceeds from borrowing on shareholder note | | | - | | | | - | | | | 282,000 | |
Repayments of long term debt | | | - | | | | - | | | | (11,902,794 | ) |
Repayments of debt - convertible debentures | | | (28,681 | ) | | | (5,000 | ) | | | (501,305 | ) |
Advances to affiliated companies, shareholders and directors | | | - | | | | - | | | | (106,730 | ) |
Restricted cash | | | - | | | | - | | | | (31,789 | ) |
Share subscriptions received in advance | | | - | | | | - | | | | 518,415 | |
Net cash provided by financing activities | | | 749,819 | | | | 47,000 | | | | 28,216,336 | |
| | | | | | | | | | | | |
Effect of foreign exchange | | | - | | | | - | | | | 936,263 | |
| | | | | | | | | | | | |
Net change in cash and cash equivalents | | | (818,831 | ) | | | (15,476 | ) | | | 94,351 | |
Cash at beginning of period | | | 913,182 | | | | 27,919 | | | | - | |
Cash at end of period | | $ | 94,351 | | | $ | 12,443 | | | $ | 94,351 | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
Supplemental Cash Flow Information | | | | | | | | | | | | |
Interest expense paid in cash | | $ | 397 | | | $ | 6,458 | | | $ | 1,203,730 | |
Interest received | | $ | - | | | $ | - | | | $ | 3,999 | |
Debt restructuring - warrants issued | | $ | - | | | $ | - | | | $ | 412,407 | |
Common shares issued in connection with debt restructuring and settlement of accrued liabilities | | $ | - | | | $ | 836,539 | | | $ | 4,987,140 | |
Common shares issued in connection with accrued liabilities | | $ | - | | | $ | 760,000 | | | $ | 1,175,651 | |
Common shares issued for debt restructuring | | $ | - | | | $ | - | | | $ | 556,321 | |
Common shares issued for settlement | | $ | - | | | $ | 76,539 | | | $ | 1,999,451 | |
Common shares issued for debt restructuring and settlements | | $ | - | | | $ | - | | | $ | 1,255,717 | |
Common shares issued for acquisition of property | | $ | - | | | $ | - | | | $ | 32,500 | |
Shares issued for mineral property development | | $ | - | | | $ | - | | | $ | 96,315 | |
Shares issued for repayment of shareholder advances | | $ | - | | | $ | - | | | $ | 9,240,146 | |
See accompanying notes to the unaudited consolidated financial statements.
CALAIS RESOURCES INC.
(A Mining Company in the Exploration Stage)
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
August 31,November 30, 2011
NOTE 1 - ORGANIZATION AND BASIS OF PRESENTATION
Calais Resources Inc. was incorporated under the laws of the Province of British Columbia, Canada, on December 30, 1986. Calais Resources Inc. and its subsidiaries (collectively with its subsidiaries, referred to herein as “Calais”, “we”, “us” or “our”) isare currently in the process of exploring various mineral interests, primarily gold and silver. We are headquartered in Colorado and have mining interests in Colorado and Nevada.
Our consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP"). The preparation of our consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and 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. The more significant areas requiring the use of management estimates and assumptions relate to the valuation of deferred tax assets accruals for liabilities and the fair value of financial instruments. 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.
Our activities to date have primarily consisted of raising capital and acquiring and exploring our mining interests. We have had no significant revenue in our history. Accordingly, we are considered to be in the exploration stage.
Our fiscal year end is May 31st. Through May 31, 2004, we reported our financial information using Canadian Generally Accepted Accounting Principles (“Canadian GAAP”) using the Canadian dollar as our functional and reporting currency. During the fiscal year ended May 31, 2005, we changed our reporting basis to the United States Generally Accepted Accounting Principles (“U.S. GAAP”) and our functional and reporting currency to the United States dollar (“U.S. dollar”). Accordingly, historical cumulative financial information included in this Quarterly Report on Form 10-Q has been restated using U.S. GAAP with a functional and reporting currency of the U.S. dollar, unless otherwise noted. All references herein to “$” and “US$” refer to U.S. dollars. Unless otherwise specified, all dollar amounts are expressed in United States dollars. All references to Common Shares refer to shares of our common stock (without par value) unless otherwise indicated.
These interim unaudited financial statements have been prepared on the same basis as the annual financial statements and in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary to present fairly our financial position, results of operations and cash flows for the periods shown. The results of operations for such periods are not necessarily indicative of the results expected for a full year or for any future period.
NOTE 2 – LIQUIDITY
As of August 31,November 30, 2011, we had a working capital deficit of $11,681,015,$11,368,783, and for the threesix months then ended cash used in operating activities amounted to $1,725,150.$2,402,985. To date, we have not generated anyonly nominal revenues from operations ($76,023) and have incurred losses since inception resulting in a deficit accumulated during the development stage of $48,194,361$49,485,477 through August 31,November 30, 2011. Further losses are anticipated as we continue to be in the exploration stage, as defined in ASC Topic 915, Development Stage Entities.
Our ability to continue as a going concern depends upon our ability to generate profitable operations in the future and/or to raise additional funds through equity or debt financing. Since inception, we have raised $23,446,994$24,166,994 through the issuance of equity securities and $17,311,960 through the issuance of debt instruments, which has been used primarily to provide operating funds, repay long termlong-term debt, and acquire mineral interests. Subsequent to August 31,November 30, 2011, we have acquired an additional $420,000$100,000 through financing, as described more fully in Note
12. On December 1, 2011, the Brigus note (See Note 5) matured and we have not made payment as of the date of these financial statements. There is no assurance that we will be able to obtain additional funding when needed, or that such funding, if available, can be obtained on terms acceptable to us or at all. If we cannot obtain needed funds for implementing our mine plan after completion of the feasibility study, we may be forced to curtail or cease our activities. Equity financing, if available, may result in substantial dilution to existing stockholders. All of these factors cause substantial doubt about our ability to continue as a going concern. These 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 we cannot continue as a going concern.
NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Inventories
Stockpiled ore inventories represent mineralized material that has been mined and hauled to the surface from our Cross Mine. This inventoried stockpile is ready for shipping for further processing by an outside source. 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).
Ore stockpile inventories are carried at the lower of average cost or net realizable value. Net realizable value represents the estimated future sales price of the product based on current and long-term metals prices, less the estimated costs to complete production and bring the product to sale. Write-downs of stockpiled ore inventories, resulting from net realizable value impairments, are reported as a component of production costs applicable to sales. The current portion of ore stockpiles is determined based on the expected amounts to be processed within the next 12 months. Ore stockpile inventories not expected to be processed within the next 12 months, if any, are classified as long-term. At November 30, 2011, all ore stockpile inventories were classified as current.
Accrued Vacation
Our full-time employees are entitled to paid vacation, depending on job classification, length of service, and other factors. A liability has been recorded in the accompanying financial statements for accrued vacation leave.
Revenue Recognition
We have generated limited income from the sale of gold from our ores processed at an offsite third party mill facility. Revenues from the sale of minerals are recognized when the ores are processed by the third party.
Foreign Currency
We have recorded amounts payable related to a convertible debenture that is denominated in Canadian dollars. As of AugustNovember 30, 2011 and May 31, 2011, and 2010 adjustments resulting from liabilities denominated in a foreign currency have been reported as other comprehensive lossincome in our financial statements.
Impairment of Long-Lived Assets
We review and evaluate long-lived assets for impairment at least once per year, or more often when events or changes in circumstances indicate that the related carrying amounts may not be recoverable. During the threesix months ended August 31,November 30, 2011 and 2010, we did not record any impairment expense.
Use of Estimates and Significant Estimates
Certain amounts in our financial statements are based upon significant estimates including environmental remediation obligations, accrued liabilities and a provision for income taxes. Actual results could materially differ from those estimates.
Reclassifications
Certain accounts and financial statement captions in the prior periods have been reclassified to conform to the presentation in the current period financial statements.
Recent Accounting Pronouncements
The Company evaluates the pronouncements of various authoritative accounting organizations, primarily the Financial Accounting Standards Board (“FASB”), the SEC, and the Emerging Issues Task Force (“EITF”), to determine the impact of new pronouncements on U.S. GAAP and the impact on the Company.
In January 2010, the FASB issued ASU 2010-06, Fair Value Measurements and Disclosures (Topic 820), which requires reporting entities to make new disclosures about recurring or nonrecurring fair value measurements including significant transfers into and out of Level 1 and Level 2 fair value measurements and information on purchases, sales, issuances, and settlements on a gross basis in the reconciliation of Level 3 fair value measurements. ASU 2010-6 is effective for annual reporting periods beginning after December 15, 2009, except for Level 3 reconciliation disclosures which are effective for annual periods beginning after December 15, 2010. We do not have any assets or liabilities classified as Level 3. We have adopted the Level 1 and Level 2 amendments accordingly. As the update only pertained to disclosures, it had no impact on our financial position, results of operations, or cash flows upon adoption.
UseIn June 2011, the FASB issued ASU No. 2011-05, Comprehensive Income (Topic 220) – Presentation of EstimatesComprehensive Income (“ASU 2011-05”). ASU 2011-05 requires entities to present net income and Significant Estimatesother comprehensive income in either a single continuous statement or in two separate, but consecutive, statements of net income and other comprehensive income. ASU 2011-05 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2011 (November 30, 2012 for the Company). We do not expect the adoption of ASU 2011-05 to have a material impact on our results of operations, financial condition, or cash flows.
Certain amountsIn December 2011, the FASB issued ASU No. 2011-12, Comprehensive Income (Topic 220) – 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”). ASU 2011-12 defers changes in Update 2011-05 that relate to the presentation of reclassification adjustments. ASU 2011-12 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2011 (November 30, 2012 for the Company). We do not expect the adoption of ASU 2011-12 to have a material impact on our results of operations, financial statements are based upon significant estimates including environmental remediation obligations, accrued liabilities and a provision for income taxes. Actual results could materially differ from those estimates.condition, or cash flows.
NOTE 4 – MINERAL INTERESTS
There were no material changes to our mineral properties from those disclosed in the audited annual consolidated financial statements for the year ended May 31, 2011.
During the quartersix months ended August 31,November 30, 2011, we began test mining operations at our Cross mine. We have begun test processing at an out of state facility. We have incurred $307,820$547,203 in costs associated with these operations, while weand have not generated revenues through August 31,of $76,203 for the six months ended November 30, 2011.
On August 11, 2011, we renewed a convertible debenture payable to Aardvark Agencies Inc. “AAI” which contained repurchase rights for interests in our Caribou properties, including the price payable for the reacquisition (a total of Cdn$747,728) and AAI’s right to convert that debenture before it is paid (Note 6).
NOTE 5 – DEBT
As of August 31,November 30, 2011 and May 31, 2011, we had one outstanding note payable (the “Brigus Note”) in the amount of $10,253,878 (the “Brigus Note”).$10,253,878. The original maturity date for the note was February 1, 2011. On January 15, 2011, we received forbearance under the terms of an agreement effectively extending the maturity date of the debt throughto June 30, 2011. On June 8, 2011, we and the note holder extended the maturity of the note through October 31, 2011. In
connection with this forbearance we paid the note holder $1,000,000 which was applied against interest due on the promissory notes. On October 24, 2011, we and the note holder further extended the maturity of the note through December 1, 2011. In connection with this forbearance we paid the note holder $200,000 which was applied against interest due on the notes. The note bears interest at 8% and is secured by a lien on our Caribou property.
We continue to explore financing opportunities related to the October 31,December 1, 2011 maturity date of the Brigus Note.
As of August 31,November 30, 2011 and May 31, 2011, we have accrued interest in the amount of $296,764$299,033 and $1,090,001, respectively.
NOTE 6 – DEBENTURES
A summary of convertible debentures outstanding is as follows:
| | August 31, 2011 | | | May 31, 2011 | | | November 30, 2011 | | | May 31, 2011 | |
Debenture (a) | | $ | 676,256 | | | $ | 702,964 | | | $ | 724,399 | | | $ | 702,964 | |
Total debenture payable | | | 676,256 | | | | 702,964 | | |
Less: Current portion | | | (676,256 | ) | | | (702,964 | ) | | | - | | | | (702,964 | ) |
Long-term portion | | $ | - | | | $ | - | | | $ | 724,399 | | | $ | - | |
(a) This debenture is unsecured, non-interest bearing, and initially matured in May 2011. This debenture is owned by Marlowe Harvey who was the President and a director of ours until he resigned as President in 2000 and as a director in November 2003. The debenture is convertible into common stock at $1.23 in Canadian Dollars at the holder’s discretion and contains no restrictive covenants.
This debenture matured in May 2011. On August 11, 2011 the convertible debenture was renewed for a period of ten years maturing on August 31, 2021. All terms contained in the debenture agreement remain consistent with the original note, as fully described in our annual report on Form 10-K for the period ended May 31, 2011.note.
NOTE 7 – SHAREHOLDERS’ DEFICIT
Common Stock - We have authorized an unlimited number of common shares of our no par value common stock. Common shares outstanding as of August 31,November 30, 2011 and May 31, 2011 were 153,844,986162,196,422 and 149,184,986, respectively.
Transactions involving our common stock during the threesix months ended August 31,November 30, 2011 were as follows:
· | We raised $778,500$1,498,500 in cash from accredited investors for the sale of units comprising 4,660,00011,626,668 shares of restricted common stock and warrants to purchase 2,330,000 of5,813,335 common shares. The common stock prices ranged from $0.10 to $0.20 per share and the warrants hadhave an exercise pricesprice from $0.20 to $0.30 per share with expiration dates of June July2012 through September 2013. |
· | In connection with the issuance of some of the shares mentioned above, as compensation for consulting services we issued 1,385,000 shares of restricted common stock at $0.10 and Augustwarrants to purchase 125,000 common shares at an exercise price of $0.30 which expire October 2012. |
NOTE 8 – COMMON STOCK WARRANTS
The following table summarizes information about outstanding stock purchase warrants as of August 31,November 30, 2011:
| | Number of Warrants Outstanding | | | Exercise Price | |
Outstanding as of May 31, 2011 | | | 31,498,196 | | | | $0.12-$0.25 | |
Issued | | | 2,330,000 | | | 5,938,335 | $0.20-$0.30 | |
Expirations | | | - | | | | | |
Balance at August 31,November 30, 2011 | | | 33,828,19637,436,531 | | | | $0.12-$0.12-$0.30 | |
Exercise Price | | | Number of Shares | | | Remaining Contractual Life in Years | | | Exercise Price Times Number of Shares | | Weighted Average Exercise Price |
$ | 0.12 | | | | 11,246,141 | | | | 1.25 | | | | 1,349,537 | | |
$ | 0.12 | | | | 4,136,259 | | | | 1.5 | | | | 496,351 | | |
$ | 0.12 | | | | 5,060,496 | | | | 1.5 | | | | 607,260 | | |
$ | 0.12 | | | | 480,000 | | | | 1.8 | | | | 57,600 | | |
$ | 0.12 | | | | 8,249,900 | | | | 9.9 | | | | 989,988 | | |
$ | 0.20 | | | | 2,825,400 | | | | 1.5 | | | | 565,080 | | |
$ | 0.25 | | | | 875,000 | | | | 9.2 | | | | 218,750 | | |
$ | 0.30 | | | | 955,000 | | | | 1.0 | | | | 286,500 | | |
| | | | | 33,828,196 | | | | | | | | 4,571,066 | | $0.14 |
Exercise Price | | | Number of Shares | | | Remaining Contractual Life in Years | | | Exercise Price Times Number of Shares | | Weighted Average Exercise Price |
| $0.12 | | | | 20,923,296 | | | | 1.2 | | | $ | 2,510,795 | | |
| $0.12 | | | | 7,000,000 | | | | 2.4 | | | | 840,000 | | |
| $0.12 | | | | 1,249,900 | | | | 9.7 | | | | 149,988 | | |
| $0.20 | | | | 5,655,000 | | | | 0.8 | | | | 1,131,000 | | |
| $0.25 | | | | 233,335 | | | | 1.8 | | | | 58,334 | | |
| $0.25 | | | | 875,000 | | | | 8.1 | | | | 218,750 | | |
| $0.30 | | | | 1,500,000 | | | | 0.6 | | | | 450,000 | | |
| | | | | 37,436,531 | | | | | | | $ | 5,358,867 | | $0.14 |
NOTE 9 – LOSS PER SHARE
Basic loss per share is computed by dividing income available to common stockholders by the weighted-average number of shares outstanding during the period. Diluted earnings per share reflect the potential of securities that could share in our earnings. All of the common shares underlying warrants outstanding as of August 31,November 30, 2011 and 2010 were excluded from diluted weighted average shares outstanding for each of the respective years because their effects were considered anti-dilutiveanti-dilutive.
NOTE 10 – RELATED PARTY TRANSACTIONS
We have frequent transactions with related parties, employees and shareholders holding more than 10% of our outstanding common stock. Transactions involving related parties during the threesix months ended August 31,November 30, 2011 were as follows:
· | Our notes payable balance as of August 31,November 30, 2011 consisted of one note payable to Brigus Gold Corp. (“Brigus”). When this note was consummated in February 2010, the counterparty to this note was Apollo Gold Corp., a predecessor of Brigus. Our now-currentcurrent CEO, R. David Russell, was the CEO of Apollo Gold Corp. at that time. |
· | From time to time, our President and Vice President of Corporate Development incur expenses on behalf of the Company and are reimbursed by us. As of August 31,November 30, 2011, included in accounts payable are amounts due to the officers as reimbursement. These amounts are not considered to be material. |
· | The Canadian-dollar denominated convertible debenture (Note 6) is owned by a company related to a shareholder and former director. |
NOTE 11 – COMMITMENTS AND CONTINGENCIES
There have been no material changes to our obligations as described in our annual report on Form 10-K issued in connection with the fiscal year ended May 31, 2011. We may from time to time become subject to various claims and litigation. The Company vigorously defends its legal position when these matters arise. The Company is
neither a party to, nor the subject of, any material pending legal proceeding nor to the knowledge of the Company are there any such legal proceedings threatened against the Company.
The Company filed its brief in support of the petition by the September 16, 2011 due date. The SEC filed its brief in opposition by the October 17, 2011 due date and the Company filed its reply brief by the October 31, 2011 due date. Because the Petition for Review has been filed, the Initial Decision shall not become final until the Commission rules on the Petition.
The British Columbia Securities Commission (“BCSC”) has issued comment letters on the Application and the Company has responded to those comments. The latest comment letter is dated October 28, 2011 and the Company has filed a response to that letter.
NOTE 12 – SUBSEQUENT EVENTS
We have evaluated all of our activity and have concluded that no subsequent events have occurred that would require recognition in the consolidated financial statements or disclosure in the notes to the unaudited consolidated financial statements, except as disclosed below.
Employment Agreements
Effective September 1, 2011, the Company entered into employment agreements with certain directors and officers of the Company, which supercede prior existing agreements. The employment agreements provide for increases in compensation, performance bonuses, stock grants, and other certain health and travel benefits. The agreements have no termination date; however, they provide for termination related to circumstances relative to: the employee’s voluntary termination; termination due either death or disability; the employee’s termination without cause; or termination resultant to the Company’s effective change of control, as defined in the employment agreements.
Debenture Settlements
Lynne Martin Settlement
On September 20, 2011, we paid the final installment on the Settlement Agreement with Lynne Martin, in the amount of $28,681.
Common Stock
Since August 31,November 30, 2011, we have issued 3,966,6681,000,000 shares of our restricted common stock and 1,983,335500,000 warrants to purchase our common shares for net cash proceeds of $420,000.
$100,000.
ITEM 2. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
Cautionary Statement Regarding Forward-Looking Statements
The following discussion and analysis should be read in conjunction with the accompanying financial statements and related notes included elsewhere in this report. It contains forward looking statements that reflect our future plans, estimates, beliefs and expected performance. The forward looking statements are dependent upon events, risks and uncertainties that may be outside our control. Our actual results could differ materially from those discussed in these forward looking statements.
In our effort to make the information in this report more meaningful, this Quarterly Report on Form 10-Q and documents incorporated by reference herein (or otherwise made by us or on our behalf) contain both historical and forward-looking statements. Such forward-looking statements are not based on historical facts, but rather reflect the current expectations of our management concerning future results and events. Forward-looking statements are generally accompanied by words such as “estimate,” “project,” “predict,” “believe,” “expect,” “anticipate,” “plan,” “goal” or other similar words or variations that convey the uncertainty of future events or outcomes. These statements are based on the beliefs anand assumptions of our management based on information currently available to us. These statements by their nature are subject to certain risks, uncertainties and assumptions and will be influenced by various factors, some of which are beyond our control. Actual results could vary materially from future results expressed or implied by such forward-looking statements. Important factors that could cause actual results to differ materially from the forward-looking statements include, without limitation, the following risk factors:
· | • | | our ability to execute against our plans; |
· | • | | our ability to continue as a going concern; |
· | • | | the possible loss of our interest in our Caribou properties if we do not meet our debt obligations; |
· | • | | the potential that we will not obtain good title to our Manhattan project; |
· | • | | the volatility and low trading volume of our common stock; |
· | • | | our ability to secure additional capital; |
· | • | | the possibility we may never achieve anysignificant mineral production; |
· | • | | the future dilution to our shareholders from future capital-raising activities and payments to employees, directors and consultants; |
· | • | | the possibility our Board of Directors may issue authorized and unissued shares of common stock and preferred stock; |
· | • | | the effects the penny stock rules may have on the trading of our stock; |
· | • | | our dependence on a few key employees; |
· | • | | the influence of a few large shareholders on our business; |
· | • | | risks associated with our incorporation in Canada; |
· | • | | our lack of experience in mining and selling minerals; |
· | • | | operational and environmental risks associated with the mining industry; |
· | • | | the effect of government regulations on our business; |
· | • | | lack of clear title to our mineral prospects; |
· | • | | the fact our mineral interests are not yet proven; |
· | • | | fluctuation in the prices of gold and silver; and |
· | • | | the limited liquidity in our common stock due to a cease trade order issued by the British Columbia Securities Commission in February 2005 and an administrative action initiated by the Securities and Exchange Commission to revoke our registration as a reporting company under the Securities Exchange Act of 1934. |
All forward-looking statements speak only as of the date made. All subsequent written and oral forward-looking statements attributable to us, or persons acting on our behalf, are expressly qualified in their entirety by these cautionary statements. Except as required by law, we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which it is made or to reflect the occurrence of anticipated or unanticipated events or circumstances.
Executive Summary
We are a mineral exploration company engaged directly and indirectly through subsidiaries, in the acquisition and exploration of minerals and metals, primarily gold and silver. Our business is currently in the exploratory or exploration stage as defined by Accounting Standards Codification (“ASC”) 915-10 and SEC Industry Guide 7 and, to date, our activities have not included development or significant mining operations. Our primary property is the Caribou project (advanced exploration stage) located in Nederland, Colorado; we also have properties in Nye County, Nevada.
Recent Events
Mining and Milling Operations
During the quartersix months ended August 31,November 30, 2011, we began test mining operations at our Cross mine. We have begun test processing at an out of state facility, in connection therewith wefacility. We have incurred $307,820$547,203 in costs associated with these operations. While weoperations, and have not generated revenues as of August 31, 2011, we expect to generate revenues beginning sometime during$76,203 for the last foursix months of calendarended November 30, 2011.
Note Payable
On January 15, 2011, we received forbearance under the terms of an agreement effectively extending the maturity date of our 8% $10,253,878 note payable through June 30, 2011. This note was originally due on February 1, 2011 and is secured by a lien on our Caribou property. On June 8, 2011, we and Brigus Gold Corp. (“Brigus”) extended the maturity under the forebearanceforbearance to October 31, 2011, under the provision that we pay Brigus at least $1,000,000 on or before June 30, 2011, which would be applied against interest due on the promissory note covered by the ForebearanceForbearance Agreement. We paid Brigus $1,000,000 on June 8, 2011 thereby extending the maturity date to October 31, 2011. On October 24, 2011, we and Brigus further extended the maturity to December 1, 2011. In connection with this additional forbearance we paid Brigus $200,000 which was applied against interest due on the promissory notes. As of the date of this report, we had not repaid the Brigus note nor otherwise reached an agreement to extend the note or otherwise settle it. We continueare in discussion with Brigus and others to explore financing opportunities related tonegotiate the pending maturityrepayment of the Brigus note.note, however, we cannot guarantee that a satisfactory agreement will be reached between Calais and Brigus or any other parties.
Common Stock
During the quarter ended August 31,November 30, 2011, we have issued 4,660,0008,351,668 shares of our restricted common stock as follows:
· | 6,966,668 for cash proceeds of $720,000 |
· | 4,660,0001,385,000 for cash proceeds of $778,500consulting services valued at $138,500 |
· | Since August 31, 2011, we have issued 3,966,668 shares of our restricted common stock and 1,983,335 warrants to purchase our common shares for net proceeds of $420,000. |
Since November 30, 2011, we have issued 1,000,000 shares of our restricted common stock and 500,000 warrants to purchase our common shares for net proceeds of $100,000.
New Chief Financial Officer
On October 26, 2011, we appointed Brent E. Timmons as Vice President of Finance and Chief Financial Officer. Mr. Timmons is a Certified Public Accountant and has 16 years of professional experience, with six years in mining. Mr. Timmons had been with Brigus from April 2005 to September 2011, serving as Vice President and Controller from April 2007 to September 2011. He was an officer of Brigus when the notes payable due to Brigus were assumed from Elkhorn Goldfields LLC.
Interim Financial Statements
The financial information with respect to the three and six months ended August 31,November 30, 2011 and 2010, discussed below, is unaudited. In the opinion of management, such information contains all adjustments, consisting only of
normal recurring accruals, necessary for a fair presentation of the results for such periods. The results of operations for interim periods are not necessarily indicative of the results of operations for the full fiscal years.
Results of Operations
During the three months and six months ended August 31,November 30, 2011, we generated a net losslosses of $822,782$1,291,116 and $2,113,898, respectively, compared to a net losslosses of $393,853$408,894 and $802,748 during the three monthsand six month prior periods ended August 31,November 30, 2010. This increaseThe increases in net losses of $428,929 or 109% results$882,222 (216%) and $1,311,150 (163%) result from the start of test mining operations at our Cross mine, as well as higher wages and benefits expense and higher consulting and professional fees in 2011 as compared to 2010, as discussed further below. In addition, we recognized a gain on settlement of debts in 2010 compared to a loss on such activity in 2011.
Revenues
During the three and six months ended November 30, 2011, we recorded $76,023, our first mineral sales in our history. Revenues were from the sale of assets in the 2011 quarter compared to no gain or loss48.2 ounces of payable gold at an offsite mill at an average price of $1,576 per ounce of gold. The 48.2 ounces were processed from sale112 dry tons of assets in the 2010 quarter.ore at a grade of 0.448 ounces per ton at a 96% recovery rate.
Costs applicable to Sales
During the three monthsprior quarter ended August 31, 2011, we beganresumed test mining operations at our Cross mine. Consequently, for the three and six months ended November 30, 2011, we incurred $307,820 in costs applicable to future sales of $239,383 and $547,203, respectively, as compared to $nil in the corresponding 2010 period.periods. The
increase in costs applicable to sales increased during the 2011 period as we began ore extraction on our Cross property. Included in these costs are waste ore removal and mine development costs that must be expensed immediately under generally accepted accounting principles in the U.S. since we report no proven or probable reserves.
General and Administrative Expense
For the three and six months ended August 31,November 30, 2011, general and administrative expense was $444,893$789,598 and $1,234,491, respectively, as compared to $184,599$449,430 and $634,027 in the corresponding 2010 period.periods. The increaseincreases of $260,294 (141%$340,168 (76%) and $600,464 (95%) was due to increased consulting and professional fees and increased wages and benefits expense, and increased consulting and professional fees as discussed below.
Consulting and professional fees. For the three and six months ended August 31,November 30, 2011, and 2010, consulting and professional fees were $239,159$327,151 and $84,486, respectively.$566,309, respectively, compared to $309,698 and $394,183 in the corresponding 2010 periods. The increaseincreases of $154,673 (183%$17,453 (6%) during the three months ended August 31, 2011and $172,126 (44%) is related primarily to accounting and legal services as we continued the process of attempting to regain compliance with our SEC and Canadian reporting requirements.
Wages and benefits expense. For the three and six months ended August 31,November 30, 2011, and 2010, wages and benefits expense amounted to $131,963$393,382 and $81,117, respectively.$525,345, respectively, compared to $81,111 and $162,229 in the corresponding 2010 periods. The increaseincreases are a result of $50,846 (63%) results primarily from the addition of our CEO and Chairman of the Board in January 2011.2011 and renegotiating certain officer’s contracts in September 2011, which included the recognition of a full calendar year of accrued vacation as of November 30, 2011 for those officers.
Other generalGeneral and administrative eAdministrative xpensesExpenses.. Additional increases in general and administrative expenses of $54,775 during the fiscal 2011 periodof $69,067 and $142,836 for the three and six months ended November 30, 2011, respectively, related to increased expenses primarily attributable to the increase in day to day operations of the Companycompany and insurance coverage.
Other Income and Expenses
Gain on sale of assets. During the quartersix months ended August 31,November 30, 2011, the Company sold fully depreciated and idle assets for $156,500 in cash proceeds. The Company recognized the full amount as a gain on sale of assets in its currentfirst quarter financial statements, due to the write-down and full depreciation of all assets to zero in prior periods.
Interest and financing fees. For the three and six months ended August 31,November 30, 2011, and 2010, interest and financing fees were $207,160$203,738 and $213,531 respectively. The decrease$410,898, respectively, compared to $209,891 and $423,423 in the 2011 period of $6,371 was due primarilycorresponding 2010 periods. The interest is related to lower finance charges on accounts payable paid in cash.the Brigus notes.
Liquidity
Because we have not yet commenced our intended primary operations and are not yet generating revenuesignificant revenues from any source, our liquidity is completely reliant on our ability to generate cash through capital-raising activities. During the threesix months ended August 31,November 30, 2011, we issued 4,660,00011,626,668 shares of our common stock for cash proceeds of $778,500.$1,498,500.
Net cash flows from operating, investing and financing activities for the threesix months ended August 31,November 30, 2011 and 2010 were as follows:
| | 2011 | | | 2010 | |
Net cash used in operating activities | | $ | (2,402,985 | ) | | $ | (586,778 | ) |
Net cash provided by (used in) investing activities | | $ | 140,365 | | | $ | (5,464 | ) |
Net cash provided by financing activities | | $ | 1,441,307 | | | $ | 1,760,800 | |
As of August 31,November 30, 2011, we had a working capital deficit of $11,681,015$11,368,783 and cash of $94,351,$91,869 while at May 31, 2011 we had a working capital deficit of $11,635,267 and cash of $913,182. The decrease in cash isworking capital deficits are primarily attributable to the fact that we have no significant revenues from operations and continue to incur expenses. We do not expect our working capital deficit to decrease significantly or cash balance to increase significantly in the near future.
| | 2011 | | | 2010 | |
Net cash used in operating activities | | $ | (1,725,150 | ) | | $ | (62,476 | ) |
Net cash provided by investing activities | | $ | 156,500 | | | $ | - | |
Net cash provided by financing activities | | $ | 749,819 | | | $ | 47,000 | |
Net cash used in operating activities. Net cash used in operating activities of $1,725,150$2,402,985 and $62,476$586,778 for the threesix month periods ended August 31,November 30, 2011 and 2010, respectively, are attributable to our net income adjusted for non-
cashnon-cash charges as presented in the consolidated statements of cash flows and changes in working capital as discussed above.
Net cash provided by investing activities. Net cash provided from investing activities of $156,500$140,365 and $nil($5,464) for the threesix month periods ended August 31,November 30, 2011 and 2010, respectively, was due to proceeds receivedresulted primarily from the 2011 sale of fully depreciated and idle equipment.
Net cash provided by financing activities. Net cash provided by financing activities of $749,819$1,441,307 and $47,000$1,760,800 for the threesix month periods ended August 31,November 30, 2011 and 2010, respectively, was primarily attributablerelated to proceeds received from the sale of common stock, partially offset by repayments on convertible debentures.
Going Concern
The report of our independent registered public accounting firm on the financial statements as of and for the year ended May 31, 2011, includes an explanatory paragraph relating to the significant doubts about our ability to continue as a going concern. As of August 31,November 30, 2011, we had an accumulated deficit of $48.2$49.5 million and have a working capital deficit of approximately $11.7$11.4 million. We require significant additional funding to commence our plan of operation. Our ability to establish ourselves as a going concern is dependent upon our ability to obtain additional funding in order to finance our planned operations. If we are unable to raise funds to repay or to otherwise settle the Brigus note, we may need to curtail current test mining activities at the Cross Mine.
Plan of Operation
For the remainder of our 2012 fiscal year and into 2013, our primary goals are to regain compliance with the SEC and British Columbia Securities Commission (“BCSC”) so that we can apply for a revocation of a 2004 Cease Trade Order from the BCSC. We intend to continue to raise capital so that we may further explore extraction from our properties which began in August 2011, thereby bringing us out of the exploration stage. We cannot anticipate our exact cash requirements for the remainder of the fiscal year. We currently have maturingdelinquent debt obligations of approximately $10.5 principal and interest that was due December 1, 2011 to Brigus and we require a significant amount of capital to continue test mining at our Cross minemine. We are in discussions with Brigus and others to negotiate the repayment of the Brigus note, however, we cannot guarantee that a satisfactory agreement will be reached between Calais and Brigus or any other parties. In addition, we have ongoing lease payments on our mining properties and general and administrative expenses coupled with compliance related expenses. We will continue to need to raise capital to fund to fund our operations and to continue to exist.
Off-Balance Sheet Arrangements
We do not have off-balance sheet arrangements.
Critical Accounting Policies and Estimates
For a discussion of accounting policies that we consider critical to our business operations and understanding of our results of operations, and that affect the more significant judgments and estimates used in the preparation of our unaudited condensed consolidated financial statements, see Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies” contained in our annual report on Form 10-K for the year ended May 31, 2011 and incorporated by reference herein.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
Not required by Form 10-Q for Smaller Reporting Companies.
ITEM 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
Disclosure controls and procedures, as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), are our controls and other procedures that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and
reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to our officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
Rule 13a-15 underDuring the Exchange Act, requires us to carryfiscal period covered by this report, our management, with the participation of the Principal Executive Officer and Principal Financial Officer of the Company, carried out an evaluation of the effectiveness of the design and operation of our disclosure controls as defined in Rules 13a-15(e) and procedures as of August 31, 2011. This evaluation was conducted15d-15(e) under the supervision and with the participation of David K. Young (our functioning principal executive officer and principal financial officer).Exchange Act. Based on this evaluation, Mr. Youngour Principal Executive Officer and Principal Financial Officer concluded that, the design and operationas of November 30, 2011, our disclosure controls and procedures were notare effective because of the identification of the material weaknesses in internal control over financial reporting described below that existed at May 31, 2011 and August 31, 2011. In light of the material weaknesses described above, we performed additional analysis and other post-closing procedures to ensure our financial statements were prepared in accordance with generally accepted accounting principles (“GAAP”). Accordingly, we believe that the financial statements included in this report fairly present, in all material respects, our financial condition, results of operations and cash flows for the periods presented.
Management's Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is a set of processes designed by, or under the supervision of, a company’s principal executive and principal financial officers, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP and includes those policies and procedures that:
· | Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect our transactions and dispositions of our assets; |
· | Provide reasonable assurance our transactions are recorded as necessary to permit preparation of our financial statements in accordance with GAAP, and that receipts and expenditures are being made only in accordance with authorizations of our management and directors; and |
· | Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements. |
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. It should be noted that any system of internal control, however well designed and operated, can provide only reasonable, and not absolute, assurance that the objectives of the system will be met. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Under the supervision and with the participation of our management, including David K. Young (our functioning principal executive officer and principal financial officer), we conducted an assessment of the effectiveness of our internal control over financial reporting based on criteria established in “Internal Control-Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), as of May 31, 2011, the end of our most recently completed fiscal year.
As a result of our material weaknesses described below, management concluded that, as of May 31, 2011, our internal control over financial reporting was not effective based on the criteria in “Internal Control-Integrated Framework” issued by COSO.
Material Weakness in Internal Control over Financial Reporting
A material weakness is a control deficiency, or combination of control deficiencies, that results in more than a remote likelihood that a material misstatement of annual or interim financial statements will not be prevented or detected. In connection with the assessment, management identified the following control deficiencies that represent material weaknesses at May 31, 2011:
· | We rely on external consultants for the preparation of our financial statements and reports. As a result, our management may not be able to identify errors and irregularities in the financial statements and reports. |
· | We relied on one of our officers for oversight of the financial reporting process and, therefore, there was an inherent lack of segregation of duties with certain aspects of the financial reporting process, and a limited independent governing board. |
· | We relied on an external consultant for the administration functions, some of which did not have standard procedures in place for formal review by the one officer who was providing financial oversight for us. |
The internal control weaknesses identified above with regard to the failure to consistently record transactions and inadequate segregation of duties with certain aspects of the financial reporting process will only be completely corrected if the Company expands and has the capacity to perform necessary accounting functions and adequately segregate the duties to mitigate the risk in financial reporting. This expansion will depend mostly on the ability of management to fully execute its business operating strategy as outlined in this report and generate enough income to warrant growth in personnel. With regard to the internal control deficiency identified above related to preventative measures to properly and accurately account for the recording of the non-cash aspects of certain debt and equity issuances, management has already taken steps to mitigate such risk going forward by utilizing external financial consulting services prior to the review by our principal independent accounting firm to ensure that all information requiredrequire to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported accurately and within the required time periods specified in the Commission’s rule and forms.are designed to ensure that information required to be disclosed is accumulated and communicated to our management, including our Principal Executive Officer and Principal Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.
Changes in Internal Control over Financial Reporting
There were noDuring the fiscal quarter ended November 30, 2011, we hired a Chief Financial Officer who is now our Principal Financial Officer, while previously, the Principal Executive Officer was also acting Principal Financial Officer. We also hired qualified accounting staff to maintain our books and records, while previously, we relied on outside consultants to perform these responsibilities. The changes into our internal control over financial reporting that occurred during the fiscal quarter ended August 31,November 30, 2011 that has materially affected, or is reasonably likelyincreased our oversight of our books and records and increased the segregation of duties to materially affect,better control our internal control over financial reporting.assets.
PART II – OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
There have been no changes to the disclosure contained in our annual report on Form 10-K for the fiscal year ended May 31, 2011, except as follows:
Securities and Exchange Commission Proceedings
The United States Securities and Exchange Commission (“SEC”) issued an order suspending trading in the common stock of Calais Resources Inc. (the “Company”) for the period from February 24, 2011 through March 9, 2011 because it had been delinquent in the filing of periodic reports since 2004. Also on February 24, 2011, the SEC issued an order instituting public administrative proceedings against the Company pursuant to Section 12(j) of the Securities Exchange Act of 1934 (the “Exchange Act”) to suspend for a period not exceeding twelve months or revoke the registration of the Company’s common stock under Section 12 of the Exchange Act.
On July 25, 2011, the Administrative Law Judge issued an Initial Decision ordering revocation of the registration of the Company’s common stock under the Exchange Act.
On August 12, 2011, the Company filed a Petition for Review of the Initial Decision with the SEC. On August 17, 2011, the SEC granted the Company’s petition for review and the Company filed its brief in support of the petition by the September 16, 2011 due date. The SEC’sSEC filed its brief in opposition is dueby the October 17, 2011 due date and anythe Company filed its reply brief fromby the Company would need to be filed by October 31, 2011.
2011 due date. Because the Petition for Review has been filed, the Initial Decision shall not become final until the Commission rules on the Petition.
British Columbia Securities Commission Proceedings
The Company filed a Revocation Application under National Policy 12-202 with the British Columbia Securities Commission (“BCSC”), seeking to revoke the cease trade order that has been in place since February 2005. The BCSC has issued comment letters on the Application and the Company has responded to those comments. The latest comment letter is dated September 21,October 28, 2011 and the Company has filed a response to that letter.
ITEM 1A. RISK FACTORS.
An investment in our common stock involves a number of significant risks. There have been no material changes to the risk factors contained in our Annual Report on Form 10-K for the year ended May 31, 2011. We caution the reader to carefully consider such risk factors, which are more thoroughly described in the section entitled “Risk Factors” under Item 1A of our Annual Report on Form 10-K for the year ended May 31, 2011 as well as any other Risk Factors described in subsequent filings with the Securities and Exchange Commission.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
| | | | Warrants | |
Date of Sale | Name of Purchaser | Title of Securities | Shares of Stock | Number of Warrants | Exercise Price | Expiration Date | Consideration ($) |
| | | | | | | |
06/11 | 3 accredited investors | Common Stock | 1,700,000 | 850,000 | $0.30 | 06/12 | 340,000 | (a) |
07/11 | 2 accredited investors | Common Stock | 1,050,000 | 525,000 | $0.30 | 07/12 | 210,000 | (a) |
08/11 | 4 accredited investors | Common Stock | 1,910,000 | 955,000 | $0.20 | 08/12 | 228,500 | (a) |
| | | | Warrants | |
Date of Sale | Name of Purchaser | Title of Securities | Shares of Stock | Number of Warrants | Exercise Prices | Expiration Date | Consideration ($) |
09/11 | 6 accredited investors | Common Stock | 3,966,668 | 1,983,335 | $0.20-$0.25 | 09/12-09/13 | 420,000 | (a) |
10/11 | 4 accredited investors | Common Stock | 2,000,000 | 1,000,000 | $0.20 | 10/12 | 200,000 | (a) |
11/11 | 1 accredited investor | Common Stock | 1,000,000 | 500,000 | $0.20 | 11/12 | 100,000 | (a) |
10/11 | 1 consultant | Common Stock | 250,000 | 125,000 | $0.30 | 10/12 | 25,000 | (b) |
11/11 | 2 consultants | Common Stock | 1,135,000 | - | n/a | n/a | 113,500 | (b) |
(a) Issued for cash consideration.
(b) Issued as compensation for consulting services.
We relied upon the exemption from registration contained in Section 4(2) of the Securities Act, as these persons were deemed to be sophisticated with respect to the investment in the securities due to their financial condition and involvement in our business and had access to the kind of information which registration would disclose.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
None.
ITEM 4. (REMOVED AND RESERVED)
None.
ITEM 5. OTHER INFORMATION.
As of September 1, 2011, we entered into employment agreements with our executive officers: R. David Russell, David K. Young and Thomas S. Hendricks.None.
The employment agreement for Mr. Russell, our Chairman of the Board of Directors and Chief Executive Officer, provides for the following:
· | a minimum annual base salary of $380,000 and an annual performance bonus of no less than 60% of his annual base salary; |
· | a restricted stock grant of 2,500,000 shares of our common stock if he successfully completes a debt restructuring between the Company and Brigus; |
· | a restricted stock grant of 1,500,000 shares of our common stock if he completes a recapitalization or financing for the Company in the minimum amount of $5,000,000 within the first 18 months of employment; |
· | a cash payment of $100,000 if either restricted stock event described above occurs; |
· | automobile, aircraft, athletic and sport club allowances; |
· | in the event of Mr. Russell’s death, a payment to his heirs equal to one year of salary and a one year bonus at 100% of salary and the vesting of all stock options and warrants; |
· | in the event of Mr. Russell’s disability, a two-year salary payment and 100% bonus, the vesting of all stock options and health benefits for 36 months; and |
· | in the event of a change of control or termination without cause, the vesting of all stock grants, a payment equal to three times the sum of his base salary and a 100% bonus, and cash payment equal to three years of the cost of COBRA health coverage and his automobile/sports club dues. |
The employment agreement for Mr. Young, our President and Chief Operating Officer, provides for the following:
· | a minimum annual base salary of $380,000 and an annual performance bonus of no less than 60% of his annual base salary; |
· | a restricted stock grant of 2,500,000 shares of our common stock if he successfully completes a debt restructuring between the Company and Brigus; |
· | a restricted stock grant of 1,500,000 shares of our common stock if he completes a recapitalization or financing for the Company in the minimum amount of $5,000,000 within the first 18 months of employment; |
· | a cash payment of $100,000 if either restricted stock event described above occurs; |
· | automobile, athletic and sport club allowances; |
· | in the event of Mr. Young’s death, a payment to his heirs equal to one year of salary and a one year bonus at 100% of salary and the vesting of all stock options and warrants; |
· | in the event of Mr. Young’s disability, a two-year salary payment and 100% bonus, the vesting of all stock options and health benefits for 36 months; and |
· | in the event of a change of control or termination without cause, the vesting of all stock grants, a payment equal to three times the sum of his base salary and a 100% bonus, and cash payment equal to three years of the cost of COBRA health coverage and his automobile/sports club dues. |
The employment agreement for Mr. Hendricks, our Vice President and General Manager, provides for the following:
· | a minimum annual base salary of $175,000; |
· | an automobile allowance; |
· | in the event of Mr. Hendricks’ death, the vesting of all stock options; and |
· | in the event of a change of control or termination without cause, the vesting of all stock options, a payment equal to three times the sum of his base salary and a 50% bonus, and health coverage for 36 months. |
ITEM 6. EXHIBITS.
Exhibit Number | | Description |
| | |
10.1 | | EmploymentExtension Agreement with R. David RussellBrigus Gold Corp. dated September 1,October 24, 2011 (1) |
10.2 | | Employment Agreement with David K. YoungBrent E. Timmons dated September 1,October 26, 2011 (1) |
10.3 | | Employment Agreement with Thomas S. Hendricks dated September 1, 2011 |
3131.1 | | Certification of Principal Executive Officer andpursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act. |
31.2 | | Certification of Principal Financial Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act. |
32 | | Certification of the Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted, pursuant to Section 906 of the Sarbanes-Oxley Act. |
101* | | Financial statements from the Quarterly Report on Form 10-Q of Calais Resources Inc. for the quarter ended November 30, 2011, formatted in XBRL: (i) the Consolidated Balance Sheet; (ii) the Consolidated Statement of Operations; (iii) the Consolidated Statement of Cash Flows; and (iv) the Notes to Unaudited Consolidated Financial Statements tagged as blocks of text. |
| | |
(1) Incorporated by reference to the exhibits filed with the registrant’s current report on Form 8-K dated October 24, 2011, filed October 28, 2011. |
* In accordance with Rule 406T of Regulation S-T, the information in these exhibits shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to liability under that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, except as expressly set forth by specific reference in such filing.
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| CALAIS RESOURCES INC. | |
| | | |
October 14, 2011January 19, 2012 | By: | /s/ David K. Young | |
| | David K. Young | |
| | President, Chief Operating Officer and | |
| | Acting | |
| | | |
January 19, 2012 | By: | /s/ Brent E. Timmons | |
| | Brent E. Timmons | |
| | Vice President of Finance and Chief Financial Officer | |
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