UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

xQuarterly Report Pursuant to Section 13 Or 15(d) Of The Securities Exchange Act of 1934

For the quarterly period ended JanuaryOctober 31, 2017

¨


Transition Report Under Section 13 Or 15(d) Of The Securities Exchange Act of 1934

For the transition period ________ to ________


COMMISSION FILE NUMBER000-52711


STAR GOLD CORP.

(Exact name of the registrant business issuer as specified in its charter)


NEVADA
27-0348508

NEVADA

27-0348508

(State or other jurisdiction of incorporation or organization)

 (IRS(IRS Employer Identification No.)

611 E. Sherman Avenue

Coeur d'Alene, Idaho

(Address of principal executive office)

83814

(Postal Code)

(208) 664-5066

(Issuer's telephone number)


(208) 664-5066
(Issuer's telephone number)
Indicate by check mark whether the issuer (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][X]   No [   ]


Indicate by check mark 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][X]   No  [   ]



Indicate by checkmark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer.  See definition of “Accelerated"Accelerated filer and large accelerated filer”filer" in Rule 12b-2 of the Exchange Act (Check one):


Large Accelerated Filer [   ]

    Accelerated Filer [   ]

    Non-Accelerated Filer [   ]

Smaller Reporting Company[x]

X]


Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes [   ]   No [x]

[X]


As ofMarch 15,December 14, 2017there were 54,836,726 76,434,424 shares of issuer’sissuer's common stock outstanding.











Page1 of29




TABLE OF CONTENTS


3
FINANCIAL STATEMENTS (UNAUDITED)3
BALANCE SHEETS AT OCTOBER 31, 2017 AND APRIL 30, 2017
3
STATEMENTS OF OPERATIONS FOR THE THREE AND SIX MONTHS ENDED OCTOBER 31, 2017 AND 2016
4
STATEMENTS OF CASH FLOWS FOR THE SIX MONTHS ENDED OCTOBER 31, 2017 AND 2016
5
NOTES TO THE FINANCIAL STATEMENTS
6
MANAGEMENT'S DISCUSSION AND ANALYSIS AND PLAN OF OPERATION14
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK21
CONTROLS AND PROCEDURES22
22
LEGAL PROCEEDINGS.22
RISK FACTORS.22
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS22
DEFAULTS ON SENIOR SECURITIES22
MINE SAFETY DISCLOSURES23
OTHER INFORMATION23
EXHIBITS23
24






Page 2 of 24

PART I - FINANCIAL INFORMATION


ITEM 1.

FINANCIAL STATEMENTS (UNAUDITED)


BALANCE SHEETS AT JANUARY 31, 2017 AND APRIL 30, 2016


STATEMENTS OF OPERATIONS FOR THE THREE AND NINE MONTHS ENDED JANUARY 31, 2017 AND 2016


STATEMENTS OF CASH FLOWS FOR THE NINE MONTHS ENDED JANUARY 31, 2017 AND 2016


NOTES TO THE FINANCIAL STATEMENTS


ITEM 2.

MANAGEMENT’S DISCUSSION AND ANALYSIS AND PLAN OF OPERATION


ITEM 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK


ITEM 4.

CONTROLS AND PROCEDURES


PART II - OTHER INFORMATION


ITEM 1.

LEGAL PROCEEDINGS.


ITEM 1A.

RISK FACTORS.


ITEM 1B.

UNRESOLVED STAFF COMMENTS


ITEM 2.

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.


ITEM 3.

DEFAULTS ON SENIOR SECURITIES


ITEM 4.

MINE SAFETY DISCLOSURES


ITEM 5.

OTHER INFORMATION


ITEM 6.

EXHIBITS


SIGNATURES






Page2 of29






PART I - FINANCIAL INFORMATION

Item 1 – Financial Statements

STAR GOLD CORP.

BALANCE SHEETS



 

January 31, 2017

 

April 30, 2016

ASSETS

(Unaudited)

 

 

CURRENT ASSETS:

 

 

 

 

 

Cash

$

 225,686

 

$

 1,785

Other current assets

 

 12,706

 

 

 8,767

TOTAL CURRENT ASSETS

 

 238,392

 

 

 10,552

EQUIPMENT AND MINING INTEREST, net (NOTE 3)

 

 360,874

 

 

 326,050

OTHER ASSETS – NON-CURRENT

 

 13,229

 

 

 -   

RESTRICTED CASH

 

 21,600

 

 

 21,600

TOTAL ASSETS

$

 634,095

 

$

 358,202

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

 

CURRENT LIABILITIES:

 

 

 

 

 

Accounts payable

$

 71,087

 

$

 53,742

Other accrued liabilities

 

 9,000

 

 

 12,381

Notes payable, related party (NOTE 5)

 

 -   

 

 

 15,000

TOTAL CURRENT LIABILITIES

 

 80,087

 

 

 81,123

LONG TERM LIABILITIES:

 

 

 

 

 

Deposits on stock subscriptions

 

 -   

 

 

 18,000

TOTAL LONG TERM LIABILITIES

 

 -   

 

 

 18,000

TOTAL LIABILITIES

 

 80,087

 

 

 99,123

COMMITMENTS AND CONTINGENCIES (NOTE 3)

 

 -   

 

 

 -   

STOCKHOLDERS' EQUITY

 

 

 

 

 

Preferred Stock, $.001 par value; 10,000,000 shares authorized, none issued and outstanding

 

 -   

 

 

 -   

Common Stock, $.001 par value; 300,000,000 shares authorized; 54,836,726 and 40,836,726 shares issued and outstanding, respectively

 

 54,837

 

 

 40,837

Additional paid-in capital

 

 10,350,403

 

 

 9,535,751

Accumulated deficit

 

 (9,851,232)

 

 

 (9,317,509)

TOTAL STOCKHOLDERS' EQUITY

 

 554,008

 

 

 259,079

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$

 634,095

 

$

 358,202

 

 

 

 

 

 


  October 31, 2017  April 30, 2017 
  (Unaudited)    
ASSETS      
CURRENT ASSETS:      
Cash and cash equivalents $962,055  $109,380 
Stock subscription receivable  10,000   - 
Other current assets (NOTE 4)  23,895   15,437 
TOTAL CURRENT ASSETS  995,950   124,817 
EQUIPMENT AND MINING INTEREST, net (NOTE 3)  372,874   360,874 
OTHER ASSETS – NON-CURRENT (NOTE 4)  23,174   11,111 
RESTRICTED CASH  21,600   21,600 
         
TOTAL ASSETS $1,413,598  $518,402 
         
LIABILITIES AND STOCKHOLDERS' EQUITY        
CURRENT LIABILITIES:        
Accounts payable $78,282  $53,052 
TOTAL CURRENT LIABILITIES  78,282   53,052 
TOTAL LIABILITIES  78,282   53,052 
COMMITMENTS AND CONTINGENCIES (NOTE 3)        
STOCKHOLDERS' EQUITY        
Preferred Stock, $0.001 par value; 10,000,000 shares
authorized, none issued and outstanding
  -   - 
Common Stock, $0.001 par value; 300,000,000 shares
authorized; 76,434,424 and 54,836,726 shares issued and outstanding
  76,434   54,837 
Additional paid-in capital  11,408,690   10,350,403 
Accumulated deficit  (10,149,808)  (9,939,890)
TOTAL STOCKHOLDERS' EQUITY  1,335,316   465,350 
         
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $1,413,598  $518,402 






The accompanyingaccompany notes are an integral part of these financial statements.

Page3of29

24





STAR GOLD CORP.

STATEMENTS OF OPERATIONS (UNAUDITED)




  For the three months ended  For the six months ended 
  October 31, 2017  October 31, 2016  October 31, 2017  October 31, 2016 
             
OPERATING EXPENSE            
Mineral exploration expense $13,164  $43,669  $80,140  $144,466 
Legal and professional fees  15,208   20,737   53,440   49,511 
Management and administrative  36,005   209,244   76,076   236,079 
Depreciation  -   1,351   -   2,701 
                 
TOTAL OPERATING EXPENSES  64,377   275,001   209,656   432,757 
                 
LOSS FROM OPERATIONS  (64,377)  (275,001)  (209,656)  (432,757)
                 
OTHER INCOME (EXPENSE)                
Interest expense  (188)  (154)  (375)  (308)
Interest expense, related party  -   (437)  -   (2,093)
Interest income  95   26   113   26 
                 
TOTAL OTHER INCOME (EXPENSE)  (93)  (565)  (262)  (2,375)
                 
NET LOSS $(64,470) $(275,566) $(209,918) $(435,132)
                 
Basic and diluted loss per share $(0.01 $(0.01 $(0.01 $(0.01
                 
Basic and diluted weighted average number shares outstanding  54,836,726   43,728,030   54,836,726   42,282,378 



 

Three months ended January 31,

 

Nine months ended January 31,

 

2017

 

2016

 

2017

 

2016

OPERATING EXPENSE

 

 

 

 

 

 

 

 

 

 

 

Mineral exploration expense

$

 52,294

 

$

 35,716

 

$

 196,760

 

$

 235,402

Legal and professional fees

 

 17,566

 

 

 7,021

 

 

 67,077

 

 

 40,235

Management and administrative

 

 27,301

 

 

 35,923

 

 

 263,380

 

 

 83,352

Depreciation

 

 1,350

 

 

 1,351

 

 

 4,051

 

 

 4,051

TOTAL OPERATING EXPENSE

 

 98,511

 

 

 80,011

 

 

 531,268

 

 

 363,040

LOSS FROM OPERATIONS

 

 (98,511)

 

 

 (80,011)

 

 

(531,268)

 

 

 (363,040)

OTHER INCOME (EXPENSE)

 

 

 

 

 

 

 

 

 

 

 

   Interest income (expense)

 

 (80)

 

 

 (172)

 

 

 (2,455)

 

 

 (2,852)

TOTAL OTHER INCOME (EXPENSE)

 

 (80)

 

 

 (172)

 

 

 (2,455)

 

 

 (2,852)

NET LOSS BEFORE INCOME TAXES

 

 (98,591)

 

 

 (80,183)

 

 

 (533,723)

 

 

 (365,892)

Provision for income tax

 

 -

 

 

 -

 

 

 -

 

 

 -

NET INCOME (LOSS)

$

 (98,591)

 

$

 (80,183)

 

$

 (533,723)

 

$

 (365,892)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted loss per share

    $

 Nil

 

$

 Nil

 

$

 (0.01)

 

$

 (0.01)

 

 

 

 

 

 

 

 

Basic and diluted weighted average number shares outstanding

54,836,726

 

40,836,726

 

46,467,161

 

38,255,248

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


















The accompanyingaccompany notes are an integral part of these financial statements.

Page4of29



24

STAR GOLD CORP.

STATEMENTS OF CASH FLOWS (UNAUDITED)




  For the six months ended 
  October 31, 2017  October 31, 2016 
       
CASH FLOWS FROM OPERATING ACTIVITIES:      
Net loss $(209,918) $(435,132)
Adjustments to reconcile net loss to cash used by operating activities        
Stock based compensation  -   126,777 
Depreciation  -   2,701 
Changes in operating assets and liabilities:        
Other current assets  (8,458)  (4,820)
Other assets  (12,063)  - 
Accounts payable  25,230   (26,948)
Other accrued liabilities  -   18,869 
Net cash used by operating activities  (205,209)  (318,553)
         
CASH FLOWS FROM INVESTING ACTIVITIES:        
Payments for mining interest  (12,000)  (12,000)
Net cash used by investing activities  (12,000)  (12,000)
         
CASH FLOWS FROM FINANCING ACTIVITIES:        
Proceeds from short-term note, related party  -   70,000 
Repayment of notes payable, related party  -   (85,000)
Proceeds from sale of common stock and warrants  1,069,884   682,000 
Net cash provided by financing activities  1,069,884   667,000 
         
Net increase in cash and cash equivalents  852,675   336,447 
         
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD  109,380   1,785 
         
CASH AND CASH EQUIVALENTS AT END OF PERIOD $962,055  $338,232 
         
NON-CASH FINANCING ACTIVITIES:        
Subscriptions receivable for sale of shares of common stock and warrants $10,000   - 


 

 

 

 

 

 

 

Nine months ended January 31,

 

2017

 

2016

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

 

 

Net loss

$

 (533,723)

 

$

 (365,892)

Adjustments to reconcile net loss to cash used by operating activities

 

 

 

 

 

    Stock based compensation

 

 126,777

 

 

 785

    Depreciation

 

 4,051

 

 

 4,051

Changes in operating assets and liabilities:

 

 

 

 

 

    Prepaid expenses and other assets

 

 (17,168)

 

 

 65,179

    Accounts payable

 

 17,345

 

 

 2,715

    Other accrued liabilities

 

 (3,381)

 

 

 (7,571)

Net cash used by operating activities

 

 (406,099)

 

 

 (300,733)

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

 

 

 

    Payments for mining interest

 

 (37,000)

 

 

 (32,000)

Net cash used by investing activities

 

 (37,000)

 

 

 (32,000)

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

 

 

    Proceeds from notes payable, related party

 

 70,000

 

 

 40,000

    Repayment of notes payable, related party

 

 (85,000)

 

 

 (129,579)

    Proceeds from sale of common stock and warrants

 

 682,000

 

 

 424,100

Net cash provided by financing activities

 

 667,000

 

 

 334,521

Net increase in cash and cash equivalents

 

 223,901

 

 

 1,788

CASH AT BEGINNING OF PERIOD

$

 1,785

 

$

 5,358

CASH AT END OF PERIOD

$

 225,686

 

$

 7,146

 

 

 

 

 

 

NON-CASH FINANCING AND INVESTING ACTIVITYACACTIVITIES:

 

 

 

 

 

    Reduction of note payable, related party by vendor refund

$

 -   

 

$

 12,337

    Options issued for mining interests

 

 1,875

 

 

 1,500

    Stock issued on subscriptions

 

 18,000

 

 

 -   

 

 

 

 

 

 









The accompanyingaccompany notes are an integral part of these financial statements.

Page5of29

24





STAR GOLD CORP.

NOTES TO FINANCIAL STATEMENTS

JANUARY

OCTOBER 31, 2017




NOTE

NOTE 1 - NATURE OF OPERATIONS


Star Gold Corp. (the "Company") was initially incorporated as Elan Development, Inc., in the State of Nevada on December 8, 2006. The Company was originally organized to explore mineral properties in British Columbia, Canada but the Company is currently focusing on gold, silver and other base metal-bearing properties in Nevada.


The Company's maincore business consists of assembling and/or acquiring land packages and mining claims the Company believes have potential mining reserves, and expending capital to explore these claims by drilling, and performing geophysical work or other exploration work deemed necessary.  The business is a high-risk business as there is no guarantee that the Company's exploration work will ultimately discover or produce any economically viable minerals.



NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES


Basis of Presentation


This summary of significant accounting policies is presented to assist in understanding the financial statements. The financial statements and notes are representations of the Company’sCompany's management, which is responsible for their integrity and objectivity. The accompanying unaudited financial statements have been prepared by the Company in accordance with accounting principles generally accepted in the United States of America for interim financial information, as well as the instructions to Form 10-Q. Accordingly, the financial statements do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. In the opinion of our management, all adjustments (consisting of only normal recurring accruals) considered necessary for a fair presentation of the interim financial statements have been included. Operating results for the nine-monthsix-month period ended JanuaryOctober 31, 2017 are not necessarily indicative of the results that may be expected for the full year ending April 30, 2017.2018.  All amounts presented are in U.S. dollars.  For further information, refer to the financial statements and footnotes thereto in the Company’sCompany's Annual Report on Form 10-K for the year ended April 30, 2016.

2017.


Going Concern


As shown in the accompanying financial statements, the Company has incurred operating losses since inception.  As of JanuaryOctober 31, 2017, the Company has limited financial resources with which to achieve the objectives and obtain profitability and positive cash flows.  As shown in the accompanying balance sheets and statements of operations, the Company has an accumulated deficit of $9,851,232$10,149,808 and, at JanuaryOctober 31, 2017, the Company's working capital was $158,305.$917,668.  Achievement of the Company's objectives will be dependent upon the ability to obtain additional financing, to locate profitable mining properties and generate revenue from current and planned business operations, and control costs.  The Company plans to fund its future operations by joint venturing, obtaining additional financing from investors and/or lenders, and attaining commercial production.  However, there is no assurance thatWith the recent capital raise (Note 8), management believes the Company will be ablehas adequate funds to achieve these objectives, therefore substantial doubt about its ability to continue as a going concern exists.  The financial statements do not include adjustments relating tooperate over the recoverability of recorded assets nor the implications of associated bankruptcy costs should the Company be unable to continue as a going concern. In the event the Company is unable to fulfill the annual exploration expenditures as specified in the Property Option Agreement (Note 3), the Company will default on the agreement(s) and surrender its right to future claims on the respective property.

next twelve months.


Use of Estimates


The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities at the dates of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Significant areas requiring the use of management assumptions and estimates relate to long-lived asset




Page6 of29




STAR GOLD CORP.

NOTES TO FINANCIAL STATEMENTS

JANUARY 31, 2017



impairments and stock option valuation.  Actual results could differ from these estimates and assumptions and could have a material effect on the Company’sCompany's reported financial position and results of operations.


Cash and cash equivalents


For the purposes of the statement of cash flows, the Company considers all highly liquid investments with original maturities of three months or less when acquired to be cash equivalents.


Page 6 of 24



STAR GOLD CORP.
NOTES TO FINANCIAL STATEMENTS
OCTOBER 31, 2017

Restricted cash


Restricted cash constitutes cash held as collateral for the faithful performance of bonds securing exploration permits.


Financial Instruments


The Company's financial instruments include cash and cash equivalents and reclamation bonds.  All instruments are accounted for on a historical cost basis, which, due to the short maturity of these financial instruments, approximates fair value at JanuaryOctober 31, 2017.


Fair Value Measures


The Financial Accounting Standards Board Accounting Standards Codification Topic 820 "Fair Value Measurements" ("ASC 820") requires an entity

When required to maximizemeasure assets or liabilities at fair value, the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.  ASC 820 establishesCompany uses a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measureused.  The Company determines the level within the fair value.  A financial instrument'svalue hierarchy in which the fair value measurements in their entirety fall.  The categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement.  ASC 820 prioritizes the inputs into three levels that may be used to measure fair value:


Level 1:  Level 1 applies to assets or liabilities for which there areuses quoted prices in active markets for identical assets or liabilities.


Level 2:liabilities, Level 2 applies to assetsuses significant other observable inputs, and Level 3 uses significant unobservable inputs.  The amount of the total gains or liabilitieslosses for which therethe period are inputs other than quoted pricesincluded in earnings that are observable for the asset or liability such as quote prices for similar assets or liabilities in active markets; quoted prices for identical assets in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data.


Level 3:  Level 3 applies to assets or liabilities for which there are unobservable inputsattributable to the valuation methodology that are significantchange in unrealized gains or losses relating to those assets and liabilities still held at the measurement of the fair value of the assets or liabilities.


reporting date.  At JanuaryOctober 31, 2017 and April 30, 2016,2017, the Company had no assets or liabilities accounted for at fair value on a recurring or nonrecurring basis.


Mining Interests and Mineral Exploration Expenditures


Exploration costs are expensed in the period in which they occur. The Company capitalizes costs for acquiring and leasing mining properties and expenses costs to maintain mineral rights as incurred. Should a property reach the production stage, these capitalized costs would be amortized using the units-of-production method on the basis of periodic estimates of ore reserves. Mining interests are periodically assessed for impairment of value, and any subsequent losses are charged to operations at the time of impairment. If a property is abandoned or sold, its capitalized costs are charged to operations.







Page7 of29




STAR GOLD CORP.

NOTES TO FINANCIAL STATEMENTS

JANUARY 31, 2017




Equipment


Equipment is stated at cost. Depreciation of equipment is calculated using the straight-line method over the estimated useful lives of the assets, which ranges from three to seven years.  Maintenance and repairs are charged to operations as incurred. Significant improvements are capitalized and depreciated over the useful life of the assets. Gains or losses on disposition or retirement of property and equipment are recognized in operating expenses.


Reclamation and Remediation


The Company's operations are subject to standards for mine reclamation that have been established by various governmental agencies.  In the period in which the Company incurs a contractual obligation for the retirement of tangible long-lived assets, the Company will record the fair value of an asset retirement obligation as a liability.  A corresponding asset will also be recorded and depreciated over the life of the asset.  After the initial measurement of an asset retirement obligation, the liability will be adjusted at the end of each reporting period to reflect changes in the estimated future cash flows underlying the obligation.  To date, the Company has not incurred any contractual obligation requiring recording either a liability or associated asset.


Impaired Asset Policy


The Company periodically reviews its long-lived assets to determine if any events or changes in circumstances have transpired which indicate that the carrying value of its assets may not be recoverable, pursuant to guidance established in ASC Topic 360, "Accounting for the Impairment or Disposal of Long-lived Assets".recoverable. The Company determines impairment by comparing the undiscounted net future cash flows estimated to be generated by its assets to their respective carrying amounts. If impairment is deemed to exist, the assets will be written down to fair value.


Page 7 of 24



STAR GOLD CORP.
NOTES TO FINANCIAL STATEMENTS
OCTOBER 31, 2017

Stock-based Compensation


The Company estimates the fair value of options to purchase common stock using the Black-Scholes model, which requires the input of some subjective assumptions. These assumptions include estimating the length of time employees will retain their vested stock options before exercising them (“("expected life”life"), the estimated volatility of the Company’sCompany's common stock price over the expected term (“volatility”("volatility"), employee forfeiture rate, the risk-free interest rate and the dividend yield. Changes in the subjective assumptions can materially affect the estimate of fair value of stock-based compensation. Options granted have a ten-year maximum term and varying vesting periods as determined by the Board of Directors.  The value of shares of common stock awards is determined based on the closing price of the Company’sCompany's stock on the date of the award.


Loss Per Share


Basic Earnings Per Share ("EPS") is computed as net income (loss) available to common stockholders divided by the weighted average number of common shares outstanding for the period. Diluted EPS reflects the potential dilution that could occur from common shares issuable through stock options and warrants.


The outstanding securities at JanuaryOctober 31, 2017 and 2016, that could have a dilutive effect are as follows:


 

January 31, 2017

 

January 31, 2016

Stock options

 

 5,210,000

 

 

 3,083,667

Warrants

 

 19,855,400

 

 

 5,855,400

  TOTAL POSSIBLE DILUTION

 

 25,065,400

 

 

 8,939,067

 

 

 

 

 

 

For the three and nine month periods ended January

  October 31, 2017  October 31, 2016 
Stock options  5,210,000   5,185,000 
Warrants  30,654,249   19,855,400 
         
TOTAL POSSIBLE DILUTION  35,864,249   25,040,400 

At October 31, 2017 and 2016, respectively, the effect of the Company's outstanding stock options and common stock equivalentswarrants would have been anti-dilutive.




Page8 of29




STAR GOLD CORP.

NOTES TO FINANCIAL STATEMENTS

JANUARY 31, 2017




Income Taxes


The Company recognizes a provision for income tax using the liability method.  Deferred income tax liabilities or assets at the end of each period are determined using the tax rates expected to be in effect when the taxes are paid or recovered. A valuation allowance is recognized on deferred tax assets when it is more likely than not that some or all of these deferred tax assets will not be realized.


Reclassifications

Certain reclassifications have been made to the 2016 financial statements in order to conform to the 2017 presentation.  These reclassifications have no effect on net loss, total assets or accumulated deficit as previously reported.

New Accounting PronouncementPronouncements


In August 2014,November 2015, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2015-17 Income Taxes - Balance Sheet Classification of Deferred Taxes (Topic 740). The update is designed to reduce complexity of reporting deferred income tax liabilities and assets into current and non-current amounts in a statement of financial position. ASU No. 2015-17 requires the presentation of deferred income taxes, changes to deferred tax liabilities and assets be classified as non-current in the statement of financial position. The update is effective for fiscal years beginning after December 15, 2016. The Company adopted this ASU on May 1, 2017.  It had no impact on the financial statements.

In March 2016, the FASB issued ASU No. 2014-15—Presentation2016-09 Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. The update simplifies the accounting for stock-based compensation, including income tax consequences and balance sheet and cash flow statement classification of Financial Statements—Going Concern.awards. The guidance requires an entity’s management to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the date that the financial statements are issued (or within one year after the date that the financial statements are available to be issued when applicable). If conditions or events exist that raise substantial doubt about an entity’s ability to continue as a going concern, the guidance requires disclosure in the financial statements. The guidance will beupdate is effective for the annual period endingfiscal years beginning after December 15, 2016, with early adoption permitted.  The Company adopted this ASU on May 1, 2017.  It had no impact on the financial statements.
Page 8 of 24



STAR GOLD CORP.
NOTES TO FINANCIAL STATEMENTS
OCTOBER 31, 2017

In August 2016, the FASB issued ASU No. 2016-15 Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. The update provides guidance on classification for annual periodscash receipts and payments related to eight specific issues. The update is effective for fiscal years beginning after December 15, 2017, and interim periods thereafter.  Early application iswithin those fiscal years, with early adoption permitted. The Company has concluded that adoptionis currently evaluating the impact of implementing this update on the financial statements.

In January 2017, the FASB issued ASU No. 2017-01 Business Combinations (Topic 805): Clarifying the Definition of a Business. The update clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The update is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. The Company will apply the provisions of the standard wouldupdate to potential future acquisitions occurring after the effective date.

Other accounting standards that have minimalbeen issued or proposed by FASB that do not require adoption until a future date are not expected to have a material impact on the Company’s financial statements as such disclosure is already included the financial statements.

upon adoption.



NOTE 3 –3– EQUIPMENT AND MINING INTEREST


The following is a summary of the Company's equipment and mining interest at JanuaryOctober 31, 2017 and April 30, 2016.

2017.


 

January 31, 2017

 

April 30, 2016

Equipment

$

 27,007

 

$

 27,007

  Less accumulated depreciation

 

 (27,007)

 

 

 (22,956)

Equipment, net of accumulated depreciation

 

 -   

 

 

 4,051

Mining interest - Longstreet

 

 360,874

 

 

 321,999

  TOTAL EQUIPMENT AND MINING INTEREST

$

 360,874

 

$

 326,050

 

 

 

 

 

 

  October 31, 2017  April 30, 2017 
       
Equipment $27,007  $27,007 
Less accumulated depreciation  (27,007)  (27,007)
Equipment, net of accumulated depreciation  -   - 
Mining interest – Longstreet  372,874   360,874 
TOTAL EQUIPMENT AND MINING INTEREST $372,874  $360,874 

The Longstreet Property


Pursuant to the Longstreet Property Option Agreement (the “Longstreet Agreement”"Longstreet Agreement") entered into by the Company on or about January 15, 2010, the Company leases, with an option to acquire, unpatented mining claims located in the State of Nevada known as the Longstreet Property.  On December 10, 2014, the Longstreet Agreement was amended revising the required expenditures and annual stock option obligation.


On January 5, 2016, the Longstreet Property Option Agreement was further amended revising the required expenditures and annual stock option obligation.  All allowable expenditures in excess of the required annual expenditures shall be carried-over to the subsequent year.


The Company is also obligated, pursuant to the Longstreet Agreement, as amended, to pay an annual owners advance royalty payment of $12,000 related to the Clifford claims.


For the year ended April 30, 2016,2017, the Company paid the annual $12,000 advance royalty for additional mining interest on the Longstreet Property related to the Clifford claims.  The Company also made an annual required payment to the optioner of $20,000$25,000 which is included in “Equipment"Equipment and Mining Interest”Interest".  The Company issued options to purchase 25,000 shares of common stock with fair value of $1,500 (Note 6).  

$1,875.




Page9 of29




STAR GOLD CORP.

NOTES TO FINANCIAL STATEMENTS

JANUARY 31, 2017



For the ninesix months ended JanuaryOctober 31, 2017, the Company paid the annual $12,000 advance royalty for additional mining interest on the Longstreet property related to the Clifford claims.  The Company also made an annual required payment to the optioner of $25,000 which is included in “Equipment and Mining Interest”.  The Company issued options to purchase 25,000 shares of common stock with fair value of $1,875.  


The schedule of annual payments, minimum expenditures and number of stock options to be issued pursuant to the amended Longstreet Agreement of January 5, 2016, is as follows:


Required annual expenditure between:

 

Required Expenditure

 

Cash payment(1)

 

Stock options

January 17, 2016 through January 16, 2017

 

$

150,000

 

$

25,000

 

 

25,000

January 17, 2017 through January 16, 2018

 

 

300,000

 

 

35,000

 

 

40,000

January 17, 2018 through January 16, 2019

 

 

500,000

 

 

40,000

 

 

45,000

January 17, 2019 through January 16, 2020

 

 

700,000

 

 

45,000

 

 

50,000

Payment due upon transfer but no later than

January 16, 2021

 

 

-

 

 

85,000

 

 

-

TOTAL

 

$

1,650,000

 

$

230,000

 

 

160,000

 

 

 

 

 

 

 

 

 

 

(1)

Does not include $12,000 annual advance royalty payment related to Clifford claims.


Page 9 of 24



STAR GOLD CORP.
NOTES TO FINANCIAL STATEMENTS
OCTOBER 31, 2017

Required annual expenditure between: 
Required
Expenditure
  
Cash payment(1)
  Stock options 
          
January 17, 2017 through January 16, 2018 $300,000  $35,000   40,000 
January 17, 2018 through January 16, 2019  500,000   40,000   45,000 
January 17, 2019 through January 16, 2020  700,000   45,000   50,000 
Payment due upon transfer but no later than
January 16, 2021
  -   85,000   - 
TOTAL $1,500,000  $205,000   135,000 

(1)
Does not include $12,000 annual advance royalty payment related to Clifford claims.

As of the measurement date of January 31, 2017, the Company hashad made cumulative allowable expenditures of $2,319,581, a surplus of $269,581 over the required cumulative expenditures of $2,050,000.  As of JanuaryOctober 31, 2017, the Company was in compliance with all provisions of the Longstreet Property Option Agreement.



NOTE 4 –OTHER ASSETS


On January 19, 2017, the Company entered into an Option and Lease of Water Rights with Stone Cabin Company, LLC (the “Water"Water Rights Agreement”Agreement").  In exchange for a one-time payment of $20,000, the Water Rights Agreement granted Star Goldthe Company a three yearthree-year option to commence a ten yearten-year lease of certain water rights in Nevada.  The water rights are for use in conjunction with the Company’sCompany's Longstreet Project. Lease payments for the water rights do not commence unless Star Goldthe Company exercises the option to lease. The Water Rights Agreement also granted the Company the ability to extend, upon additional option payments, the option to lease for up to an additional three years and the ability to extend the water rights lease (if exercised) for an additional ten-year period.  The $20,000 payment has been deferred and is being amortized on a straight-line basis over the three-year option period.

On August 21, 2017, the Company entered into an Option and Lease of Water Rights, with High Test Hay, LLC (the "High Test Water Rights Agreement").  In exchange for a one-time payment of $25,000, the High Test Water Rights Agreement grants the Company a three-year option to commence a ten-year lease on certain water rights in Nevada.  The water rights are for use in conjunction with the Company's Longstreet Project.  Lease payments for the water do not commence unless and until the Company exercises the option to lease.  The High Test Water Rights Agreement also grants Star Gold the ability to extend, upon additional option payments, the option to lease for up to an additional three years and the ability to extend the water rights lease (if exercised) for up to an additional ten yeartwenty years.  The $25,000 payment has been deferred and is being amortized on a straight-line basis over the three-year option period.


The following is a summary of the Company's other assets at JanuaryOctober 31, 2017 and April 30, 2016.

2017.


 

January 31, 2017

 

April 30, 2016

Option on water rights lease

$

 20,000

 

$

 -   

Prepaid insurance

 

 5,935

 

 

 8,767

 

 

 25,935

 

 

 8,767

Less Other Assets - Current

 

 (12,706)

 

 

 (8,767)

  Total Other Assets – Non-current

$

 13,229

 

$

 -   

  October 31, 2017  April 30, 2017 
       
Option on water rights lease agreements $38,174  $17,777 
Prepaid insurance  8,895   8,771 
Subtotal  47,069   26,548 
Less Other Assets - Current  (23,895)  (15,437)
         
TOTAL OTHER ASSETS - NON-CURRENT $23,174  $11,111 



Page 10 of 24



STAR GOLD CORP.
NOTES TO FINANCIAL STATEMENTS
OCTOBER 31, 2017


NOTE 5 –5– RELATED PARTY TRANSACTIONS


On March 16, April 10

The Company rents its office space from Marlin Property Management, LLC ("Marlin") an entity owned by the spouse of the Company's former President and April 14, 2015,current Chairman of the Board of Directors.  The lease is on a month-to-month basis as financial resources are available.  The Company entered intocurrently pays $250 per month plus a proportionate share of utilities and insurance.  For the three months ended October 31, 2017 and 2016, office rent was $750 and $Nil, respectively. For the six months ended October 31, 2017 and 2016, office rent was $1,500 and $Nil, respectively.

The Company has had short term promissory notes with the Company’sits Chairman of the Board of Directors in the aggregate amount of $101,916.  The notes matured on December 31, 2015 and bore interest at 8% per annum with bi-monthly payments of $450 commencing on August 1, 2015. The notes and accrued interest were paid in full during the year ended April 30, 2016.

as follows:


·On March 20, 2016 in the amount of $15,000 with an original maturity date of December 31, 2016.  The full amount of principal and all accrued interest was paid on August 23, 2016.
·On May 4, 2016 in the amount of $70,000 with an original maturity date of December 31, 2016.  The full amount of principal and all accrued interest were paid in full on August 23, 2016.


Page10 of29




STAR GOLD CORP.

NOTES TO FINANCIAL STATEMENTS

JANUARY 31, 2017



On March 20, 2016, the Company entered into short term promissory note with the Company’s Chairman of the Board of Directors in the amount of $15,000.  The Note originally had a maturity date of December 31, 2016.  The full amount of principal and all accrued interest was paid on August 23, 2016.  


On May 4, 2016, the Company entered into short term promissory note with the Company’s Chairman of the Board of Directors in the amount of $70,000.  The Note originally had a maturity date of December 31, 2016.  The full amount of principal and all accrued interest were paid in full on August 23, 2016.   


For the three months ended JanuaryOctober 31, 2017 and 2016, interest expense on the short term promissorythese notes in aggregate was $Nil and $2,113$437, respectively.  For the ninesix months ended JanuaryOctober 31, 2017 and 2016, interest expense on the short term promissorythese notes in aggregate was $Nil and $2,093, and $2,320 respectively.



NOTE 6– COMMON STOCK

6 – WARRANTS


On October 12, 2015, the Company completed

The following is a private placement of its securities wherein it raised a total of $424,100 (the “2015 Offering”).  The 2015 Offering consistedsummary of the sale of “units” of the Company’s securities at the per unit price of $0.10.  Pursuant to the Offering, the Company issued 4,241,000 shares of its common stock andCompany's warrants to purchase an additional 4,241,000 shares of its common stock.  Warrants issued pursuant to the Offering entitle the holders thereof to purchase shares of common stock for the price of $0.20 per share.  activity:

  Warrants  
Weighted Average
Exercise Price
 
Balance outstanding at April 30, 2015  1,614,400  $0.23 
Issued – October 12, 2015  4,241,000   0.20 
Balance outstanding at April 30, 2016  5,855,400   0.21 
Issued – October 12, 2016 (Note 8)  14,000,000   0.15 
Balance outstanding at April 30, 2017  19,855,400  $0.17 
Issued – October 31, 2017 (Note 8)  10,798,849   0.15 
Balance outstanding at October 31, 2017  30,654,249  $0.16 

The term of each warrant is for five years commencing with its issuance date.


On October 12, 2016, the Company issued 14,000,000 shares of its common stock and warrants to purchase an additional 14,000,000 shares of its common stock to 24 investors pursuant to a private placement of its securities (the “2016 Offering”).  The 2016 Offering consistedcomposition of the sale of “units” of the Company’s securitiesCompany's warrants outstanding at the per unit price of $0.05.  Warrants issued pursuant to the 2016 Offering entitled the holders thereof to purchase shares of common stock for the price of $0.15 per share.  The term of each warrantOctober 31, 2017 is for five years commencing with its issuance date.  The Company closed the 2016 Offering and having raised a total of $700,000 ($18,000 in fiscal year ended April 30, 2016 and $682,000 in nine months ended January 31, 2017).  

as follows:


Issue Date Expiration Date Warrants  Exercise Price  Remaining life (years) 
July 29, 2014 July 29, 2019  1,614,400  $0.23   1.99 
October 12, 2015 October 12, 2020  4,241,000   0.20   3.20 
October 12, 2016 October 12, 2021  14,000,000   0.15   4.20 
October 31, 2017 October 31, 2020  10,798,849   0.15   3.00 
     30,654,249  $0.16   3.36 


NOTE 7 - STOCK OPTIONS


Options issued for mining interest


In consideration for mining interests (see Note 3), the Company is obligated to issue stock options to purchase shares of the Company’sCompany's common stock based on "fair market price" which for financial statement purposes is considered to be the closing price of the Company's common stock on the issue dates. 


The following is a summary of the Company’s options issued and outstanding in conjunction with certain mining interest agreements on properties for the three and nine months ended January 31, 2017 and January 31, 2016, respectively:


 

For the three and nine months ended January 31, 2017

 

For the three and nine months ended January 31, 2016

 

 

Options

 

Price (a)

 

Options

 

Price (a)

Beginning balance

 

 375,000

 

$

 0.32

 

 

 350,000

 

$

 0.34

   Issued

 

 25,000

 

 

 0.08

 

 

 25,000

 

 

 0.06

   Exercised

 

 -   

 

 

 -   

 

 

 -   

 

 

 -   

   Expired

 

 -   

 

 

 -   

 

 

 -   

 

 

 -   

Ending balance

 

 400,000

 

$

 0.30

 

 

 375,000

 

$

 0.32

 

 

 

 

 

 

 

 

 

 

 

 

(a) Weighted average exercise price.




Page11 of29




STAR GOLD CORP.

NOTES TO FINANCIAL STATEMENTS

JANUARY 31, 2017




Fair value of the option grants for mining interests for the three and nine months ended January 31, 2017 and 2016, was $1,875 and $1,500, respectively.  Those costs are capitalized as Mining Interests (Note 3).

  No options were issued for mineral interests during the three and six months ended October 31, 2017 and 2016.

Page 11 of 24



STAR GOLD CORP.
NOTES TO FINANCIAL STATEMENTS
OCTOBER 31, 2017

As of October 31, 2017, the remaining weighted average term of the 400,000 outstanding stock options granted for mining interest was 4.33 years.

Options issued for consulting services


As per an agreement fully executed on October 3, 2012, in consideration for consulting and advisory services rendered, the Company was obligated to issue a total of 1,000 stock options based on 5 day5-day variable weighted-average price (VWAP) at the end of each month of the associated consulting contract.  The stock options had a term of 1 year.  The consultant options vested on the first day of the following month of service and were exercisable for a period of nine months following the termination of the agreement.


The following is a summary of

During the Company’s options issued and outstanding associated with the consulting agreement:


 

For the three months ended January 31,

 

2017

 

2016

 

 

Options

 

Price (a)

 

Options

 

Price (a)

Beginning balance

 

 -   

 

$

 -   

 

 

 12,000

 

$

 0.34

   Issued

 

 -   

 

 

 -   

 

 

 3,000

 

 

 0.10

   Exercised

 

 -   

 

 

 -   

 

 

 -   

 

 

 -   

   Expired

 

 -   

 

 

 -   

 

 

 (3,000)

 

 

 (0.24)

Ending balance

 

 -   

 

$

 -   

 

 

 12,000

 

$

 0.10

 

 

 

 

 

 

 

 

 

 

 

 

(a) Weighted average exercise price.



 

For the nine months ended January 31,

 

2017

 

2016

 

 

Options

 

Price (a)

 

Options

 

Price (a)

Beginning balance

 

 12,000

 

$

 0.16

 

 

 12,000

 

$

 0.34

   Issued

 

 3,000

 

 

 0.06

 

 

 9,000

 

 

 0.09

   Exercised

 

 -   

 

 

 -   

 

 

 -   

 

 

 -   

   Rescinded/expired

 

 (15,000)

 

 

 (0.10)

 

 

 (9,000)

 

 

 (0.17)

Ending balance

 

 -   

 

$

 -   

 

 

 12,000

 

$

 0.10

 

 

 

 

 

 

 

 

 

 

 

 

(a) Weighted average exercise price.


Total charged against operations under the option grants for consulting services was $Nil and $300, for the threesix months ended JanuaryOctober 31, 2017 and 2016, respectively.   Total charged against operations3,000 options with a fair value of $215 were granted under the option grants forthis consulting services was $Nil and $785 for the nine months ended January 31, 2017 and 2016, respectively.  These costs are classified as management and administrative expense.   


agreement.    Effective August 1, 2016, the consulting agreement was terminated, and all outstanding options issued for consulting services were rescinded by mutual consent of the parties.


Total charged against operations under the option grants for consulting services was $Nil and $215, for the six months ended October 31, 2017 and 2016, respectively.  These costs are classified as management and administrative expense.

Options issued under the 2011 Stock Option/Restricted Plan





Page12 of29




STAR GOLD CORP.

NOTES TO FINANCIAL STATEMENTS

JANUARY 31, 2017



The Company established the 2011 Stock Option/Restricted Stock Plan.  The Stock Option Plan is administered by the Board of Directors and provides for the grant of stock options to eligible individual including directors, executive officers and advisors that have furnished bona fide services to the Company not related to the sale of securities in a capital-raising transaction.


The Stock Option Plan has a fixed maximum percentage of 10% of the Company's outstanding shares that are eligible for the plan pool, whereby the number of Shares under the plan increases automatically increases as the total number of shares outstanding increase.  The number of shares subject to the Stock Option Plan and any outstanding awards will be adjusted appropriately by the Board of Directors if the Company's common stock is affected through a reorganization, merger, consolidation, recapitalization, restructuring, reclassification dividend (other than quarterly cash dividends) or other distribution, stock split, spin-off or sale of substantially all of the Company's assets.


The Stock Option plan also has terms and conditions, including without limitations that the exercise price for stock options granted under the Stock Option Plan must equal the stock's fair market value, based on the closing price per share of common stock, at the time the stock option is granted.  The fair value of each option award is estimated on the date of grant utilizing the Black-Scholes model and commonly utilized assumptions associated with the Black-Scholes methodology.  Options granted under the Plan have a ten-year maximum term and varying vesting periods as determined by the Board.


On October 18, 2016, the Company rescinded 2,696,667 fully vested options previously granted under the Stock Option plan with a weighted average exercise price of $0.37.  The Company re-issued the options and granted an additional 2,116,333 options to purchase shares of the Company’sCompany's common stock, or a total of 4,810,000 options, with an exercise price of $0.06 per share.  The options vested immediately and havehad a term of 5 years.  The difference betweenCompany accounted for the repricing as a modification of stock option terms.  The incremental fair value of the modified options over the fair value of the original options rescinded and the fair value of the new options granted was treated as a re-pricing event$126,562 and the Companywas recognized stock-based compensation in the amount of $126,562 for the ninequarter ended October 31, 2016.  No options were issued during the six months ended JanuaryOctober 31, 2017.


The Company estimated the fair value of thesethe option grantsgrant in October 2016 using the Black-Scholes model with the following information and range of assumptions:


 

For the nine months ended January 31,

 

2017

 

2016

Options re-priced/issued

 

 4,810,000

 

 

N/A

Expected volatility

 

329.9%

 

 

N/A

Expected term

 

5 years

 

 

N/A

Risk free rate

 

1.24%

 

 

N/A

Options re-priced/issued4,810,000
Expected volatility329.9%
Expected term5 years
Risk free rate1.24%

The following is a summary of the Company’sCompany's options issuedoutstanding and outstandingexercisable in conjunction with the Company’sCompany's Stock Option Plan:

Page 12 of 24


 

For the three months ended January 31,

 

2017

 

2016

 

 

Options

 

Price (a)

 

Options

 

Price (a)

Beginning balance

 

 4,810,000

 

$

 0.06

 

 

 2,696,667

 

$

 0.37

   Issued

 

 -   

 

 

 -   

 

 

 -   

 

 

 -   

   Exercised

 

 -   

 

 

 -   

 

 

 -   

 

 

 -   

   Expired/Repriced

 

 -   

 

 

 -   

 

 

 -   

 

 

 -   

Ending balance

 

 4,810,000

 

$

 0.06

 

 

 2,696,667

 

$

 0.37

 

 

 

 

 

 

 

 

 

 

 

 


STAR GOLD CORP.
NOTES TO FINANCIAL STATEMENTS
OCTOBER 31, 2017

  For the six months ended October 31, 
  2017  2016 
  Options  Price (a)  Options  Price (a) 
Beginning balance  4,810,000  $0.06   2,696,667  $0.37 
Issued  -   -   4,810,000   0.06 
Exercised  -   -   -   - 
Expired/Repriced  -   -   (2,696,667)  (0.37)
Ending balance  4,810,000  $0.06   4,810,000  $0.06 

(a) Weighted average exercise price.




Page13 of29




STAR GOLD CORP.

NOTES TO FINANCIAL STATEMENTS

JANUARY 31, 2017




 

For the nine months ended January 31,

 

2017

 

2016

 

 

Options

 

Price (a)

 

Options

 

Price (a)

Beginning balance

 

 2,696,667

 

$

 0.37

 

 

 2,696,667

 

$

 0.37

   Issued

 

 4,810,000

 

 

 0.06

 

 

 -   

 

 

 -   

   Exercised

 

 -   

 

 

 -   

 

 

 -   

 

 

 -   

   Expired/Repriced

 

 (2,696,667)

 

 

(0.37)

 

 

-

 

 

-

Ending balance

 

 4,810,000

 

$

 0.06

 

 

 2,696,667

 

$

 0.37

 

 

 

 

 

 

 

 

 

 

 

 

(a) Weighted average exercise price.


The following table summarizes additional information about the options under the Company’sCompany's Stock Option Plan as of JanuaryOctober 31, 2017:


 

 

Options outstanding and exercisable

Date of Grant

 

Shares

 

 

Price

 

Life

October 18, 2016

 

 4,810,000

 

$

 0.06

 

 

 4.72

   Total options

 

 4,810,000

 

$

 0.06

 

 

 4.72

 

 

 

 

 

 

 

 

 

  Options outstanding and exercisable 
Date of Grant Shares  Price Remaining Life 
October 18, 2016  4,810,000  $0.06   3.97 
Total options  4,810,000  $0.06   3.97 

The total value of the Plan stock option awards is expensed ratably over the vesting period of the employees receiving the awards.  As of JanuaryOctober 31, 2017, there was no unrecognized compensation cost related to stock-based options and awards.


Summary:


The following is a summary of the Company’sCompany's stock options outstanding and exercisable:


 

 

Expiration Date

 

 

Options

 

Weighted Average Exercise Price

Options issued for mining interests

 

April 22, 2019 through January 15, 2025

 

 

 400,000

 

$

 0.30

Options issued under Stock Option Plan

 

October 18, 2021

 

 

 4,810,000

 

 

 0.06

Outstanding at January 31, 2017

 

 

 

 

 5,210,000

 

$

 0.08

 

 

 

 

 

 

 

 

 

Total vest options

 

 

 

 

 5,210,000

 

 

 

 

 

 

 

 

 

 

 

 

 Expiration Date  Options  
Weighted Average
Exercise Price
 
Options issued for mining interests
April 22, 2019 through
January 15, 2027
  400,000  $0.30 
Options issued under Stock Option PlanOctober 18, 2021  4,810,000   0.06 
Vested and outstanding at October 31, 2017   5,210,000  $0.08 




Page14 of29




STAR GOLD CORP.

NOTES TO FINANCIAL STATEMENTS

JANUARY 31, 2017



The aggregate intrinsic value of all options vested and exercisable at JanuaryOctober 31, 2017, was $96,200$Nil based on the Company's closing price of $0.08$0.056 per common share at JanuaryOctober 31, 2017.  The Company's current policy is to issue new shares to satisfy option exercises.



NOTE 8 - WARRANTS

– STOCKHOLDERS' EQUITY


On October 12, 2016, the Company issued 14,000,000 shares of its common stock, and warrants to purchase an additional 14,000,000 shares of its common stock to 24 investors pursuant to a private placement of its securities (the "2016 Offering").  The following is a summary2016 Offering consisted of the Company’s warrants activity (Note 6):


 

Warrants

 

Weighted Average Exercise Price

Balance outstanding at April 30, 2015

 

 1,614,400

 

$

 0.23

   Issued – October 12, 2015 (Note 6)

 

 4,241,000

 

 

 0.20

Balance outstanding at April 30, 2016

 

 5,855,400

 

$

 0.21

   Issued – October 12, 2016 (Note 6)

 

 14,000,000

 

 

 0.15

Balance outstanding at January 31, 2017

 

 19,855,400

 

$

 0.17

 

 

 

 

 

 


The compositionsale of "units" of the Company’s warrants outstandingCompany's securities at Januarythe per unit price of $0.05.  Warrants issued pursuant to the 2016 Offering entitled the holders thereof to purchase shares of common stock for the price of $0.15 per share.  The term of each warrant is for five years commencing with its issuance date.  The Company raised a total of $700,000 ($18,000 in fiscal year ended April 30, 2016 and $682,000 in the year ended April 30, 2017) pursuant to the 2016 Offering.


On October 31, 2017, the Company issued 21,597,698 shares of its common stock, and warrants to purchase an additional 10,798,849 shares of its common stock to 34 investors pursuant to a private placement of its securities (the "2017 Offering").  The 2017 Offering consisted of the sale of "units" of the Company's securities at the per unit price of $0.10. Each unit consisted of two shares of common stock and one warrants to purchase an additional share of common stock.   Warrants issued pursuant to the 2017 Offering entitled the holders thereof to purchase shares of common stock for the price of $0.15 per share.  The term of each warrant is as follows:

for three years commencing with its issuance date.  The Company raised a total of $1,079,885, including receipt of $10,000 stock subscription receivable subsequent to October 31, 2017 pursuant to the 2017 Offering.

Page 13 of 24


Issue Date

 

Expiration Date

 

 

Warrants

 

Exercise Price

July 29, 2014

 

July 29, 2019

 

 

 1,614,400

 

$

 0.23

October 12, 2015

 

October 12, 2020

 

 

 4,241,000

 

 

 0.20

October 12, 2016

 

October 12, 2021

 

 

 14,000,000

 

 

 0.15

 

 

 

 

 

 19,855,400

 

$

 0.17

 

 

 

 

 

 

 

 

 





Page15 of29






ITEMITEM 2.

 MANAGEMENT’SMANAGEMENT'S DISCUSSION AND ANALYSIS AND PLAN OF OPERATION.


CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS


This quarterly report and the exhibits attached hereto contain “forward-looking statements”"forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, as amended.  Such forward-looking statements concern the Company’sCompany's anticipated results and developments in the Company’sCompany's operations in future periods, planned exploration and development of its properties, plans related to its business and other matters that may occur in the future.  These statements relate to analyses and other information that are based on forecasts of future results, estimates of amounts not yet determinable and assumptions of management.


Any statement that expresses or involves discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance (often, but not always using words or phrases such as “expects”"expects" or “does"does not expect”expect", “is expected”"is expected", “anticipates”"anticipates" or “does"does not anticipate”anticipate", “plans”"plans", “estimates”"estimates", or “intends”"intends", or states that certain actions, events or results “may”"may" or “could”"could", “would”"would", “might”"might" or “will”"will" be taken, occur or be achieved) are not statements of historical fact and may be forward-looking statements.  Forward-looking statements are subject to a variety of known and unknown risks, uncertainties and other factors which could cause actual events or results to differ from those expressed or implied by the forward-looking statements, including, without limitation:


·

Risks related to the Company’s properties being in the exploration stage;

·

Risks related to the mineral operations being subject to government regulation;

·

Risks related to environmental concerns;

·

Risks related to the Company’s ability to obtain additional capital to develop the Company’s resources, if any;

·

Risks related to mineral exploration and development activities;

·

Risks related to mineral estimates;

·

Risks related to the Company’s insurance coverage for operating risks;

·

Risks related to the fluctuation of prices for precious and base metals, such as gold, silver and copper;

·

Risks related to the competitive industry of mineral exploration;

·

Risks related to the title and rights in the Company’s mineral properties;

·

Risks related to the possible dilution of the Company’s common stock from additional financing activities;

·

Risks related to potential conflicts of interest with the Company’s management;

·

Risks related to the Company’s shares of common stock;

·Risks related to the Company's properties being in the exploration stage;
·Risks related to the mineral operations being subject to government regulation;
·Risks related to environmental concerns;
·Risks related to the Company's ability to obtain additional capital to develop the Company's resources, if any;
·Risks related to mineral exploration and development activities;
·Risks related to mineral estimates;
·Risks related to the Company's insurance coverage for operating risks;
·Risks related to the fluctuation of prices for precious and base metals, such as gold, silver and copper;
·Risks related to the competitive industry of mineral exploration;
·Risks related to the title and rights in the Company's mineral properties;
·Risks related to the possible dilution of the Company's common stock from additional financing activities;
·Risks related to potential conflicts of interest with the Company's management;
·Risks related to the Company's shares of common stock;

This list is not exhaustive of the factors that may affect the Company’sCompany's forward-looking statements.  Some of the important risks and uncertainties that could affect forward-looking statements are described further under the sections titled “Risk"Risk Factors and Uncertainties”Uncertainties", “Description"Description of Business”Business" and “Management’s"Management's Discussion and Analysis”Analysis" of this Quarterly Report.  Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated, believed, estimated or expected.  The Company cautions readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made.  Star Gold Corp. disclaims any obligation subsequently to revise any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events, except as required by law.  The Company advises readers to carefully review the reports and documents filed from time to time with the Securities and Exchange Commission (the “SEC”"SEC"), particularly the Company’sCompany's Annual Reports on Form 10-K, reports on Form 10-Q and Current Reports on Form 8-K.








Page16 of29







Star Gold Corp qualifies all forward-looking statements contained in this Quarterly Report by the foregoing cautionary statement.


Certain statements contained in this Quarterly Report on Form 10-Q constitute “forward-looking"forward-looking statements." These statements, identified by words such as “plan,” “anticipate,” “believe,” “estimate,” “should,” “expect,”"plan," "anticipate," "believe," "estimate," "should," "expect," and similar expressions include the Company’sCompany's expectations and objectives regarding its future financial position, operating results and business strategy. These statements reflect the current views of management with respect to future events and are subject to risks, uncertainties and other factors that may cause actual results, performance or achievements, or industry results, to be materially different from those described in the forward-looking statements. Such risks and uncertainties include those set forth under the caption “Management’s"Management's Discussion and Analysis or Plan of Operation”Operation" and elsewhere in this Quarterly Report.


As used in this Quarterly Report, the terms “we,” “us,” “our,” “Star"we," "us," "our," "Star Gold," and the “Company”"Company", mean Star Gold Corp., unless otherwise indicated. All dollar amounts in this Quarterly Report are expressed in U.S. dollars, unless otherwise indicated.

Page 14 of 24


Management’s


Management's Discussion and Analysis is intended to be read in conjunction with the Company’sCompany's financial statements and the integral notes (“Notes”("Notes") thereto included in the Company’sCompany's Annual Report on Form 10-K for the fiscal year ending April 30, 2016.2017.  The following statements may be forward-looking in nature and actual results may differ materially.


Corporate Background


The Company was originally incorporated on December 8, 2006, under the laws of the State of Nevada as Elan Development, Inc.  On April 25, 2008, the name of the company was changed to Star Gold Corp.  Star Gold Corp. is an exploration stage company engaged in the acquisition and exploration of precious metal deposit properties and advancing them toward production.  The Company is engaged in the business of exploring, evaluating and acquiring mineral prospects with the potential for economic deposits of precious and base metals.


Star Gold Corp. currently leases with an option to acquire certain unpatented mining claims located in the State of Nevada which in part make up what we refer to as the Longstreet Property."Longstreet Property" (or the "Longstreet Project"). The Longstreet Property in its entirety comprises 125 mineral claims (75 original optioned claims, of which 70 are unpatented staked claims and five claims leased from local ranchers),ranchers, pursuant to the "Clifford Lease," as well as 50 recently staked claims by Star Gold, covering a total area of approximately 2,500 acres (1,012 ha). The Longstreet property is at an intermediate stage of exploration.


The Company has no patents, licenses, franchises or concessions which are considered by the Company to be of importance.  The business is not of a seasonal nature.  Since the potential products are traded in the open market, the Company has no control over the competitive conditions in the industry.


Overview of Mineral Exploration and Current Operations


Star Gold Corp. is an exploration stage mineral company with no producing mines.  Mineral exploration is essentially a research activity that does not produce a product.  As such, the Company acquires properties which it believes have potential to host economic concentrations of minerals,minerals; particularly gold and silver.  These acquisitions have and may take the form of obtaining or leasing unpatented mining claims on federal land, or onleasing claims, or private property owned by third parties.others.  An unpatented mining claim is an interest that can be acquired to the mineral rights on open lands of the federal owned public domain.  Claims are staked in accordance with the Mining Law of 1872, recorded with the federal government pursuant to laws and regulations established by the Bureau of Land Management.  The Company intends to remain in the business of exploring for mining properties that have the potential to produce gold, silver, base metals and other commodities.


The Company will perform basic geological work to identify specific drill targets on the properties, and then collect subsurface samples by drilling to confirm the presence of mineralization (the presence of economic minerals in a specific area or geological formation).  The Company may enter into joint venture agreements with other companies to fund further exploration and/or development work.  It is the Company’sCompany's plan to focus on assembling a high




Page17 of29






qualityhigh-quality group of mid-stage mineral (primarily gold and silver) exploration prospects, using the experience and contacts of the management group.  By such prospects, the Company means properties that have been previously identified by third parties, (including prior owners and/or exploration companies), as mineral prospects with potential for economic mineralization.  Often these properties have been sampled, mapped and sometimes drilled, usually with indefinite results.  Accordingly, such acquired projects will have either prior exploration history or will have strong similarity to a recognized geologic ore deposit model.  Geographic emphasis will be place on the western United States.


The geologic potential and ore deposit models have been defined and specific drill targets identified the Company’sCompany's sole remaining property.  The Company’sCompany's property evaluation process involves using basic geologic fieldwork to perform an initial evaluation of a property.  If the evaluation is positive, the Company seeks to acquire, either by staking unpatented mining claims on open public domain, or by leasing the property from the owner of private property or the owner of unpatented claims.  Once acquired, the Company then typically makes a more detailed evaluation of the property.  This detailed evaluation involves expenditures for exploration work which may include rock and soil sampling, geologic mapping, geophysics, trenching, drilling or other means to determine if economic mineralization is present on a property.


Portions of the Company’sCompany's mining properties are owned by third parties and leased to Star Gold as outlined in the following table:


 

Property Name

Third Party

Number of Claims

 

Acres

 

Agreements/Royalties

 

Longstreet

Minquest

125

 

2,500

 

3% Net Smelter Royalty (“NSR”)

Annual lease payments totaling $247,000, annual exploration expenditures totaling $1.75m, and 185,000 shares due through 2020.  Annual advance royalty payment of $12,000.

Property nameLongstreet
Third partiesMinQuest and Clifford
Number of claims
125  (1)
Acres (approx.)2,500
Page 15 of 24



Agreements/Royalties
Royalties3% Net Smelter Royalty ("NSR")
Annual lease payments – total due through 2020$205,000
Minimum exploration expenditures – total due through 2020$1,500,000
Stock options – total due through 2020185,000
Annual advance royalty payment$12,000
(1)MinQuest owns 120 claims which are leased (with an option to acquire) to the Company under the Longstreet Agreement (Note 3 of the financial statements contained in Item 8) and Clifford owns 5 claims (also Note 3) which are managed by the Company.

Compliance with Government Regulations


Continuing to acquire and explore mineral properties in the State of Nevada will be require the Company to comply with all regulations, rules and directives of governmental authorities and agencies applicable to the exploration of minerals in the State of Nevada and the United States Federal agencies.


United States


Mining in the State of Nevada is subject to federal, state and local law. Three types of laws are of particular importance to the Company’sCompany's U.S. mineral properties: those affecting land ownership and mining rights; those regulating mining operations; and those dealing with the environment.


Land Ownership and Mining Rights.


On Federal Lands, mining rights are governed by the General Mining Law of 1872 (General Mining Law) as amended, 30 U.S.C. §§21-161 (various sections), which allows the location of mining claims on certain Federal Lands upon the discovery of a valuable mineral deposit and proper compliance with claim location requirements. A valid mining claim provides the holder with the right to conduct mining operations for the removal of locatable minerals, subject to compliance with the General Mining Law and Nevada state law governing the staking and registration of mining claims, as well as compliance with various federal, state and local operating and environmental laws, regulations and ordinances. As the owner or lessee of the unpatented mining claims, the Company has the right to conduct mining operations on the lands subject to the prior procurement of required operating permits and approvals, compliance with the terms and conditions of any applicable mining lease, and compliance with applicable federal, state, and local laws, regulations and ordinances.






Page18 of29







Mining Operations


The exploration of mining properties and development and operation of mines is governed by both federal and state laws.


The State of Nevada likewise requires various permits and approvals before mining operations can begin, although the state and federal regulatory agencies usually cooperate to minimize duplication of permitting efforts. Among other things, a detailed reclamation plan must be prepared and approved, with bonding in the amount of projected reclamation costs. The bond is used to ensure that proper reclamation takes place, and the bond will not be released until that time. The Nevada Department of Environmental Protection, which is referred to as the NDEP, is the state agency that administers the reclamation permits, mine permits and related closure plans on the Nevada property. Local jurisdictions (such as Eureka County) may also impose permitting requirements (such as conditional use permits or zoning approvals).


Environmental Law


The development, operation, closure, and reclamation of mining projects in the United States requires numerous notifications, permits, authorizations, and public agency decisions. Compliance with environmental and related laws and regulations requires us to obtain permits issued by regulatory agencies, and to file various reports and keep records of the Company’sCompany's operations. Certain of these permits require periodic renewal or review of their conditions and may be subject to a public review process during which opposition to the Company’sCompany's proposed operations may be encountered. The Company is currently operating under various permits for activities connected to mineral exploration, reclamation, and environmental considerations. Unless and until a mineral resource is proven,proved, it is unlikely Star Gold Corp. operations will move beyond the exploration stage. If in the future the Company decides to proceed beyond exploration, there will be numerous notifications, permit applications, and other decisions to be addressed at that time.


Page 16 of 24



Competition


Star Gold Corp. competes with other mineral resource exploration and development companies for financing and for the acquisition of new mineral properties and also for equipment and labor related to exploration and development of mineral properties. Many of the mineral resource exploration and development companies with whom the Company competes have greater financial and technical resources.  Accordingly, competitors may be able to spend greater amounts on acquisitions of mineral properties of merit, on exploration of their mineral properties and on development of their mineral properties. In addition, they may be able to afford greater geological expertise in the targeting and exploration of mineral properties. This competition could result in competitors having mineral properties of greater quality and interest to prospective investors who may finance additional exploration and development. This competition could adversely impact Star Gold Corp.’s's ability to finance further exploration and to achieve the financing necessary for the Company to develop its mineral properties.


The Company provides no assurance it will be able to compete in any of its business areas effectively with current or future competitors or that the competitive pressures faced by the Company will not have a material adverse effect on the business, financial condition and operating results.


Office and Other Facilities


Star Gold Corp. currently maintains its administrative offices at 611 E. Sherman Avenue, Coeur d'Alene, ID  83814.  The telephone number is (208) 664-5066.  Star Gold Corp. does not currently own title to any real property.


Employees


The Company has no employees other than its executive officers as of the date of this AnnualQuarterly Report on Form 10-K.10-Q.  Star Gold Corp. conducts business largely through independent contractor agreements with consultants.






Page19 of29







Research and Development Expenditures


The Company has not incurred any research expenditures since incorporation.


Reports to Security Holders


The Registrant does not issue annual or quarterly reports to security holders other than the annual Form 10-K and quarterly Forms 10-Q as electronically filed with the SEC.  Electronically filed reports may be accessed atwww.sec.gov.  Interested parties also may read and copy any materials filed with the SEC at the SEC’sSEC's Public Reference Room at 450 Fifth Street NW, Washington, DC 20549.  Information may be obtained on the operation of the Public Reference Room by calling the SEC at (800) SEC-0330.


PLAN OF OPERATION


The Company maintains a corporate office in Coeur d'Alene, Idaho.  This is the primary administrative office for the Company and is utilized by Board Chairman Lindsay Gorrill and Chief Financial Officer Kelly Stopher.


In

During the past year ended April 30, 2017, the Company completed the following:


·

Star Gold Corp Board formally decided

·Evaluated the costs of studies necessary for the preparation of an Environmental Impact Study ("EIS").
·Investigation and preparation of flora and fauna studies at Longstreet which generally indicate no material conditions present that would limit the Company's ability to commence mining operations at the site.
·Completion of cultural resources studies at Longstreet that provided reasonable assurance of no significant barriers to commence mining operations at the site.
·Reached agreement on leasing water rights for a portion of the quantity of water necessary to operate an open pit mine and heap leach pad on or adjacent to the Longstreet property.

For the current fiscal year ending April 30, 2018, the Company plans to commence the following activities as it prepares the EIS on the Longstreet Project:

·Aerial mapping of the Property
·Preparation of a hydro-geologic study of the Longstreet Property to determine the hydrogeologic conditions of and confirm the water table depth in the project area.
Page 17 of 24



·Completion of a rock characterization study to determine any potential issues with leaching ore from the target property and assessing any potentially required remediation actions.
·Develop a mine and engineering plan to assess the necessary footprint of the proposed mining operations, with a view toward minimizing the areas of potential land disturbance.

Assuming the results of the above-referenced studies are favorable, the Company intends to proceed to the preparation of an EIS and plan of operation for the Longstreet project (the "Longstreet Plan"). The eventual objective of the EIS and Longstreet Plan is the issuance, by each governing agency, of the necessary mine permits to authorize the construction of, and ongoing operations at, an open pit/heap leach mine at the Longstreet Property.

The Company anticipates the aforementioned tasks to be completed during late 2017, with the studies necessary to allow an EIS document to be produced with the goal of obtaining a mine permit to be issued at Longstreet.

·

Met with representatives from USFS and BLM and other stakeholders as to an agreed pathway to proceed through to an EIS document.


In 2016 the following studies were commenced:

1.

Fauna and Flora studies – late 2015 and completed June 2016.

2.

Water rights negotiations and requirements commencedprepared in late 2015 and will be ongoing.

3.

Cultural Resource Studies began in July 2016.

early 2018.


Due to the water requirements

Approval of the Longstreet ProjectPlan is subject to governmental agency review and may require additional water rights are required. Star Gold is currently in negotiation for these rights.  With the exception of hydrology related drilling, the Company does not intend to drill further at Longstreet deposit until permitting has been completed.

remediation activities.


Funds raised pursuant to our most recent private placement (see Note 5) are intended to finish all necessary studies and should be sufficient to progress from completing the necessary studies and into preparing an Environmental Impact Statement.


In 2017, the most significant item apart from securing the required water rights is the development of a mine plan. This is currently in the process of being drafted. 


The preliminary budget for Fiscal Year End April 2017:


STAR GOLD CORP. – LONGSTREET Au-Ag PROJECT, NEVADA

Permit fees

$

45,000

 

 

 

Flora and fauna contractor

 

30,000

 

 

 

Cultural studies

 

130,000

 

 

 

Water rights costs

 

65,000

 

 

 

Geochemistry

 

40,000

 

 

 




Page20 of29









Engineering for pads, air, permit, initial plan

 

85,000

 

 

 

Aerial mapping

 

15,000

 

 

 

Plan of Operations

 

80,000

 

 

 

Project management

 

33,000

 

 

 

Hydrology

 

120,000

 

 

 

Contingency

 

34,000

 

 

 

   Total

$

677,000

 

 

 

 

 

 

 

 

 

The hydrology workLongstreet Project is contingent on securing additional financing.

as follows:


Based upon the current condition of the capital markets, mineral prices and the state of the Longstreet project, management reasonably

  Fiscal year end April 30, 
STAR GOLD CORP. – LONGSTREET Au-Ag PROJECT, 2018  2019 
Permit fees $45,000  $- 
Flora and fauna contractor  9,000   - 
Cultural studies  42,000   - 
Hydrology  120,000     
Geo-chemistry  40,000   - 
Engineering for pads, air, permit, initial plan  210,000   - 
Plan of Operations  180,000   310,000 
Project management  77,000   30,000 
Water rights costs  35,000   - 
Aerial mapping  15,000   - 
Contingency, follow-up, mapping  42,000   70,000 
Claims and annual minimum option payments  82,000   87,000 
Total $897,000  $497,000 

Management believes it can source additional capital in the investment markets in the coming months and years.  The Company may also consider other sources of funding, including potential mergers, joint ventures and/or a farm-out of a portion of its exploration properties.


Future liquidity and capital requirements depend on many factors including timing, cost and progress of the Company's exploration efforts.  The Company will consider additional public offerings, private placement, mergers or debt instruments.

instruments to finance its activities.


Additional financing will be required in the future to complete all necessary steps to apply for a final permits required to allow the Company to commence any construction of our mining facilities and to begin production of any minerals present in economically viable quantities.permit. Although the Company believes it will be able to source additional financing there are no guarantees any needed financing will be available at the time needed or on acceptable terms, if at all.  If the Company is unable to raise additional financing when necessary, it may have to delay exploration efforts or property acquisitions, or be forced to cease operations.  Collaborative arrangements may require the Company to relinquish rights to certain of its mining claims.


RESULTS OF OPERATIONS


  For the three months ended October 31,       
  2017  2016  $ Change  % Change 
Mineral exploration expense $13,164  $43,669  $(30,505)  (69.9)
Legal and professional fees  15,208   20,737   (5,529)  (26.7)
Management and administrative  36,005   209,244   (173,239)  (82.8)
Depreciation  -   1,351   (1,351)  (100.0)
Other expense (income)  93   565   (472)  (83.5)
                 
NET LOSS $64,470  $275,566  $(211,096)  (76.6)

Page 18 of 24




  For the six months ended October 31,       
  2017  2016  $ Change  % Change 
Mineral exploration expense $80,140  $144,466  $(64,326)  (44.5)
Legal and professional fees  53,440   49,511   3,929   7.9 
Management and administrative  76,076   236,079   (160,003)  (67.8)
Depreciation  -   2,701   (2,701)  (100.0)
Other expense (income)  262   2,375   (2,113)  (89.0)
                 
NET LOSS $209,918  $435,132  $(225,214)  (51.8)

The Company has earned no revenues from operationsoperating revenue in 2017 or 2016 and does not anticipate earning any revenues from operations, in the foreseeablenear future. Star Gold Corp. is an exploration stage company and presently is seeking additionalother natural resources related business opportunities.


 

For the three months ended January 31,

 

 

 

 

 

 

2017

 

2016

 

$ Change

 

% Change

Mineral exploration expense

$

 52,294

 

$

 35,716

 

$

 16,578

 

46.4%

Legal and professional fees

 

 17,566

 

 

 7,021

 

 

 10,545

 

150.2%

Management and administrative

 

 27,301

 

 

 35,923

 

 

 (8,622)

 

(24.0%)

Depreciation

 

 1,350

 

 

 1,351

 

 

 (1)

 

(0.1%)

Other expense (income)

 

 80

 

 

 172

 

 

 (92)

 

(53.5%)

  NET LOSS

$

 98,591

 

$

 80,183

 

$

 18,408

 

23.0%

 

 

 

 

 

 

 

 

 

 

 

The Company will continue to focus its capital and resources toward exploration and permitting activities at its Longstreet Property.




Page21 of29






Total expensesnet loss for the three months ended JanuaryOctober 31, 2017 of $98,591 increased $18,408$64,470 decreased by $211,096 from total expenses of $80,183 for the comparable period ended January 31, 2016.  The Company incurred increased mineral exploration expense during the three months ended JanuaryOctober 31, 2017 compared to the prior period primarily as a result2016 total net loss of anthropological studies on the Longstreet Property project site.

 

For the nine months ended January 31,

 

 

 

 

 

 

2017

 

2016

 

$ Change

 

% Change

Mineral exploration expense

$

 196,760

 

$

 235,402

 

$

 (38,642)

 

(16.4%)

Legal and professional fees

 

 67,077

 

 

 40,235

 

 

 26,842

 

66.7%

Management and administrative

 

 263,380

 

 

 83,352

 

 

 180,028

 

216.0%

Depreciation

 

 4,051

 

 

 4,051

 

 

 -

 

0.0%

Other expense (income)

 

 2,455

 

 

 2,852

 

 

 (397)

 

(13.9%)

  NET LOSS

$

 533,723

 

$

 365,892

 

$

 167,831

 

45.9%

 

 

 

 

 

 

 

 

 

 

 


$275,566.  Total expensesnet loss for the ninesix months ended JanuaryOctober 31, 2017 of $533,723 increased$167,831$209,918 decreased by $225,214 from total expenses of $365,892 for the comparable period ended January 31, 2016.  The Company reduced field exploration and drilling activities during the ninesix months ended JanuaryOctober 31, 2017, compared to the prior period and increased emphasis on permitting-related activities such as archaeological studies.  The primary increase was related to issuance2016 total net loss of stock options during the nine months ended January 31, 2017 compared to the nine months ended January 31, 2016.  

$435,132.


Mineral exploration expense


 

For the three months ended January 31,

 

 

 

 

 

 

2017

 

2016

 

$ Change

 

% Change

Drilling and field work

$

 1,936

 

$

 1,479

 

$

 457

 

N/A

Environmental and permitting

 

 41,358

 

 

 20,594

 

 

 20,764

 

100.8%

Technical consultants

 

 9,000

 

 

 9,397

 

 

 (397)

 

(4.2%)

Claims

 

 -

 

 

 4,246

 

 

 (4,246)

 

N/A

    Total mineral exploration expense

$

 52,294

 

$

 35,716

 

$

 16,578

 

46.4%

 

 

 

 

 

 

 

 

 

 

 

Mineral

  For the three months ended October 31,      
  2017  2016  $ Change % Change 
Drilling and field work $783  $965  $(182)  (18.90)
Environmental and permitting  11,581   42,704   (31,123)  (72.90)
Technical consultants  800   -   800 NA 
Claims  -   -   - NA 
                 
Total mineral exploration expense $13,164  $43,669  $(30,505)  (69.90)

  For the six months ended October 31,       
  2017  2016  $ Change  % Change 
Drilling and field work $783  $3,068  $(2,285)  (74.50)
Environmental and permitting  41,089   108,680   (67,591)  (62.20)
Technical consultants  14,550   9,000   5,550   61.70 
Claims  23,718   23,718   -   - 
                 
Total mineral exploration expense $80,140  $144,466  $(64,326)  (0.45)

Exploration expense for the six months end October 31, 2017 was $80,140, a decrease of $64,326 from 2016 exploration expense of $144,466, resulting from archaeological and flora and fauna studies at the Longstreet property.  The Company's emphasis during the year ended April 30, 2017 shifted from exploratory drilling to activities related to environmental and anthropological studies.

Legal and professional fees

  For the three months ended October 31,    
  2017  2016  $ Change  % Change 
Audit and accounting $3,013  $5,925  $(2,912)  (49.1)
Legal fees  6,838   12,397   (5,559)  (44.8)
Public company expense  3,522   990   2,532   255.8 
Investor relations  1,835   1,425   410   28.8 
                 
Total legal and professional fees $15,208  $20,737  $(5,529)  (26.7)

Page 19 of 24




  For the six months ended October 31,    
  2017  2016  $ Change  % Change 
Audit and accounting $18,013  $20,609  $(2,596)  (12.6)
Legal fees  19,513   16,167   3,346   20.7 
Public company expense  14,079   11,310   2,769   24.5 
Investor relations  1,835   1,425   410   28.8 
                 
Total legal and professional fees $53,440  $49,511  $3,929   7.9 

Audit and accounting expense decreased $2,912 to $3,013 for the three months ended JanuaryOctober 31, 2017 were $52,294, a decrease of $16,578 from the three months ended January 31, 2016 expense of $35,716. During the three months ended January 31, 2017, the Company engaged technical consultants and cultural specialists, to conduct archaeological studies and activities related to the environmental and permitting phase on the Longstreet Property project.  

 

For the nine months ended January 31,

 

 

 

 

 

 

2017

 

2016

 

$ Change

 

% Change

Drilling and field work

$

 5,004

 

$

 6,370

 

$

 (1,366)

 

(21.4%)

Environmental and permitting

 

 140,038

 

 

 167,076

 

 

 (27,038)

 

(16.2%)

Technical consultants

 

 28,000

 

 

 28,073

 

 

 (73)

 

(0.3%)

Claims

 

 23,718

 

 

 33,883

 

 

 (10,165)

 

(30.0%)

    Total mineral exploration expense

$

 196,760

 

$

 235,402

 

$

 (38,642)

 

(16.4%)

 

 

 

 

 

 

 

 

 

 

 




Page22 of29









Mineral exploration expense for the nine months ended January 31, 2017, was $196,760 compared to $235,402 for the nine months ended January 31, 2016.  Claims expense decreased $10,165 for the nine month comparable period as a result of the Company’s non-renewal of its Excalibur Property Agreement.   


Environmental and permitting expense decreased from $167,076 for the nine months ended January 31, 2016, to $140,038 for the nine months ended January 31, 2017.  The Company performed extensive archaeological studies related to the permitting process during the nine months ended January 31, 2017.  Technical consultants engaged during the nine months ended January 31, 2017 were reclassified in 2017 to project management roles.


The emphasis on exploration expense in the current year is on conducting environmental and engineering work geared toward permitting of an open pit heap leach pad operation at Longstreet rather than additional exploratory drilling.  


Legal and professional fees


 

For the three months ended January 31,

 

 

 

 

 

 

2017

 

2016

 

$ Change

 

% Change

Audit and accounting

$

 5,575

 

$

 4,601

 

$

 974

 

21.2%

Legal fees

 

 9,108

 

 

 1,940

 

 

 7,168

 

369.5%

Public company expense

 

 298

 

 

 480

 

 

 (182)

 

(37.9%)

Investor relations

 

 2,585

 

 

 -

 

 

 2,585

 

0.0%

    Total legal and professional fees

$

 17,566

 

$

 7,021

 

$

 10,545

 

150.2%

 

 

 

 

 

 

 

 

 

 

 


Total legal and professional fees increased $10,545$5,925 for the three months ended JanuaryOctober 31, 2016.  For the six months ended October 31, 2017, audit and accounting fees decreased $2,596 from the six months ended October 31, 2016.


The primary component of public company expense is the annual fee of $10,000 associated with OTC Markets for the Company's OTCQB status.

For the three months ended JanuaryOctober 31, 2016.  This is primarily related2017, legal fees decreased $5,559 to professional fees incurred with respect$6,838 compared to the Company’s corporate governance and statutory filings.


Legal fees increased $7,168$12,397 for the three months ended JanuaryOctober 31, 2016.  For the six months ended October 31, 2017, fromlegal fees increased $3,346 to $19,513 compared to $16,167 for the threesix months ended JanuaryOctober 31, 2016.  The increase inis primarily related to expenses related to legal costs related to documentation related to private placements, regulatory filings related to officers and directors and legal fees was a resultrelated negotiation and documentation of ongoingwater rights agreements on the Longstreet project.  There are no pending legal matters relatedissues or contingencies as of October 31, 2017.


General and administrative expense

  For the three months ended October 31,       
  2017  2016  $ Change  % Change 
Auto and travel $13,201  $11,448  $1,753   15.3 
General administrative and insurance  8,750   49,550   (40,800)  (82.3)
Management fees and payroll  11,774   12,159   (385)  (3.2)
Office and computer expense  1,043   2,551   (1,508)  (59.1)
Rent and lease expense  750   4,750   (4,000)  (84.2)
Stock based compensation  -   126,562   (126,562)  (100.0)
Telephone and utilities  487   2,224   (1,737)  (78.1)
                 
Total general and administrative $36,005  $209,244  $(173,239)  (82.8)

  For the six months ended October 31,       
  2017  2016  $ Change  % Change 
Auto and travel $30,712  $15,647  $15,065   96.3 
General administrative and insurance  17,500   58,300   (40,800)  (70.0)
Management fees and payroll  23,548   25,454   (1,906)  (7.5)
Office and computer expense  1,785   2,927   (1,142)  (39.0)
Rent and lease expense  1,500   4,750   (3,250)  (68.4)
Stock based compensation  -   126,777   (126,777)  (100.0)
Telephone and utilities  1,031   2,224   (1,193)  (53.6)
                 
Total general and administrative $76,076  $236,079  $(160,003)  (67.8)

Total general and administrative expense decreased $173,329 to corporate governance and statutory filings.


Audit and accounting fees$36,005 for the three months ended January 31, 2017 increased $974 compared to the three months ended January 31, 2016. The annual audit of the Company’s financial statements came in on budget.  The Company expects its audit and accounting fees for the subsequent fiscal quarter to remain relatively constant per a fixed fee engagement with the audit firm.


 

For the nine months ended January 31,

 

 

 

 

 

 

2017

 

2016

 

$ Change

 

% Change

Audit and accounting

$

 26,184

 

$

 27,805

 

$

 (1,621)

 

(5.8%)

Legal fees

 

 25,275

 

 

 11,455

 

 

 13,820

 

120.6%

Public company expense

 

 11,608

 

 

 301

 

 

 11,307

 

3,756.5%

Investor relations

 

 4,010

 

 

 674

 

 

 3,336

 

495.0%

    Total legal and professional fees

$

 67,077

 

$

 40,235

 

$

 26,842

 

66.7%

 

 

 

 

 

 

 

 

 

 

 


For the nine months ended January 31, 2017, total legal and professional fees increased $26,842 over the nine months ended January 31, 2016.  This is primarily related to annual market listing fees paid during the nine-month period.





Page23 of29






Legal fees increased $13,820 for the nine months ended January 31, 2017 compared to the nine months ended January 31, 2016.  The increase in legal fees was a result of ongoing legal matters related to corporate governance and statutory filings.


Audit and accounting fees for the nine months ended January 31, 2017 decreased $1,621 compared to the nine months ended January 31, 2016. The annual audit of the Company’s financial statements came in on budget.  


Management and administrative expense


 

For the three months ended

January 31,

 

 

 

 

 

2017

 

2016

 

$ Change

 

% Change

Auto and travel

$

 2,673

 

$

 14,310

 

$

 (11,637)

 

N/A

General administrative and insurance

 

 9,550

 

 

 9,340

 

 

 210

 

2.2%

Management fees and payroll

 

 12,190

 

 

 11,387

 

 

 803

 

7.1%

Office and computer expense

 

 1,535

 

 

 549

 

 

 986

 

179.6%

Rent and lease expense

 

 750

 

 

 -

 

 

 750

 

N/A

Stock based compensation

 

 -

 

 

 297

 

 

 (297)

 

(100.0%)

Telephone and utilities

 

 603

 

 

 40

 

 

 563

 

1,407.5%

    Total management and administrative

$

 27,301

 

$

 35,923

 

$

 (8,622)

 

(24.0%)

 

 

 

 

 

 

 

 

 

 

 

Management and administrative expense decreased $8,622 to $27,301 for the three months ended JanuaryOctober 31, 2017 compared to 2016 expense of $35,923 resulting$209,244.  The difference is primarily from decreased travel expense relatedattributable to capital raisinga $126,562 decrease in stock based compensation that did not recur during the current quarter.    

 

For the nine months ended January 31,

 

 

 

 

 

2017

 

2016

 

$ Change

 

% Change

Auto and travel

$

 18,320

 

$

 15,615

 

$

 2,705

 

17.3%

General administrative and insurance

 

 67,850

 

 

 26,375

 

 

 41,475

 

157.3%

Management fees and payroll

 

 37,644

 

 

 34,271

 

 

 3,373

 

9.8%

Office and computer expense

 

 4,462

 

 

 2,954

 

 

 1,508

 

51.0%

Rent and lease expense

 

 5,500

 

 

 2,500

 

 

 3,000

 

120.0%

Stock based compensation

 

 126,777

 

 

 785

 

 

 125,992

 

16,049.9%

Telephone and utilities

 

 2,827

 

 

 852

 

 

 1,975

 

231.8%

    Total management and administrative

$

 263,380

 

$

 83,352

 

$

 180,028

 

216.0%

 

 

 

 

 

 

 

 

 

 

 

three months ended October 31, 2017.


Management

For the six months ended October 31, 2017, total general and administrative expense of $263,380 for the nine months ended January 31, 2017 increased $180,028 compareddecreased $160,003 to 2016 expense of $83,352 resulting primarily from repricing and issuance of stock options in the prior quarter.  Stock options are a non-cash expense.  


Auto and travel expense increased $2,705 for the nine months ended January 31, 2017 compared to the nine months ended January 31, 2016, related to increased travel related to raising capital.


$76,076.  General administrative and insurance expense increased $41,475 for the nine months ended January 31, 2017decreased $40,800 compared to the ninesix months ended JanuaryJuly 31, 2016 as a result of anthe Company did not participate in any advertising and investor awareness expense promotional program during the current fiscal year.  Stock based compensation decreased $126,777 as the Company has not issued stock options during the current fiscal year as it did during the same timeframe in the prior year.

Page 20 of $40,800.

24





Page24 of29







LIQUIDITY AND FINANCIAL CONDITION

BALANCE SHEET INFORMATION

January 31, 2017

 

April 30, 2016

Working capital (deficit)

$

 158,305

 

$

 (70,571)

Total assets

 

 634,095

 

 

 358,202

Accumulated deficit

 

 9,851,232

 

 

 9,317,509

Stockholders’ equity

 

 554,008

 

 

 259,079

 

 

 

 

WORKING CAPITAL

January 31, 2017

 

April 30, 2016

Current assets

$

 238,392

 

$

 10,552

Current liabilities

 

 80,087

 

 

 81,123

Working capital (deficit)

$

 158,305

 

$

 (70,571)

 

 

 

 

 

 

 

For the nine months ended January 31,

CASH FLOWS

2017

 

2016

Cash flow used by operating activities

$

 (406,099)

 

$

 (300,733)

Cash flow used by investing activities

 

 (37,000)

 

 

 (32,000)

Cash flow provided by financing activities

 

 667,000

 

 

 334,521

Net increase in cash during period

$

 223,901

 

$

 1,788

 

 

 

 

 

 


The

BALANCE SHEET INFORMATION October 31, 2017  April 30, 2017 
       
Working capital $917,668  $71,765 
Total assets  1,413,598   518,402 
Accumulated deficit  10,149,808   9,939,890 
Stockholders' equity $1,335,316  $465,350 

WORKING CAPITAL October 31, 2017  April 30, 2017 
       
Current assets $995,950  $124,817 
Current liabilities  78,282   53,052 
Working capital (deficit) $917,668  $71,765 

  For the six months ended 
CASH FLOWS October 31, 2017  October 31, 2016 
       
Cash flow used by operating activities $(205,209) $(318,553)
Cash flow used by investing activities  (12,000)  (12,000)
Cash flow from financing activities  1,069,884   667,000 
Net increase (decrease) in cash during period $852,675  $336,447 

Working capital will be utilized for the Company's ongoing exploration and environmental studies at its Longstreet project and general corporate purposes.

For investing activities, the Company total assets increased to $634,095 at January 31, 2017 compared to $358,202 at April 30, 2016, primarily as a result of an increaseutilized $12,000 in cash balanceto make an advanced royalty payment and certain capitalized mineral assets at its Longstreet project related to the private placement of the Company’s common stock.


Equipment and mining interest, net of depreciation increased from $326,050 at April 30, 2016 to $360,874 at January 31, 2017 as a result of the acquisition of additional mining interests in thee Clifford claims at the Longstreet Property.


At January 31, 2017, the Company had a working capital of $171,534 primarily related to cash balance from the Company’s most recent private placement of its securities.  


claims.  The Company is in compliance with all obligationsintends to continue exploration activities at Longstreet upon completion of the Longstreet Agreement including required cumulative exploration expenditures.  

environmental studies and permitting.


As of JanuaryOctober 31, 2017, the Company had cash on hand of $225,686.$962,055.  Since inception, the primary sources of the Company’s financing have been through offeringssales of itsthe Company's debt and equity and debt securities. Star Gold Corp. has not attained profitable operations and its ability to pursue any future plan of operation is likely dependent upon the Company’sour ability to obtain additional financing in the future.  

financing.


Star Gold Corp. anticipates continuing to rely on sales of its debt and/or equity securities in order to continue to fund ongoing operations. Issuances of additional shares of common stock may result in dilution to the Company's existing stockholders. There is no assurance that the Company will be able to complete any additional sales of equity securities or that it will be able arrange for other financing to fund its planned business activities.


The Company completed as of January 31, 2017, a private placement offering that raised a total of $700,000.  The private placement consisted of the sale of Units at $0.05 per Unit. Each Unit consists of one common share of the Company’s common stock and one common share purchase warrant.  Each Warrant is exercisable no later than sixty months from the date of issuance thereof to purchase one Common Share of the Company’s stock at an exercise price of $0.15.  Once the Company has obtained all permits necessary to begin site development and construction at its Longstreet Property, the Company, at its sole discretion, may call the Warrants as due and exercisable by providing the Warrant holders of Warrants with 60 days’ written notice.  





Page25 of29






Disruptions in the credit and financial markets over the past several years have had a material adverse impact on a number of financial institutions and have limited access to capital and credit for many companies.  The prices for gold, silver and other base metals have also recently been subject to fluctuations which have had a material adverse impact on mining related companies’ ability to raise capital.  These disruptions could, among other things, make it more difficult for the Company to obtain, or increase the cost of obtaining, capital and financing for operations.  Access to additional capital may not be available to terms acceptable to the Company or at all.


The Company's continuation as a going concern or ultimately to attain profitability is dependent upon its ability to generate sufficient cash flow to meet its obligations on a timely basis, to obtain additional financing as may be required, andor ultimately to further develop its properties.attain profitability.  Potential sources of cash, or relief of demand for cash, include additional external debt, the sale of shares of the Company's stock or alternative methods such as joint ventures, mergers or sale(s)sale of the Company's assets.  No assurances can be given, however, that the Company will be able to obtain any of these potential sources of cash.  The Company currently requires additional cash funding from outside sources to sustain existing operations and to meet current obligations and ongoing capital requirements.


The Company’sCompany plans for itsthe long-term continuation as a going concern include financing future operations through sales of our common stockequity and/or debt securities and the eventualanticipated profitable exploitation of the Company's mining properties.  These plans may also, at some future point, include the formation of mining joint ventures with senior mining company partners on specific mineral properties whereby the joint venture partner would provide the necessary financing in return for an interestequity in the Company’s properties and/or any minerals it may produce in the future.

property.


ITEM 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK


The Company does not hold any derivative instruments and does not engage in any hedging activities.

Page 21 of 24




ITEM 4.

CONTROLS AND PROCEDURES.

PROCEDURES


Evaluation

Conclusions of Management Regarding Effectiveness of Disclosure Controls and Procedures


The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting.  The Company’s internal control over financial reporting is a process designed under

At the supervision of its President and Chief Financial Officer to provide reasonable assurance regarding the reliability of financial reporting and the preparationend of the Company’s financial statements for external reporting in accordance with accounting principles generally accepted in the United States of America.  Management evaluates the effectiveness of the Company’s internal control over financial reporting using the criteria set forthperiod covered by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control – “Integrated Framework.”


Management,this Quarterly Report on Form 10-Q, an evaluation was carried out under the supervision and with the participation of the Company’sCompany's management, including the President and ChiefPrincipal Executive Officer ("PEO") and Principal Financial Officer assessed("PFO"), of the effectiveness of the Company’s internal control over financial reporting as of January 31, 2017,design and concluded that it is ineffective in assuring that the financial reportsoperations of the Company are free from material errors or misstatements.


Management has identified one material weakness and is taking action to remedy and remove the weakness in its internal controls over financial reporting:


·

Inappropriate Segregation of Duties, as the same Officer was responsible for initiating and recording transactions, thereby creating segregation of duties weakness.


Management’s Remediation Initiatives.


Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, within the Company have been detected.  These inherent limitations include the realities that judgments in decision making can be faulty and that breakdowns can occur because of simple error or mistake.  The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance




Page26 of29






that any design will succeed in achieving its stated goals under all potential future conditions.  Projections of any evaluation of controls effectiveness to future periods are subject to risks.


The Company clearly recognizes, and continues to recognize, the importance of implementing and maintainingCompany's disclosure controls and procedures (as defined in Rule 13a – 15(e) and Rule 15d – 15(e) under the Exchange Act). Based on that evaluation, the PEO and the PFO have concluded that as of the end of the period covered by this report, the Company's disclosure controls and procedures were not effective as it was determined that there were material weaknesses affecting our disclosure controls and procedures. 


Management of the Company believes that these material weaknesses are due to the small size of the company's accounting staff. The small size of the Company's accounting staff may prevent adequate controls in the future, such as segregation of duties, due to the cost/benefit of such remediation. To mitigate the current limited resources and limited employees, we rely heavily on direct management oversight of transactions, along with the use of external legal and accounting professionals. As the Company grows, management expects to increase the number of employees, which will enable us to implement adequate segregation of duties within the internal control framework.

PEO and PFO Certifications

Appearing immediately following the Signatures section of this report there are Certifications of the PEO and the PFO.  The Certifications are required in accordance with Section 03 of the Sarbanes-Oxley Act of 2002 (the Section 302 Certifications).  This Items of this report which you are currently reading is the information concerning the Evaluation referred to in Section 302 Certifications and this information should be read in conjunction with Section 302 Certifications for a more complete understanding of the topics presented.

Changes in Internal Control over Financial Reporting

There have been no changes during the quarter ended October 31, 2017 in the Company's internal controls over financial reporting and is workingthat have materially affected, or are reasonably likely to implement an effective system of controls.   Management is currently evaluating avenues for mitigating the Company's internal controls weaknesses, but mitigating controls that are practical and cost effective may not be found based on the size, structure, and future existence of the organization, Since the Company has not generated any significant revenues, the Company is limited in its options for remediation efforts. Management, within the confines of its budgetary resources, will engage its outside accounting firm to assist with an assessment of the Company’smaterially affect, internal controls over financial reporting as of January 31, 2017.

reporting.


Changes in internal controls over financial reporting


There have been no material changes in internal controls over financial reporting during the quarter ended January 31, 2017.


PART II - OTHER INFORMATION



ITEM 1.

LEGAL PROCEEDINGS


Star Gold Corp. is not a party to any material legal proceedings and, to Management’sManagement's knowledge, no such proceedings are threatened or contemplated. No director, officer or affiliate of Star Gold Corp. and no owner of record or beneficial owner of more than 5% of the Company’sCompany's securities or any associate of any such director, officer or security holder is a party adverse to Star Gold Corp. or has a material interest adverse to Star Gold Corp. in reference to pending litigation.


ITEM 1A.

RISK FACTORS


There have been no material changes from the risk factors as previously disclosed in the Company’sCompany's Form 10-K for the year ended April 30, 20162017 which was filed with the SEC on August 15, 2016.July 20, 2017.


ITEM 2.

RECENT SALES OF UNREGISTERED SECURITIES


None.


ITEM 3.

DEFAULTS UPON SENIOR SECURITIES


None


Page 22 of 24



ITEM 4.

MINE SAFETY DISCLOSURES


Pursuant to Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act”"Dodd-Frank Act"), issuers that are operators, or that have a subsidiary that is an operator, of a coal or other mine in the United States are required to disclose in their periodic reports filed with the SEC information regarding specified health and safety violations, orders and citations, related assessments and legal actions, and mining-related fatalities. The Company is in the exploration stage and has no operations.


ITEM 5.

OTHER INFORMATION.

INFORMATION


None




Page27 of29







ITEM 6.

EXHIBITS


Exhibit

Exhibit

Number

Number

Description of Exhibits

Articles of Incorporation.(1)

Bylaws, as amended.(1)

Form of Share Certificate.(1)

Purchase Agreement dated June 22, 2004 between Guy R. Delorme and Star Gold Corp.(1)

Declaration of Trust executed by Guy R. Delorme.(1)

Code of Ethics.(2)

31.1

Option and Lease of Water Rights Agreement dated August 21, 2017 between High Test Hay, LLC and Star Gold Corp.

Certification of Principal Executive Officer andas adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
Certification of Principal Financial Officer as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

Certification of Principal Executive Officer andas adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Certification of Principal Financial Officer as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS(2)

XBRL Instance

101.SCH*

XBRL Taxonomy Extension Schema

101.CAL*

XBRL Taxonomy Extension Calculation

101.DEF*

XBRL Taxonomy Extension Definition

101.LAB*

XBRL Taxonomy Extension Labels

101.PRE*

XBRL Taxonomy Extension Presentation

(1)

Filed with the SEC as an exhibit to the Company’sCompany's Registration Statement on Form SB-2 originally filed on June 14, 2007, as amended.

(2)

Filed with the SEC, on February 02, 2012, as an exhibit to formForm 8-K.

(*)

XBRL 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.


Page 23 of 24


SIGNATURES








Page28 of29






SIGNATURES

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.


STAR GOLD CORP.

Date:

March 15,December 14, 2017

By:

/s/ David Segelov

DAVID SEGELOV

President

(Principal Executive Officer)

Date:

March 15,December 14, 2017

By:

/s/KELLY J. STOPHER
Kelly J. Stopher

      By:

Kelly J. Stopher

Chief Financial Officer and Secretary

(Principal Financial Officer)




















Page29 24 of29



24