COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Jan. 31, 2014 |
COMMITMENTS AND CONTINGENCIES [Abstract] | ' |
COMMITMENTS AND CONTINGENCIES | ' |
NOTE 15 - COMMITMENTS AND CONTINGENCIES |
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Compliance with Environmental Regulations |
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The Company's activities are subject to laws and regulations controlling not only the exploration and mining of mineral properties, but also the effect of such activities on the environment. Compliance with such laws and regulations may necessitate additional capital outlays or affect the economics of a project, and cause changes or delays in the Company's activities. |
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Property Concessions Mexico |
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To properly maintain property concessions in Mexico, the Company is required to pay a semi-annual fee to the Mexican government and complete annual assessment work. |
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In addition, seven of the concessions in the Sierra Mojada project are subject to options to purchase from existing third party concession owners. Pursuant to the option purchase agreements, the Company is required to make certain payments over the terms of these contracts to obtain full ownership of these concessions as set forth in the table below: |
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Olympia (1 concession) | |
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Payment Date | Payment Amount | |
March 2014(1) | $MXN 500,000 | |
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(1) If a change of control occurs prior to the payment date, this payment is due upon the change of control. | |
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Nuevo Dulces Nombres (Centenario) and Yolanda III (2 concessions) | |
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Payment Date | Payment Amount(1) | |
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Monthly payment beginning August 2014 and ending July 2016 | $20,000 per month | |
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(1) Until July 2016, the Company has the option of acquiring Nuevo Dulces Nombres (100% interest) for $4 million and Yolanda III (100% interest) for $2 million plus a lump sum payment equal to any remaining monthly payments. | |
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Poder de Dios, Anexas a Poder de Dios, and Ampliacion a Poder de Dios (3 concessions) |
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Payment Date | Payment Amount(1) | |
Apr-14 | $6 million | |
Oct-14 | $6 million | |
April 2015(1) | $7 million | |
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(1) Payments shown reflect the option purchase price for a period of six months from the payment date for the acquisition of 100% of the concessions. Subsequent to April 2015 the option purchase price is $7 million for the acquisition of 100% of the concession. In addition the Company is required to make payments of $300,000 in April and October of each year until the option purchase is made otherwise the Company will lose its interest in the concessions. The option purchase price until April 2014 is $5 million. |
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Veta Rica o La Inglesa (1 concession) | |
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Payment Date | Payment Amount | |
Apr-14 | $300,000 | |
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Property Concessions Gabon |
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The Company holds title to the Ndjole (Note 4) and Mitzic concessions in Gabon, Africa that require the Company to spend minimum amounts each term to renew the concessions. Each concession is renewable twice with each renewal lasting for three years. The initial renewal of the Ndjole concession was granted on June 21, 2012 and the initial renewal of the Mitzic concession was granted on July 24, 2012. Per the renewed concession licenses, the Company must spend $CFA 2,926,000,000 ($6,083,160) on exploration work on the Ndjole concession and $CFA 901,000,000 ($1,873,181) on exploration work on the Mitzic concession in order to renew these concessions for a third term of three years. The expenditures during the second period are reduced by $CFA 2,724,805,322 ($5,664,876) for Ndjole and $CFA 244,668,825 ($508,667) for Mitzic which represent amounts spent in the second period to January 31, 2014 and amounts carried forward from the initial term for expenditures incurred in excess of the renewal requirements. The Company must spend $CFA 800,000,000 ($1,663,202) in the third term per Gabonese law. The Company may apply for a mining license at any time during these periods. As of January 31, 2014, one U.S. dollar approximates $CFA 481. |
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Royalty |
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The Company has agreed to pay a 2% net smelter return royalty on certain property concessions within the Sierra Mojada Property. Total payments under this royalty are limited to $6.875 million. |
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Office Lease Commitment |
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The Company entered into a five-year office lease agreement from April 1, 2012 to March 31, 2017 for the Company's corporate office in Vancouver, Canada. The monthly lease payment is $CDN 7,506 until March 31, 2014, increasing to $CDN 7,743 on April 1, 2014, with a further increase to $CDN 7,981 on April 1, 2016. As of January 31, 2014, one U.S. dollar approximates $CDN 1.11. |