SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO. 1
TO
FORM SB-2
REGISTRATION STATEMENT
UNDER THE
SECURITIES ACT OF 1933
GENTOR RESOURCES, INC.
(Name of small business Issuer in its charter)
Florida 1000 20-2679777
(State or other (Primary Standard (I.R.S. Employer
jurisdiction of Industrial Identification No.)
incorporation or Classification Code
organization) Number)
1 Alder Gulch Road
Virginia City, Montana 59755
(406)843-5383
(Address and Telephone Number of Principal Executive Offices and
Principal Place of Business)
Lloyd J. Bardswich, President
Gentor Resources, Inc.
1 Alder Gulch Road
Virginia City, Montana 59755
(406)843-5383
(Name, Address and Telephone Number of Agent for Service)
<PAGE>
Copies to:
Edward H. Gilbert, Esq.
Edward H .Gilbert, P.A.
5100 Town Center Circle, Suite 430
Boca Raton, Florida 33486
(561) 361-9300 Ext. 202
Approximate date of commencement of proposed sale to the public: As
soon as practicable after this Registration Statement becomes
effective.
If this Form is filed to register additional securities for an
offering pursuant to 462(b) under the Securities Act, check the
following box and list the Securities Act registration statement
number of the earlier effective registration statement for the same
offering. ( )
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list
the Securities Act registration statement number of the earlier
effective registration statement for the same offering. ( )
If this Form is a post-effective amendment filed pursuant to Rule
462(d) under the Securities Act, check the following box and list
the Securities Act registration statement number of the earlier
effective registration statement for the same offering. ( )
If delivery of the prospectus is expected to be made pursuant to
Rule 434, please check the following box. ( )
CALCULATION OF REGISTRATION FEE
<TABLE>
<S> <C> <C> <C> <C>
Title of Amount to Proposed Proposed Amount of
each class be maximum maximum registration
of registered offering aggregate fee
securities price per offering
to be Share (1) price (1)
registered
Common 200,000 $5.00 $1,000,000 $117.70
Stock, shares
$.0001 par
value
</TABLE>
(1) Estimated solely for purpose of calculating the registration fee.
<PAGE>
The Registrant hereby amends this Registration Statement on such
date or dates as may be necessary to delay its effective date until
the Registrant shall file a further amendment which specifically
states that this Registration Statement shall thereafter become
effective in accordance with Section 8(a) of the Securities Act of
1933 or until the Registration Statement shall become effective on
such date as the Commission, acting pursuant to said Section 8(a),
may determine.
<PAGE>
The information in this prospectus is not complete and may be
changed. We may not sell these securities until the registration
statement filed with the Securities and Exchange Commission is
effective. This prospectus is not an offer to sell these securities,
and it is not soliciting an offer to buy these securities in any
state where the offer or sale is not permitted.
Subject to completion, May 1, 2006
Prospectus
Gentor Resources, Inc.
200,000 shares of Common Stock
$5.00 per share
<TABLE>
<S> <C> <C> <C>
Per Share Minimum Maximum
Initial Offering $5.00 $200,000 $1,000,000
Price to Public
Commissions $0.00 $0 $0
Proceeds to
Gentor Resources $5.00 $200,000 $1,000,000
</TABLE>
This is our initial public offering. There has never been a public
market for our common stock, and we have arbitrarily determined the
offering price.
We are offering the shares on a "best efforts" basis. We are making
the offering through our president, who will not be compensated for
offering the shares. Any prospective purchaser will be required to
purchase a minimum 1,000 shares. All proceeds from the offering
will be deposited into a non-interest bearing special receipts
account in our name, and unless we receive paid subscriptions for at
least 40,000 shares by May 31, 2006, no shares will be sold and all
proceeds held in the special receipts account will be promptly
returned to subscribers without interest. If we receive paid
subscriptions for at least 40,000 shares by May 31, 2006, we will
transfer those proceeds from the special receipts account to our
<PAGE>
general operating account. Any proceeds that we receive after the
receipt of proceeds from the sale of 40,000 shares will be deposited
directly into our general operating account. If we sell at least
40,000 shares by May 31, 2006, we may extend our offering until the
earlier of September 30, 2006 or the time that all 200,000 shares
are sold.
An investment in the shares involves substantial risks and is
speculative. SEE "RISK FACTORS" BEGINNING ON PAGE 9 OF THIS
PROSPECTUS.
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these
securities or determined if this prospectus is truthful or complete.
Any representation to the contrary is a criminal offense.
The date of this prospectus is May 1, 2006
<PAGE>
In making a decision whether to buy our common stock, you should
only rely on the information contained in this prospectus. We have
not authorized anyone to provide you with any different or other
information.
<PAGE>
PROSPECTUS SUMMARY
Because this is only a summary, it does not contain all of the
information that may be important to you. Before deciding whether to
invest in our common stock, you should carefully read the entire
prospectus. In this prospectus, references to "we," "us" and "our"
refer to Gentor Resources, Inc.
Our Proposed Business
We are an exploration stage company (as such term is defined in
Securities Act Industry Guide 7(a)(4)(i)) which means that we are
engaged in the search for mineral deposits (reserves) which are not
either in the development or production stage. We are in the
business of gold exploration. We have already entered into an
Amended and Restated Mining Exploration and Option Agreement with
Hartmut W. and Inga M. Baitis (the "Claim Owner") which relates to
six (6) unpatented mining claims, Gold #1 through Gold #6
(collectively, the "Subject Claims") owned by the Claim Owner within
the Delmoe Lake Property in Jefferson County, Montana.
The 120 acre Delmoe Lake Property (the "Property") is located in
southwest Montana approximately 25 miles east of Butte, within the
Homestake Mining District of Jefferson County, Montana. The
Property is located on the southeast flank of the Boulder Batholith.
A major northeast-southwest trending fault line (a lineament) is
immediately adjacent to the mineralized area.
Little information is available on the history of the Property or
surrounding area prior to 1981. In September of 1981, Noranda
Exploration Company ("Noranda") conducted surface and underground
testing of rock to determine the presence or absence of gold. Under
the supervision of the Claim Owner, the samples of rock from the
Property were collected and chemically tested (assayed) to determine
the amounts of valuable metals. Results from the Noranda samples
showed anomalous values of gold. Later, in 1992, Independence Mining
carried out a similar sampling program on the Property. Their
sampling results were similar to the previous Noranda results. The
potential economic significance of the Subject Claims is based upon
the sampling results previously reported by Noranda and Independence
Mining, as well as the report by Roscoe Postle Associates, Inc.
which confirms the anomalous presence of gold in the Subject Claims.
However, the Subject Claims have not yet been explored by us. The
Property is without known reserves. The Property is accessed by 13
<PAGE>
miles of improved and unimproved gravel road off of Interstate
Highway 90. A 2 mile 4-wheel drive road would be used to access the
Property from Delmoe Lake, but such road will require work to
provide access for heavy equipment.
The Property is considered to be at the grass-roots exploration
stage. There is no assurance that commercially viable gold-bearing
mineral deposits exist on any of the Subject Claims. Our objective
is to conduct a two Phase exploration program on the Subject Claims
to assess the extent of any mineral deposits. Although previous
workers on the Property reported the presence of gold in quartz
veins, we cannot provide any assurance that the Subject Claims will
prove commercially viable.
Our plan is to complete the first Phase of our exploration program
in order to assess the nature and tenor of the gold mineralization
and to determine the advisability of proceeding with Phase 2. Based
upon the report prepared by Roscoe Postle Associates, Inc. ("Roscoe
Postle Associates") we anticipate that the cost to undertake Phase 1
of our exploration program is approximately $140,000. If Phase 1 of
our exploration program is successful, we expect to proceed with a
second Phase of our exploration program. Phase 2 of our exploration
program is expected to include further excavation, drilling and
engineering studies, and is expected to cost us approximately
$250,000. Until we have completed Phase 2 of our exploration
program, we can not determine if commercially viable gold deposits
exist within the Subject Claims because Phase 1 does not include a
drilling program, and without a drilling program, there is not
enough information to determine if the Subject Claim contains
commercially viable deposits of gold. We have determined that if we
receive at least the minimum proceeds of our offering, we will have
adequate funds to complete Phase 1 of our exploration program as
recommended by Roscoe Postle Associates, but we will not have
sufficient funds to proceed with Phase 2 of our exploration program
unless we raise substantial additional capital or locate a joint
venture partner. If we receive the maximum proceeds of our offering
we will have sufficient funds to complete Phase 2 of our exploration
program.
Until we complete Phase 1 of our exploration program, we are unable
to determine when or if Phase 2 of our exploration program would
commence. The Directors of Gentor, all whom have mining and
exploration expertise, will assess and review the results, data and
<PAGE>
analysis derived from our Phase 1 exploration program to determine
the presence of gold, the feasibility, if any, of recovering any
such gold deposits, and whether or not the planned expenditures for
Phase 2 of our exploration program are warranted. Since the
maintenance of the Option Agreements are relatively inexpensive, if
the results of the Phase 1 exploration program indicate the presence
of gold, but less than expected based on the previous results of
Noranda and Independence Mining, such that it would not be costs
effective and/or profitable to mine or further explore the Property
based on the then current price of gold, then we plans to keep the
Option Agreements open and hope for higher gold prices that would
justify further development of the Subject Claims. Also, if the
Directors of Gentor determine that further development and/or
exploration of the Subject Claims is not warranted at such time,
then we intend to acquire new claims for exploration, if we have the
adequate funds to do so.
To date our founders, Arnold T. Kondrat and Lloyd J. Bardswich have
contributed an aggregate of $50,000 to our capital in exchange for
which we have issued 450,000 and 50,000 shares of our common stock,
respectively to such parties.
Since our inception, we have not generated any revenues, and we have
incurred losses. We have not yet commenced operations, and our
auditors have, as part of their report on our financial statements,
included a "going concern opinion". A "going concern opinion"
expresses substantial doubt as to our ability to continue as a going
concern. Currently, we are entirely reliant upon receipt of at
least the minimum proceeds of our offering to commence our proposed
operations.
Corporate Information
We are a Florida corporation formed on March 24, 2005.
Our executive offices are located at 1 Alder Gulch Road, Virginia
City, Montana 59755, and our telephone number is(406)843-5383.
<PAGE>
Our Offering
<TABLE>
<S> <C>
Common stock offered by us Up to 200,000 shares. The
minimum purchase is 1,000
shares.
Public offering price of $5.00 per share.
shares being offered by us
Offering Period Unless we receive paid
subscriptions for at least
40,000 shares by May 31, 2006,
no shares will be sold and all
proceeds will be promptly
returned to subscribers without
interest. If we sell at least
40,000 shares by that date, we
may extend our offering until
the earlier of September 30,
2006 or the time that all
200,000 shares are sold.
Common stock to be outstanding 540,000 shares if 40,000 shares
after the offering are sold or 700,000 shares if
200,000 shares are sold.
Use of proceeds We intend to use the net
proceeds primarily to undertake
our exploration program as to
the Subject Claims and to pay
our operating expenses and for
other general corporate
purposes. See "Use of Proceeds."
</TABLE>
We initially intend to offer our shares in the states of Florida and
New York, although we may expand our offering to other states.
<PAGE>
Summary Financial Information
<TABLE>
<S> <C>
BALANCE SHEET
December 31, 2005
TOTAL CURRENT ASSETS $19,441
TOTAL ASSETS $19,441
TOTAL CURRENT LIABILITIES $67,078
TOTAL LIABILITIES $67,078
STOCKHOLDERS' EQUITY (DEFICIENCY) ($47,637)
TOTAL LIABILITIES AND STOCKHOLDERS' $19,441
EQUITY (DEFICIENCY)
</TABLE>
<TABLE>
<S> <C>
INCOME STATEMENT
From inception to
December 31, 2005
INCOME
OPERATING INCOME $0
INTEREST INCOME $182
TOTAL INCOME $182
OPERATING EXPENSES $19,309
OTHER EXPENSES - $78,510
<PAGE>
TOTAL EXPENSES $97,819
NET LOSS $97,637
NET LOSS PER SHARE $0.20
</TABLE>
RISK FACTORS
An investment in our common stock involves substantial risks. You
should consider carefully the following information about these
risks, together with the financial and other information contained
in this prospectus, before you decide whether to buy our common
stock. If any of these risks actually occur our financial condition
and results of operations would likely not permit us to continue to
operate and our business could fail. In such case, you might lose
all or part of your investment.
RISKS RELATED TO OUR PROPOSED BUSINESS
Because we have only recently commenced business and have a limited
operating history, there is no basis upon which you can evaluate our
proposed business and prospects.
* We were incorporated under the name Gentor Resources, Inc.
on March 24, 2005, and to date have been involved
primarily in organizational activities and obtaining our
Option Agreement.
* We have not begun the exploration of our Subject Claims,
and there is no way to evaluate the likelihood of whether
we will be able to operate our proposed business
successfully.
<PAGE>
* If our business fails to develop in the manner we have
anticipated, you will lose your investment in the shares.
As a newly formed mineral exploration company, we are subject to the
many risks and unforseen expenses and problems that newly formed
mineral exploration companies encounter, which could result in a
total loss of your investment in the shares.
* As a newly formed mineral exploration company, we are
subject to all of the operating hazards and risks normally
incident to exploring and developing mineral properties
such as unusual rock formations, environmental pollution,
personal injuries, industrial accidents, flooding,
cave-ins, and periodic interruptions due to inclement
weather. These risks can materially adversely affect our
business and cause our business to fail. Furthermore, if
we are unsuccessful in preparing for and/or addressing
these risks, our business will be likely to fail and you
will loose your entire investment in the shares.
* Similar to other mineral exploration companies, we are
also subject to many unforseen risks and expenses incident
to exploring and developing mineral properties such as
delays in governmental or environmental permitting,
changes in the legislation governing the mining industry
that might alter our ability to conduct our operations as
planned, the availability of reasonably priced insurance
products, unexpected construction costs necessary to
create and maintain the production facility, and normal
fluctuations in the general markets for the minerals
and/or metals to be produced. These risks and expenses,
while beyond our control, can materially adversely affect
our business and cause our business to fail. Furthermore,
if these unforseen costs and expenses exceed our current
estimates, our business will be likely to fail and you
will loose your entire investment in the shares.
<PAGE>
As a newly formed mineral exploration company, we will be required
to implement and execute our proposed business, and if we are unable
to do so you will lose your investment in the shares.
* New mineral exploration companies are traditionally
subject to high rates of failure. We are no exception to
this general trend and we can provide no assurances to
investors that we will be able to generate any operating
revenues or achieve profitable operations.
* If we are unsuccessful in implementing exploration plans
due to the problems, risks, or expenses previously
mentioned above, our business will likely fail and you
will lose your entire investment in the shares.
As a newly formed mineral exploration company, we will be required
to anticipate and handle potential growth and we may not be able to
do so in which event you will lose your investment in the shares.
* If exploration of our Subject Claims proves successful,
our potential for growth will place a significant strain
on our technical, financial and managerial resources. We
may have to implement new operational and financial
systems and procedures, and controls to expand, train and
manage employees and to coordinate our technical and
accounting staffs, and if we fail to do so you will lose
your investment in the shares.
Because of the limited capital available to us for the foreseeable
future, we may not have sufficient capital to implement our business
plan.
* We are obligated to pay our operating expenses as they
arise, including required annual fees to the State of
Florida. If we sell any of our shares in this offering, we
will incur legal and accounting expenses to comply with
our reporting obligations to the SEC. If we fail to pay
any of the forgoing, we may be forced to cease our
business operations.
<PAGE>
* If we receive the proceeds of the sale of the minimum
number of our shares, we will be able to continue with our
limited operations, and we will be able to undertake Phase
1 of our exploration plans, but we will not be able to
undertake Phase 2 of our exploration plans.
* If we receive the proceeds of the sale of the maximum
number of our shares, we will be able to implement our
proposed business plan, and we anticipate that we will
have sufficient funds to continue our proposed business
operations for at least 12 months.
If we need to raise additional funds, the funds may not be available
when we need them. We may be required to provide rights senior to
the rights of our shareholders in order to attract additional funds
and, if we use equity securities to raise additional funds dilution
to our shareholders may occur.
* To the extent that we require additional funds, we cannot
assure you that additional financing will be available
when needed on favorable terms or at all, and if the funds
are not available when we need them, we may be forced to
terminate our business.
* If additional funds are raised through the issuance of
equity securities, the percentage ownership of our
existing stockholders will be reduced; and those equity
securities issued to raise additional funds may have
rights, preferences or privileges senior to those of the
rights of the holders of our common stock.
If we fail to make required payments under the Option Agreement or
to the United States Department of the Interior, Bureau of Land
Management, we will lose the right to the Subject Claims.
* In order to maintain our rights under the Option Agreement
we must timely make annual payments to the Claim Owner and
to the United States Department of the Interior, Bureau of
Land Management , and if we fail to do so we will lose our
option as the Option Agreement will be terminated.
<PAGE>
* If our Option Agreement is terminated we may be forced to
cease our business operations in which event you will lose
your investment in the shares.
If our exploration program provides results indicating a
commercially viable gold deposits exist within the Subject Claims we
will be required to raise substantial additional capital or locate a
joint venture partner in order to achieve production and generate
revenue from such deposits, and if we are unable to do so, our
business may fail and you will lose your entire investment in the
shares.
* If the initial results of our exploration program are
successful, we may try to enter a joint venture agreement
with a partner for the further exploration and possible
production from any mineral deposits within the Subject
Claims.
* If we entered into a joint venture agreement, we would
likely be required to assign a substantial percentage of
our interest in the Subject Claims to the joint venture
partner.
* If we are unable to enter into a joint venture agreement
with a partner, or if we are otherwise unable to raise
substantial additional capital, our business may fail and
you will lose your entire investment in the shares.
Most, if not all, of our competition will be from larger, more well
established and better financed companies, and if we are unable to
successfully compete with other companies our business will fail.
* If we are able to implement our business operations,
substantially all of our competitors will have greater
financial resources, technical expertise and managerial
capabilities than we do.
* If we are unable to overcome such competitive
disadvantages, we will be forced to cease our business
operations and you will lose the investment in the shares.
<PAGE>
We currently have no employees other than our officers, we have no
employment agreement with our officers, our officers serves on a
part-time basis, we cannot pay our officers any compensation, and if
our officers were to leave our employ, our business could fail.
* Because our ability to engage in business is dependent
upon, among other things, the personal efforts, abilities
and business relationships of our officer, if our officer
were to terminate employment with us or become unable to
provide such services before a qualified successor, if
any, could be found, our business could fail.
* Our current officer does not provide full time services to
us, and we will not have full-time management until such
time, if ever, as we engage employees on a full-time basis.
* We do not maintain "key person" insurance on our officer,
and if our officer were to die or become disabled, we do
not have any insurance benefits to defer the costs of
seeking a replacement.
We are highly dependent upon our Officers, we have no definitive
compensation agreements with them, and because some of them have
involvements or relations with other business, they may have a
conflict of interest.
* None of our officers work for us on a full-time basis and
we have no definitive arrangements to compensate our
officers or to engage them on a full-time basis. In the
event that any of our officers resign because of time
restraints or financial reasons, the loss of their mining
and exploration expertise could adversely affect our
ability to carry on business and could reduce the value of
your investment in the shares or even cause our business
to fail.
* Our officers rely on other business activities to support
themselves and some of them provide services and/or
consulting work to other companies in the mineral
exploration business. Such business activities may be
considered a conflict of interest because these
individuals must continually make decisions on how much of
their time they will allocate to our business as against
their other business projects, which may be competitive,
or where they will allocate new business opportunities.
<PAGE>
We may be unable to attract or retain employees in which event our
business could fail.
* Competition for personnel in the junior mineral
exploration industry is intense. Because of our limited
resources, we may not be able to compensate our employees
at the same level as our competitors. If we are unable
to attract, retain and motivate skilled employees, our
business could fail.
* We cannot assure you that we will have the financial
resources to hire full-time personnel when they are needed
or that qualified personnel will then be available, and if
we are unable to hire full-time personnel when they are
needed, our business could fail.
As a result of the speculative nature of mineral property
exploration, there is substantial risk that no commercially
exploitable minerals will be found and our business will fail.
* Exploration for minerals is a speculative venture
necessarily involving substantial risk. Many exploration
programs do not result in the discovery of
mineralization, and any mineralization discovered may not
be of sufficient quantity or quality to be profitably
mined.
* We can provide you with no assurance that our Subject
Claims contain any commercially exploitable reserves.
* The exploration work that we intend to conduct on the
Subject Claims may not result in the discovery of
commercial quantities of gold. Even if commercial
qualities of gold are found, we might not be able to
effectively mine the gold because of the lack of available
technology.
<PAGE>
* Problems, such as unusual and unexpected rock formations,
environmental pollution, flooding, cave-ins, and
industrial accidents, are involved in mineral exploration
and often result in unsuccessful exploration efforts. In
such a case, we would be unable to complete our business
plan and you would lose your entire investment in the shares.
There are inherent dangers involved in mineral exploration, and, as
a result, there is a risk that we may incur liability or damages as
we conduct our business.
* The search for valuable minerals involves numerous hazards
and risks, such as cave-ins, environmental pollution
liability, and personal injuries.
* We may be unable or unwilling to obtain insurance against
such hazards and risks. We currently have no insurance
against the risks of mineral exploration, and we not
expect to obtain any such insurance in the foreseeable
future, other than the liability insurance required by the
Claim Owners under the Option Agreement.
* If we were to incur such a hazard or risk, the costs of
overcoming same may exceed our ability to do so, in which
event we could be required to liquidate all our assets and
you will lose your entire investment in the shares.
If our exploration program is able to confirm commercial
concentrations of gold on our Subject Claims, we are unable to
provide any assurance that we will be able to successfully place any
of the Subject Claims into commercial production.
* If our exploration programs are successful in confirming
deposits of commercial tonnage and grade, we will require
a joint venture partner or additional funds in order to
place the Subject Claims into commercial production.
* In such an event, we may be unable to locate a joint
venture partner or obtain any required funds, in which
event you may lose your entire investment in the shares.
<PAGE>
Because access to our Subject Claims is often restricted by
inclement weather, we may be delayed in implementing or continuing
with our exploration, as well as, with any future mining efforts.
* Access to the Subject claims may be hindered during the
period between December and April of each year due to
inclement weather conditions in the area. As a result,
any attempts to visit, test, or explore the Subject Claims
are largely limited to a few months of the year when
weather permits such activities.
* These limitations can result in significant delays in our
exploration efforts, as well as, any mining and production
in the event that commercial amounts of minerals are
found. Such delays can result in our inability to meet
our obligations under the Option Agreement. Such failures
could cause our business to fail and you would lose the
entire investment in the shares.
As we undertake exploration of our Subject Claims, we will be
subject to compliance of government regulation that may increase the
anticipated time and cost of our exploration program.
* There is much governmental regulation that materially
affects the exploration of minerals. We will be subject
to the mining laws and regulations of the State of Montana
and the United States.
* We may be required to obtain work permits, post bonds and
perform remediation work for any physical disturbance to
the land in order to comply with applicable law.
* Our planned exploration program budgets provide amounts
for anticipated regulatory compliance, however, there is a
risk that the amounts budgeted may be inadequate due to
errors, omissions or additional regulations, any one of
which could prevent us from carrying out our exploration
program.
<PAGE>
Market factors in the mining business are out of our control. As a
result, we may not be able to market any minerals that may be found.
* The mining industry, in general, is intensively
competitive, and we are unable to provide any assurance
that a ready market will exist for the sale of any gold,
even if commercial quantities of gold are discovered
within the Subject Claims.
* Numerous factors beyond our control may affect the
marketability of any substances discovered. These factors
include market fluctuations, the proximity and capacity of
natural resource markets and processing equipment,
government regulations, including regulations relating to
prices, taxes, royalties, land tenure, land use, importing
and exporting of minerals and environmental protection.
* The exact effect of these factors cannot be accurately
predicted, but the impact or any one or a combination
thereof may result in our inability to generate any
revenue, in which event you will lose your entire
investment in the shares.
Our independent auditor has substantial doubt as to our ability to
continue as a going concern.
* Our financial statements have been prepared on the
assumption that we will continue as a going concern, but
if we fail to continue as a going concern, you will lose
your investment in the shares.
* The report of our independent auditor refers to the
substantial doubt as to our ability to continue as a going
concern.
<PAGE>
RISKS RELATED TO THIS OFFERING
We have arbitrarily determined the offering price of our shares and
you may never be able to recoup your investment in our shares.
* The public offering price for the shares was determined
solely by us and bears no relationship to our book value,
projected earnings, results of operations, net asset value
or any other objective criterion of value.
There has not been and may never be a viable public market for our
common stock, and if a viable public market does not develop, you
will not be able to sell your shares easily, if at all.
* There has not been a trading market for our shares, and we
cannot predict the extent to which investor interest in
our company will lead to the development of a trading
market for our shares or how liquid that market might be.
* If a trading market for our shares develops, the public
offering price for the shares may not be indicative of
prices that will prevail in such market. The market price
of our common stock, if any, may decline below the public
offering price.
If any of our shares were to become eligible for public sale after
this offering, same can be expected to adversely affect the price
that will prevail in the trading market, if one develops.
* If a public market develops for our common stock, sales of
significant amounts of our common stock in the public
market or the perception that such sales will occur could
materially adversely affect the market price of the common
stock or our ability to raise capital through future
offerings of equity securities.
* None of the holders of our common stock have agreed, in
writing or otherwise, to refrain from publicly selling
their shares of our common stock when they are entitled to
do so.
<PAGE>
Investors in the shares will incur substantial immediate dilution.
* The public offering price of the shares is substantially
higher than the net tangible book value per share of the
shares immediately after the offering.
* If you purchase our shares as part of this offering, you
will incur immediate dilution of approximately $4.72 per
share in the net tangible book value per share of common
stock from the price you paid for the shares if 40,000
shares are sold or $3.64 per share if 200,000 shares are
sold.
Our Board of Directors may issue shares of "blank check" preferred
stock which may result in substantial dilution to Investors.
* Without further action by the stockholders, our Board of
Directors can issue up to 500,000 shares of preferred
stock with such dividend rights, conversion rights, voting
rights, redemption rights, liquidation preferences and
other rights as may be determined appropriate by our Board
of Directors.
* If such preferred stock were issued, the holders of our
common stock could, among other things, experience
substantial dilution, and the voting power, dividend
receipt and liquidation rights of the common stock could
be adversely affected.
After the completion of this offering, the present shareholders will
own or control a majority of our outstanding stock and will have the
right to effectively control the Company.
* Following completion of this offering, our present
shareholders will own or control more than a majority of
our outstanding common stock.
* Our present shareholders may be able to influence the
outcome of shareholder votes, including votes concerning
the election of directors, amendments to our charter and
bylaws, and the approval of significant corporate
transactions such as a merger or sale of our assets. In
<PAGE>
addition, that controlling influence could have the effect
of delaying, deferring or preventing a change in control
of our company.
We have never paid dividends to our shareholders, and we do not
anticipate that we will pay any dividends to our shareholders in the
foreseeable future.
* Our future policy on payment of dividends will be
determined by our Board of Directors based upon a
consideration of our earnings, if any, our future capital
needs and other relevant factors.
If we incur unforseen costs, expenses or problems in and are forced
to deviate from our intended application of proceeds of this
offering to sustain our proposed exploration programs, such a result
might hamper our ability to succeed in the implementation of our
business plan and may cause you to lose your investment in our shares.
* We have identified our intended uses for the net proceeds
of this offering, and we expect to apply the net proceeds
in the manner identified. If we incur unexpected problems,
costs and/or expenses in connection with the exploration
and development of the Subject Claims, we might be forced
to deviate from our intended plan for the intended uses
for the net proceeds of this offering and such a result
might hamper our ability to succeed in the implementation
of our business plan and may cause you to lose your
investment in our shares.
Anti-takeover provisions could hinder a potential third-party
acquisition.
* Our Board of Directors may, from time to time, adopt
certain provisions of the Florida Business Corporation
Act, which, if adopted, could delay, discourage or prevent
a change in control.
* Adoption of such provisions could discourage bids for our
common stock at a premium over the market price; could
adversely affect the market price, if any, of our common
<PAGE>
stock; and could adversely affect the voting and other
rights of the holders of our common stock.
FORWARD-LOOKING STATEMENTS
Many statements made or incorporated by reference in this prospectus
are "forward-looking statements". These forward-looking statements
include statements about:
* our ability to explore and develop the Subject Claims
and/or other similar properties
* our capital needs
* the competitiveness of the business in our industry
* our strategies
* other statements that are not historical facts
When used in this prospectus, the words "anticipate," "believe,"
"expect," "estimate," "intend" and similar expressions are generally
intended to identify forward-looking statements. Because these
forward-looking statements involve risks and uncertainties, there
are important factors that could cause our actual results to differ
materially from those expressed or implied by these forward-looking
statements, including:
* changes in general economic and business conditions
* actions of our competitors
* the time and expense involved in development activities
* changes in our business strategies
* other factors discussed in the "Risk Factors" section and
elsewhere in this prospectus.
The forward-looking statements in this prospectus reflect what we
currently anticipate will happen. What actually happens could differ
materially from what we currently anticipate will happen. We are not
<PAGE>
promising to make any public announcement when we think
forward-looking statements in this prospectus are no longer
accurate, whether as a result of new information, what actually
happens in the future or for any other reason.
USE OF PROCEEDS
The proceeds we will
receive will be $200,000 from the sale of 40,000 shares of our
common stock or $1,000,000 from the sale of 200,000 shares of our
common stock. We will not utilize any portion of the proceeds
unless we sell at least 40,000 shares. We intend to use the
proceeds from the sale of shares of our common stock in the order of
priority shown in the following table:
<TABLE>
<S> <C> <C> <C> <C>
Amount if Amount if Amount if Amount if
40,000 70,000 140,000 200,000
shares are shares shares are shares are
sold are sold sold sold
Gross Proceeds $200,000 $350,000 $700,000 $1,000,000
Rehabilitate $40,000 $40,000 $40,000 $40,000
hillside tunnels
that were
created to gain
access to the
mineral deposits
Digging ditches, $12,000 $12,000 $12,000 $12,000
and trenches,
sampling, and
analysis
Soils, analysis $4,000 $4,000 $4,000 $4,000
Survey $3,000 $3,000 $3,000 $3,000
Roads/Land $10,000 $10,000 $10,000 $10,000
Geologists $30,000 $40,000 $50,000 $60,000
Permitting and $10,000 $15,000 $20,000 $20,000
Bonding
<PAGE>
Reserve for $8,250 $8,250 $8,250 $8,250
Certain Payments
Due Under the
Delmoe Lake
Option Agreement
Drilling $0 $125,000 $250,000 $300,000
Assessment of $0 $0 $50,000 $50,000
other properties
Acquisition of $0 $0 $100,000 $100,000
other properties
Exploration of $0 $0 $0 $195,000
other properties
Estimated $64,000 $64,000 $64,000 $64,000
offering expenses
General and $8,750 $11,250 $53,750 $83,750
administrative
expenses,
including legal
and accounting
fees and
administrative
support expenses
incurred in
connection with
our reporting
obligations to
the SEC
Contingencies $10,000 $17,500 $35,000 $50,000
</TABLE>
Nearly all of our current liabilities consist of legal expenses and
audit fees that are being incurred in connection with this offering.
<PAGE>
As shown in the table above, the Company estimates that its legal
fees and audit expenses associated with this offering will be
approximately $64,000. Of the foregoing $64,000 amount, the Company
estimates that its legal fees will comprise $35,000. Certain of our
officers and directors have verbally expressed a willingness to
assume the responsibility for the payment of such legal fees and
audit expenses if we are unable to pay same. If, any of our
officers and directors pay such legal fees and audit expenses we
will be obligated to reimburse them when, if ever, we have
sufficient funds to do so. If 40,000 or more shares are sold in
this offering, we will pay our legal expenses and audit fees or, if
applicable, reimburse our officers and directors that have paid them.
In the event that we sell 40,000 shares of our common stock, we
intend to complete Phase 1 of our exploration program, which
includes rehabilitation of hillside tunnels that were created to
gain access to the mineral deposits, digging ditches and/or
trenches, sampling, soil analysis and surveying.
In the event we sell 70,000 shares of our common stock, we intend to
complete Phase 1 of our exploration program and commence a small
Phase 2 drilling program.
In the event we sell 140,000 shares of our common stock, we intend
to complete Phase 1 of our exploration program and undertake a large
Phase 2 drilling program. If it is determined after the
commencement of Phase 1 and Phase 2 that the Subject Claims do not
possess any commercially viable gold-bearing mineral deposits or
that any recovery of such deposits is not feasible, then we might
use the remaining proceeds to assess and acquire new properties that
warrant exploration. These properties have not yet been identified
and will be acquired, if at all, in arms length transactions with
non-affiliates of the Company.
In the event we sell 200,000 shares of our common stock, we intend
to complete Phase 1 and 2 of our exploration program, assess and
acquire new properties and commence the exploration of such new
properties.
All proceeds from the offering will be initially deposited into a
non-interest bearing special receipts account in our name (similar
to an escrow account), and unless we receive paid subscriptions for
at least 40,000 shares by May 31, 2006, no shares will be sold and
all proceeds held in the special receipts account will be promptly
returned to subscribers without interest. If we receive paid
<PAGE>
subscriptions for at least 40,000 shares by May 31, 2006, we will
transfer those proceeds from the special receipts account to our
general operating account, and any proceeds that we receive after
the receipt of proceeds from the sale of 40,000 shares will be
deposited directly into our general operating account. Furthermore,
until the offering proceeds are actually utilized, we intend to
invest the proceeds received in one or more of the following:
* an obligation that constitutes a "deposit" as that term is
defined in section 3(1) of the Federal Deposit Insurance Act;
* securities of any qualifying money market mutual fund; or
* securities that are direct obligations of or obligations
guaranteed as to principal or interest by the United
States; provided the securities can be readily sold or
otherwise disposed of for cash at the time required
without any dissipation of offering proceeds invested.
DIVIDEND POLICY
We have never declared
or paid any cash dividends on our capital stock and do not
anticipate paying any cash dividends on our capital stock in the
foreseeable future. Future dividends, if any, will be determined by
our Board of Directors. In addition, we may incur indebtedness in
the future which may prohibit or effectively restrict the payment of
dividends, although we have no current plans to do so.
DETERMINATION OF OFFERING PRICE
There has never been a public market for our common stock and we
have arbitrarily determined the offering price. Among the factors we
considered in determining the public offering price were the absence
<PAGE>
of a record of operations, our current financial condition, our
future prospects, the inexperience of our management, and the
general condition of the equity securities market. The public
offering price for the shares bears no relationship to our book
value, projected earnings, results of operations, net asset value or
any other objective criterion of value, and may be substantially
higher than the prices that will prevail in the trading market, if
one develops.
<PAGE>
DILUTION
<TABLE>
<S> <C> <C>
Amount if Amount if
40,000 200,000
shares are shares are
sold sold
Net tangible deficit per share on $0.10 $0.10
December 31, 2005
Net tangible book value per share on
December 31, 2005 if the shares were $0.28 $1.36
sold on that date
Amount of increase in net tangible
book value per share attributable to $0.38 $1.46
cash payments made by purchasers of
the shares being offered
Amount of the immediate dilution
from the public offering price that $4.72 $3.64
will be absorbed by purchasers
Cash contribution of purchasers $200,000 $1,000,000
Cash contribution of officers, $50,000 $50,000
directors, founders and affiliates
Price per share paid by officers, $0.10 $0.10
directors, founders and affiliates
Price per share to be paid by $5.00 $5.00
purchasers of shares in this offering
</TABLE>
The immediate and substantial dilution could adversely affect the
value of the shares.
<PAGE>
MINING OPERATIONS DISCLOSURE
The Subject Claims are located within a 120 acre area of land known
as the Delmo Lake Property (previously defined as the "Property").
The Property is located in Sections 14 and 15, Township 3 North,
Range 6 West, in the Homestake Mining District of Jefferson County,
Montana. The Property is located twenty five (25) miles east of the
city of Butte, Montana which is a major regional center with a
population of estimated 40,000 and a domestic airport. Below is a map
of the location of the location of the Property.
Access to the Property is available through approximately thirteen
(13) miles of improved and unimproved gravel roads off of Interstate
Highway I-90 at Exit 233 which is known as the Homestake Pass exit.
From the Homestake Pass Exit off I-90, one would then travel along
Forest Service Road #222 north easterly for about eleven (11) miles
to the intersection with Forest Service Road #8695, and then travel
along Forest Service Road #8695 northerly for about two (2) miles to
the Property. Forest Service Road #222 is accessible by 2-wheel
drive vehicles, but Forest Service Road #8695 is currently only
accessible with high clearance 4x4 vehicles.
The Option Agreement with the Claim Owner grants us the exclusive
right and privilege to enter the Property for the purpose of
exploration and developing the Subject Claims, as well as removing
and selling for our own account any and all minerals, mineral
substances, metals ore bearing materials and rocks of any kind. The
Option Agreement also grants us an option (the "Option Right") to
purchase the Claim Owner's rights to the Subject Claims for a total
of $1,000,000, excluding the Claim Owner's right to their 2% royalty
on the net revenues generated from the sale of any metals recovered
from the Subject Claims (the "Net Smelter Return"). However, the
Option Agreement also grants us a right of first refusal (the "Right
of First Refusal") to purchase the Claim Owner's rights to the Net
Smelter Return in the event that the Claim Owner receives a bona
fide offer from a third party to purchase such rights. In order to
retain our rights to mine the Subject Claims, we must make annual
payments to the Claim Owner according to the following schedule:
$7,500 upon the first anniversary of the execution of the Option
Agreement, $10,000 upon the second and third anniversary of the
<PAGE>
Option Agreement, and $15,000 on every successive anniversary of the
Option Agreement until the purchase price of $1,000,000 has been
paid in full. In addition to the annual payments, we must pay the
Claim Owner an amount equal to the Net Smelter Return once
commercial production is achieved. Also, and as required by Federal
Law, in order to retain the right to mine the Subject Claims, we are
required to pay an Annual Maintenance Fee of $125 per year per claim
to the government. As such, we are required to pay $750.00 per
annum to the United States Department of the Interior, Bureau of
Land Management in order to retain the Subject Claims.
Before the acquisition of our interest in the Subject Claims, the
previous operations of the Property by persons or entities unknown
consisted of the construction of at least three (3) hillside tunnels
that were created to gain access to the mineral deposits, and the
excavation of numerous ditches and trenches.
The Property, situated in the Beaverhead-Deerlodge National Forest,
is located within the Boulder Batholith on its south-east flank. A
series of quartz veins approximately 4,000 feet long strike
east-west across the Property, dipping 75 degrees north to vertical.
The host rock is a massive quartz monzonite to granodiorite with
the quartz veins and veinlets consisting of milky white quartz.
Mineralization includes small percentages of pyrite, chalcopyrite
and galena. Physical and chemical changes in the host rock shows
typical mesothermal silicification, argillization, sericitization
and propylitic envelopes. Several parties in past years (Mateer,
1962; Noranda, 1981; Independence Mining, 1992) have sampled the
quartz veins from the host rock, and through chemical analysis and
testing of such samples (assaying), determined gold values of
potential economic significance. However, additional exploration
work is required to determine if the Subject Claims are commercially
viable.
At the present time, the existing hillside tunnels that were created
to gain access to the mineral deposits and underground mines are
caved and require rehabilitation work to render them safe for entry.
The existing trenches on the property are sloughed and overgrown.
Also, even though Forest Service Road # 8695 provides access to 4x4
vehicles to the immediate vicinity of the hillside tunnels, this
access road will require up-grading to be used on a daily basis.
<PAGE>
We have not conducted or allowed any work on the Property except for
reconnaissance and perimeter surveying, the staking out of proposed
work and design of our Plan of Operations to the U.S. Forest
Service, and the field testing and preparation of a technical report
by Eric Fier of Roscoe, Postle & Associates. The total cost of the
work performed to date is $11,809. We intend to commence exploration
of the Subject Mines after our Plan of Operations to the U.S. Forest
Service has been accepted. At this point in time, there is no
equipment or other infrastructure facilities existing on the Property.
Besides the $11,809 in costs incurred with respect to the surveying,
the preparation of our Plan of Operations that were submitted to the
U.S. Forest Service, and the preparation of the technical report by
Rose, Postle & Associates, we have incurred $8,250 in expenses
($7,500 for the initial option payment to the Claim Owner and $750
in Annual Maintenance Fees to United States Department of the
Interior, Bureau of Land Management). Our expected costs for the
five (5) years are as follows:
* For the year 2006, we expect to pay $7,500 to the Claim
Owner as the option payment and $750 to the United States
Department of the Interior, Bureau of Land Management for
the Annual Maintenance Fee
* For the year 2007, we expect to pay $10,000 to the Claim
Owner as the option payment and $750 to the United States
Department of the Interior, Bureau of Land Management for
the Annual Maintenance Fee
* For the year 2008, we expect to pay $10,000 to the Claim
Owner as the option payment and $750 to the United States
Department of the Interior, Bureau of Land Management for
the Annual Maintenance Fee
* For the year 2009, we expect to pay $15,000 to the Claim
Owner as the option payment and $750 to the United States
Department of the Interior, Bureau of Land Management for
the Annual Maintenance Fee
* For the year 2010 and beyond, we expect to pay $15,000 to
the Claim Owner as the option payment and $750 to the
United States Department of the Interior, Bureau of Land
Management for the Annual Maintenance Fee
<PAGE>
The closest source of power (high voltage) to the Property is at
least eight (8) miles away. If electrical power is required at the
entrance to the Subject Claims, then we will be required to obtain
and/or lease a mobile motor generator and haul such generator to the
site.
The Subject Claims are without known reserves and the proposed
program is exploratory in nature.
MANAGEMENT'S PLAN OF OPERATION
The following plan of operation should be read in conjunction with
our financial statements and the related notes that appear elsewhere
in this prospectus. The discussion contains forward-looking
statements that reflect our plans, estimates and beliefs. Our actual
results could differ materially from those discussed in the
forward-looking statements. Factors that could cause or contribute
to these differences include, but are not limited to, those
discussed below and elsewhere in this prospectus, particularly in
"Risk Factors."
Our objective is to be in the business of gold exploration. We
entered into a the Option Agreement with the Claim Owner, which
Option Agreement relates to six (6)Subject Claims owned by the Claim
Owner within the Property. The Claim Owner is unrelated to us.
A memorandum of our Option Agreement has been recorded in the public
records of Jefferson County, Montana. The Option Agreement provides
us the exclusive right and privilege to enter the Property for the
purpose of exploration and developing the Subject Claims, as well as
removing and selling for our own account any and all minerals,
mineral substances, metals ore bearing materials and rocks of any
kind. The Option Agreement also grants us an option (the "Option
Right") to purchase the Claim Owner's rights to the Subject Claims
for a total of $1,000,000, excluding the Claim Owner's right to
their Net Smelter Return. The Option Agreement also grants us a
right of first refusal (the "Right of First Refusal") to purchase
the Claim Owner's rights to their Net Smelter Return in the event
that the Claim Owner receives a bona fide offer from a third party
to purchase such rights. We made an initial payment of $7,500 upon
<PAGE>
execution of the Option Agreement. An Additional payment of $7,500
is due on the first anniversary date of the Option Agreement with
additional payments of $10,000 each due on each of the next two
subsequent anniversary dates and with additional payments of $15,000
each due on each subsequent anniversary date until the Purchase
Price is paid or the Option Agreement is terminated or cancelled.
Also, we must pay the Claim Owner an amount equal to the Net Smelter
Return. In addition to the payments we are required to pay to the
Claim Owner, we are required to pay $750.00 per annum to the United
States Department of the Interior, Bureau of Land Management in
order to retain the Subject Claims. In the event the Claim Owner
notifies us that we have breached a term, condition or covenant of
the Option Agreement (other than the payment of monies due and
payable under the Option Agreement), then we have at least sixty
(60) days (twenty (20) days for any monetary payment obligation) to
cure any such breach. If we cannot cure, or begin to cure, any such
breach within the cure period, then the Claim Owner can terminate
the Option Agreement. We also have the right to terminate the Option
Agreement at any time, and so long as the termination date is before
August 1 of any calendar year, then we do not have to pay the Annual
Maintenance Fee to the to the United States Department of the
Interior, Bureau of Land Management. However, we also have the
right to assign all or any of our rights in and to the Option
Agreement with the consent of the Claim Owner, which consent cannot
be unreasonably withheld. In the event that we determine that there
is no viable commercial production from the Subject Claims, we might
sell our rights under the Option Agreement to fund other exploration
properties rather than terminate the Option Agreement. We have
attached the Option Agreement and the Memorandum thereof as an
exhibit to this prospectus.
The 120 acre Delmoe Lake Property is located in southwest Montana
approximately 25 miles east of Butte in Sections 14 and 15, Township
3 North, Range 6 West, within the Homestake Mining District of
Jefferson County, Montana. The Property is located on the southeast
flank of the Boulder Batholith. A major northeast-southwest
trending fault line (a lineament) is immediately adjacent to the
mineralized area.
Little information is available on the history of the Property or
surrounding area prior to 1981. In September of 1981, Noranda
Exploration Company ("Noranda") conducted surface and underground
<PAGE>
testing of rock to determine the presence or absence of gold. Under
the supervision of the Claim Owner, the samples of rock from the
Property were collected and chemically tested (assayed) to determine
the amounts of valuable metals. Results from the Noranda samples
showed anomalous values of gold. Later, in 1992, Independence Mining
carried out a sampling program on the Property. Their sampling
results were similar to and confirmed the previous Noranda results.
The potential economic significance of the Subject Claims is based
upon the sampling results previously reported by Noranda and
Independent Mining, as well as the report by Roscoe Postle
Associates, Inc. which confirms the anomalous presence of gold in
the Subject Claims. However, the Subject Claims have not yet been
explored by us and until we are able to validate otherwise, the
Property is without known reserves.
The Property is accessed by 13 miles of improved and unimproved
gravel road off of Interstate Highway 90. Butte Montana, a major
regional center with a population of estimated 40,000 and a domestic
airport, is located approximately 25 miles to the west. A 2 mile
4-wheel drive road would be used to access the Property from Delmoe
Lake, but such road will require work to provide access for heavy
equipment.
Infrastructure in the region around the Property appears to be good
with nearby power, phone, services, hotels, restaurants, housing and
an extensive pool of skilled labor. Cellular service is available
at the Property. The Property is at an altitude of between 6,600 and
7,200 feet and consists of mountainous terrain dropping
south-westward into the Delmoe Lake basin. The area is forested
predominately by lodge pole pine. Weather conditions include
snowfalls as early as September until as late as early June.
Average precipitation is estimated at 25 inches per annum.
Temperatures range from -50 degrees F in January to +80 degrees F
in July.
<PAGE>
We are an exploration stage company and there is no assurance that
commercially viable gold-bearing mineral deposits exist on any of
the Subject Claims. Our objective is to conduct a two phase
exploration program on the Subject Claims to assess whether they
possess any commercially viable gold-bearing mineral deposits. We
cannot provide any assurance that the Subject Claims will prove
commercially viable.
Our plan is to complete our Phase 1 exploration program. Based on
<PAGE>
the report prepared by Roscoe Postle Associates, we anticipate that
the cost to undertake Phase 1 of our exploration program is
approximately $140,000.00. We anticipate that the work included as
part of Phase 1 of our exploration program will include surface
geological mapping, sampling, survey control, road upgrading,
rehabilitation and re-opening of existing hillside tunnels that were
created to gain access to the mineralized rock, and digging ditches
and/or trenches with subsequent mapping, sampling and analysis, soil
survey, permitting and bonding. In light of our limited financial
and employee resources we intend to engage the services of local
contractors and lease equipment and machinery on a short term basis
in order to conduct and execute our Phase 1 program. Furthermore,
one or more of our directors will oversee all of the exploration
work such as up-grading the access road, cleaning out the ditches
and trenches, cleaning out and securing the existing hillside
tunnels that were created to gain access to the mineralized rock,
and reclaiming and cleaning up other ground disturbances to the
satisfaction of the United States Forest Service. If Phase 1 of our
exploration program is successful, we expect to proceed with a
second Phase of our exploration program. Phase 2 of our exploration
program is expected to include further excavation, drilling and
engineering studies, and is expected to cost us approximately
$250,000.00. Until we have completed Phase 2 of our exploration
program, we can not determine if commercially viable gold deposits
exist within the Subject Claims because Phase 1 does not include a
drilling program, and without a drilling program, there is not
enough information to determine if the Subject Claim contains
commercially viable deposits of gold. If we receive at least the
minimum proceeds of our offering, we will have adequate funds to
complete Phase 1 of our exploration program, but we will not have
sufficient funds to proceed with Phase 2 of our exploration program
unless we raise substantial additional capital or locate a joint
venture partner. If we receive the maximum proceeds of our offering
we will have sufficient funds to complete Phase 2 of our exploration
program. If we do complete Phase 2, then our Directors will assess
and review the results, data and analysis derived from our Phase 2
exploration program and determine whether to continue or terminate
the Option Agreements, to continue or terminate the current
exploration and development of the Subject Claims, acquire other
properties, and/or halt operations and wait for our economic
conditions to improve.
<PAGE>
Depending upon the receipt of proceeds of our offering and
permissible weather conditions, we expect to commence Phase 1 of our
exploration program during the month of June of the calendar year
2006 and we anticipate that Phase 1 will be concluded within three
months after commencement. Until we complete Phase 1 of our
exploration program, we are unable to determine when or if Phase 2
of our exploration program would commence. Our Directors, all whom
have mining and exploration expertise, will assess and review the
results, data and analysis derived from our Phase 1 exploration
program to determine the presence of gold, the feasibility, if any,
of recovering any such gold deposits, and whether or not the planned
expenditures for Phase 2 of our exploration program are warranted.
Since the maintenance of the Option Agreements are relatively
inexpensive, if the results of the Phase 1 exploration program
indicate the presence of gold, but in smaller quantities such that
it would not be cost effective and/or profitable to recover the gold
deposits based on the then current price of gold, then we plan to
keep the Option Agreements open and hope for higher gold prices that
would justify further development of the Subject Claims. Also, if
our Directors determine that further development and/or exploration
of the Subject Claims is not warranted at such time, then we intend
to acquire new claims for exploration but only if we have sufficient
capital resources to undertake such projects and if such additional
projects do not hinder our ability to maintain and explore our
Subject Claims.
Specifically, during the next twelve (12) months, we plan to
undertake the following courses of action in order explore the
Subject Claims:
First, we need to obtain a Work Permit (the "Permit")from the
United States Forest Service, Jefferson Ranger District, Whitehall,
Montana, in order to conduct our Phase 1 exploration program. We
previously submitted our application for the Permit in September
2005. While we have not received the Permit as of the date of this
prospectus, we have not received an negative comments from the
Forrest Service Specialists who are reviewing our Permit
application. The issuance and receipt of the Permit is required
before we can commence any mechanical stripping, road building or
other major disturbance in any National Forest. We have already
incurred the cost to submit the Permit application and we hope that
the Permit will be issued on or before May 1, 2006.
<PAGE>
Second, we intend to conduct our Phase 1 exploration program in
accordance with the recommendations of Roscoe Postle Associates.
The Phase 1 exploration program will include the cleaning out and
shoring up of the existing hillside tunnels that were excavated by
miners in the past, the digging of trenches and pits throughout the
earth overlaying the bedrock in order to expose the bedrock, the
collection of bedrock samples and analysis (assaying) of these
samples, the repair of the road leading to the property, surveying
and the hiring of a geologist or a mining engineer to report on the
rock structures, bonding and reclamation of the disturbed areas. We
estimate that it will cost approximately $140,000 and take about 3
months to conduct the Phase 1 exploration program. We will be able
to conduct the Phase 1 exploration program if the minimum number of
shares are sold in this offering. Assuming that the minimum number
of shares are sold in this offering, we hope to commence the Phase 1
exploration program on June 1, 2006 and anticipate that it will be
completed on September 1, 2006.
Third, and assuming that we have completed the Phase 1
exploration program, we intend to assess and analyze the results
from the Phase 1 exploration program to determine whether or not to
proceed with the Phase 2 exploration program. We estimate that it
will cost approximately $2,000 to analyze the results of the Phase 1
exploration program and take about 2 weeks to conduct such testing.
Assuming that the Phase 1 exploration program is completed on
September 1, 2006, we anticipate that the results of the Phase 1
exploration program will be completed on September 15, 2006. We will
be able to analyze the results of the Phase 1 exploration program if
the minimum number of shares are sold in this offering.
Fourth, if the preliminary results of our Phase 1 exploration
program show positive results, then we intend to obtain a Permit
from the United States Forest Service, Jefferson Ranger District,
Whitehall, Montana, in order to conduct our Phase 2 exploration
program. We estimate that it will cost approximately $5,000 and take
approximately 2 weeks to prepare and submit the application for this
Permit. Assuming that the Phase 1 exploration program in completed
on September 1, 2006, and assuming that the results from the Phase
1 exploration program are positive, we anticipate that we will file
the Permit application on September 30, 2006 and we hope that the
Permit will be issued on or before May 1, 2007. However, if we only
<PAGE>
receive the minimum proceeds of our offering, we will not have
sufficient funds to proceed with Phase 2 of our exploration program
and therefore we will not submit an application for the second
Permit unless we raise substantial additional capital or locate a
joint venture partner.
Fifth, if the preliminary results of our Phase 1 exploration
program show positive results and we are able to obtain the second
Permit, we intend to conduct our Phase 2 exploration program. The
Phase 2 exploration program will mainly consist of drilling holes
into the bedrock and the examination and analysis of the bedrock
samples collected from the drilled holes in order to determine the
geology and presence, if any, of gold beneath the surface of the
bedrock. We estimate that it will cost approximately $250,000 and
take about 3 months to conduct the Phase 2 exploration program. If
we sell at least 70,000 shares in this offering, then we will be
able to conduct at least half of the Phase 2 exploration program.
If we sell at least 140,000 shares in this offering, then we will be
able to conduct the entire Phase 2 exploration program. Assuming
that we have the financial resources and the second Permit on or
before May 1, 2007, and assuming that the Phase 2 exploration
program is warranted based on the results of the Phase 1 exploration
program, then we hope to commence the Phase 2 exploration program on
June 1, 2007 and anticipate that it will be completed on September
1, 2007.
<PAGE>
To date our founders, Arnold T. Kondrat and Lloyd J. Bardswich have
contributed an aggregate of $50,000 to our capital in exchange for
which we have issued 450,000 and 50,000 shares of our common stock,
respectively to such parties.
Since our inception, we have not generated any revenues, and we have
incurred losses. We have not yet commenced operations, and our
auditors have, as part of their report on our financial statements,
included a "going concern opinion". Currently, we are entirely
reliant upon receipt of at least the minimum proceeds of our
offering to commence our proposed operations.
Nearly all of our current liabilities consist of legal expenses and
audit fees that are being incurred in connection with this offering.
As shown in the table above, the Company estimates that its legal
fees and audit expenses associated with this offering will be
approximately $64,000. Of the foregoing $64,000 amount, the Company
<PAGE>
estimates that its legal fees will comprise $35,000. Certain of our
officers and directors have verbally expressed a willingness to
assume the responsibility for the payment of such legal fees and
audit expenses if we are unable to pay same. If, any of our
officers and directors pay such legal fees and audit expenses we
will be obligated to reimburse them when, if ever, we have
sufficient funds to do so. If 40,000 or more shares are sold in
this offering, we will pay our legal expenses and audit fees or, if
applicable, reimburse our officers and directors that have paid them.
As of December 31, 2005, we had cash on hand in the amount of
$19,441.
Assuming that we do not receive any proceeds from the sale of our
shares from this offering, we anticipate that we will continue
undertaking the activities similar to those very limited activities
that we have undertaken from our inception. In that event, we
believe that our cash requirements for the next twelve months would
be approximately $50,000. If we do not receive any proceeds from
the sale of our shares from this offering, we believe that our
shareholders may be willing to loan or otherwise provide us
sufficient funds to enable us to continue to operate for the next
twelve months. We are not certain, however, that our shareholders
will agree to loan or otherwise provide such funds to us, and if
such funds are loaned or otherwise provided, we are not certain of
the terms associated therewith. Other than funds from our
shareholders, we are unable to determine whether any other source of
funds may be available to us to allow us to obtain the amounts
necessary to sustain our operations for the next twelve months
without the receipt of proceeds from the sale of our shares from
this offering. If, we do not receive any proceeds from the sale of
our shares from this offering and if the funds we require are not
available when we need them from other sources, we may be forced to
terminate our business. We have not made any determination as to
what we would do if we were required to terminate our business
operations, and we have not entered into nor does we presently
intend to enter into any negotiations, understandings, or
agreements, preliminary or otherwise, to acquire or be acquired in a
merger or reverse acquisition.
We have not had any revenues since inception, and our ability to
continue as a going concern is dependent upon receipt of sufficient
<PAGE>
proceeds from this offering and shareholder loans. If we do not
obtain sufficient proceeds from this offering or from loans from our
shareholders, we will exhaust our limited financial resources before
our business objectives can be accomplished. Although certain of
our shareholders have indicated a willingness to provide limited
amounts of shareholder loans, none of our shareholders have given us
any binding commitment to provide any such shareholder loan or any
amount thereof, and we can provide no assurance that we will be able
to obtain a shareholder loan when and if funds are needed.
Until we receive proceeds from this offering, we intend to continue
undertaking activities similar to those very limited activities that
we have undertaken since our inception. From inception we
negotiated and concluded the Option Agreement and we engaged Roscoe
Postle Associates, Inc. to prepare a technical report on the Delmoe
Lake Property.
In summary, if we receive the proceeds of the sale of the minimum
number of our shares from this offering, we expect that we will only
be able to continue undertaking activities similar to those very
limited activities we have undertaken since our inception, namely,
refinement of our business plan and to undertake our Phase 1
exploration program in accordance with the recommendations of Roscoe
Postle Associates.
If we are able to sell at least 70,000 shares in connection with
this offering, then we will be able to conduct our Phase 1
exploration program in accordance with the recommendations of Roscoe
Postle Associates and also plan to conduct a portion of our Phase 2
exploration program provided that the geological results from the
Phase 1 exploration program are positive and warrant further
exploration.
If we are able to sell at least 140,000 shares in connection with
this offering, then we be able to conduct our Phase 1 exploration
program in accordance with the recommendations of Roscoe Postle
Associates and also plan to conduct all of our Phase 2 exploration
program provided that the geological results from the Phase 1
exploration plan are positive and warrant further exploration. We
also anticipate that we will undertake to assess and acquire
additional properties and commence exploration on new properties.
However, we intend to assess and acquire additional properties only
if Phase 2 has been completed or that based on the results of the
<PAGE>
Phase 1 exploration program, it has been determined that the Phase 2
exploration program is not warranted.
If we sell less than the maximum amount of our shares offered in
connection with this offering, we may not have sufficient funds to
complete any or all of our objectives described above, and we
anticipate that our operations, if any, related to these activities
may be hampered by our limited resources.
Furthermore, we can provide no assurance that the accomplishment by
us of less than all of our objectives will produce any meaningful
benefit for us. In that regard, if we are only partially able to
meet our objectives, we may not have a viable business and we may be
forced to terminate our operations. Likewise, to the extent that we
require funds in excess of the amounts we have anticipated, we may
not be able to obtain such funds and we may be forced to terminate
our business.
Other than the foregoing, we do not expect to purchase or sell any
significant equipment and do not expect any significant changes in
the number of our employees.
PROPOSED BUSINESS
Background
We are a Florida corporation formed under the name of Gentor
Resources, Inc. on March 24, 2005. We are an exploration stage
company (as such term is defined in Securities Act Industry Guide
7(a)(4)(i) which means that we are engaged in the search for mineral
deposits (reserves) which are not either in the development or
production stage.
There is aggressive competition within the mineral exploration
industry to discover, acquire and develop properties considered to
have commercial potential. Even though we can compete for the
opportunity to participate in promising exploration projects with
other entities, most of our competitors will have greater financial
resources, technical expertise and managerial capabilities than we
do. In addition, we need to compete with these other entities in our
efforts to obtain additional financing which is necessary to explore
and develop the Subject Claims or other similar properties. As a
newly formed mineral exploration company with limited financial and
<PAGE>
managerial resources, we will need to overcome such competitive
disadvantages to execute our contemplated exploration programs or
generate any revenues.
Our objective is to be in the business of gold exploration. We
entered the Option Agreement with the Claim Owner who is unrelated
to use. The Option Agreement relates to six (6) Subject Claims
owned by the Claim Owner within the Property. The duration of the
Option Agreement is indefinite so long as we make the necessary
annual payments under the Option Agreement, which are applicable to
the ultimate purchase price of the Subject Claims. Before the
acquisition of our interest in the Subject Claims, the previous
operations of the Property by W.D. Mateer, Noranda Exploration Co.
Ltd., Independence Mining and persons or entities unknown consisted
of the construction of at lease three (3)hillside tunnels that were
created to gain access to the mineralized rock and the excavation of
numerous ditches and trenches.
We are an exploration stage company and there is no assurance that
commercially viable gold-bearing mineral deposits exist on any of
the Subject Claims. Our objective is to conduct a two Phase
exploration program on the Subject Claims to assess whether they
possess any commercially viable gold-bearing mineral deposits. We
cannot provide any assurance that the Subject Claims will prove
commercially viable.
Our plan is to complete our Phase 1 exploration program during the
summer of 2006. We anticipate that the cost to undertake Phase 1 of
our exploration program is approximately $140,000.00. We anticipate
that the work included as part of Phase 1 of our exploration program
will include surface geologic mapping, sampling, survey control,
access road repair, rehabilitation of hillside tunnels that were
created to gain access to the mineral deposits, and the excavation
of ditches and/or trenches with subsequent mapping, sampling and
analysis, soil survey, permitting and bonding. In light of our
limited financial and employee resources we intend to engage the
services of local contractors and lease equipment and machinery on a
short term basis in order to conduct and execute our Phase 1 plan.
Furthermore, one of our directors will oversee all of the
construction projects such as up-grading the access road, cleaning
out the ditches and trenches, cleaning out and securing the existing
hillside tunnels that were created to gain access to the mineral
<PAGE>
deposits, and reclaiming and cleaning up other ground disturbances
to the satisfaction of the United States Forest Service. If Phase 1
of our exploration program is successful, we expect to proceed with
a second Phase of our exploration program during the summer of 2007.
Phase 2 of our exploration program is expected to include further
excavation, drilling and engineering studies, and is expected to
cost us approximately $250,000.00. Until we have completed Phase 2
of our exploration program, we can not determine if commercially
viable gold deposits exist within the Subject Claims because Phase 1
does not include a drilling program, and without a drilling program,
there is not enough information to determine if the Subject Claim
contains commercially viable deposits of gold. If we receive at
least the minimum proceeds of our offering, we will have adequate
funds to complete Phase 1 of our exploration program, but we will
not have sufficient funds to proceed with Phase 2 of our exploration
program unless we raise substantial additional capital or locate a
joint venture partner. If we receive the maximum proceeds of our
offering we will have sufficient funds to complete Phase 2 of our
exploration program. If we do complete Phase 2, then the Directors
will assess and review the results, data and analyses derived from
our Phase 2 exploration program and determine whether to continue or
terminate the Option Agreements, to continue or terminate the
current exploration and development of the Subject Claims, acquire
other properties, and/or halt operations and wait for our economic
conditions to improve.
The undertaking of our proposed Phase 1 and Phase 2 exploration
program involves numerous hazards and risks, such as cave-ins,
environmental pollution liability, and personal injuries. Due to our
limited financial resources, we do not maintain any insurance
against the hazards of mineral exploration and we do not expect to
obtain any such insurance in the foreseeable future. However,
pursuant to the terms of the Option Agreement, we will obtain all
risk liability insurance policies to protect us and the Claim Owner
for risks other than mineral exploration hazard risks.
Depending upon the receipt of proceeds of our offering and
permissible weather conditions, we expect to commence Phase 1 of our
exploration program during the month of June of the calendar year
2006 and we anticipate that Phase 1 will be concluded within three
months after commencement. Until we complete Phase 1 of our
exploration program, we are unable to determine when or if Phase 2
of our exploration program would commence. The Directors of Gentor,
<PAGE>
all whom have mining and exploration expertise, will assess and
review the results, data and analysis derived from our Phase 1
exploration program to determine the presence of gold, the
feasibility, if any, of recovering any such gold deposits, and
whether or not the planned expenditures for Phase 2 of our
exploration program are warranted. Since the maintenance of the
Option Agreements are relatively inexpensive, if the results of the
Phase 1 exploration program indicate presence of gold, but also
determine that it would not be cost effective and/or profitable to
recover the gold from the property based on the then current price
of gold, then we plan to keep the Option Agreements open and hope
for higher gold prices that would justify further development of the
Subject Claims. Also, if the Directors of Gentor determine that
further development and/or exploration of the Subject Claims is not
warranted at such time, then we intend to acquire new properties for
exploration, if we have the adequate funds to do so.
Future Plans
We intend to search for additional properties of merit whenever
funding is available for such searches. Our searches will be
conducted in areas thought to be conducive for discovery,
development or exploration and we will try to obtain rights similar
to the Option Agreement to conduct any such exploration or
development so long as any such identified property can be acquired
at a cost deemed by us to be reasonable and provided that the
anticipated costs of development and exploration of such properties
can be undertaken at a relatively low cost. While we would prefer
to undertake any such additional exploration on our own, our
decision to raise additional capital or seek a joint venture partner
depends upon the type of property available and the terms of any
such funding. Furthermore, we might use the proceeds from this
offering to explore other properties, but we believe that we would
not undertake any additional exploration if it would hinder or
threaten our Phase 1 exploration plans or our Phase 2 exploration
plans to the extent the same are viable.
Agreements
The Option Agreement
Our entire business plan is based upon the Option Agreement. The
Option Agreement, which was originally dated April 29, 2005, was
<PAGE>
amended and restated on March 30, 2006. A memorandum of our Option
Agreement has been recorded in the public records of Jefferson
County, Montana. The Option Agreement grants us exploration and
mineral rights on the Property (the "Exploration and Mineral
Rights"). The Exploration and Mineral Rights provide us the
exclusive right and privilege to enter the Property for the purpose
of exploration and developing the Subject Claims, as well as
removing and selling for our own account any and all minerals,
mineral substances, metals ore bearing materials and rocks of any
kind. The Option Agreement also grants us an option (the "Option
Right") to purchase the Claim Owner's rights to the Subject Claims
for a total of $1,000,000, excluding the Claim Owner's right to the
Net Smelter Return. In the event that we exercise the Option Right,
all annual payments and royalty payments under the Option Agreement
will be credited against the $1,000,000 purchase price. The Option
Agreement also grants us a right of first refusal (the "Right of
First Refusal") to purchase the Claim Owner's rights to the Net
Smelter Return in the event that the Claim Owner receives a bona
fide offer from a third party to purchase such rights. We made an
initial payment of $7,500 upon execution of the Option Agreement. In
order to maintain our Exploration and Mineral Rights, we must make
the following annual payments to the Claim Owner: $7,500 is due on
the first anniversary date of the Option Agreement, $10,000 is due
on each of the next two (2) subsequent anniversary dates of the
Option Agreement, and $15,000 is due on every subsequent anniversary
date of the Option Agreement until the $1,000,000 purchase price for
the Subject Claims are paid or the Option Agreement is terminated or
cancelled. Furthermore, we also must pay the Claim Owner, on an
annual basis, an amount equal to 2% of the net revenues generated
from the sale of the metals recovered from the Subject Claims. In
the event the Claim Owner notifies us that we have breached a term,
condition or covenant of the Option Agreement (other than the
payment of monies due and payable under the Option Agreement), then
we have at least sixty (60) days (twenty (20) days for any monetary
payment obligation) to cure any such breach. If we cannot cure, or
begin to cure, any such breach within the cure period, then the
Claim Owner can terminate the Option Agreement. We also have the
right to terminate the Option Agreement at any time, and so long as
the termination date is before August 1 of any calendar year, then
we do not have to pay the Annual Maintenance Fee to the to the
United States Department of the Interior, Bureau of Land Management.
However, we also have the right to assign all or any of our rights
<PAGE>
in and to the Option Agreement with the consent of the Claim Owner,
which consent cannot be unreasonably withheld. In the event that we
determine that there is no viable commercial production from the
Subject Claims, we might sell our rights under the Option Agreement
to fund other exploration properties rather than terminate the
Option Agreement. We have attached the Option Agreement and the
Memorandum thereof as an exhibit to this prospectus.
Report on the Delmoe Lake Property
We engaged Roscoe Postle Associates, Inc. ("RPA") to prepare a
technical report on the Delmoe Lake Property for us in conformity
with Security Exchange Commission guidelines for a description of
property by issuers engaged or to be engaged in significant mining
operations. Nathan Eric Fier, CPG, P.Eng., a Consulting Geologist
and Mining Engineer associated with RPA, is the author of the
technical report.
A summary of the information included as part of the technical
report is as follows:
The 120 acre Delmoe Lake Property is located in southwest Montana
approximately 25 miles east of Butte in Sections 14 and 15, T3N, R6W
in the Homestake Mining District, Jefferson County.
Little information is available on the history of the Delmoe Lake
property or surrounding area prior to 1981. In 1962, W.D. Mateer
("Mateer"), a geologist, examined the property and collected 3
samples. Chemical testing and analysis (assays) of the samples
revealed the presence of gold and silver values. We do not know
which laboratory was used by Mateer to assay the samples and we do
not know what procedures or charge weights were used by the
laboratory that assayed the samples.
In September of 1981, Noranda Exploration Company ('Noranda")
conducted surface and underground channel sampling of the old
tunnels and pits on the Property. The results of the chemical
analyses (assays) were as follows:
<PAGE>
<TABLE>
<S> <C> <C> <C> <C>
Sample # Location Length (ft) Gold (ppm) Silver (ppm)
9301 underground 3.0 16.0 12.0
tunnel
9302 underground 2.0 7.0 5.4
tunnel
9312 solid rock 3.0 6.0 13.0
exposed on
the surface
</TABLE>
The assay laboratory that performed the analyses for Noranda was
their own in-house assay laboratory located in Vancouver, Canada. We
do not know the analytical method that was used by the Noranda
laboratory to the assay the samples and we are unaware of the charge
weights and detection limits associated with the assay techniques
that were performed on the samples.
Later in 1992, Independence Mining conducted surface and underground
channel sampling of the same tunnels and pits on the Property that
were sampled by Noranda. The results of the chemical analyses
(assays) were as follows:
<TABLE>
<S> <C> <C> <C> <C>
Sample # Location Length (ft) Gold (ppm) Silver (ppm)
DL92-850 solid rock 3.0 0.23 2.9
exposed on
the surface
DL92-860 surface pit 2.0 14.30 10.0
DL92-860 re-assay n/a 14.20 N/R
DL92-861 underground 3.0 0.004 0.6
tunnel
</TABLE>
The assay laboratory that performed the analyses for Independence
Mining on October 5, 1992 was SVL Analytical, Inc., 1 Government
Gulch, Kellog, ID 83837. The analytical method was used by the
laboratory to assay the samples was fire assay with an AA finish.
We are unaware of the charge weights and detection limits associated
<PAGE>
with the assay techniques that were performed on the samples.
The Delmoe Lake property is located on the southeast flank of the
Boulder Batholith. A major northeast-southwest trending fault line
is immediately adjacent to the mineralized area.
Northeast-southwest trending fault lines appear to be a main
controlling trend for mineralization in Montana and Idaho.
A series of quartz veins can be traced on surface for a distance of
approximately 4,000 feet. The host rock is a massive quartz
monzonite to granodiorite. Alteration is minimal with minor
bleaching and the introduction of or replacement by silica of the
wallrocks adjacent to mineralized veins.
The U.S. Geological Survey completed an aeromagnetic geophysical
survey for southwest Montana in 1964-65.
The property is considered to be at the grass-roots exploration
stage. The proposed Phase 1 budget for Delmoe Lake is based on
defining drill targets with an expenditure of $134,000. Work should
include surface geologic mapping, sampling, survey control, access
road repair, rehabilitation of hillside tunnels that were created to
gain access to the mineralized deposits, and digging ditches and/or
trenches with subsequent mapping, sampling and analysis, soil
survey, permitting and bonding for the work program. Contingent upon
the successful completion of the Phase 1 program, a Phase 2 program
may be warranted at an estimated cost of $250,000.
Employees
We currently have no full-time employees. Our only employees are,
Lloyd J. Bardswich (Joe) who serves as a director and our president
and treasurer; Kitt M. Dale who serves as a director; and Samuel Lee
Henry who serves as a director and our secretary.
We expect that Mr. Bardswich will spend as much as 20 hours each
week in attending to our business affairs, but Mr. Bardswich is not
obligated to do so. We expect that Mr. Bardswich will also be
engaged as a consultant to third-party companies engaged in mining
businesses that may be competitive to us and that he will devote
such portion of his time to such other activities as he may deem
necessary. We believe that the time Mr. Bardswich intends to devote
<PAGE>
to our business affairs, along with the time to be provided to us by
our other employees, will initially be adequate for us to implement
our plan of operations. As our business develops and as our
financial resources permit, we intend to hire such additional staff
as may be necessary to further develop and implement our plan of
operations.
We expect that Mr. Dale will spend as much as 5 hours each week in
attending to our business affairs, but Mr. Dale is not obligated to
do so. We expect that Mr. Dale will also be engaged as a consultant
to third-party companies engaged in mining businesses that may be
competitive to us and that he will devote such portion of his time
to such other activities as he may deem necessary. Such other
business activities may be considered a conflict of interest because
Mr. Dale must continually make decisions on how much of his time he
will allocate to our business as against his other business
projects, which may be competitive to our business, or where he will
allocate new business opportunities.
We expect that Mr. Henry will spend as much as 5 hours each week in
attending to our business affairs, but Mr. Henry is not obligated to
do so. We expect that Mr. Henry will also be engaged as a
consultant to third-party companies engaged in mining businesses
that may be competitive to us and that he will devote such portion
of his time to such other activities as he may deem necessary.
Facilities
The Company's principal executive offices are located at 1 Alder
Gulch Road, Virginia City, Montana 59755; telephone (406)843-5383.
We do not own an interest in the real property where our principal
executive offices are located.
MANAGEMENT
Executive Officers and Directors
The following sets forth certain information with respect to our
executive officers and directors. Each director holds such position
until the next annual meeting of our shareholders and until his
<PAGE>
respective successor has been elected and qualifies.
<TABLE>
<S> <C> <C>
Name Age Positions
Lloyd J. 61 Director, President, Treasurer and
Bardswich Chief Financial Officer
Kitt M. Dale 45 Director
Samuel L. Henry 32 Director and Secretary
</TABLE>
Any of our directors may be removed with or without cause at any
time by the vote of the holders of not less than a majority of our
then outstanding common stock. Officers are elected annually by the
Board of Directors. Any of our officers may be removed with or
without cause at any time by our Board of Directors.
Mr. Bardswich is one of our founders and has held his positions with
us since our inception.
Mr. Bardswich is one of our Directors and serves as our corporate
President, our Treasurer and our Chief Financial Officer.
Mr. Bardswich holds a B.A. Sc. from the University of Windsor,
Ontario Canada and a M.Eng (Mining) degree from McGill University,
Montreal Canada. From 1994 through November 1, 2005, Mr. Bardswich
has been the president and general manager of Madison Mining
Corporation, a private Montana corporation, which owns a cyanide
permitted gold mine and mill in Madison County, Montana. Also, since
1999 through November 1, 2005, Mr. Bardswich served as a mining
consultant to Vertical Investments (located in Zimbabwe), Shadow
Gold (located in Mali) and Cline Mining (located in Ontario) and a
variety of other junior gold mining and gold exploration companies,
and has also been the president and director of BRC Diamond
Corporation, a publicly held company that trades on the Toronto
Venture Exchange under the symbol "BRC." In December 2004, Mr.
Bardswich became a director of United Bolero Development, a publicly
held company that trades on the Toronto Venture Exchange under the
symbol "UNB." Since 2005, Mr. Bardwich has served as the President
of Montana Molybdenum Corporation, which operates a molybdenum mine
in Lewis and Clark County, Montana.
Mr. Bardswich does not devote his entire time to us. He does intend
to regularly discuss our affairs and to review the status of our
<PAGE>
business operations. We anticipate that Mr. Bardswich will devote
up to 20 hours per weeks to our business affairs. Any conflicts of
interest that arise affecting Mr. Bardswich and us will be resolved
by him in a manner that he deems will be fair. You may not agree
with his determination. If you have any doubt about the abilities
or integrity of Mr. Bardswich, you should not purchase any shares.
Mr. Dale is one of our Directors.
Kitt M. Dale holds a Bachelors of Science (Mining Engineering) from
Montana College of Mineral Science and Technology, Butte, Montana.
For the past five (5) years, Mr. Dale has been the owner and
operator of Indian Hay Ranch located in Sheridan, Montana, which is
a producer of beef and specialized agricultural products related to
the beef industry. From late 1998 to February 2003, Mr. Dale served
as a consulting mining engineer for M3 Engineering and Technology
Group, Inc., which is a full service engineering and architectural
design company headquartered in Tucson, Arizona. Since February
2003, Mr. Dale has also served as a part time consulting engineer to
Barrick Gold (the world's largest producer of gold), Kennecott Utah
Copper Company (the world's largest open pit copper mine located
west of Salt Lake City Utah), and the Ascentis Operations Company
(an affiliate of Ausenco Limited, one of Australia's premier
engineering and project management companies specializing in the
design, building, extension and refurbishment of mineral processing
plants worldwide).
Mr. Dale does not devote his entire time to us. He does intend to
regularly to discuss our affairs and to review the status of our
business operations with Mr. Bardswich and Mr. Henry. We anticipate
that Mr. Dale will devote up to 5 hours per weeks to our business
affairs. If you have any doubt about the abilities or integrity of
Mr. Dale, you should not purchase any shares.
Mr. Henry is one of our Directors and serves as our corporate
Secretary.
Mr. Henry holds an Associates degree in Business from the University
of Montana, Western in Dillon, Montana. From May 1997 through March
16, 2004, Mr. Henry was a project supervisor with Moen Builders and
M&W Milling and Refining located in Virginia City, Montana and which
are owned by the same individuals. Moen Builders and M&W Milling and
<PAGE>
Refining build mining equipment, operate small gold mines and
operate a mill and refinery in Madison County, Montana. From May 17,
2004 though May 1, 2005, Mr. Henry served as a project supervisor
for ORO Management which owns and operates a placer gold mine in
Madison County, Montana. From May 1, 2005 to the present, Mr. Henry
has been a construction supervisor for 3 Rivers Communication
located in Ennis, Montana, which is a telecommunications company.
Mr. Henry does not devote his entire time to us. He does intend to
regularly to discuss our affairs and to review the status of our
business operations with Mr. Bardswich and Mr. Dale. We anticipate
that Mr. Henry will devote up to 5 hours per weeks to our business
affairs. If you have any doubt about the abilities or integrity of
Mr. Henry, you should not purchase any shares.
Executive Compensation of our Executive Officers
We have no agreements relating to compensation with Mr. Bardswich,
with Mr. Dale or with Mr. Henry. We have in the past, and
anticipate that we will in the future, compensate Mr. Bardswich, Mr.
Dale and Mr. Henry on a consulting basis in accordance with industry
standard rates for the work provided. The compensation of our
executive officers will be determined by our Board of Directors.
Our executive officers have verbally agreed to defer the payment of
any compensation from us as an executive officer until such time, if
any, that we obtain sufficient capital through this offering or
otherwise. We do not presently intend to use any of the proceeds of
this offering to compensate our executive officers, except that we
intend to reimburse our executive officers for any expenses of the
offering paid by them, if any.
We do not have any written procedures in place to address conflicts
of interest that may arise as a result of their outside business
interests. Any such conflicts of interest that arise will be
resolved by the executive officer himself in a manner that he deems
will be fair. You may not agree with his determination. If you
have any doubt about the abilities or integrity of any of the
executive officers, you should not purchase any shares.
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
As of December 31, 2005, there are 2 holders of record of our common
stock. The following table sets forth certain information as of
December 31, 2005 with respect to any person who is known to us to
be the beneficial owner of more than 5% of our common stock, which
is the only class of our outstanding voting securities and as to
each class of our equity securities beneficially owned by our
directors and officers and directors as a group:
<TABLE>
<S> <C> <C>
Name of Beneficial Owner Amount of Shares Approximate
Beneficially Percent of
Owned Class
Arnold T. Kondrat 450,000 90.0%
1 First Canadian Place
Suite 7070
Toronto, Ontario M5X 1E3
Canada
Lloyd J. Bardswich 50,000 10.0%
1 Alder Gulch Road
Virginia City, Montana 59755
Officers and Directors as a 50,000 10.0%
Group (1 person)
</TABLE>
CERTAIN TRANSACTIONS
On formation, we issued an aggregate of 500,000 shares of our common
stock to the following two (2) founders: Arnold T. Kondrat and Lloyd
J. Bardwich (the "Founders"). Arnold T. Kondrat paid $45,000 for
450,000 shares and Lloyd J. Bardwich paid $5,000 for 50,000 shares.
The Founders, all of whom are, pursuant to the provisions of Rule
405 of Regulation C under the Securities Act, are deemed to be
organizers of the Company since at inception, each of such
shareholders received in excess of ten (10%) percent of the common
stock of the Company.
<PAGE>
DESCRIPTION OF COMMON STOCK
Our authorized capital stock consists of 1,500,000 shares of
common stock, par value $.0001 per share, and 500,000 shares of
preferred stock, par value $.0001 per share.
The holders of outstanding shares of our common stock are entitled
to receive dividends out of assets legally available therefore at
such times and in such amounts, if any, as our Board of Directors
from time to time may determine. Holders of common stock are
entitled to one vote for each share held on all matters submitted to
a vote of stockholders, which means that the holders of a majority
of the shares voted can elect all of the directors then standing for
election. Holders of the common stock are not entitled to
preemptive rights, and the common stock is not subject to conversion
or redemption.
The holders of our securities described under the caption "Security
Ownership of Certain Beneficial Owners and Management", above, one
of which is one of our director and an executive officer, own all of
our outstanding common stock. These stockholders can determine the
outcome of stockholder votes, including votes concerning the
election of directors, amendments to our charter and bylaws, and the
approval of significant corporate transactions such as a merger or
sale of our assets. In addition, their controlling influence could
have the effect of delaying, deferring or preventing a change in
control of our company.
Our preferred stock may be issued from time to time in one or more
series, and each of such series will have distinctive serial
designations in such manner as is determined by our Board of Directors.
Each series of preferred stock may be of such number of shares and
may have such rights and preferences, including but not limited to
special voting rights, redemption rights, conversion rights,
dividend rights, liquidation rights, other relative, participating,
optional or other special rights, and qualifications, limitations or
restrictions, as may be stated in the resolution of our Board of
Directors providing for the issuance of such preferred stock.
<PAGE>
Control-Share Acquisitions and Affiliated Transactions
We may become subject to the control-share acquisition and
affiliated transaction provisions of the Florida Business
Corporation Act. Those provisions could have the effect of
discouraging offers to acquire us and of increasing the difficulty
of consummating any such offer. Those provisions may also
discourage bids for our common stock at a premium over the market
price.
Transfer Agent
We intend to engage Florida Atlantic Stock Transfer Company, Inc.,
7130 Nob Hill Road, Tamarac, FL 33321 whose telephone number is
(954)726-4954 as the transfer agent for our common stock.
SHARES ELIGIBLE FOR FUTURE SALE
Prior to this
offering, there has not been any public market for our common stock.
Sales of substantial amounts of our common stock in the public
market, or the perception that such sales could occur, could
adversely affect prevailing market prices, if any, of our common
stock and could impair our future ability to raise capital through
the sale of equity securities. As of March 25, 2006, all of the
shares that are owned by Arnold T. Kondrat and Lloyd J. Bardswich
are eligible for sale pursuant to the provisions of Rule 144.
In general, under Rule 144, any person who owns shares that were
acquired from us at least one year prior to the proposed sale is
entitled to sell, within any three-month period beginning 90 days
after the date of this prospectus, a number of shares that does not
exceed the greater of:
* 1% of the number of shares of our common stock then
outstanding or
* the average weekly trading volume of the common stock on
Nasdaq during the four calendar weeks preceding the filing
of a notice on Form 144 with respect to such sale.
<PAGE>
Shares that were acquired from us at least two years prior to the
proposed sale may generally be sold by non-affiliates without
restriction. Any shares purchased by our affiliates in this
offering and subsequently publicly sold by those affiliates will not
be subject to the one-year holding period. Sales under Rule 144 are
also subject to a certain manner of sale provisions and notice
requirements and to the availability of current public information
about us.
PLAN OF DISTRIBUTION
Our Offering
We are offering 200,000 shares on a "best efforts" basis. Unless we
receive paid subscriptions for at least 40,000 shares by May 31,
2006, no shares will be sold and all proceeds will be promptly
returned to subscribers without interest. If we sell at least
40,000 shares by that date, we may extend our offering until the
earlier of September 30, 2006 or such time that all 200,000 shares
are sold. The minimum purchase is 1,000 shares. There is no limit
on the number of shares that may be purchased by any of our
founders. Any purchases by them must be made with investment intent
and made on the same terms and conditions as are purchases made by
public investors.
We are making the offering through our President, who will not be
compensated for offering the shares. However, subject to the
limitation described under "Use of Proceeds," we will reimburse him
for all expenses incurred by him in connection with the offering.
Because we are offering the shares through our President without the
use of a professional securities underwriting firm, there may be
less due diligence performed in conjunction with this offering than
would be performed in the event of an underwritten offering.
With respect to the offering, the President will be relying on the
safe harbor exemption from broker dealer registration that is set
forth in Rule 3a4-1 under the Securities Exchange Act of 1934. The
President is eligible to rely on the safe harbor exemption because
(i) he is not subject to statutory disqualification, (ii) he is not
being compensated for offering the shares, (iii) he is not an
associated person of a broker dealer, (iv) after the offering, the
President will primarily perform substantial duties for the Company
that are unrelated to this offering, (v) he was not a broker, dealer
<PAGE>
or an associated person of a broker dealer within the past 12 months
and (vi) he will not participate in selling or offering of
securities of any other issuer more than once every 12 months.
Prior to this offering, there has been no market for our common
stock. The public offering price for the shares was determined
solely by us and may be substantially higher than the prices that
will prevail in the trading market, if one develops. Among the
factors we considered in determining the public offering price were
the absence of a record of operations, our current financial
condition, our future prospects, the inexperience of our management,
and the general condition of the equity securities market.
We initially intend to offer our shares in the states of Florida and
New York, although we may expand our offering to other states. We
intend to solicit investors only through personal contacts and not
with direct mailings. Except for this prospectus, we do not intend
to use any sales materials in promoting this offering.
Our officers, directors, employees and affiliates may purchase
shares in this offering. Even though our officers, directors,
employees and affiliates may purchase shares in this offering, (i)
no offers for purchase or sale of shares will be made prior to the
filing of this registration statement, (ii) any offers for purchase
and sale of shares will be made only with the prospectus, and (iii)
no funds have or will be committed or paid prior to the effective
date of this registration statement.
If a public market develops for our common stock, trading in the
common stock may be subject to the requirements of applicable rules
under the Securities Exchange Act of 1934, which require additional
disclosure by broker-dealers in connection with any trades involving
the common stock. Those rules require the delivery, prior to any
transaction in the common stock, of a disclosure schedule explaining
the penny stock market and associated risks, and impose various
sales practice requirements on broker-dealers who sell the common
<PAGE>
stock to persons other than established customers and accredited
investors (generally institutions). For these types of transactions,
the broker-dealer must make a special suitability determination for
the purchaser and have received the purchaser's written consent to
the transaction prior to sale. The additional burdens imposed upon
broker-dealers may discourage broker-dealers from effecting
transactions in our common stock, which could severely limit its
liquidity.
LEGAL PROCEEDINGS
There are no pending or threatened legal proceedings to which we are
a party or of which any of our property is the subject, or to our
knowledge, any proceedings contemplated by governmental authorities.
INDEMNIFICATION
We have agreed to indemnify our executive officers and directors to
the fullest extent permitted by the Florida Business Corporation
Act. The Act permits us to indemnify any person who is or is
threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action by us or in
our right) by reason of the fact that the person is or was an
officer or director or is or was serving at our request as an
officer or director. The indemnity may include expenses (including
attorney's fees), judgments, fines and amounts paid in settlement
that were actually and reasonably incurred by the person in
connection with the action, suit or proceeding; provided, however,
that the person acted in good faith and in a manner such person
reasonably believed to be in or not opposed to our best interests,
and with respect to any criminal action or proceeding, had no
reasonable cause to believe such person's conduct was unlawful. We
may indemnify officers and directors in an action by us or in our
right under the same conditions, except that no indemnification is
permitted without judicial approval if the officer or director is
adjudged to be liable to us. Where an officer or director is
successful on the merits or otherwise in the defense of any action
referred to above, we must indemnify such officer or director
against the expenses which such officer or director actually and
<PAGE>
reasonably incurred. The indemnification provisions of the Florida
Business Corporation Act are not exclusive of any other rights to
which an officer or director may be entitled under our bylaws, by
agreement, vote or otherwise.
Insofar as indemnification arising under the Securities Act may be
permitted to our directors, officers and controlling persons
pursuant to the foregoing provisions or otherwise, we have been
advised that, in the opinion of the SEC, such indemnification is
against public policy as expressed in the Securities Act and is
therefore unenforceable.
LEGAL MATTERS
The validity of the shares of common stock offered by this
prospectus have been passed upon for us by Edward H. Gilbert, P.A.
to the extent set forth in that firm's opinion filed as an exhibit
to the registration statement. Edward H. Gilbert is the sole owner
of Edward H. Gilbert, P.A. Neither Mr. Gilbert nor Edward H.
Gilbert, P.A. own any of our shares. Mr. Gilbert is not one of our
officers, nor is he a director.
EXPERTS
The financial statements included in this Prospectus and in the
Registration Statement have been audited by BDO Dunwoody LLP, an
independent registered public accounting firm, to the extent and for
the period set forth in their report appearing elsewhere herein and
in the Registration Statement, and are included in reliance upon
such report given upon the authority of said firm as experts in
accounting and auditing.
ADDITIONAL INFORMATION
We have electronically filed a registration statement on Form SB-2
with the SEC with respect to the shares of common stock to be sold
in this offering. This prospectus, which forms a part of that
registration statement, does not contain all of the information
included in the registration statement. Certain information is
<PAGE>
omitted and you should refer to the registration statement and its
exhibits. With respect to references made in this prospectus to any
contract or other document, the references are not necessarily
complete and you should refer to the exhibits attached to the
registration statement for copies of the actual contract or
document. You may read the registration statement and other
materials we file with the SEC at the Public Reference Section of
the SEC at Room 1580, 100 F Street, N.E., Washington, D.C. 20549.
Copies of the registration statement and other materials we file
with the SEC may be obtained from the Public Reference Section upon
payment of the prescribed fees therefor. The public may obtain
information on the operation of the Public Reference Room by calling
the SEC at 1-800-SEC-0330. The SEC maintains an Internet site that
contains reports, proxy statements and information statements, and
other information regarding issuers that file electronically with
the SEC. The address of that site is http://www.sec.gov.
Upon the effectiveness of the registration statement of which this
Prospectus is a part, we will become subject to the information and
reporting requirements of the Securities Exchange Act of 1934 and
will file periodic reports and other information with the SEC.
We intend to furnish our stockholders with annual reports containing
audited financial statements.
<PAGE>
GENTOR RESOURCES, INC.
(AN EXPLORATION STAGE COMPANY)
FINANCIAL STATEMENTS
DECEMBER 31, 2005
GENTOR RESOURCES, INC.
(AN EXPLORATION STAGE COMPANY)
CONTENTS
<TABLE>
<S> <C>
Page(s)
Report of Independent Registered Public Accounting 63
Firm
Balance Sheet 65
Statement of Operations and Deficit 67
Statement of Cash Flows 69
Notes to Financial Statements 71
</TABLE>
<PAGE>
Report of Independent Registered Public Accounting Firm
To the Directors and Shareholders of
Gentor Resources, Inc.
(An Exploration Stage Company)
We have audited the balance sheet of Gentor Resources, Inc. (an
Exploration Stage Company) as at December 31, 2005, and the
statements of operations and deficit and cash flows for the period
March 24, 2005 (date of inception) to December 31, 2005. The
financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on the
financial statements based on our audit.
We conducted our audit in accordance with the standards of the
Public Company Accounting Oversight Board (United States). Those
standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
of material misstatement. The Company is not required to have, nor
were we engaged to perform, an audit of its internal control over
financial reporting. Our audit included consideration of internal
control over financial reporting as a basis for designing audit
procedures that are appropriate in the circumstances, but not for
the purpose of expressing an opinion on the effectiveness of the
Company's internal control over financial reporting. Accordingly,
we express no such opinion. An audit also includes examining, on a
test basis, evidence supporting the amounts and disclosures in the
financial statements and assessing the accounting principles used
and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.
In our opinion, the financial statements present fairly, in all
material respects, the financial position of Gentor Resources, Inc.
(an exploration stage company) as at December 31, 2005 and the
results of its operations and cash flows for the period from March
24, 2005 (date of inception) to December 31, 2005 in conformity with
United States generally accepted accounting principles.
<PAGE>
The accompanying financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in
Note 1 to the financial statements, the Company has a net loss of
$97,637 for the period ended December 31, 2005 and a Shareholders'
Deficit of $47,637 as at December 31, 2005. These matters raise
substantial doubt about the Company's ability to continue as a going
concern. Management's plans regarding these matters are also
described in Note 1. The accompanying financial statements do not
include any adjustments that might result from the outcome of this
uncertainty.
BDO Dunwoody LLP
Chartered Accountants
Toronto, Ontario
March 7, 2006
<PAGE>
GENTOR RESOURCES, INC.
(AN EXPLORATION STAGE COMPANY)
BALANCE SHEET
(STATED IN US DOLLARS)
AS AT DECEMBER 31, 2005
<TABLE>
<S> <C>
ASSETS
CURRENT
Cash & cash equivalents (note 3) $19,441
------------
TOTAL CURRENT ASSETS $19,441
============
LIABILITIES
CURRENT
Accounts payable and accrued liabilities $67,078
------------
TOTAL CURRENT LIABILITIES $67,078
SHAREHOLDERS' DEFICIT
Authorized
1,500,000 Common shares, $0.0001 par value
500,000 Preferred shares, $0.0001 par value
Issued and outstanding
<PAGE>
500,000 common shares (note 5) 50
Paid-in capital 49,950
Deficit accumulated during exploration stage (97,637)
------------
Shareholder Equity (Deficiency) ($47,637)
------------
TOTAL LIABILITIES AND SHAREHOLDER DEFICIT $19,441
============
</TABLE>
See accompanying summary of accounting policies and notes to
financial statements.
<PAGE>
GENTOR RESOURCES, INC.
(AN EXPLORATION STAGE COMPANY)
STATEMENT OF OPERATIONS AND DEFICIT
(STATED IN US DOLLARS)
FOR THE PERIOD MARCH 24, 2005 (INCEPTION)
THROUGH DECEMBER 31, 2005
<TABLE>
<S> <C>
EXPENSES
Mineral Properties $7,500
Consulting fees - related parties 7,400
Consulting fees - others 4,409
Legal, accounting and auditing fees 77,078
General and administrative expenses 1,432
-----------
(97,819)
Interest income 182
-----------
NET LOSS (97,637)
DEFICIT, BEGINNING OF THE PERIOD -
-----------
DEFICIT, END OF PERIOD $(97,637)
===========
<PAGE>
Basic and diluted loss per common share 0.20
Weighted aver number of shares 500,000
</TABLE>
See accompanying summary of accounting policies and notes to
financial statements.
<PAGE>
GENTOR RESOURCES, INC.
(AN EXPLORATION STAGE COMPANY)
STATEMENT OF CASH FLOWS
(STATED IN US DOLLARS)
FOR THE PERIOD MARCH 24, 2005 (INCEPTION)
THROUGH DECEMBER 31, 2005
<TABLE>
<S> <C>
CASH PROVIDED BY (APPLIED TO):
OPERATING ACTIVITIES:
Adjustments required to reconcile net loss with
net cash used in operating activities
Net loss for the period $(97,637)
CHANGE IN NON CASH WORKING CAPITAL BALANCE
Accounts payable and accrued liabilities (67,078)
-----------
(30,559)
INVESTING ACTIVITIES:
FINANCING ACTIVITIES:
Common shares issued 50,000
-----------
NET INCREASE IN CASH & EQUIVALENTS $19,441
===========
<PAGE>
SUPPLEMENTARY CASH FLOW INFORMATION
-----------
CASH RECEIVED FOR INTEREST $182
===========
</TABLE>
See accompanying summary of accounting policies and notes to
financial statements.
<PAGE>
GENTOR RESOURCES, INC.
(AN EXPLORATION STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2005
1. ORGANIZATION AND GOING CONCERN
Gentor Resources, Inc. ("the Company") was incorporated on March 24,
2005 under the Florida Business Corporation Act. The Company is an
exploration stage company formed for the purpose of prospecting and
developing mineral properties. During the period, the company
purchased option agreements to acquire exclusive gold exploration,
prospecting and development rights and privileges to six (6)
unpatented mining claims ("the Mining Claims"), located in the
Jefferson County, State of Montana. To date, the Company's
activities have been limited to its formation and the raising of
equity capital. At present, management is devoting most of its
activities to getting an SB-2 Registration Statement declared
effective.
The accompanying financial statements have been prepared assuming
that the Company will continue as a going concern, which
contemplates, the realization of assets and satisfaction of
liabilities in the normal course of business. The Company has a net
loss from operations of $97,637 for the period ended December 31,
2005 and a shareholders' deficit of $47,637 as at December 31, 2005.
The Company intends to fund operations through equity financing
arrangements, which may be insufficient to fund its capital
expenditure, working capital and other cash requirements for the
year ending December 31,2006.
The Company's continued existence is dependent upon it emerging from
the exploration stage, obtaining additional financing to continue
operations, explore and develop the mining properties and the
discovery, development and sale of ore reserves.
The Company plans to apply for an SB-2 Registration Statement and
intends to raise additional funding through public or private place
offerings. Funding may not be available at all or at terms that are
acceptable to the Company.
<PAGE>
The financial statements do not include any adjustments to reflect
the possible future effects on the recoverability and classification
of assets or the amounts and classification of liabilities that may
result from the possible inability of the company to continue as a
going concern.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a) CASH AND CASH EQUIVALENTS
Cash and equivalents consist of bank balances and other short
term, highly liquid instrument with maturity of three months or
less at the time of issuance.
b) USE OF ESTIMATES
The preparation of financial statements in accordance with
United States generally accepted accounting principles requires
management to make estimates and assumptions that affect the
reported amounts of assets and liabilities at the date of the
financial statements, and the reported amounts of expenses
during the reporting period. Actual results could differ from
management's best estimates as additional information becomes
available in the future.
c) MINERAL PROPERTIES
The Company holds option agreements to acquire exclusive gold
exploration, prospecting and development rights and privileges
to six (6) unpatented mining claims ("the Mining Claims"),
located in the Jefferson County, State of Montana. Under the
mining exploration and option agreement signed on April 29,
2005,the Company holds the exclusive option to purchase the
Mining Claims for a total cash consideration of One million
United States dollars ($1,000,000) ("the purchase price")
subject to a 2% Net smelter return royalty. A option payment of
$7,500 was made upon execution of the option agreement on April
29, 2005 and an additional payment of $7,500 is due on the
first anniversary date of signing the option agreement and
$10,000 per year for the second and third anniversary dates of
signing and then $15,000 per year thereafter until the purchase
<PAGE>
price has been paid, unless the agreement is terminated or
cancelled. In the event the option to purchase is exercised,
all annual payments and/or royalty production payments will be
credited against the purchase price.
Annual option payments towards the Mining Claims are expensed
until such time as the properties have proven reserves when
these amounts will be capitalized under mineral properties. The
Company is also required to pay $750 for annual maintenance
fee.
d) FAIR VALUE OF FINANCIAL INSTRUMENTS
Unless otherwise noted, it is management's opinion that the
Company is not exposed to significant interest, currency or
credit risks arising from its financial instruments. The fair
value of its financial instruments approximates their carrying
values, unless otherwise noted.
e) INCOME TAXES
Deferred income taxes are reported for temporary differences
between items reported in the financial statements and those
reported for income tax purposes in accordance with US GAAP,
which requires the use of asset/liability method of accounting
for income taxes. Deferred income taxes and tax benefits are
recognized for the future tax consequences attributable to
differences between the financial statements carrying amounts
of existing assets and liabilities and their respective tax
bases, and for the tax loss and credits carryforwards.
Deferred tax assets and liabilities are measured using the
enacted rates expected to apply to taxable income in the years
in which those temporary differences are expected to be
recovered or settled. The Company provides for deferred taxes
for the estimated future tax effects attributable to temporary
differences and carryforwards when realization is more likely
than not. The deferred taxes for the company therefore amount
to nil at the balance sheet date.
f) NET LOSS PER COMMON SHARE
Basic EPS is computed by dividing income (loss) attributable to
common stockholders by weighted average number of common shares
<PAGE>
outstanding during the period. Diluted EPS gives effect to all
dilutive potential common shares outstanding during the period.
g) FOREIGN CURRENCY TRANSLATION
Foreign currency transactions are translated into US dollars as
follows:
At the transaction date, each asset, liability, revenue and
expense is translated into US dollars by the use of the
exchange rate in effect at that date. At the year end date,
monetary assets and liabilities are translated into US dollars
by using the exchange rate in effect at that date. The
resulting foreign exchange gains and losses are included in the
current income period.
3. CASH AND CASH EQUIVALENTS
Bank account $4,266
Cash on short term deposit $15,175
$19,441
========
The term deposit matures on January 23, 2006 and bears interest
at 2.3%.
4. RELATED PARTY TRANSACTIONS
As part of initial capitalization of the Company, the founding
shareholders subscribed for 500,000 common shares for cash
consideration of $50,000.
Consulting fees of $7,400 were paid to a director of the
Company.
These transactions are in the normal course of the Company's
operations and were measured at the exchange amount.
<PAGE>
5. SHARE CAPITAL
The authorized share capital of the Company consists of 500,000
preferred shares and 1,500,000 common shares with a par value
of $0.0001 per share. Each common share entitles the holder to
one vote and no holder of the common shares shall be entitled
to any right of cumulative voting. Preferred shares may be
issued is series with distinctive serial designations.
Currently, the Company has outstanding 500,000 common shares
and no preferred shares. These were issued on incorporation
March 24, 2005.
6. INCOME TAXES
The Company uses the liability method, where deferred tax
assets are liabilities are determined based on the expected
future tax consequences of temporary differences between the
carrying amount of assets and liabilities for financial and
income tax reporting purposes. During the period from March 24,
2005 (inception) to December 31, 2005, the Company incurred net
losses and, therefore, has no tax liability. The net deferred
tax asset generated by the loss carryforward has been fully
reserved. The net operating loss carryforward is $97,637 at
December 31, 2005, and will expire in the year 2025.
At December 31, 2005, deferred tax assets consisted of the
following:
Net operating losses $33,196
Less: valuation allowance (33,196)
Net deferred tax asset $ -
<PAGE>
No person has been authorized to give any information or to make any
representations in connection with this offering other than those
contained in this prospectus and, if given or made, such other
information and representations must not be relied upon as having
been authorized by Gentor Resources, Inc. This prospectus does not
constitute an offer to sell or a solicitation of an offer to buy any
securities other than the registered securities to which it relates.
This prospectus does not constitute an offer to sell or a
solicitation of an offer to buy such securities in any circumstances
in which such offer or solicitation is unlawful.
-----------------------
TABLE OF CONTENTS
PROSPECTUS SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . 4
RISK FACTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
FORWARD-LOOKING STATEMENTS . . . . . . . . . . . . . . . . . . . . .22
USE OF PROCEEDS. . . . . . . . . . . . . . . . . . . . . . . . . . .23
DIVIDEND POLICY. . . . . . . . . . . . . . . . . . . . . . . . . . .26
DETERMINATION OF OFFERING PRICE. . . . . . . . . . . . . . . . . . .27
DILUTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .28
<PAGE>
MINING OPERATIONS DISCLOSURE . . . . . . . . . . . . . . . . . . .29
MANAGEMENT'S PLAN OF OPERATION . . . . . . . . . . . . . . . . . . .32
PROPOSED BUSINESS. . . . . . . . . . . . . . . . . . . . . . . . . .41
MANAGEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . .49
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT . . ..53
CERTAIN TRANSACTIONS . . . . . . . . . . . . . . . . . . . . . . . .53
DESCRIPTION OF COMMON STOCK. . . . . . . . . . . . . . . . . . . . .54
SHARES ELIGIBLE FOR FUTURE SALE. . . . . . . . . . . . . . . . . . .55
PLAN OF DISTRIBUTION . . . . . . . . . . . . . . . . . . . . . . . .56
LEGAL PROCEEDINGS. . . . . . . . . . . . . . . . . . . . . . . . . .58
INDEMNIFICATION. . . . . . . . . . . . . . . . . . . . . . . . . . .58
LEGAL MATTERS. . . . . . . . . . . . . . . . . . . . . . . . . . . .59
EXPERTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .59
ADDITIONAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . .59
------------------------
<PAGE>
Until __________________, 2006 (90 days after the date of this
prospectus), all dealers that effect transactions in these
securities, whether or not participating in this offering, may be
required to deliver a prospectus. This is in addition to the
dealers' obligation to deliver a prospectus when acting as
underwriters and with respect to their unsold allotments or
subscriptions.
Gentor Resources, INC.
COMMON STOCK
------------------------
PROSPECTUS
------------------------
May 1, 2006
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 24. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The expenses to be paid by the Registrant in connection with this
offering are as follows. All amounts other than the SEC registration
fee are estimates.
<TABLE>
<S> <C>
ITEM AMOUNT
SEC registration fee $117.70
Printing $3,000.00
Legal fees and expenses $35,000.00
Accounting and auditing fees and expenses $16,700.00
Blue sky fees and expenses $5,000.00
Transfer agent fees $3,000.00
Miscellaneous $1,500.00
TOTAL $64,317.70
</TABLE>
ITEM 25. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Registrant had agreed to indemnify its executive officers and
directors the fullest extent permitted by the Florida Business
Corporation Act. That Act permits the Registrant to indemnify any
person who is, or is threatened to be made, a party to any
threatened, pending or completed action, suit or proceeding, whether
civil, criminal, administrative or investigative (other than an
action by the Registrant or in its right) by reason of the fact that
the person is or was an officer or director or is or was serving our
request as a an officer or director. The indemnity may include
expenses (including attorney's fees), judgments, fines and amounts
paid in settlement actually and reasonably incurred by the person in
connection with the action, suit or proceeding, provided that such
person acted in good faith and in a manner such person reasonably
<PAGE>
believed to be in or not opposed to our best interests, and, with
respect to any criminal action or proceeding, had no reasonable
cause to believe such person's conduct was unlawful. The Registrant
may indemnify officers and directors in an action by the Registrant
or in its right under the same conditions, except that no
indemnification is permitted without judicial approval if the
officer or director is adjudged to be liable to the Registrant.
Where an officer or director is successful on the merits or
otherwise in the defense of any action referred to above, the
Registrant must indemnify such person against the expenses which
such person actually and reasonably incurred. The foregoing
indemnification provisions are not exclusive of any other rights to
which an officer or director may be entitled under a our bylaws, by
agreement, vote, or otherwise.
ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES.
(a) Upon formation, the Registrant issued 500,000 shares of
common stock for an aggregate consideration of $50,000 to
two founders, all of whom are, pursuant to the provisions
of Rule 405 of Regulation C under the Securities Act are
deemed to be "organizers" of the Company since at
inception, each of such shareholders received in excess of
ten (10%) percent of the common stock of the Company.
(b) There were no principal underwriters.
(c) The aggregate consideration for the securities referred to
in subparagraph was $50,000.
(d) The Registrant claimed exemption from the registration
provisions of the Securities Act of 1933 with respect to
the securities pursuant to Section 4(2) thereof inasmuch
as no public offering was involved.
ITEM 27. EXHIBITS.
3.01 Articles of Incorporation(2).
3.03 Bylaws (2).
4.01 Form of Specimen Stock Certificate for the
Registrant's Common Stock (2).
5.01 Opinion of Edward H. Gilbert, P.A. regarding legality
of securities being registered (1).
10.01 Amended and Restated Option Agreement (1).
23.01 Consent of Edward H. Gilbert, P.A. (included in
Exhibit 5.01)(1).
23.02 Consent of BDO Dunwoody LLP (1).
23.03 Consent of Roscoe Postle Associates, Inc.(2).
____________________
(1)Filed herewith.
(2)Filed as part of the Registration Statement on Form SB-2.
ITEM 28. UNDERTAKINGS.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this
Registration Statement to:
(i) Include any prospectus required by Section 10(a)(3) of
the Securities Act;
(ii) Reflect in the prospectus any facts or events which,
individually or together, represent a fundamental change
in the information in the Registration Statement.
Notwithstanding the foregoing, any increase or decrease in
volume of securities offered (if the total dollar value of
securities offered would not exceed that which was
<PAGE>
registered) and any deviation from the low or high end of
the estimated maximum offering range may be reflected in
the form of prospectus filed with the Commission pursuant
to Rule 424(b) if, in the aggregate, the changes in volume
and price represent no more than a 20 percent change in
the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective
registration statement.
(iii) Include any additional or changed material
information on the plan of distribution.
(2) For determining liability under the Securities Act, each
such post-effective amendment shall be treated as a new
registration statement of the securities offered, and the
offering of the securities at that time to be the initial
bona fide offering.
(3) To file a post-effective amendment to remove from
registration any of the securities that remain unsold at
the end of the offering.
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and
controlling persons of the Registrant pursuant to the foregoing
provisions or otherwise, the Registrant has been advised that in the
opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a
director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by
such director, officer or controlling person in connection with the
securities being registered, the Registrant will, unless in the
opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy
as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
<PAGE>
SIGNATURES
In accordance with the requirements of the Securities Act of 1933,
the Registrant certifies that it has reasonable grounds to believe
that it meets all of the requirements for filing on Form SB-2 and
has authorized this registration statement to be signed on its
behalf by the undersigned, in the Virginia City, State of Montana,
on the 1st day of May, 2006.
Gentor Resources, Inc.
/s/ Lloyd J. Bardswich
---------------------------------
By: Lloyd J. Bardswich, President
and principal executive officer
/s/ Lloyd J. Bardswich
---------------------------------
By: Lloyd J. Bardswich, principal
financial officer
In accordance with the requirements of the Securities Act of 1933,
this Registration Statement has been signed by the following persons
in the capacities and on the dates stated.
Date: May 1, 2006 /s/ Lloyd J. Bardswich
---------------------------------
By: Lloyd J. Bardswich, principal
executive officer
Date: May 1, 2006 /s/ Lloyd J. Bardswich
---------------------------------
By: Lloyd J. Bardswich, principal
accounting officer
Date: May 1, 2006 /s/ Lloyd J. Bardswich
---------------------------------
By: Lloyd J. Bardswich, director
Date: May 1, 2006 /s/ Kitt M. Dale
---------------------------------
By: Kitt M. Dale, director
Date: May 1, 2006 /s/ Samuel L. Henry
---------------------------------
By: Samuel L. Henry, director