Red Metal Resources (RMESF) 10-Q 14 Sep 18 2019 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Jul. 31, 2018	Sep. 14, 2018
Document and Entity Information:
Entity Registrant Name	RED METAL RESOURCES, LTD.
Document Type	10-Q
Document Period End Date	Jul. 31, 2018
Amendment Flag	false
Entity Central Index Key	1,358,654
Current Fiscal Year End Date	--01-31
Entity Common Stock, Shares Outstanding		37,504,588
Entity Filer Category	Smaller Reporting Company
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	No
Document Fiscal Year Focus	2,019
Document Fiscal Period Focus	Q2
Trading Symbol	rmes

Consolidated Balance Sheets

Consolidated Balance Sheets - USD ($)	Jul. 31, 2018	Jan. 31, 2018
Current Assets
Cash	$ 9,748	$ 2,392
Prepaids and other receivables	10,956	7,034
Total Current Assets	20,704	9,426
Equipment	1,594	1,966
Unproved mineral properties	703,982	694,616
Total Assets	726,280	706,008
Current Liabilities
Accounts payable	218,980	387,961
Accrued liabilities	118,352	179,239
Due to related parties		1,196,798
Notes payable	27,090	34,384
Notes payable to related parties		1,218,375
Total Current Liabilities	364,422	3,016,757
Long-term notes payable to related parties	479,995
Total Liabilities	844,417	3,016,757
Stockholders' Equity
Common stock value	37,504	35,004
Additional paid-in capital	8,968,677	6,803,833
Deficit	(9,148,001)	(9,129,238)
Accumulated other comprehensive income (loss)	23,683	(20,348)
Total Stockholders' Equity (Deficit)	(118,137)	(2,310,749)
Total Liabilities and Stockholders' Equity (Deficit)	$ 726,280	$ 706,008

Balance Sheets (Parenthetical)

Balance Sheets (Parenthetical) - $ / shares	Jul. 31, 2018	Jan. 31, 2018
Balance Sheet
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	500,000,000	500,000,000
Common stock, shares issued	37,504,588	35,004,588
Common stock, shares outstanding	37,504,588	35,004,588

Consolidated Statements of Oper

Consolidated Statements of Operations - USD ($)	3 Months Ended		6 Months Ended
	Jul. 31, 2018	Jul. 31, 2017	Jul. 31, 2018	Jul. 31, 2017
Operating expenses
Amortization	$ 130	$ 171	$ 275	$ 353
Consulting fees	15,000	15,000	30,000	30,000
General and administrative	11,199	15,247	22,956	31,546
Mineral exploration costs	1,875	578	12,405	1,022
Professional fees	7,883	2,591	15,502	3,616
Rent	2,580	2,481	5,329	5,006
Regulatory	1,824	4,430	4,476	5,557
Salaries, wages and benefits	18,189	17,289	37,298	34,862
Total operating expenses	58,680	57,787	128,241	111,962
Other items
Foreign exchange gain (loss)	186	(46)	3,827	(42)
Extinguishment of debt	162,723		162,723
Interest expense on current debt	29,138	25,197	57,072	47,779
Net royalty income (loss)		(493)
Net loss	75,091	(83,523)	(18,763)	(159,783)
Unrealized foreign exchange gain (loss)	(9,104)	(95,289)	44,031	(53,890)
Comprehensive income (loss)	$ 65,987	$ (178,812)	$ 25,268	$ (213,673)
Net loss per share - basic and diluted	$ 0	$ 0	$ 0	$ 0
Weighted average number of shares outstanding - basic and diluted	36,413,428	34,647,445	36,413,428	34,647,445

Consolidated Statement of Stock

Consolidated Statement of Stockholders' Deficit - USD ($)	Common Stock	Additional Paid-in Capital	Accumulated Deficit	Accumulated Other Comprehensive Income (Loss)	Total
Beginning Balance, shares at Jan. 31, 2017	34,647,445
Beginning Balance, amount at Jan. 31, 2017	$ 34,647	$ 6,779,190	$ (8,835,401)	$ 26,153	$ (1,995,411)
Foreign exchange translation				(53,890)	(53,890)
Net income (loss) for the period			(159,783)		(159,783)
Ending Balance, shares at Jul. 31, 2017	34,647,445
Ending Balance, amount at Jul. 31, 2017	$ 34,647	6,779,190	(8,995,184)	(27,737)	(2,209,084)
Stock issued for mineral property, shares	357,143
Stock issued for mineral property, value	$ 357	24,643			25,000
Foreign exchange translation				7,389	7,389
Net income (loss) for the period			(134,054)		(134,054)
Ending Balance, shares at Jan. 31, 2018	35,004,588
Ending Balance, amount at Jan. 31, 2018	$ 35,004	6,803,833	(9,129,238)	(20,348)	(2,310,749)
Stock issued for cash, shares	2,500,000
Stock issued for cash, value	$ 2,500	185,000			187,500
Extinguishment of related party debt		1,979,844			1,979,844
Foreign exchange translation				44,031	44,031
Net income (loss) for the period			(18,763)		(18,763)
Ending Balance, shares at Jul. 31, 2018	37,504,588
Ending Balance, amount at Jul. 31, 2018	$ 37,504	$ 8,968,677	$ (9,148,001)	$ 23,683	$ (118,137)

Consolidated Statements of Cash

Consolidated Statements of Cash Flows - USD ($)	3 Months Ended	6 Months Ended
	Jul. 31, 2018	Jul. 31, 2018	Jul. 31, 2017
Cash Flows used in Operating Activities
Net loss	$ 75,091	$ (18,763)	$ (159,783)
Adjustment to reconcile net loss to net cash used in operating activities:
Accrued interest on related party notes payable		48,377	38,927
Accrued interest on related party payables		7,259	7,060
Accrued interest on notes payable		1,359	1,611
Amortization	130	275	353
Extinguishment of debt	162,723	162,723
Changes in operating assets and liabilities:
Prepaids and other receivables		(4,341)	(673)
Accounts payable		723	28,701
Accrued liabilities		(55,122)	(6,064)
Due to related parties		34,223	35,006
Cash paid for interest on notes payable		(4,646)
Net cash used in operating activities		(153,379)	(54,862)
Cash Flows from Investing Activities
Acquisition of unproved mineral properties		47,977	28,008
Net cash provided by (used in) investing activities		(47,977)	(28,008)
Cash Flows from Financing Activities
Cash received on issuance of notes payable to related party		26,034	88,392
Cash received on issuance of common stock		187,500
Cash paid for notes payable		2,130
Net cash provided by financing activities		211,404	88,392
Effect of foreign currency exchange		(2,692)	(1,075)
Increase (decrease) in cash		7,356	4,447
Cash, beginning of period		2,392	7,679
Cash, end of period	$ 9,748	9,748	12,126
Supplemental Disclosure of Cash Flow Information:
Income tax
Interest		$ 4,646

Organization and Basis of Prese

Organization and Basis of Presentation	6 Months Ended
	Jul. 31, 2018
Notes
Organization and Basis of Presentation	NOTE 1 - ORGANIZATION AND BASIS OF PRESENTATION Nature of Operations Red Metal Resources Ltd. (the “Company”) holds a 99% interest in Minera Polymet SpA (“Polymet”) under the laws of the Republic of Chile. The Company is involved in acquiring and exploring mineral properties in Chile. The Company has not determined whether its properties contain mineral reserves that are economically recoverable. Unaudited Interim Consolidated Financial Statements The unaudited interim consolidated financial statements of the Company have been prepared in accordance with the United States generally accepted accounting principles (“GAAP”) for interim financial information and the rules and regulations of the Securities and Exchange Commission (“SEC”). They do not include all information and footnotes required by GAAP for complete financial statements. Except as disclosed herein, there have been no material changes in the information disclosed in the notes to the financial statements for the year ended January 31, 2018, included in the Company’s Annual Report on Form 10-K, filed with the SEC. The unaudited interim consolidated financial statements should be read in conjunction with those financial statements included in Form 10-K. In the opinion of management, all adjustments considered necessary for fair presentation, consisting solely of normal recurring adjustments, have been made. Operating results for the three and six months ended July 31, 2018, are not necessarily indicative of the results that may be expected for the year ending January 31, 2019.

Related-Party Transactions Disc

Related-Party Transactions Disclosure	6 Months Ended
	Jul. 31, 2018
Notes
Related-Party Transactions Disclosure	NOTE 2 - RELATED-PARTY TRANSACTIONS The following amounts were due to related parties as at: July 31, 2018 January 31, 2018 Due to a company owned by an officer (a) $ -- $ 699,882 Due to a company controlled by directors (b) -- 371,303 Due to a company controlled by a major shareholder (a) -- 85,906 Due to a major shareholder (a) -- 39,707 Total due to related parties $ -- $ 1,196,798 (a) Amounts were unsecured, due on demand and bore no interest. (b) Amounts were unsecured, due on demand and bore interest at 10%. During the six-month period ended July 31, 2018, the Company accrued $7,259 (July 31, 2017 - $7,060) in interest expense on trade accounts payable with related parties. During the quarter ended July 31, 2018, debt owing by the Company to related parties of $1,206,055 was forgiven. The gain on the extinguishment of debt was recorded in additional paid-in capital. The details of debt forgiveness are as follows: July 31, 2018 Amounts due for services: Debt forgiven by the company owned by an officer $ 721,947 Debt forgiven by the company controlled by directors 361,163 Debt forgiven by the company controlled by a major shareholder 85,374 Debt forgiven by the major shareholder 37,571 Total debt forgiven by related parties $ 1,206,055 The following amounts were due under the notes payable the Company issued to related parties: July 31, 2018 January 31, 2018 Note payable to the Chief Executive Officer (“CEO”) (c) $ 372,323 $ 478,355 Note payable to the Chief Financial Officer (“CFO”) (c) 8,500 13,724 Note payable to a major shareholder (c) -- 569,064 Note payable to a company controlled by directors (c) 99,172 157,232 Total notes payable to related parties (d) $ 479,995 $ 1,218,375 (c) Amounts are unsecured and bear interest at 8%. (d) As at July 31, 2018, the debt holders agreed to extend the repayment period until July 31, 2021; as such, the full amount due under the notes payable was reclassified to long-term notes payable. During the six-month period ended July 31, 2018, the Company accrued $48,377 (July 31, 2017 - $38,927) in interest expense on the notes payable to related parties. During the quarter ended July 31, 2018, debt owing by the Company to related parties under the demand notes payable of $773,789 was forgiven. The gain on the extinguishment of debt was recorded in additional paid-in capital. The details of forgiveness of the notes payable are as follows: July 31, 2018 Amounts due for Principal Accrued Interest Accrued interest on Note payable to the CEO $ -- $ 127,675 Accrued interest on Note payable to the CFO -- 5,777 Note payable including accrued interest to a major shareholder (c) 456,369 128,666 Accrued interest on Note payable to the company controlled by directors -- 55,302 Total notes payable to related parties (d) $ 456,369 $ 317,420 Transactions with Related Parties During the six-month periods ended July 31, 2018 and 2017, the Company incurred the following expenses with related parties: July 31, 2018 July 31, 2017 Consulting fees paid or accrued to a company owned by the CFO $ 30,000 $ 30,000 Rent fees paid or accrued to a company controlled by a major shareholder $ 5,329 $ 5,006

Unproved Mineral Properties Dis

Unproved Mineral Properties Disclosure	6 Months Ended
	Jul. 31, 2018
Notes
Unproved Mineral Properties Disclosure	NOTE 3 - UNPROVED MINERAL PROPERTIES Following are the schedules of the Company’s unproved mineral properties as at July 31, 2018: Mineral Claims January 31, 2018 Acquisition fees and property taxes paid Effect of foreign currency translation July 31, 2018 Farellon Project Farellon Alto 1-8 $ 443,027 $ 10,635 $ (24,386) $ 429,276 Quina 117,145 1,962 (6,407) 112,700 Exeter 92,741 26,837 (5,196) 114,382 652,913 39,434 (35,989) 656,358 Perth Project 41,703 8,543 (2,622) 47,624 Total Costs $ 694,616 $ 47,977 $ (38,611) $ 703,982

Common Stock Disclosure

Common Stock Disclosure	6 Months Ended
	Jul. 31, 2018
Notes
Common Stock Disclosure	NOTE 4- COMMON STOCK On April 20, 2018, the Company issued 2,500,000 units of the Company’s common stock at a price of $0.075 per unit for total proceeds of $187,500. Each unit consisted of one common share of the Company and one share purchase warrant entitling a holder to purchase one additional common share for a period of two years after closing at an exercise price of $0.1875 per share. The Company may accelerate the expiration date of the warrants if the daily volume weighted average share price of the Company’s common shares equals to or is greater than CAD$0.30 as posted on Canadian Securities Exchange, or USD$0.225 as posted on OTC Link alternative trading system (or such other stock exchange as the Company’s common shares are then trading on) for ten consecutive trading days. Warrants At July 31, 2018, the Company had 2,500,000 warrants issued and exercisable. Each warrant entitles its holder to purchase one common share for a period of two years expiring on April 20, 2020, at an exercise price of $0.1875 per share, subject to acceleration clause as described above.

Subsequent Events Disclosure

Subsequent Events Disclosure	6 Months Ended
	Jul. 31, 2018
Notes
Subsequent Events Disclosure	NOTE 5 - SUBSEQUENT EVENT Subsequent to July 31, 2018, the Company entered into a lease agreement (the “Lease Agreement”) with Mr. Lucas Godoy Ocayo (the “Lessee”) to lease out its Farellon Alto 1-8 property (the “Property”) in exchange for a 15% royalty on gross smelter returns of Cobalt extracted from the Property and a 10% royalty on gross smelter returns received from all other minerals extracted from the Property. The Lease Agreement is subject to minimum royalty payments of $1,500 per month, which the Lessee will be required to make once a three-month grace period is over. The Lease Agreement is for a period of three years and is renewable automatically for additional three-year consecutive periods. Based on the Lease Agreement, the Lessee is responsible for the exploitation arrangements such as camp costs, road repairs, permits, and man power.

Related-Party Transactions Di12

Related-Party Transactions Disclosure: Schedule of Related Party Transactions (Tables)	6 Months Ended
	Jul. 31, 2018
Tables/Schedules
Schedule of Related Party Transactions	July 31, 2018 January 31, 2018 Due to a company owned by an officer (a) $ -- $ 699,882 Due to a company controlled by directors (b) -- 371,303 Due to a company controlled by a major shareholder (a) -- 85,906 Due to a major shareholder (a) -- 39,707 Total due to related parties $ -- $ 1,196,798 (a) Amounts were unsecured, due on demand and bore no interest. (b) Amounts were unsecured, due on demand and bore interest at 10%.

Related-Party Transactions Di13

Related-Party Transactions Disclosure: Summary of Debt Forgiveness - Due to related parties (Tables)	6 Months Ended
	Jul. 31, 2018
Tables/Schedules
Summary of Debt Forgiveness - Due to related parties	July 31, 2018 Amounts due for services: Debt forgiven by the company owned by an officer $ 721,947 Debt forgiven by the company controlled by directors 361,163 Debt forgiven by the company controlled by a major shareholder 85,374 Debt forgiven by the major shareholder 37,571 Total debt forgiven by related parties $ 1,206,055

Related-Party Transactions Di14

Related-Party Transactions Disclosure: Schedule of notes payable issued to related parties (Tables)	6 Months Ended
	Jul. 31, 2018
Tables/Schedules
Schedule of notes payable issued to related parties	July 31, 2018 January 31, 2018 Note payable to the Chief Executive Officer (“CEO”) (c) $ 372,323 $ 478,355 Note payable to the Chief Financial Officer (“CFO”) (c) 8,500 13,724 Note payable to a major shareholder (c) -- 569,064 Note payable to a company controlled by directors (c) 99,172 157,232 Total notes payable to related parties (d) $ 479,995 $ 1,218,375 (c) Amounts are unsecured and bear interest at 8%. (d) As at July 31, 2018, the debt holders agreed to extend the repayment period until July 31, 2021; as such, the full amount due under the notes payable was reclassified to long-term notes payable.

Related-Party Transactions Di15

Related-Party Transactions Disclosure: Summary of Debt Forgiveness - Notes payable to related parties (Tables)	6 Months Ended
	Jul. 31, 2018
Tables/Schedules
Summary of Debt Forgiveness - Notes payable to related parties	July 31, 2018 Amounts due for Principal Accrued Interest Accrued interest on Note payable to the CEO $ -- $ 127,675 Accrued interest on Note payable to the CFO -- 5,777 Note payable including accrued interest to a major shareholder (c) 456,369 128,666 Accrued interest on Note payable to the company controlled by directors -- 55,302 Total notes payable to related parties (d) $ 456,369 $ 317,420

Related-Party Transactions Di16

Related-Party Transactions Disclosure: Schedule of Transactions with Related Parties (Tables)	6 Months Ended
	Jul. 31, 2018
Tables/Schedules
Schedule of Transactions with Related Parties	July 31, 2018 July 31, 2017 Consulting fees paid or accrued to a company owned by the CFO $ 30,000 $ 30,000 Rent fees paid or accrued to a company controlled by a major shareholder $ 5,329 $ 5,006

Unproved Mineral Properties D17

Unproved Mineral Properties Disclosure: Schedule of Unproved Propertiies (Tables)	6 Months Ended
	Jul. 31, 2018
Tables/Schedules
Schedule of Unproved Propertiies	Mineral Claims January 31, 2018 Acquisition fees and property taxes paid Effect of foreign currency translation July 31, 2018 Farellon Project Farellon Alto 1-8 $ 443,027 $ 10,635 $ (24,386) $ 429,276 Quina 117,145 1,962 (6,407) 112,700 Exeter 92,741 26,837 (5,196) 114,382 652,913 39,434 (35,989) 656,358 Perth Project 41,703 8,543 (2,622) 47,624 Total Costs $ 694,616 $ 47,977 $ (38,611) $ 703,982

Organization and Basis of Pre18

Organization and Basis of Presentation (Details)	Aug. 21, 2007
Details
Business acquisition, interest acquired	99.00%

Related-Party Transactions Di19

Related-Party Transactions Disclosure: Schedule of Related Party Transactions (Details)	Jan. 31, 2018USD ($)
Due to related parties	$ 1,196,798
Company Owned by Officer
Due to related parties	699,882
Company Controlled by Directors
Due to related parties	371,303
Company Controlled by Major Shareholder
Due to related parties	85,906
Major Shareholder
Due to related parties	$ 39,707

Related-Party Transactions Di20

Related-Party Transactions Disclosure (Details) - USD ($)	6 Months Ended
	Jul. 31, 2018	Jul. 31, 2017
Extinguishment of related party debt	$ 1,979,844
Due to related parties - current
Interest accrued with related parties	7,259	$ 7,060
Extinguishment of related party debt	1,206,055
Notes payable to related parties
Interest accrued with related parties	48,377	$ 38,927
Extinguishment of related party debt	$ 773,789

Related-Party Transactions Di21

Related-Party Transactions Disclosure: Schedule of notes payable issued to related parties (Details) - USD ($)	Jul. 31, 2018	Jan. 31, 2018
Long-term notes payable to related parties	$ 479,995
Notes payable to related parties		$ 1,218,375
CEO
Long-term notes payable to related parties	372,323
Notes payable to related parties		478,355
CFO
Long-term notes payable to related parties	8,500
Notes payable to related parties		13,724
Major Shareholder
Notes payable to related parties		569,064
Company Controlled by Directors
Long-term notes payable to related parties	$ 99,172
Notes payable to related parties		$ 157,232

Related-Party Transactions Di22

Related-Party Transactions Disclosure: Schedule of Transactions with Related Parties (Details) - USD ($)	6 Months Ended
	Jul. 31, 2018	Jul. 31, 2017
Consulting fees paid or accrued, Company Owned by the CFO
Related Party Transaction, Amounts of Transaction	$ 30,000	$ 30,000
Rent fees paid or accrued, Company Controlled by Major Shareholder
Related Party Transaction, Amounts of Transaction	$ 5,329	$ 5,006

Unproved Mineral Properties D23

Unproved Mineral Properties Disclosure: Schedule of Unproved Propertiies (Details) - USD ($)	6 Months Ended
	Jul. 31, 2018	Jan. 31, 2018
Mineral claims, balance	$ 703,982	$ 694,616
Property taxes and acquisition fees paid	47,977
Mineral claims, effect of foreign currency translation	(38,611)
Farellon Project
Mineral claims, balance	656,358	652,913
Property taxes and acquisition fees paid	39,434
Mineral claims, effect of foreign currency translation	(35,989)
Perth Project
Mineral claims, balance	47,624	$ 41,703
Property taxes and acquisition fees paid	8,543
Mineral claims, effect of foreign currency translation	$ (2,622)

Common Stock Disclosure (Detail

Common Stock Disclosure (Details)	6 Months Ended
	Jul. 31, 2018USD ($)$ / sharesshares
Common stock issued for cash, proceeds | $	$ 187,500
Warrants issued and exercisable | shares	2,500,000
Exercise price per warrant | $ / shares	$ 0.1875
Common stock issued with units for cash
Shares of common stock issued | shares	2,500,000
Price per Stock sold | $ / shares	$ 0.075
Common stock issued for cash, proceeds | $	$ 187,500