| NOTE 9 - Convertible Debentures | On March 8, 2010, the Company closed a note
purchase agreement with an accredited investor pursuant to which the Company sold a $50,000 convertible note in a private placement
transaction. In the transaction, the Company received proceeds of $35,000 and the investor also paid $15,000 of consulting expense
on behalf of the Company. The convertible note was due and payable on December 31, 2010 with an interest rate of 10% per annum.
The note is convertible at the option of the holder into our common stock at a fixed conversion price of $3.70, subject to adjustment
for stock splits and combinations. Accrued interest of $10,735 and $15,704 were outstanding at April 30, 2012 and April 30, 2013
respectively. As of April 30, 2013 and 2012 this note is in default. On January 28, 2011 and February 1, 2011, the
Company closed a Convertible Note Agreement totaling $514,900 in principal amount of 25% Convertible Note (the "Notes")
due on the first anniversary of the date of the Note, to a group of institutional and high net worth investors. The Notes are convertible
into the Company's common stock at the holders' option at $1.00 per common share. The holder may accelerate repayment of the Note
upon sale of the Carpenter Creek prospect. In addition, the Company issued 643,625 warrants to purchase shares of the Company's
common stock at an exercise price of $1.00 per share on or before three years from the repayment or conversion date. All but $25,000
of the promissory notes plus interest were paid in full on March 23, 2011. As of April 30, 2013 and 2012 the remaining $25,000
was in default. The Company allocated the proceeds from the
issuance of the Notes to the warrants and the Notes based on their fair market values at the date of issuance using the Black-Scholes
model. The value assigned to the warrants of $514,900 was recorded as an increase in additional paid-in capital and was limited
to the note balance. The assignment of a value to the warrants resulted in a loan discount being recorded for the same amount.
The discount will be amortized over the original one-year term of the Notes as additional interest expense. Upon repayment of the
notes on March 23, 2011, $514,900 of the loan discount was taken as an interest expense. On April 25, and May 7, 2011, the Company closed
a note purchase agreement with various investors pursuant to which the Company sold an aggregate of $680,000 notes in a private
placement transaction. The notes are due and payable on or before October 14, 2011 and carry a 25% interest rate due in full at
issuance. The computed interest of $170,000 was added to the balance of the note and recorded as debt discount which will be taken
as interest expense over the life of the notes. The note is convertible upon default at the option of the holder into our common
stock at a fixed conversion price of $0.40, subject to adjustment for stock splits and combinations. In addition, the Company issued
1,062,500 warrants to purchase shares of the Company's common stock at an exercise price of $0.80 per share on or before three
years from the issuance date. The Company allocated the proceeds from the
issuance of the notes to the warrants and the notes based on their fair market values at the date of issuance using the Black-Scholes
model. The value assigned to the warrants of $680,000 was recorded as an increase in additional paid-in capital and was limited
to the note balance. The assignment of a value to the warrants resulted in a loan discount being recorded for the same amount.
The discount will be amortized over the original six-month term of the notes as additional interest expense. On October 14, 2011, $106,250 of these notes
plus interest was converted into common stock. As consideration for the extension of the balance of the notes, the Company issued
989,188 warrants to purchase shares of the Company's common stock at an exercise price of $0.20 per share on or before April 25,
2014. The warrants were valued at the date of issuance using the Black-Scholes model. The value assigned to the warrants of $195,646
was recorded as an increase in additional paid-in capital. The assignment of a value to the warrants resulted in a financing fee
being recorded for the same amount. On September 9, 2011, the Company closed a
note purchase agreement with an accredited investor pursuant to which the Company sold a $300,000 note in a private placement transaction.
The note is due and payable on September 19, 2012, carries a 25% interest rate due in full at issuance. The computed interest of
$75,000 was added to the balance of the note and recorded as additional debt discount. The note is secured with 1,000,000 of the
Company's common stock. In addition, the Company issued 375,000 warrants to purchase shares of the Company's common stock at an
exercise price of $0.16 per share on or before three years from the issuance date. The Company allocated the proceeds from the
issuance of the note to the warrants and the note based on their fair market values at the date of issuance using the Black-Scholes
model. The value assigned to the warrants of $55,934 was recorded as an increase in additional paid-in capital. The assignment
of a value to the warrants resulted in a loan discount being recorded for the same amount. The discount will be amortized over
the original one year term of the Note as additional interest expense. During the fiscal years ended April 30, 2013 and 2012, $20,173
and $35,761 was amortized into interest expense leaving a remaining balance of $0 at April 30, 2013. On October 28, 2011, the Company closed a note
purchase agreement with an accredited investor pursuant to which the Company sold a $500,000 note in a private placement transaction.
The note is due and payable on October 31, 2012, carries a 25% interest rate due in full at issuance. The computed interest of
$125,000 was added to the balance of the note and recorded as additional debt discount. The note is secured with 1,665,000 of the
Company's common stock. In addition, the Company issued 625,000 warrants to purchase shares of the Company's common stock at an
exercise price of $0.16 per share on or before three years from the issuance date. The Company allocated the proceeds from the
issuance of the note to the warrants and the note based on their fair market values at the date of issuance using the Black-Scholes
model. The value assigned to the warrants of $124,400 was recorded as an increase in additional paid-in capital. The assignment
of a value to the warrants resulted in a loan discount being recorded for the same amount. The discount will be amortized over
the original one year term of the Note as additional interest expense. During the fiscal years ended April 30, 2013 and 2012, $62,031
and $62,369 was amortized into interest expense leaving a remaining balance of $0 at April 30, 2013. On December 8, 2011, the Company closed a note
purchase agreement with an accredited investor pursuant to which the Company sold a $100,000 note in a private placement transaction.
The Company is required to redeem the note on that date which is the earlier of: (i) the closing of any Company equity financing
in excess of $2,250,000 or (ii) December 8, 2012 at a payment equal to $125,000. The Company at its option may elect to redeem
the note at such payment amount on any earlier date. In addition to redemption of the note, the Company agreed to redeem an additional
amount of debt owed to the investor in the amount of $100,000 in principal and $25,000 in fees out of additional funding from any
financing. Such funding shall be applied to the $500,000 note dated October 28, 2011 issued by the Company to the investor. The
note is secured with 330,000 shares of the Company's common stock. In addition, the Company issued 125,000 warrants to purchase
shares of the Company's common stock at an exercise price of $0.20 per share on or before three years from the issuance date. The Company allocated the proceeds from the
issuance of the note to the warrants and the note based on their fair market values at the date of issuance using the Black-Scholes
model. The value assigned to the warrants of $28,369 was recorded as an increase in additional paid-in capital. The assignment
of a value to the warrants resulted in a loan discount being recorded for the same amount. The discount will be amortized over
the original one year term of the Note as additional interest expense. During the fiscal years ended April 30, 2013 and 2012, $17,207
and $11,162 was amortized into interest expense leaving a remaining balance of $0 at April 30, 2013. On January 13, 2012, the Company closed a note
purchase agreement with an accredited investor pursuant to which the Company sold a $100,000 note in a private placement transaction.
The note is due and payable on January 12, 2013, carries a 25% interest rate due in full at issuance. The computed interest of
$25,000 was added to the balance of the note and recorded as additional debt discount. The note is secured with 330,000 of the
Company's common stock. In addition, the Company issued 125,000 warrants to purchase shares of the Company's common stock at an
exercise price of $.075 per share on or before three years from the issuance date. The Company allocated the proceeds from the
issuance of the note to the warrants and the note based on their fair market values at the date of issuance using the Black-Scholes
model. The value assigned to the warrants of $19,817 was recorded as an increase in additional paid-in capital. The assignment
of a value to the warrants resulted in a loan discount being recorded for the same amount. The discount will be amortized over
the original one year term of the Note as additional interest expense. During the fiscal years ended April 30, 2013 and 2012, $13,953
and $5,864 was amortized into interest expense leaving a remaining balance of $0 at April 30, 2013. On February 17, 2012, $43,750 of these notes
plus interest was converted into common stock, and on April 24, 2012, $368,750 of these notes plus interest was converted into
common stock. At April 30, 2012 the stock associated to $368,750 notes and interest remained unissued. Capital stock payable in
the amount of $415,592 and loss on conversion of the debentures of $46,842 was recorded. On April 25, 2012, the holder of the above
note elected to convert their note and accrued interest into 625,000 common shares under the same terms as provided to investors
in the March 2, 2012 private placement. The shares remained unissued at April 30, 2012. In addition, the Company issued 625,000
warrants to purchase shares of the Company's common stock at an exercise price of $0.30 per share on or before three years from
the issuance date. Since the debt was converted at a higher price
than under the terms of the note agreement, a gain on conversion of shares of $250,000 was reported. The Company allocated the
proceeds from the issuance of the shares to the warrants and the shares on their fair market values at the date of conversion using
the Black-Scholes model. The value assigned to the warrants of $148,215 was recorded as a reduction in the gain realized on the
conversion of the shares and an increase in additional paid-in capital. In addition, the beneficial conversion feature of $80,183
was fully expensed on April 25, 2012 due to the conversion of the note into common shares. On March 1, 2012, the Company issued a $1,200,000
convertible debenture as part of an amendment to its acquisition of the Hunza mine. The note is due and payable on March 1, 2017
and carries a 6% interest rate. The note is convertible at the option of the holder into our common stock at a fixed conversion
price of $0.30. On March 8, 2012, $538,200 of the note was converted into 1,794,000 of the Company's common stock. No gain or loss
was recognized on the conversion as it was within the terms of the convertible debenture. On May 1, 2012, $681,800 of the note
was converted into 2,206,000 of the Company's common stock. No gain or loss was recognized on the conversion as it was within the
terms of the convertible debenture. The Company recorded the intrinsic value of
the beneficial conversion of $200,000 as debt discount and will amortize the discount if the note is converted or over the life
of the convertible debenture. As a result of the conversion of part of the convertible debenture, $89,700 of the beneficial conversion
debt discount was recognized as expense on March 8, 2012. During the fiscal year ended April 30, 2013, the remaining discount balance
of $106,767 was amortized into interest expense with no remaining balance as of April 30, 2013. On April 25, 2012, the notes dated September
9, 2011, October 28, 2011 and December 8, 2011 and $375,000 from the April 25, 2011 offering were consolidated into a new $1,500,000
note. The note is due and payable on July 31, 2013, carry an additional 10% interest rate due in full at maturity. The computed
interest of $150,000 was added to the balance of the note and recorded as additional debt discount. During the fiscal years ended
April 30, 2013 and 2012, $98,827 and $1,354, respectively, of the discount was amortized into interest expense with a remaining
discount balance at April 30, 2013 of $49,819. The note is convertible at the option of the holder into our common stock at a fixed
conversion price of $0.20, subject to adjustment for stock splits and combinations. The note is secured with 2,995,000 of the Company's
common stock. The Company recorded the intrinsic value of
the beneficial conversion of $330,000 as debt discount and will amortize the discount over the original fifteen month term of the
Note. During the fiscal years ended April 30, 2013 and 2012, $217,419 and $2,978, respectively, of the discount was amortized into
interest expense with a remaining discount balance at April 30, 2013 of $109,603. On August 1, 2012, the Corporation entered
into a $10,000 convertible note agreement with BNL Family Partners, Mr. Bruce N. Lemons, a director of the Corporation, is a partner
of BNL Family Partners, The debentures are convertible into common shares at the holder's option at $0.20 per common share. The
holders may accelerate repayment of the promissory notes upon the Corporation raising additional capital of $150,000. In addition,
the Corporation issued 10,000 warrants at an exercise price of $0.30 per common share until August 1, 2015 valued at $994. On August
21, 2012, the Corporation repaid the $10,000 debenture. The Company allocated the proceeds from the
issuance of the note to the warrants and the note based on their fair market values at the date of issuance using the Black-Scholes
model. The value assigned to the warrants of $994 was recorded as an increase in additional paid-in capital. The assignment of
a value to the warrants resulted in a loan discount being recorded for the same amount. The discount will be amortized over the
original one year term of the Note as additional interest expense. During the fiscal year ended April 30, 2013, $636 was recorded
as amortization of the debt discount into interest expense with a remaining discount balance of $353 as of April 30, 2013. On August 1, 2012, the Company entered into
a $13,000 convertible note agreement with Delavega Trading Ltd., Mr. Nabil Katabi, a director of the Corporation, is a control
person of Delavega Trading Ltd. The debenture carries a 20% interest rate until maturity at September 30, 2013 and is convertible
into common shares at the holder's option at $0.20 per common share. The computed interest of $2,600 was added to the balance of
the note and recorded as additional debt discount. During the fiscal year ended April 30, 2013, $1,664 was recorded as amortization
of the debt discount into interest expense with a remaining balance of $936 as of April 30, 2013. In addition, the Corporation
issued 13,000 Warrants at an exercise price of $0.30 per Common Share until August 1, 2015 valued at $1,292. The Company allocated the proceeds from the
issuance of the note to the warrants and the note based on their fair market values at the date of issuance using the Black-Scholes
model. The value assigned to the warrants of $1,292 was recorded as an increase in additional paid-in capital. The assignment of
a value to the warrants resulted in a loan discount being recorded for the same amount. The discount will be amortized over the
original one year term of the Note as additional interest expense. During the fiscal year ended April 30, 2013, $827 was recorded
as amortization of the debt discount into interest expense with a remaining discount balance of $465 as of April 30, 2013. On August 15, 2012, the Corporation entered
into a $100,000 convertible note agreement with an unrelated party. The debenture is subject to a 20% placement fee payable to
the holder irrespective of the date redeemed, matures on October 31, 2013 and is convertible into common shares at the holder's
option at $0.20 per Common Share. Pursuant to the agreement, the Corporation also (i) amended the conversion rate of the March
2011 Series A Preferred Stock ("Preferred Stock") from $0.40 to $0.20 per Common Share, (ii) amended the maturity date
of the April 2012 Debenture from July 31, 2013 to October 31, 2013, (iii) amended the exercise price of the Warrant agreement of
April 2011 to purchase 468,750 Common Shares from $0.80 to $0.20, and (iv) issued 120,000 Warrants, to the holder of the August
15, 2012 Debenture, with an exercise price of $0.30 per Common Share until August 15, 2015 valued at $14,232. The computed interest
of $20,000 was added to the balance of the note and recorded as additional debt discount. During the fiscal year ended April 30,
2013, $11,674 was recorded as amortization of the debt discount into interest expense with a remaining discount balance of $8,326
as of April 30, 2013. As a result of the August 15, 2012 amendment
of the Preferred Stock exercise price, $300,000 of additional paid in capital was recognized as an additional interest expense
in conjunction with the proceeds received from the note agreement. As a result of the August 25, 2012 amendment to the exercise
price of the warrant agreement, $2,694 of additional paid in capital was recognized as an additional interest expense in conjunction
with the proceeds received from the note agreement. The Company allocated the proceeds from the
issuance of the note to the warrants and the note based on their fair market values at the date of issuance using the Black-Scholes
model. The value assigned to the warrants of $14,232 was recorded as an increase in additional paid-in capital. The assignment
of a value to the warrants resulted in a loan discount being recorded for the same amount. The discount will be amortized over
the original one year term of the Note as additional interest expense. During the fiscal year ended April 30, 2013, $8,307 was
amortized into interest expense with a remaining discount balance of $5,925 as of April 30, 2013. On September 15, 2012, the Corporation entered
into a $4,500 convertible note agreement with BNL Family Partners, LLC. Mr. Bruce N. Lemons, a director of the Corporation, is
a partner of BNL Family Partners. The debentures carry a 20% interest rate until maturity at September 30, 2013 and are convertible
into common shares at the holder's option at $0.20 per common share. The holders may accelerate repayment of the promissory notes
upon the Corporation raising additional capital of $150,000. The computed interest of $900 was added to the balance of the note
and recorded as additional debt discount. During the fiscal year ended April 30, 2013, $497 was recorded as amortization of the
debt discount into interest expense with a remaining discount balance of $403 as of April 30, 2013. In addition, the Corporation
issued 4,500 Warrants at an exercise price of $0.30 per Common Share until September 15, 2015 valued at $800. The Company allocated the proceeds from the
issuance of the note to the warrants and the note based on their fair market values at the date of issuance using the Black-Scholes
model. The value assigned to the warrants of $800 was recorded as an increase in additional paid-in capital. The assignment of
a value to the warrants resulted in a loan discount being recorded for the same amount. The discount will be amortized over the
original one year term of the Note as additional interest expense. During the fiscal year ended April 30, 2013, $442 was recorded
as amortization of the debt discount into interest expense with a remaining discount balance of $358 as of April 30, 2013. On December 17, 2012, the Company entered into
a $6,500 convertible note agreement with Delavega Trading Ltd., Mr. Nabil Katabi, a director of the Corporation, is a control person
of Delavega Trading Ltd. The debenture carries a 20% interest rate until maturity at December 17, 2013 and is convertible into
common shares at the holder's option at $0.20 per common share. The computed interest of $1,300 was added to the balance of the
note and recorded as additional debt discount. During the fiscal year ended April 30, 2013, $485 was recorded as amortization of
the debt discount into interest expense with a remaining discount balance of $815 as of April 30, 2013. In addition, the Corporation
issued 6,500 Warrants at an exercise price of $0.30 per Common Share until December 17, 2015 valued at $549. The Company allocated the proceeds from the
issuance of the note to the warrants and the note based on their fair market values at the date of issuance using the Black-Scholes
model. The value assigned to the warrants of $549 was recorded as an increase in additional paid-in capital. The assignment of
a value to the warrants resulted in a loan discount being recorded for the same amount. The discount will be amortized over the
original one year term of the Note as additional interest expense. During the fiscal year ended April 30, 2013, $205 was recorded
as amortization of the debt discount into interest expense with a remaining discount balance of $344 as of April 30, 2013. On January 4, 2013, the Company entered into
a $10,000 convertible note agreement with BNL Family Partners (a related party); Mr. Bruce N. Lemons, a director of the Company,
is a partner of BNL Family Partners. The holder may accelerate repayment of the promissory note upon the Corporation raising additional
capital of $150,000 and are convertible into Common Shares at the holder's option at $0.20 per Common Share. In addition, the Corporation
issued 10,000 warrants to purchase Common Shares at an exercise price of $0.30 per Common Share until January 4, 2016 On January
10, 2013 the note was repaid in full. The Company allocated the proceeds from the
issuance of the note to the warrants and the note based on their fair market values at the date of issuance using the Black-Scholes
model. The value assigned to the warrants of $780 was recorded as an increase in additional paid-in capital. The assignment of
a value to the warrants resulted in a loan discount being recorded for the same amount. The discount will be amortized over the
original one year term of the Note as additional interest expense. During the fiscal year ended April 30, 2013, $780 was recorded
as amortization of the debt discount into interest expense with a remaining discount balance at April 30, 2013 of $0. On January 2, 2013, the Company closed a note
purchase agreement with an accredited investor pursuant to which the Company sold a $120,000 note in a private placement transaction.
The note is due and payable on March 1, 2013, carries a 1.87% per month interest rate due and payable on March 1, 2013 and included
300,000 shares of the Company's common stock. If the note is not paid by March 1, 2013, the interest rate is increased by an additional
30% annually. The note is secured with 900,000 of the Company's common stock which were pledged and owned by Jack Hanks, the Company's
President and CEO. The 300,000 shares were valued at $0.10 per share, the closing price of the Company stock on January 2, 2013,
and recorded as a $30,000 increase to discount on notes payable and an increase in common stock payable. The discount will be amortized
over the term of the note. During the fiscal year ended April 30, 2013, $30,000 was amortized into interest expense with a remaining
discount balance of $0 as of April 30, 2013. On February 1, 2013, the Company entered into
a $150,000 convertible note agreement with an unrelated party. The debentures carry a 20% interest rate until maturity at February
1, 2014 and are convertible into Common Shares at the holder's option at $0.20 per Common Share. The note is convertible upon default
at the option of the holder into our common stock at a fixed conversion price of $0.20, subject to adjustment for stock splits
and combinations. The Company recorded as a $30,000 increase to debt discount on notes payable from the additional accrued interest.
The discount will be amortized over the term of the note. During the fiscal year ended April 30, 2013, $7,500 was amortized into
interest expense with a remaining discount balance of $22,500 as of April 30, 2013. In addition, the Company issued 150,000 warrants
to purchase shares of the Company's common stock at an exercise price of $0.20 per share on or before three years from the repayment
or conversion date. The Company allocated the proceeds from the
issuance of the note to the warrants and the note based on their fair market values at the date of issuance using the Black-Scholes
model. The value assigned to the warrants of $16,103 was recorded as an increase in additional paid-in capital. The assignment
of a value to the warrants resulted in a loan discount being recorded for the same amount. The discount will be amortized over
the original one year term of the Note as additional interest expense. During the fiscal year ended April 30, 2013, $4,026 was
recorded as amortization of the debt discount into interest expense with a remaining discount balance of $12,077 as of April 30,
2013. |
