Strategic Mining (SMNG) 10-Q 2012 Q1 Quarterly report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the Quarterly Period Ended March 31, 2012
o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Transition Period From   to

Commission File Number 000-53434

STRATEGIC MINING CORP.

(Name of small business issuer specified in its charter)

Wyoming	88-0432539
(State or other jurisdiction of	(I.R.S. Employer Identification No.)
incorporation or organization)
36 Toronto Street, Suite 1170          Toronto, Ontario, Canada	M5C 2C5
(Address of principal executive offices)	(Zip Code)

 416 840-9843

 (Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days:   Yes   T    No   £

Indicate by check mark whether the registrant is a large accelerated filer, a non –accelerated filer, or a smaller reporting company.  See definitions of large accelerated filer, accelerated filer and smaller reporting company in Section 12b-2 of the Exchange Act.

Large accelerated filer	¨	Accelerated filer	¨
Non-accelerated filer	¨	Smaller reporting company	x
(Do not check if a smaller reporting company)

As of May 18, 2012, the issuer had 250,895,851 shares of common stock and 20,634,741 shares of preferred stock outstanding.

Transitional Small Business Disclosure Format:   Yes   £     No   T

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act): Yes   £     No   T

STRATEGIC MINING CORP.

FORM 10-Q

THREE MONTHS ENDED MARCH 31, 2012 AND 2011

__________________

TABLE OF CONTENTS

___________________

		Page
PART I - FINANCIAL INFORMATION
Item 1.	Financial Statements (unaudited)	1
	Balance Sheets	2
	Statements of Operations and Comprehensive Loss	3
	Statements of Cash Flows	4
	Notes to Financial Statements	5-10
Item 2.	Management’s Discussion & Analysis of Financial Condition and Results of Operations	11
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	15
Item 4.	Controls and Procedures	15
PART II -- OTHER INFORMATION
Item 1.	Legal Proceedings	15
Item 1A.	Rick Factors	16
Item 2.	Unregistered Sales of Equity securities and Use of Proceeds	16
Item 3.	Defaults Upon Senior Securities	16
Item 4.	Removed and Reserved	16
Item 5	Other Information	16
Item 6.	Exhibits	16
Signatures		17

PART I – FINANCIAL INFORMATION

Item 1.  Financial Statements

STRATEGIC MINING CORP.

(An Exploration Stage Company)

FINANCIAL STATEMENTS

31 MARCH 2012

1

STRATEGIC MINING CORP.

(An Exploration Stage Company)

BALANCE SHEETS

AS OF

(Expressed in United States Dollars)

	31 March  2012 (Unaudited)			31 December 2011 (Audited)
ASSETS
Current Assets
Cash	$	17,195		$	532
Refundable permit fee		35,000			35,000
Total Current Assets		52,195			35,532
Long Term Assets
Exploration properties		728,250			728,250
Total Assets	$	780,445		$	763,782
LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY
Current Liabilities
Accounts payable	$	358,359		$	267,557
Accrued interest		20,244			13,851
Convertible promissory notes		245,208			-
Loans payable to related parties		178,818			273,726
Total Liabilities		802,629			555,134
Stockholders' (Deficit) Equity
Preferred stock $0.0001 par value; Authorized 25,000,000; Issued and outstanding 20,634,741 (20,634,741 - December 31 2011)		2,063			2,063
Common stock $.001 par value; Authorized 400,000,000; Issued and outstanding 181,236,792 (164,843,294 - December 31 2011)		181,237			164,844
Additional paid-in capital		2,648,891			2,749,535
Deficit accumulated during the exploration stage		(2,854,375	)		(2,707,794	)
Total Stockholders' (Deficit) Equity		(22,184	)		208,648
Total Liabilities and Stockholders' (Deficit) Equity	$	780,445		$	763,782

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

2

STRATEGIC MINING CORP.

(An Exploration Stage Company)

STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(Expressed in United States Dollars)

(Unaudited)

	For the Three months Ended 31 March 2012			For the Three months  Ended 31 March 2011			For the Period from Inception (17 January 2007) to 31 March 2012
EXPENSES
Consulting	$	63,827		$	38,833		$	910,210
Exploration costs		60,459			68,828			1,013,485
Professional fees		15,562			7,677			155,376
Interest and bank charges		6,733			8,041			207,228
Incorporation tax		-			-			11,197
Depreciation		-			9,188			18,374
TOTAL OPERATING EXPENSES		146,581			132,567			2,315,870
LOSS FROM OPERATIONS		(146,581	)		(132,567	)		(2,315,870	)
Impairment of equipment		-			-			(78,807	)
Impairment of exploration properties		-			-			(459,698	)
NET LOSS ANDCOMPREHENSIVE LOSS	$	(146,581	)		(132,567	)		(2,854,375	)
LOSS PER WEIGHTED NUMBER OF SHARES OUTSTANDING - BASIC AND DILUTED	$	0.00		$	0.00
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING - BASIC AND DILUTED		161,355,642			158,343,294

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

3

STRATEGIC MINING CORP.

(An Exploration Stage Company)

STATEMENTS OF CASH FLOWS

(Expressed in United States Dollars)

(Unaudited)

	For the Three months Ended 31 March 2012			For the Three months Ended 31 March 2011			For the Period from Inception (17 January 2007) to 31 March 2012
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(146,581	)	$	(132,567	)	$	(2,854,375	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation		-			9,188			18,374
Impairment of exploration properties and equipment		-			-			538,505
Stock-based compensation		-			5,000			72,742
Shares issued for services		20,000			-			145,799
Interest accrued on converted loans		6,393			-			56,583
Changes in operating assets and liabilities:
Prepaid deposits and refundable permit fees		-			(5,000	)		(35,000	)
Accounts payable		7,851			20,042			721,127
CASH USED IN OPERATING ACTIVITIES		(112,337	)		(103,337	)		(1,336,245	)
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of exploration properties		-			(25,000	)		(538,879	)
CASH FLOWS USED IN INVESTING ACTIVITIES		-			(25,000	)		(538,879	)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from convertible promissory notes		107,500			-			107,500
Proceeds from related party loans		21,500			125,911			1,539,719
Issuance of common stock		-			-			245,100
CASH FLOWS PROVIDED BY FINANCING ACTIVITIES		129,000			125,911			1,892,319
NET INCREASE (DECREASE) IN CASH		16,663			(2,426	)		17,195
CASH, BEGINNING OF PERIOD		532			2,600			-
CASH, END OF PERIOD	$	17,195		$	174		$	17,195

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

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Non-Cash Investing and Financing Activities:
Shares issued for acquisition of exploration properties	$	-		$	10,000	$	10,000
Convertible promissory notes issued in exchange for debt assumptions	$	248,708		$	-	$	248,708
Loans payable to related parties exchanged for convertible promissory notes	$	(248,708	)	$	-	$	(248,708	)
Shares issued on conversion of loans	$	111,000		$	1,663,064	$	1,774,064
Shares issued in settlement of accounts payable	$	-		$	31,918	$	31,918
Debt assumed in exchange for share cancellations	$	215,250		$	-	$	215,250
Shares cancelled for debt assumptions	$	(215,250	)			$	(215,250	)

1.   NATURE OF BUSINESS, ORGANIZATION AND BASIS OF PRESENTATION

Nature of Business

Strategic Mining Corp. is engaged in the business of exploration and development of gold properties in Guinea, West Africa and Vietnam, Southeast Asia.

Organization

Strategic Mining Corp.(the “Company”) was originally incorporated in Delaware on 24 August 1995 as Infocenter Inc. On 28 February 2000, the Company changed its name to Green Dolphin Systems Corporation and new corporate officers were appointed.  On 10 January 2006, the Board of Directors adopted a resolution authorizing the assignment of all the assets of Green Dolphin Systems Corporation to PentaDeltex, Ltd., a Canadian corporation, in exchange for the forgiveness of $263,717 in debt owing to Nicholas Plessas and an additional $153,683 owing to PentaDeltex, and assumption by PentaDeltex of all obligations owed by Green Dolphin Systems Corporation to suppliers and on other accounts payable.  As the result of the above settlements of debts, Green Dolphin Systems Corporation effectively ceased operations on 10 January 2006 with the discontinued operations of its U.S. subsidiary.  On 1 December 2006, the Company changed its name to Gold Coast Mining Corporation and new corporate officers were appointed shortly after.  On 17 January 2007 the Company issued 97,100,000 shares of its common stock to unrelated parties in exchange for various mining rights.  The issuance of the 97,100,000 represented approximately 97.5% of the then outstanding shares.  The transaction resulted in a change in control of the entity.  The issuance of shares and change in control has been accounted for as a reverse acquisition followed by a recapitalization of the Company’s equity structure.  The stockholders obtaining control in the transaction is considered the accounting acquirer for financial reporting purposes.  Accordingly, the equity section of the financial statements have been presented displaying the recapitalization of shares held by the individuals obtaining control followed by the issuance of shares to the minority stockholders.

On 13 November 2009, the Company was reincorporated in the State of Wyoming. On 23 November 2009, the Company changed its name to Strategic Mining Corp.

Basis of Presentation

The accompanying unaudited interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and the SEC instructions to Form 10-Q. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included.  

Operating results for the three months ended 31 March 2012 are not necessarily indicative of the results that may be expected for the year ending 31 December 2011.  For further information, refer to the financial statements and footnotes thereto included in the Company’s annual report on Form 10-K for the year ended 31 December 2011.

The Company is in the exploration stage in accordance with Financial Accounting Standards Board (“FASB”)Accounting Standards Codification (“ASC”) Topic No. 915 “Development Stage Entities”).

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2.  GOING CONCERN

The Company's financial statements are presented on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business.  The Company has experienced losses from operations since inception and has working capital deficiencies that raise substantial doubt as to its ability to continue as a going concern.

The Company's existence is dependent upon management's ability to raise capital and/or to successfully market and sell its products. Management anticipates the Company will attain profitable status and improve its liquidity through continued business development and additional equity investment in the Company.

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.

3.  RECENT ACCOUNTING PRONOUNCEMENTS

There were various updates recently issued, most of which represented technical corrections to the accounting literature or application to specific industries and are not expected to a have a material impact on the Company's consolidated financial position, results of operations or cash flows.

4.  PLANNED EXPLORATION

Guinea, West Africa

The Company entered into a joint venture agreement with Gold River of Africa Company (“Gold River”) for the Siguiri property on 15 January 2007.  Gold River is a small mineral exploration company active in Guinea.  Through this joint venture, the Company holds 100% interest in a two year exploration permit for this property covering 103 square kilometers in the Siguiri region of Guinea and issued by the Republic of Guinea to Gold River. The Company acquired the interest in exchange for shares of common stock. The Guinea government is entitled to a 15% royalty on all extracted minerals.

An extension of this permit was applied for in May 2011 by Gold River, but was in review at the end of 2011 due to the change in governments in Guinea during mid-2011 and subsequent reviews by the government of mining laws and all exploration permits.  The Company paid $35,000 to Gold River to pay the Guinea Ministry of Mines for the application of the permit extension, on behalf of the Company. The permit extension was granted by the Ministry of Mines in April 2012.

Nat Son, Vietnam

The Company entered into a binding letter of intent to purchase a 51% interest in a joint venture (“Joint Venture”) with Ba Dinh Mineral  Company Limited, a Vietnamese company engaged in mineral exploration in that country,  to explore for minerals per license # 39/QD-UBND (dated 9 June 2009) issued to Ba Dinh Construction and Investment Joint Stock Company by the Peoples Committee of Hoa Binh Province, Vietnam. This license is valid for five years from the issue date and is renewable for an additional four years according to current mining laws in Vietnam. The permitted area covers 40 square hectares in Nat Son Commune, Hoa Binh Province Vietnam.

A dispute arose in October, 2011 concerning the status of joint work on the Nat Son property between the Company and Ba Dinh Mineral Company Limited (“Ba Dinh”) as a result of key partners in Ba Dinh disagreeing with the Company about the status of their stock holdings in the Company.  Management in consultation with legal counsel has determined that the arguments by those key partners have no legal merit and may expose those partners to litigation should they not desist and should they fail to comply with documentation requests from the Company.  Ba Dinh has been notified of this finding. The Company is awaiting their response and delivery of key property documents on Nat Son to the Company for its records and safe-keeping.  This dispute may result in a disruption or change of our drilling plan on the Nat Son property for 2012.

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Legal counsel in Vietnam was retained during first quarter of 2012 to investigate the status of the exploration license and any property ownership for the Nat Son project and Joint Venture with Ba Dinh.  The exploration license was found to be valid and active until 8 June 2014 in the name of Ba Dinh Construction Investment and Consulting Joint Stock Company.  Results of the investigation from our Vietnam legal counsel are pending to confirm the status of the joint venture, and the ownership or lease of the underlying property.  There is not enough information available on the legal status of the Joint Venture and the Nat Son property to determine whether or not Ba Dinh has performed according to the requirements of the binding letter of intent.  Therefore, the project has been written down in the fourth quarter of 2011 to allow for possible permanent impairment of the project.  Management’s opinion on this matter is that the project still is potentially viable, but that all JV activities with Ba Dinh may need to cease if a mutually agreeable solution cannot be reached.  Should the Joint Venture be formally dissolved, the Company may pursue legal options in Vietnam during 2012 to recover payments made to Ba Dinh for expenses that they have not documented adequately or for which official government documentation has not been provided for the project.

 5.   PROPERTY AND EQUIPMENT

As of 31 March 2012 and December 31, 2011, respectively, equipment is as follows:

	2012			2011
Infrastructure development	$	5,931		$	5,931
Telecom equipment		13,125			13,125
Equipment		47,500			47,500
Vehicle		30,625			30,625
Total equipment		97,181			97,181
Less: accumulated depreciation		(18,374	)		(18,374	)
Less; Impairment of equipment		(78,807	)		(78,807	)
Equipment, net	$	-		$	-

Depreciation expense for the three months ended 31 March 2012 and for the year ended 31 December 2011 was $Nil and $18,374, respectively. During the year ended 31 December 2011, the Company recorded an impairment of property and equipment of $78,807. The impairment was based on an assessment by management which concluded that an impairment loss on obsolete and lost items was considered necessary.

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6.   LOANS PAYABLE TO RELATED PARTIES

As of 31 March 2012 and 31 December 2011, respectively, the Company has loans payable to related parties as follows:

	31 March		31 December
	2012		2011
AGMC LTD.	$	16,000	$	16,000
Frank Brodzik		162,818		191,726
Magma Gold Corporation		-		66,000
Total loans payable	$	178,818	$	273,726

The above loans are due to stockholders or companies controlled by stockholders of the Company.  All loans payable bear interest at 4% per annum, are unsecured and due on demand.

7.   CONVERTIBLE PROMISSORY NOTES

As of 31 March 2012 and 31 December 2011, respectively, the Company has convertible promissory notes payable as follows:

	31 March		31 December
	2012		2011
Asher Enterprises Inc.		72,500		-
Redwood Management, LLC		172,708		-
Total loans payable	$	245,208	$	-

Asher Enterprises Inc. (“Asher”)

A convertible promissory note was issued to Asher Enterprises Inc. during the first quarter of 2012 in exchange for $50,000 in cash.  The convertible promissory note bears interest at 8% per annum, matures on 6 November 2012, can be converted to shares of common stock after a six month restriction period and is unsecured.  The Company has the option within 120 days of the date of the agreement to prepay the convertible promissory note at 140% of the principal amount including accrued interest or within 121-180 days of the agreement to prepay the convertible promissory note at 150% of the principal amount including accrued interest.  If any amount of principal or interest remains unpaid at the maturity date, the remaining amount will bear interest at a rate of 22% per annum. Asher has the option, at any time or from time to time, to convert the principal amount of the convertible promissory note including accrued interest to shares of the Company’s common stock at a price of 55% of the average lowest three days trading price out of 17 days, determined on the then current trading market for the Company’s common stock, prior to the conversion date.

A second convertible promissory note was issued to Asher during the first quarter of 2012 in exchange for $22,500 in cash.  The convertible promissory note bears interest at 8% per annum, matures on 12 December 2012, can be converted to shares of common stock after a six month restriction period and is unsecured.  The Company has the option within 120 days of the date of the agreement to prepay the convertible promissory note at 140% of the principal amount including accrued interest or within 121-180 days of the agreement to prepay the convertible promissory note at 150% of the principal amount including accrued interest.  If any amount of principal or interest remains unpaid at the maturity date, the remaining amount will bear interest at a rate of 22% per annum. Asher has the option, at any time or from time to time, to convert the principal amount of the convertible promissory note including accrued interest to shares of the Company’s common stock at a price of 55% of the average lowest three days trading price out of 17 days, determined on the then current trading market for the Company’s common stock, prior to the conversion date.

8

The two convertible notes issued to Asher during the first quarter of 2012 for a total of $72,500 are potentially in default, and as a result the Company may owe $108,750 (which includes interest and penalty on the notes) if Asher fully pursues the default issue.

Redwood Management, LLC (“Redwood”)

A convertible debenture was issued to Redwood  for $70,000 during the first quarter of 2012, in which the Company received $35,000 in cash during the three months ended 31 March 2012.  The convertible debenture bears interest at 12% per annum, matures on 16 March 2013, can be converted to shares of common stock after a nine month restriction period and is unsecured. The Company has the option before maturity to prepay the convertible note at 125% of the principal amount including accrued interest.  Redwood has the option, at any time or from time to time, to convert the principal amount including accrued interest to shares of the Company’s common stock at a price of 55% of the lowest traded price, determined on the then current trading market for the Company’s common stock, for ten trading days prior to the conversion date.

During the first quarter of 2012 the Company entered into a debt assumption agreement with Redwood for assumption of $182,708 of debt originally held by Frank Brodzik.  This assumption was for original debt older than six months and was convertible to common stock in portions and with timing at the discretion of the assuming company. In March 2012, the Company issued 12,588,652 shares of common stock to Redwood in exchange for $45,000of this debt assumption based upon 55% of the lowest trading price of the stock within the five days preceding a conversion notice.

8.   CAPITAL STOCK

During the first quarter of 2012 the Company entered into a debt assumption agreement with Asher for assumption of $66,000 of debt originally held by Magma Gold Corporation. This assumption was for original debt older than six months and was convertible to common stock in portions and with timing at the discretion of the assuming company. In March 2012 the Company issued 15,829,295 shares of common stock to Asher in exchange for this debt assumption based upon 55% of the average of the three lowest trading prices of the stock within the week preceding a conversion notice.

During the first quarter of 2012 the Company entered into a debt assumption agreement with Redwood for assumption of $182,708 of debt originally held by Frank Brodzik.  This assumption was for original debt older than six months and was convertible to common stock in portions and with timing at the discretion of the assuming company. In March 2012, the Company issued 12,588,652 shares of common stock to Redwood in exchange for $45,000of this debt assumption based upon 55% of the lowest trading price of the stock within the five days preceding a conversion notice.

In March 2012, the Company cancelled 14,350,030 shares of common stock which were previously issued in the prior fiscal year in settlement of loans payable to related parties.  The Company has assumed the original debt in the amount of $215,250 in exchange for the cancellation of the shares.

The process of initiating a Reserve Equity Financing (the “REF Agreement”) with AGS Capital Corp. (“AGS”), for a total available financing of $5,000,000, commenced in the first quarter of 2012.  This required issuance of 2,325,581 in restricted shares of common stock to AGS in exchange for $20,000 in services to allow for preparation of the related documents and discussions.

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9.   RELATED PARTY TRANSACTIONS

The following transactions with related parties were in the normal course of operations and were measured at the exchange value, which represented the amount of consideration established and agreed to by the related parties.

Related party transactions not disclosed elsewhere in these financial statements are as follows:

On 22 October 2009, the Company entered into a binding letter of intent with Ba Dinh to acquire a 51% interest in the Nat Son property.  Subsequently, Todd Sterck, the former president of Ba Dinh, became our Chief Executive Officer. Prior to the letter of intent, Mr. Sterck had no interest or affiliation with the Company.   Mr. Sterck resigned from Ba Dinh on July 22, 2010.  In May 2011, Mr. Sterck resigned as Chief Executive Officer and in August 2011 resigned as director of the Company.

The Company entered into a joint venture with Gold River of Africa Company (“Gold River”) for the Siguiri property on 15 January 2007.  Gold River is a small mineral exploration company active in Guinea.  Through this joint venture, the Company holds 100% interest in a two year exploration permit for this property covering 103 square kilometers in the Siguiri region of Guinea and issued by the Republic of Guinea #2009/1031 dated May 2009 to Gold River.  Gold River is also a stockholder of the Company.

Included in accounts payable as of 31 March 2012 is $334,949 (31 December 2011 - $227,037) due to various current and former directors, officers and stockholders of the Company for consulting fees rendered and/or expense reimbursements, subject to normal trade terms.

During the three months ended 31 March 2012, the Company recorded $30,202 (three months ended 31 March 2011 - $20,000) of consulting fees to various current and former directors, officers and stockholders of the Company.

During the three months ended 31 March 2012, the Company recorded $54,091 (three months ended 31 March 2011 - $21,600) of exploration costs to companies controlled by various current and former directors and stockholders of the Company.

10.   GENERAL BUSINESS RISKS

A significant portion of the Company's assets are located in the Republic of Guinea and Vietnam and changes in the political and economic policies of these governments could have a significant impact upon what business the Company may be able to conduct in these countries and accordingly on the results of its operations and financial condition. The business operations may be negatively affected by the current and future political environment in these countries. The governments of the Republic of Guinea and Vietnam exert substantial influence and control over the manner in which the Company must conduct their business activities. The Company’s ability to operate in these countries may be affected by changes in laws and regulations, including those relating to taxation, import and export tariffs, raw materials, environmental regulations, land use rights, exploration properties and other matters.

11.   SUBSEQUENT EVENTS

The permit extension for the Siguiri property in Guinea has been granted by the Ministry of Mines based upon the extension letter dated 12 April 2012.  The Company’s copy of the permit has not been received yet.

The Company received $35,000 in cash from Redwood on 17 April 2012 as the remainder of the outstanding payment for the convertible debenture.

In the second quarter of 2012 the Company issued an additional 38,680,125 shares of common stock to Redwood in exchange for an additional $76,000 of the debt assumption with Redwood discussed in note 8.

Additional restricted shares of common stock of 30,978,934 were issued to AGS in the second quarter 2012 as commitment shares required under the REF Agreement.

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ITEM 2:  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Certain statements contained in this quarterly filing, including, without limitation, statements containing the words “believes”, “anticipates”, “expects” and words of similar import, constitute forward-looking statements. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the Company, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements.

Such factors include, among others, the following: international, national and local general economic and market conditions: demographic changes; the ability of the Company to sustain, manage or forecast its growth; the ability of the Company to successfully make and integrate acquisitions; raw material costs and availability; new product development and introduction; existing government regulations and changes in, or the failure to comply with, government regulations; adverse publicity; competition; the loss of significant customers or suppliers; fluctuations and difficulty in forecasting operating results; changes in business strategy or development plans; business disruptions; the ability to attract and retain qualified personnel; the ability to protect technology; and other factors referenced in this and previous filings.

Given these uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements. The following discussion and analysis should be read in conjunction with our Financial Statements and notes appearing elsewhere in this report.

Results of Operations

The Company is an exploration stage mining company with no revenues since entering the exploration stage.   

Three months ended March 31, 2012 Compared to the Three months ended March31, 2011

Revenues

There were no revenues in either three month period ended March31, 2012 and March 31, 2011.

Operating Expenses

Interest expense for the three months ended March 31, 2012 was $6,733compared to an expense of $8,041for the three months ended March 31, 2011.  The reduction was as a result of the decrease of the outstanding loan balances.

Professional fees for the three months ended March 31, 2012 were $15,562 compared to $7,677 for the three months ended March 31, 2011.  The increase during the three months ended March 31, 2012 was primarily due to the Company incurring higher expenses for disclosure and reporting requirements for completion of its securities filings.

Exploration costs for the three months ended March 31, 2012 were $60,459 and $68,828for the three months ended March 31, 2011.  The decrease during the three months ended March 31, 2012, was primarily due to less exploration activity in Nat Son, Vietnam and Siguiri, Guinea.

Depreciation expense for the three months ended March 31, 2012 was $Nil and $9,188 for the three months ended March 31, 2011.  The equipment was depreciated in the prior year but was written off during the fourth quarter of 2011.

Consulting fees for the three months ended March 31, 2012 was $63,827 and $38,833 for the three months ended March 31, 2011.  The expenses during the three months ended March 31, 2012 were primarily from the consulting contract granted to Ken Baird commencing on May 23, 2011and ending on November 2, 2011 for $6,000 per month, management consulting by Douglas Peters as invoiced during this period, and consulting fees invoiced by Atlantic Mining LLC.

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Net Income (Loss)

The Company incurred a net loss of $146,581, for the three months ended March 31, 2012, as compared to a net loss of $132,567 for the three months ended March 31, 2011.  The increase in net loss is primarily attributed to the increase in consulting fees and professional fees.

Plan of Operations

Our current plan of operations is to complete further exploration, drilling and mapping on our various properties, as follows:

Guinea, West Africa

The Company entered into a joint venture agreement with Gold River of Africa Company (“Gold River”) for the Siguiri property on January 15, 2007.  Gold River is a small mineral exploration company active in Guinea.  Through this joint venture, the Company holds 100% interest in a two year exploration permit for this property covering 103 square kilometers in the Siguiri region of Guinea and issued by the Republic of Guinea to Gold River. The Company acquired the interest in exchange for shares of common stock. The Guinea government is entitled to a 15% royalty on all extracted minerals. 

An extension of this permit was applied for in May 2011 by Gold River, but still was in review during the first quarter of 2012 due to the change in governments in Guinea during mid-2011 and subsequent reviews by the government of mining laws and all exploration permits.  The Company paid $35,000 to Gold River to pay the Guinea Ministry of Mines for the application of the permit extension, on behalf of the Company. The permit extension for the Siguiri property in Guinea has been granted by the Ministry of Mines based upon the extension letter dated April 12, 2012.  The Company’s copy of the permit has not been received yet.

The geologist’s report on the Siguiri exploration permit recommended a two stage program of further exploration. The proposed plan for the first stage entails completion of a three month program of termite mound sampling, geological mapping, and geophysical and geochemical surveys budgeted at $630,000. The second stage entails a twelve month program of reverse circulation drilling sampling in areas showing positive assays, totaling $1.2 million.  It is anticipated that the first stage will commence in the first half of 2012, and the second will continue for a 15 to 18 month duration tentatively to be completed in 2013. During the three month rainy season, no work will be performed.

In addition, upon arrangement of financing for such operations, it is anticipated that equipment and personnel necessary to begin placer mining operations within the Siguiri permit area will be identified and engaged as possible to bring available placer gold deposits in the property into production as soon as possible.  Exact timing of these operations is dependent on timing of financing, availability of equipment and personnel in a timely fashion, and permitting of such operations by the Guinea government.

Nat Son, Vietnam

The Company entered into a binding letter of intent to purchase a 51% interest in a joint venture (“Joint Venture”) with Ba Dinh Mineral  Company Limited, a Vietnamese company engaged in mineral exploration in that country,  to explore for minerals per license # 39/QD-UBND (dated June 9, 2009) issued to Ba Dinh Construction and Investment Joint Stock Company by the Peoples Committee of Hoa Binh Province, Vietnam. This license is valid for five years from the issue date and is renewable for an additional four years according to current mining laws in Vietnam. The permitted area covers 40 square hectares in Nat Son Commune, Hoa Binh Province Vietnam

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A dispute arose in October, 2011 concerning the status of joint work on the Nat Son property between the Company and Ba DinhMineral Company Limited(“Ba Dinh”) as a result of key partners in Ba Dinh disagreeing with the Company about the status of their stock holdings in the Company.  Management in consultation with legal counsel has determined that the arguments by those key partners have no legal merit and may expose those partners to litigation should they not desist and should they fail to comply with documentation requests from the Company.  Ba Dinh has been notified of this finding. The Company is awaiting their response and delivery of key property documents on Nat Son to the Company for its records and safe-keeping.  This dispute may result in a disruption or change of our drilling plan on the Nat Son property for 2012.

Legal counsel in Vietnam was retained during first quarter of 2012 to investigate the status of the exploration license and any property ownership for the Nat Son project and Joint Venture  with Ba Dinh Mineral Company Limited.  The exploration license was found to be valid and active until June 8, 2014 in the name of Ba Dinh Construction Investment and Consulting Joint Stock Company, a different legal entity.  Results of the investigation from our Vietnam legal counsel are pending to confirm the status of the Joint Venture, the  and the ownership or lease of the underlying property.  There is not enough information available on the legal status of the Joint Venture and the Nat Son property to determine whether or not Ba Dinh has performed according to the requirements of the binding letter of intent.  Therefore, the project has been written down in the 4th quarter of 2011 to allow for possible permanent impairment of the project.  Management’s opinion on this matter is that the project still is potentially viable, but that all Joint Venture activities with Ba Dinh may need to cease if a mutually agreeable solution cannot be reached.  Should the Joint Venture be formally dissolved, the Company may pursue legal options in Vietnam during 2012 to recover payments made to Ba Dinh for expenses that they have not documented adequately or for which official government documentation has not been provided for the project.

The geologist’s report on the Nat Son property recommended a detailed drill program to test the subsurface potential of the property.  The recommended work program will include geological mapping, geochemical and geophysical surveys and a drilling program spanning twelve months budgeted at $1.6 million. A small drilling program began in mid-2011, but was suspended due to equipment and personnel problems and extremely adverse weather conditions.  The program was planned to re-commence by Winter of 2011, however, operations were suspended due to a dispute that arose with Ba Dinh in October 2011.   This dispute may result in a disruption or change of our drilling plan on the Nat Son property for 2012.  Assuming positive resolution of this dispute, a drilling program would be initiated that would require another twelve months. There will be a work stoppage during the two month rainy season

The amount of work undertaken, and timing of the work, is dependent upon the successful raising of equity capital to fund the projects.  Should the capital be available, it is anticipated that the recommended work programs outlined will take between two to three years to accomplish.

During the next twelve months, the Company plans to satisfy its cash requirements by additional equity financing. The Company intends to undertake private placements of its common stock in order to raise future development and operating capital. The Company depends upon capital to be derived from future financing activities such as subsequent offerings of its stock. There can be no assurance that the Company will be successful in raising the capital it requires through the sale of its common stock.

The Company does not contemplate any product research and development, but it does anticipate additional exploration and development costs on its properties. The Company anticipates an increase in labor force to explore and develop its properties which will be sought from outside contract labor.

Liquidity and Capital Resources

As of March 31, 2012, we had an accumulated deficit of $2,854,375 and a working capital deficit of $750,434. For the three months ended March 31, 2012, net cash used in operating activities amounted to $112,337, as compared to $103,337 for the three months ended March 31, 2011. The increase in cash used in operating activities was due to additional professional fees and consulting fees versus the previous comparable three month quarter from 2011.

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As of March 31, 2012, we had no material commitments for capital expenditures other than for those expenditures incurred for the exploration operations.

A total of $142,500 was raised through equity financing through April 30, 2012 for company operations.  Also during the first quarter of 2012, an additional $248,782 in Company debt was transferred from previous debt holders to debt assumption companies for subsequent conversion in 2012 to stock.  These debt assumptions will ultimately remove this debt from the Company accounts as those conversions to shares of common stock take place.

We will need to raise additional capital through equity or debt financing in the next twelve months in order to fund our planned operations and repay, restructure, or refinance our debt obligations. Our current operating plans for the next fiscal year are to meet our existing customer commitments, expand our exploration and engineering capabilities, and continue to develop innovative solutions for our customers. Although we will have to raise additional funds through the issuance of debt and/or equity during the next twelve months, there can be no assurance that financing will be available, or if available, that such financing will be upon terms acceptable to us.  The process of initiating a Reserve Equity Financing (the “REF Agreement”) with AGS Capital Corp. (“AGS”), for a total available financing of $5,000,000, commenced in the first quarter of 2012.  This required issuance of 2,325,581 in restricted shares of common stock to AGS in exchange for $20,000 in services to allow for preparation of the related documents and discussions. Additional restricted shares of common stock of 30,978,934 were issued to AGS in the second quarter 2012 as commitment shares required under the REF Agreement.  Advances on the total available financing have not been requested pending filing of this first quarter 2012 10Q.

We will need to raise additional capital through equity or debt financing in the next twelve months in order to fund our planned operations and repay, restructure or refinance our debt obligations. Our current operating plans for the next fiscal year are to meet our existing customer commitments, expand our marketing and sales and engineering capabilities, and continue to develop innovative solutions for our customers. Although we will have to raise additional funds through the issuance of debt and/or equity during the next twelve months, there can be no assurance that financing will be available, or if available, that such financing will be upon terms acceptable to us.

Critical Accounting Estimates and Policies

The discussion and analysis of our financial condition and plan of operations is based upon our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities.

On an on-going basis, we evaluate our estimates including, among others, those affecting revenue, the allowance for doubtful accounts, the salability of inventory and the useful lives of tangible and intangible assets. The discussion below is intended as a brief discussion of some of the judgments and uncertainties that can impact the application of these policies and the specific dollar amounts reported on our financial statements. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form our basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions, or if management made different judgments or utilized different estimates. Many of our estimates or judgments are based on anticipated future events or performance, and as such are forward-looking in nature, and are subject to many risks and uncertainties, including those discussed below and elsewhere in this Registration Statement. We do not undertake any obligation to update or revise this discussion to reflect any future events or circumstances.

Our significant accounting policies are summarized in our Form 10K dated May 15, 2012.  While all these significant accounting policies impact its financial condition and results of operations, the Company views certain of these policies as critical. Policies determined to be critical are those policies that have the most significant impact on the Company’s consolidated financial statements and require management to use a greater degree of judgment and estimates. Actual results may differ from those estimates. Our management believes that given current facts and circumstances, it is unlikely that applying any other reasonable judgments or estimate methodologies would cause effect on our consolidated results of operations, financial position or liquidity for the periods presented in this report.

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ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company is not subject to certain market risks, including changes in interest rates and currency exchange rates.

ITEM 4: CONTROLS AND PROCEDURES

Evaluation of disclosure controls and procedures

Under the supervision and with the participation of our management, including our President, Chief Executive Officer/Chief Financial Officer (the “Certifying Officer”) we evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”). Based upon that evaluation, the Certifying Officer concluded that, as of the end of the period covered by this report, our disclosure controls and procedures were not effective.

We have identified the following material weaknesses in internal control over financial reporting:

●        Segregation of Duties – As a result of limited resources, we did not maintain proper segregation of incompatible duties. Namely the lack of an audit committee, an understaffed financial and accounting function and the need for additional personnel to prepare and analyze financial information in a timely manner and to allow review and on-going monitoring and enhancement of our controls. The effect of the lack of segregation of duties potentially affects multiple processes and procedures.

●        Maintenance of Current Accounting Records – This weakness specifically affects the payments and purchase cycle and therefore we failed to maintain effective internal controls over the completeness and cut off of accounts payable, expenses and other capital transactions.

We are in the continuous process of improving our internal control over financial reporting in an effort to eliminate these material weaknesses through improved supervision and training of our staff, but additional effort is needed to fully remedy these deficiencies. Management has engaged a Certified Public Accountant as a consultant to assist with the financial reporting process in an effort to mitigate some of the identified weaknesses. The Company is still in its exploration stage and intends on hiring the necessary staff to address the weaknesses once full operations have commenced.

Changes in Internal Control over Financial Reporting

There have been no changes in internal control over financial reporting since the last fiscal quarter of calendar year 2011, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II – OTHER INFORMATION

Item 1. Legal Proceedings

A dispute arose in October, 2011 concerning the status of joint work on the Nat Son property in Vietnam between the Company and Ba Dinh Mineral Company Limited as a result of key partners in Ba Dinh disagreeing with the Company about the status of their stock holdings in the Company.  Management, in consultation with legal counsel, has determined that the arguments by those key partners have no legal merit and may expose those partners to litigation should they not desist and should they fail to comply with documentation requests from the Company.  Ba Dinh has been notified of these findings and has not responded to further inquires. The Company is awaiting their response and delivery of key property documents on Nat Son to the Company for its records and safe-keeping.  This dispute may result in a disruption or change of our drilling plan on the Nat Son property for 2012.  To date, Ba Dinh has not completed a transfer of the title to the Nat Son property to the Company, per the agreement between the parties, and the Company has sought the assistance of Vietnamese counsel to enforce the binding letter of intent.  To the best of our knowledge, no other legal action by or against the Company has been threatened

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Item 1A Risk Factors

There are no material changes to the risk factors disclosed in our Form 10K dated May 15, 2012, which are hereby incorporated herein by reference.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

The following securities were issued by Strategic Mining Corporation within the fiscal year and were not registered under the Securities Act:

During the first quarter of 2012 the Company entered into a debt assumption agreement with Asher Enterprises Inc. for assumption of $66,000 of debt originally held by Magma Gold Corporation. This assumption was for original debt older than six months and was convertible to common stock in portions and with timing at the discretion of the assuming company.  In March 2012 the Company issued 15,829,295 shares of common stock to Asher Enterprises Inc. in exchange for this debt assumption.

During the first quarter of 2012 the Company entered into a debt assumption agreement with Redwood Management LLC for assumption of $182,708 of debt originally held by Frank Brodzik.  This assumption was for original debt older than six months and was convertible to common stock in portions and with timing at the discretion of the assuming company. The Company issued 51,268,777 shares of common stock to Redwood Management LLC through May 14, 2012 in exchange for $121,000 of this debt assumption.

In March 2012, the Company cancelled 14,350,030 shares of common stock which were previously issued in the prior fiscal year in settlement of loans payable to related parties. The Company has assumed the original debt in the amount of $215,250 in exchange for the cancellation of the shares.

The process of initiating a Reserve Equity Financing (the “REF Agreement”) with AGS Capital Corp., for a total available financing of $5,000,000, commenced in the first quarter of 2012.  This required issuance of 2,325,581 in restricted common stock to AGS Capital Corp. in exchange for $20,000 in services to allow for preparation of the related documents and discussions.

Additional restricted shares of common stock of 30,978,934 were issued to AGS Capital Corp. in the second quarter 2012 as commitment required under the REF Agreement.  Advances on the total available financing have not been requested pending completion of the 10K filing and subsequent first quarter 10Q filing.

Proceeds from the above-referenced sales were used for administrative and corporate expenses, including legal, accounting, consulting and finance activities, as well as research, travel and acquisition and exploration expenses.

Item 3. Defaults Upon Senior Securities

None.

Item 5. Other Information

None.

Item 6.Exhibits.

Exhibit No.	DESCRIPTION
31.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2	Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

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SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	STRATEGIC MINING CORP.
Date:  May 21, 2012	By:	/s/ Douglas C. Peters
		Douglas C. Peters
		President, Chief Executive Officer, Director
Date: May 21 , 2012	By:	/s/ Ian Lambert
		Ian Lambert
		Chief Financial Officer, Director

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