2. Summary of Significant Accounting Policies | 12 Months Ended |
Apr. 30, 2014 |
Notes | ' |
2. Summary of Significant Accounting Policies | ' |
2. Summary of Significant Accounting Policies |
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(a) Basis of Presentation |
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These consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States. The Company’s fiscal year end is April 30. These consolidated financial statements include the accounts of the Company and its wholly owned subsidiary, Long Canyon Gold Resources Corp. (“Long Canyon”). All inter-company transactions and balances have been eliminated. |
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(b) Exploration Stage Company |
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Since the Company does not yet have an established commercially minable deposit or reserves for extraction and is not yet engaged in the exploitation or production of a mineral deposit, it is considered to be in the exploration stage. |
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(c) Exploration Costs |
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Since the Company is deemed to be in the exploration stage, all sampling, metallurgical, engineering, contractor costs, and efforts to obtain mineral rights have been charged to expense as incurred. |
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(d) Basic and Diluted Net Loss per Share |
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The Company computes net loss per share in accordance with ASC 260, Earnings per Share, which requires presentation of both basic and diluted loss per share (“EPS”) on the face of the statement of operations. Basic EPS is computed by dividing net loss available to common shareholders (numerator) by the weighted average number of common shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period including stock options, using the treasury stock method, convertible preferred stock, and convertible debt, using the if-converted method. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all potentially dilutive common shares if their effect is antidilutive. As of April 30, 2014, convertible debt and related accrued interest payable were convertible into approximately 5,391,000 common shares of the Company. |
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Since we had no dilutive effect of stock options, warrants or convertible debt for the years ended April 30, 2014 and 2013, basic weighted average number of common shares outstanding is the same as our diluted weighted average number of common shares outstanding. |
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(e) Revenue Recognition |
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Revenues from the sale of products will be recorded when the product is shipped, title and risk of loss have transferred to the purchaser, payment terms are fixed or determinable and payment is reasonably assured. Revenues from service contracts will be recognized when performance of the service is complete or over the term of the contract. |
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(f) Foreign Currency Translation |
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The Company’s financial instruments and reporting currency is the United States dollar. Monetary assets and liabilities denominated in foreign currencies are translated in accordance with ASC 830, Foreign Currency Translation Matters, using the exchange rate prevailing at the balance sheet date. Gains and losses arising on translation or settlement of foreign currency denominated transactions or balances are included in the determination of net income. |
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(g) Income Taxes |
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The Company accounts for income taxes using the asset and liability method in accordance with ASC 740, Income Taxes. The asset and liability method provides that deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities and for operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using the currently enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company records a valuation allowance to reduce deferred tax assets to the amount that is believed more likely than not to be realized. |
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(h) Use of Estimates |
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The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected. |
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(i) Financial Instruments |
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Pursuant to ASC 820, Fair Value Measurements and Disclosures and ASC 825, Financial Instruments, an entity is required to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value using a hierarchy based on the level of independent, objective evidence when measuring fair value using a hierarch based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument’s categorization with the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The hierarchy prioritized the inputs into three levels that may be used to measure fair value: |
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Level 1 |
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Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities. |
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Level 2 |
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Level 2 applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in markets that are not active. |
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Level 3 |
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Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities. |
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As of April 30, 2014, the Company believes the amounts reported for cash, payables, accrued liabilities and amounts due to related parties approximate their fair values due to the nature or duration of these instruments. In addition, the fair value of certain of the Company’s convertible notes was not determinable since there has been no current market value for the Company’s common stock. Accordingly, no beneficial conversion feature or derivative liabilities were determinable or have been recognized related to these convertible notes payable. |
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The convertible note payable to an institutional investor entered into in February 2014 and related derivative liability are measured at fair value on a recurring basis and estimated as follows at April 30, 2014: |
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| Total | Level 1 | Level 2 | Level 3 |
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Derivative liability | $ 63,359 | $ - | $ - | $ 63,359 |
Convertible notes payable | 42,500 | - | - | 42,500 |
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Total liabilities measured at fair value | $ 105,859 | $ - | $ - | $ 105,859 |
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We had no liabilities measured at fair value at April 30, 2013. |
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The Company’s accounting policy for equity instruments issued to consultants and vendors in exchange for goods and services follows the provisions of ASC 505, Equity Based Payments to Non Employees. The measurement date for the fair value of the equity instruments issued is determined at the earlier of (i) the date at which a commitment for performance by the consultant or vendor is reached or (ii) the date at which the consultant or vendor’s performance is complete. |
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(j) Non-Monetary Transactions |
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All issuances of the Company’s common stock for non-cash consideration have been assigned a dollar amount equaling either the market value of the shares issued or the value of consideration received whichever is more readily determinable. The majority of the non-cash consideration received pertains to services rendered by consultants and others and has been valued at the market value of the shares issued. |
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The Company’s accounting policy for equity instruments issued to consultants and vendors in exchange for goods and services follows the provisions of ASC 505, Equity Based Payments to Non Employees. The measurement date for the fair value of the equity instruments issued is determined at the earlier of (i) the date at which a commitment for performance by the consultant or vendor is reached or (ii) the date at which the consultant or vendor’s performance is complete. |
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In the case of equity instruments issued to consultants, the fair value of the equity instrument is recognized over the term of the consulting agreement. |
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(k) Comprehensive Loss |
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ASC 220, Comprehensive Income, establishes standards for the reporting and display of comprehensive loss and its components in the financial statements. As at April 30, 2014 and 2013, the Company has no items that represent comprehensive loss and, therefore, has not included a schedule of comprehensive loss in the financial statements. |
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(l) Cash and Cash Equivalents |
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The Company considers all investments purchased with original maturity of three or fewer months to be cash equivalents. |