U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2005
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from
Commission File No. 000-24262
GREAT WEST GOLD, INC.
(Exact name of small business issuer as specified in its charter)
Wyoming 91-1363905
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
c/o St James Resource Management Limited, 16 Hanover Square,
London, W1S 1HT, United Kingdom
(Address of Principal Executive Offices)
+ 44 207 408 9451
(Issuer's telephone number)
(Former name, address and fiscal year, if changed since last report)
Check whether the issuer (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 issuer was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Yes [ X] No [ ]
State the number of shares outstanding of each of the issuer's classes of common
equity, as of August 24, 2005: 12,927,193,050 shares of common stock
outstanding, $0.0001 par value.
Part I-- FINANCIAL INFORMATION
Item 1. Financial Statements
Item 2. Management's Discussion and Analysis of Financial Condition
Item 3. Control and Procedures
Part II-- OTHER INFORMATION
Item 1. Legal Proceedings
Item 2. Changes in Securities
Item 3. Defaults Upon Senior Securities
Item 4. Submission of Matters to a Vote of Security Holders
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K
Signature
Item 1. Financial Information
- -----------------------------
BASIS OF PRESENTATION
The accompanying reviewed financial statements are presented in accordance with
generally accepted accounting principles for interim financial information and
the instructions to Form 10-QSB and item 310 under subpart A of Regulation S-B.
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 only of normal
occurring accruals) considered necessary in order to make the financial
statements not misleading, have been included. Operating results for the six
months ended June 30, 2005 are not necessarily indicative of results that may be
expected for the year ending December 31, 2005. The financial statements are
presented on the accrual basis.
2
GREAT WEST GOLD, INC.
(An Exploration Stage Company)
CONDENDSED BALANCE SHEET
For the period ended June 30, 2005
2005
---------------------
(Unaudited)
ASSETS
Current Assets:
Cash $ -
Total Current Assets -
---------------------
TOTAL ASSETS $ -
=====================
LIABILITIES AND SHAREHOLDERS' DEFICENCY
Current Liabilities:
Accounts payable $ 49,106
Related party payable 1,507,426
---------------------
Total Current Liabilities 1,556,532
---------------------
Shareholders' Deficiency:
Common stock, $0.0001 par value, 20,000,000,000
shares authorized, 10,341,754,427 issued and outstanding 1,034,176
Additional paid-in capital 11,776,329
Accumulated deficit (14,367,037)
---------------------
Total Shareholders' Deficiency (1,556,532)
---------------------
Total Liabilities and Shareholders' Deficiency $ -
=====================
3
GREAT WEST GOLD, INC.
(An Exploration Stage Company)
CONDENSED STATEMENTS OF OPERATIONS
Period from
January 7, 2004
Three Months Ended June 30, Six Months Ended June 30, (inception) to
2005 2004 2005 2004 June 30, 2005
-------------- ------------- ------------- ------------- -------------
Current Assets:
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
NET SALES $ - $ - $ - $ - $ -
Expenses
General and administrative expenses 235,219 650,045 496,072 662,315 5,911,082
Arrangement fees 400,000 - 400,000 - 400,000
Accounting fees 7,500 8,797 15,000 14,797 42,407
Consulting - 12,000 9,678 29,252 4,605,644
Legal fees 3,495 15,136 6,675 50,797 77,120
Exploration costs 20,000 - 40,000 - 3,330,784
-------------- ------------- ------------- ------------- --------------
LOSS BEFORE PROVISION FOR INCOME TAXES 666,214 685,978 967,425 757,161 14,367,707
Provision for income taxes - - - - -
-------------- ------------- ------------- ------------- --------------
Net loss $ (666,214) $ (685,978) $ (967,425) $ (757,161) $ (14,367,707)
============== ============= ============== ============= ==============
Loss per share - basic and diluted $ (0.00) $ (0.00) $ (0.00) $ (0.00) $ (0.00)
============== ============= ============== ============= ==============
Weighted average number of common
shares outstanding - basic and diluted 10,341,754,427 2,072,392,403 10,341,754,427 2,044,812,403 10,341,754,427
============== ============= ============== ============= ==============
4
GREAT WEST GOLD, INC.
(An Exploration Stage Company)
STATEMENTS OF CASH FLOWS
Period from
January 7, 2004
Six Months Ended Jun3 30, (inception) to
2005 2004 March 31, 2005
-------------- -------------- -----------------
(Unaudited) (Unaudited)
Current Assets:
Cash Flows From Operating Activities:
Net Loss $ (967,425) $ (757,161) $ (14,367,037)
Issuance of common stock for services 22,500 7,541,450
Adjustments to reconcile net income to net
cash provided by operating activities:
Loss on disposal of assets - 446 -
Changes in current assets and liabilities:
Other current assets - - (945)
Accounts payable 15,100 3,119 49,106
Related party payable 952,325 1,507,426
-------------- -------------- -----------------
Net Cash Provided by (Used in) Operating Activities (731,096) (5,270,000) (5,270,000)
-------------- -------------- -----------------
Cash Flows from Investing Activities
Issuance of shareholder advances - (750,000) -
Repayment of shareholder advance - 713,008 -
Purchase of mining rights - (20,000) -
-------------- -------------- -----------------
Net Cash Used in Investing Activities - (56,992) -
-------------- -------------- -----------------
Cash Flows from Financing Activities:
Proceeds from sale of shares - 750,000
Issuance of common stock - 31,782 5,270,000
-------------- -------------- -----------------
Net cash provided by Financing Activities 781,782 5,270,000
-------------- -------------- -----------------
Net Decrease in Cash and Cash Equivalents (6,306) -
Cash and Cash Equivalents - Beginning of Period $ 6,575 $ -
-------------- -------------- -----------------
Cash and Cash Equivalents - End of Period $ 269 $ -
============== ============== =================
Non cash transactions:
Common Stock dividend $ 197,469 $ - $ -
============== ============== =================
5
GREAT WEST GOLD, INC.
(A Exploration Stage Company)
NOTES TO THE CONDENSED FINANCIAL STATEMENTS
June 30, 2005
(Unaudited)
NOTE A - DESCRIPTION OF THE BUSINESS
Business Activity
- -----------------
In January 2004 the Company was acquired by three foreign companies in a reverse
merger. Since Adven, Inc. was a dormant company, and West Africa Gold, Inc. (the
surviving company from the reverse merger) is expanding its activities into
mining in West Africa, the Company is in the exploration stage. As the Company
is in the exploration stage all exploration costs will be expensed.
NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Interim Financial Statements
- ----------------------------
The interim financial statements presented herein have been prepared pursuant to
the rules and regulations of the Securities and Exchange Commission ("SEC").
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with accounting principles generally accepted
in the United States of America have been condensed or omitted pursuant to such
rules and regulations. The interim financial statements should be read in
conjunction with the Company's annual financial statements, notes and accounting
policies included in the Company's annual report on Form 10-KSB for the year
ended December 31, 2004 as filed with the SEC. In the opinion of management, all
adjustments (consisting only of normal recurring adjustments) which are
necessary to provide a fair presentation of financial position as of June 30,
2005 and the related operating results and cash flows for the interim period
presented have been made. The results of operations, for the period presented
are not necessarily indicative of the results to be expected for the year.
Mineral Property Costs
- ----------------------
Mineral property acquisition, exploration and development costs are expensed as
incurred until such time as economic reserves are quantified. From that time
forward, the Company will capitalize all costs to the extent that future cash
flows from mineral reserves equal or exceed the costs deferred. The deferred
costs will be amortized over the recoverable reserves when a property reaches
commercial production. Costs related to site restoration programs will be
accrued over the life of the project. To date the Company has not established
any proven reserves on its mineral deposits.
NOTE C - SUBSEQUENT EVENTS
Dividend
- --------
On July 21, 2005, the Company approved a 1-4 Stock dividend with a record date
of August 1, 2005 and a pay date of August 8, 2005.
This dividend increased the Company's outstanding shares to 12,927,193,050.
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Item 2. Management's Discussion and Analysis of Financial Conditions and Results
of Operations
- --------------------------------------------------------------------------------
INTRODUCTION
We acquired certain rights to prospect for minerals in certain concession areas
in the Republic of Mali and we subsequently terminated its involvement in the
five Malian Mining Projects in order to focus on its Gold Projects in Arizona,
SA, acquired in September 2004.
Pursuant to the Stock Purchase Agreements, we acquired one hundred percent
(100%) of the issued and outstanding shares of common stock of Golden Sierra and
Western Gold in exchange for a total of 4,000,000,000 shares of our common
stock. Pursuant to the Agreement, Golden Sierra and Western Gold became our
wholly owned subsidiaries.
FUTURE PLANS
The Company is actively pursuing various alternatives to "unlock" shareholder
value and to this end are considering various acquisitions in the Mining Sector
as well as other Industry sectors. The Company is in negotiations to "Spin off"
its existing Mining Projects into two new companies and to admit those Companies
for trading on the OTC Pink Sheets Market, the shares in those companies would
be distributed to Great West Gold, Inc. shareholders. There is no guarantee that
the Company will be successful in these plans as it is dependant upon the
consent of various third parties as well as further funding from Sloane Holdings
Limited. The Company is investigating the possibility of further Mining Project
acquisitions but this will only come to fruition should Sloane Holdings Limited
advance further funding to the Company. It is very likely that the Company will
shortly acquire assets in a different Industry Sector which if successful will
result in the Company changing its name and Trading Symbol. This will not affect
the Company's plans for its Mining assets as aforesaid providing that the third
party consents can be sought and obtained and Sloane Holdings Limited agreeing
to extend further funding to the Company.
Golden Sierra
Golden Sierra controls one hundred (100%) percent of Mockingbird, Great West,
Hall (Dandy), and Pocahontas, being the gold mining prospects in Mohave County,
Arizona.
The Mockingbird mineralisation is tectonically and structurally controlled, an
important feature which may not have received sufficient attention from previous
owners of the property. Mockingbird is an historic gold producer, with some
15,000 ounces from high-grade ore at an average grade of 0.8 oz/ton being
produced. Most of this production was from the Mockingbird Mine itself, the
centerpiece of the Company's present land position. Other mines which produced
gold at this location included the Great West, the Hall (Dandy) and the
Pocahontas Mines, all of which are included in the Company's property.
The Mockingbird Project contains a new and important type of gold deposit, a
"detachment fault" deposit (first recognized as a separate form of gold deposit
in the 1980s), the best example of which is Copperstone. This was the biggest
gold discovery in Arizona in the past 50 years. Cyprus Gold profitably mined the
500,000 oz open pit Copperstone resource during the 1980s. Based on underground
drilling by the American Bonanza company, it is likely that the underground
high-grade resource at Mockingbird is even larger.
The Company's mining title consists of 2,500 acres of mineral rights comprising
a number of federal claims with 3 lode deposits and 16 placer deposits, as well
as the Mockingbird Claims. Significantly, these include the 4 existing mines -
Mockingbird, Great West, Hall (Dandy) and Pocahontas, all of which contributed
significantly to the past gold production in this important gold producing
mining district.
Mineralization is found both in quartz veins and in breccia zones hosted by
steep faults, with the mines located along north-west to east-west striking,
north-dipping to flat quartz veins containing specular hematite, oxidized copper
and free gold. The nature of these structures and associated mineralization
suggest even further potential for a major detachment fault-associated
gold/copper deposit, similar to the proven and mined Copperstone and Mesquite
deposits.
The Mockingbird Project area therefore has the potential for the development of
a large gold reserve. Anaconda estimated a deposit at Mockingbird of at least 10
million tons grading 0.05 to 0.1 oz/ton gold, with additional resources of
silver and copper, putting the potential deposit size in the range of 500,000 to
1,000,000 ounces of gold, approximately the same size as Copperstone. The
Anaconda estimate is corroborated by US Geological Survey Open File Report
92-002 and the Arizona Department of Mines and Mineral Resources.
Western Gold
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Western Gold controls 100 percent of certain mineral rights relating to the
Bouse property in Arizona. These mineral rights consist of twelve placer claims
spread over 1,300 acres in La Paz County, located just north of the Plomosa
Fault and include the Little Butte, Flat Fault, and Arrastre projects.
The 1,300 acre Bouse gold (silver - copper) property situated in the La Paz area
of western Arizona, USA, near the California border.
The mineralising event at Bouse was a mid-Tertiary epithermal event, causing
complex mineralisation of gold, fluorite, barite, and associated metals into
previous copper-specularite mineralisation. The prime cause was regional crustal
extension along the Plomosa Fault, just north of the Plomosa Mountains, which
has now been identified as a detachment fault. The "detachment fault" style of
deposit is best seen at Copperstone, the biggest gold discovery in Arizona in
the past 50 years, where 500,000 ounces of gold were profitably by Cyprus Gold
in the open pit there. The Mesquite mine is another of this type.
Mineralisation at Bouse is located primarily below the fault trace, in the lower
plate, in pre-Cambrian rocks older than 1 billion years. Mineralization is found
both in steeply dipping quartz veins and in laterally extensive breccia zones.
The nature of these structures and associated mineralization over almost all of
the 1,300 acres suggest further potential for major detachment fault gold
deposits, and other deposits associated with this style of mineralisation.
The Bouse area is an historic gold producer, with the Little Butte open pit and
underground mines as known producers. Importantly, the historical grade
recovered here averaged over 0.4 oz/ton. Around 2/3 of this production was from
the Little Butte Mine, where the Arizona Department of Mines and Mineral
Resources has recorded that the results of a 16-hold drilling programme showed
about 5 million tons of inferred ore grading between 0.05 and 0.30 oz/ton.
Others areas of interest within the Company's 1,300 acres are the Brindle
Claims, the high grade Arrastre Mine, the Blue Slate Mine and the Flat Fault
Mine.
The Company is now "hiving off" its Arizona Gold Mining Projects, Sierra Gold
and Western Gold into two new separate companies. These companies will operate
independently of each other but remain under the control of Great West Gold,
Inc.
The two new mining companies will each raise capital from external sources to
fund the Company's mining plans for these projects. It is anticipated that this
will result in an acceleration of the Company's plans to bring these Gold Mining
Projects to production.
Berlin-Bremen Stock Exchange
The Company's shares were admitted for trading on the Berlin-Bremen Stock
Exchange by a Broker without the knowledge, approval or cooperation of the
Company. Our Corporate Counsel has demanded that the company's shares be
delisted from the Berlin-Bremen Stock Exchange with immediate effect. We have
taken this action because they have never asked for any information or contacted
our Company in any regard, and therefore we are convinced that someone other
than our Company had an interest to have our shares traded on this exchange. We
have deemed this to not be in the best interest of our Company and our
shareholders as this abuse is now very widespread and is used only for the
purposes of the short selling of Company's stock, a practice which is illegal.
The rash of naked shorting is rumored to now being orchestrated through this
unregulated exchange. We believe that the constant selling pressure on our
shares in the market for some time, despite positive news, is linked to this
unauthorized listing.
We are reliant upon Sloane Holdings Limited ("Sloane") for our funding; and
should Sloane elect not to extend additional funds to us, we will not be in a
position to develop our mining concessions without raising additional funding.
Furthermore, the delay in funding may impact upon our ability to complete our
planned restructuring; and should that not take place, we will not be in a
position to develop our mining concessions. Should Sloane Holdings Limited not
advance further funding, the Company could lose its rights to the two Mining
Projects in Arizona. Sloane Holdings has disposed to of an amount of
US$1,500,000 of its debt owed by the Company to St James Capital Holdings, Inc.
Critical Accounting Policies
Great West Gold's financial statements and related public financial information
are based on the application of accounting principles generally accepted in the
United States ("GAAP"). GAAP requires the use of estimates; assumptions,
judgments and subjective interpretations of accounting principles that have an
impact on the assets, liabilities, revenue and expense amounts reported. These
estimates can also affect supplemental information contained in our external
disclosures including information regarding contingencies, risk and financial
condition. We believe our use if estimates and underlying accounting assumptions
adhere to GAAP and are consistently and conservatively applied. We base our
8
estimates on historical experience and on various other assumptions that we
believe to be reasonable under the circumstances. Actual results may differ
materially from these estimates under different assumptions or conditions. We
continue to monitor significant estimates made during the preparation of our
financial statements.
Our significant accounting policies are summarized in Note 1 of our financial
statements. While all these significant accounting policies impact its financial
condition and results of operations, Great West Gold views certain of these
policies as critical. Policies determined to be critical are those policies that
have the most significant impact on Great West Gold'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.
Item 3. Controls and Procedures
- -------------------------------
(a) Evaluation of disclosure controls and procedures
Our Chief Executive Officer and Chief Financial Officer (collectively the
"Certifying Officers") maintain a system of disclosure controls and procedures
that is designed to provide reasonable assurance that information, which is
required to be disclosed, is accumulated and communicated to management timely.
Under the supervision and with the participation of management, the Certifying
Officers evaluated the effectiveness of the design and operation of our
disclosure controls and procedures (as defined in Rule
[13a-14(c)/15d-14(c)]under the Exchange Act) within 90 days prior to the filing
date of this report. Based upon that evaluation, the Certifying Officers
concluded that our disclosure controls and procedures are effective in timely
alerting them to material information relative to our company required to be
disclosed in our periodic filings with the SEC.
(b) Changes in internal controls
Our Certifying Officer has indicated that there were no significant changes in
our internal controls or other factors that could significantly affect such
controls subsequent to the date of his evaluation, and there were no such
control actions with regard to significant deficiencies and material weaknesses.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
None
Item 2. Changes in Securities.
None
Item 3. Defaults Upon Senior Securities.
None
Item 4. Submission of Matters to a Vote of Security Holders.
None
Item 5. Other Information.
None
Item 6. Exhibits and Reports of Form 8-K.
(a) Exhibits
31.1 Certification pursuant to Section 302 of Sarbanes Oxley Act
of 2002
32.1 Certification pursuant to Section 906 of Sarbanes Oxley Act
of 2002
(b) Reports of Form 8-K
9
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.
GREAT WEST GOLD, INC.
Date: August 24, 2005 /s/ Richard Axtell
--------------
Richard Axtell
President, Secretary and Director
10