UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended May 31, 2009
[ ] 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 000-52668
NOVA MINING CORPORATION
(Exact name of registrant as specified in its charter)
NEVADA 98-0491170
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Zivova Street 26, Suite #8
Ternopil, Ukraine 282001
(Address of principal executive offices) (Zip code)
011-38-0352-520-416
(Registrant's telephone number, including area code)
322 Brightwater Crescent
Saskatoon, Saskatchewan, Canada S7J 5H9
Former Tel: (306) 373-9092
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 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 [X] No [ ]
Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of "large accelerated filer," "accelerated filer" and "smaller
reporting company" in Rule 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)
Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). Yes [X] No [ ]
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date: As of July 13, 2009, the Issuer
had 6,000,000 shares of common stock issued and outstanding.
Nova Mining Corporation
(An Exploration Stage Company)
May 31, 2009
Index
-----
Balance Sheets.......................................................... 3
Statements of Expenses.................................................. 4
Statements of Cash Flows................................................ 5
Notes to the Financial Statements....................................... 6
2
Nova Mining Corporation
(An Exploration Stage Company)
Balance Sheets
(Unaudited)
May 31, February 28,
2009 2009
--------- ---------
ASSETS
Current Assets
Cash $ 246 $ 4,431
Prepaid expenses 5,000 5,000
--------- ---------
Total Assets $ 5,246 $ 9,431
========= =========
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities
Accounts payable $ 17,614 $ 15,191
Accrued liabilities 11,010 11,010
Loan from related party 110,000 110,000
--------- ---------
Total Liabilities 138,624 136,201
--------- ---------
Stockholders' Deficit
Common Stock, 100,000,000 shares authorized, $0.00001 par value
6,000,000 shares issued and outstanding 60 60
Additional Paid-in Capital 130,740 128,490
Deficit Accumulated During the Exploration Stage (264,178) (255,320)
--------- ---------
Total Stockholders' Deficit (133,378) (126,770)
--------- ---------
Total Liabilities and Stockholders' Deficit $ 5,246 $ 9,431
========= =========
See notes to unaudited financial statements
3
Nova Mining Corporation
(An Exploration Stage Company)
Statements of Expenses
(Unaudited)
Accumulated from
Three Months Three Months December 29, 2005
Ended Ended (Date of Inception) to
May 31, May 31, May 31,
2009 2008 2009
---------- ---------- ----------
Expenses
General and administrative $ 8,858 $ 44,345 $ 190,240
Mining property costs -- -- 8,073
Mining exploration expense -- 8,380 15,865
Impairment of loan receivable -- -- 50,000
---------- ---------- ----------
Total Expenses 8,858 52,725 189,390
---------- ---------- ----------
Net Loss $ (8,858) $ (52,725) $ (264,178)
========== ========== ==========
Net Loss Per Share - Basic and Diluted $ (0.01) $ (0.01) N/A
========== ========== ==========
Weighted Average Shares Outstanding 6,000,000 6,000,000 N/A
========== ========== ==========
See notes to unaudited financial statements
4
Nova Mining Corporation
(An Exploration Stage Company)
Statements of Cash Flows
(Unaudited)
Accumulated from
Three Months Three Months December 29, 2005
Ended Ended (Date of Inception) to
May 31, May 31, May 31,
2009 2008 2009
--------- --------- ---------
Operating Activities
Net loss $ (8,858) $ (52,725) $(264,178)
Adjustments to reconcile net loss to net
cash used in operating activities
Stock issued for general and administrative
expenses -- -- 50
Donated consulting services and expenses 2,250 2,250 30,750
Changes in operating assets and liabilities
Increase in prepaid expenses -- -- (5,000)
Increase in accounts payable 2,423 1 17,614
Increase in accrued liabilities -- -- 11,010
--------- --------- ---------
Net Cash Used in Operating Activities (4,185) (50,474) (209,754)
--------- --------- ---------
Investing Activities -- (50,000) --
Loan Receivable
Financing Activities
Proceeds from the issuance of common stock -- -- 100,000
Proceeds from loan from related party -- 100,000 110,000
--------- --------- ---------
Net Cash Provided by Financing Activities -- 100,000 210,000
--------- --------- ---------
Increase (Decrease) in Cash (4,185) (474) 246
Cash - Beginning of Period 4,431 20,326 --
--------- --------- ---------
Cash - End of Period $ 246 $ 19,852 $ 246
========= ========= =========
Supplemental Disclosures:
Interest paid $ -- $ -- $ --
Income taxes paid -- -- --
========= ========= =========
See notes to unaudited financial statements
5
Nova Mining Corporation
(An Exploration Stage Company)
Notes to Unaudited Financial Statements
1. Basis of Presentation
The accompanying unaudited interim financial statements of Nova have been
prepared in accordance with accounting principles generally accepted in the
United States of America and the rules of the Securities and Exchange
Commission, and should be read in conjunction with Nova's audited 2009
annual financial statements and notes thereto contained in Nova's Annual
Report filed with the SEC on Form 10-K. In the opinion of management, all
adjustments, consisting of normal recurring adjustments, necessary for a
fair presentation of financial position and the results of operations for
the interim periods presented have been reflected herein. The results of
operations for interim periods are not necessarily indicative of the
results to be expected for the full year. Notes to the financial
statements, which would substantially duplicate the disclosure required in
Nova's fiscal 2009 financial statements have been omitted.
2. Going Concern
These financial statements have been prepared on a going concern basis,
which implies Nova will continue to realize its assets and discharge its
liabilities in the normal course of business. Nova has never generated
revenues since inception and is unlikely to generate earnings in the
immediate or foreseeable future. The continuation of Nova as a going
concern is dependent upon the continued financial support from its
shareholders, the ability of Nova to obtain necessary equity financing to
continue operations, and the attainment of profitable operations. As of May
31, 2009, Nova has accumulated losses since inception and has negative
working capital. These factors raise substantial doubt regarding Nova's
ability to continue as a going concern. These financial statements do not
include any adjustments to the recoverability and classification of
recorded asset amounts and classification of liabilities that might be
necessary should Nova be unable to continue as a going concern.
3. Related Party Transactions
During the quarter ended May 31, 2009 the Company recognized a total of
$1,500 for donated services at $500 per month and $750 for donated rent at
$250 per month provided by the President and Director of the Company. These
transactions are recorded at the exchange amount which is the amount agreed
to by the transacting parties.
6
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATION
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
Certain statements contained in this Quarterly Report constitute
"forward-looking statements." These statements, identified by words such as
"plan," "anticipate," "believe," "estimate," "should," "expect" and similar
expressions include our expectations and objectives regarding our future
financial position, operating results and business strategy. These statements
reflect the current views of management with respect to future events and are
subject to risks, uncertainties and other factors that may cause our actual
results, performance or achievements, or industry results, to be materially
different from those described in the forward-looking statements. Such risks and
uncertainties include those set forth under the caption "Part II - Item 1A. Risk
Factors" and elsewhere in this Quarterly Report. We do not intend to update the
forward-looking information to reflect actual results or changes in the factors
affecting such forward-looking information. We advise you to carefully review
the reports and documents, particularly our Annual Reports, Quarterly Reports
and our Current Reports, we file from time to time with the Securities and
Exchange Commission (the "SEC").
As used in this Quarterly Report, the terms "we," "us," "our," "Nova," and the
"Company" mean Nova Mining Corporation unless otherwise indicated. All dollar
amounts in this Quarterly Report are expressed in U.S. dollars, unless otherwise
indicated.
INTRODUCTION
We were incorporated on December 29, 2005 under the laws of the State of Nevada.
Until recently, we were engaged in the exploration of our mineral property,
called the "Columbia VI Claim," located in the Province of British Columbia,
Canada. During our February 29, 2008 fiscal year, we completed Phase IA of our
exploration program on the Columbia VI Claim, which included the placement of a
control grid and the collection and analysis of soil and rock samples from the
property. In our consulting geologist's report on Phase IA, he recommended that
we not proceed with any further exploration work on the Columbia VI Claim as the
results of the soil and rock samples indicated minimal mineralization on the
property. Based on the recommendations of our consulting geologist, we have
decided to abandon our exploration program on the Columbia VI Claim and were
evaluating alternative business opportunities.
In February 2009 Nova Mining Corp. requested a Consulting Geologist, D. Bain,
B.Sc., P.Geo. of DUNCAN BAIN CONSULTING LTD., to select an area in Saskatchewan
considered favorable for hosting diamondiferous kimberlite pipes. That site was
staked by the Mr. Bain and registered with the province of Saskatchewan on March
30, 2009. Nova Minerals Corp. is a public Ukraine-based exploration company .
Duncan J. Bain, P.Geo. is an independent Qualified Person in accordance with
Canadian securities National Instrument 43-101 and as defined in the CIM
(Canadian Institute of Mining and Metallurgy) Standards on Mineral Resources and
Reserves.
The Bittern Lake Project consists of one claim of 256 hectares. This claim was
registered on March 30, 2009 in the name of Duncan Bain, 49 Midale Crescent,
London, Ontario, Canada N5X 3C2. Title to the claim was subsequently transferred
to Nova Mining Corp., Zivova Street 25, Suite #8 Ternopil, Ukraine, in April
2009.
The claim is located in the east-central part of the province of Saskatchewan,
in the NW corner of N.T.S. map sheet 73H/13, centered at Latitude 53o 59' North,
Longitude 105o 53' West and UTM co-ordinates 5983000 N, 442000 E, Zone 13, using
NAD 27 datum. The claim covers an area of 256 hectares and is shown in Figure 3.
The claim is located within the surveyed (southern) portion of Saskatchewan and
is described in terms of legal sections and subdivisions. It is listed in Table
1. To maintain the property in good standing, Saskatchewan Energy and Resources
(SER) require proof of exploration expenditures, or cash payment in lieu, of $12
per hectare per year (after the first year). These assessment requirements
amount to $3,072 for the property. The first assessment due date is March 30,
2011.
7
TABLE 1 - CLAIM DATA
Registered Area Recording Anniversary
Claim Name Owner (Hectares) Date Date Township/Range
- ---------- ----- ---------- ---- ---- --------------
Bittern Lk Duncan Bain 256 hectares March 30, March 30, All of Section 1, Township 58, Range 27
2009 2011 west of Second Meridian
Permits for exploration field work are administered by Saskatchewan Environment
and Resource Management, with regional offices in Prince Albert. No mineralized
zones, mineral resources or mine workings are located on the property.
RECENT CORPORATE DEVELOPMENTS
Effective December 10, 2008 Mr. Terry N. Williams resigned as our Chief
Executive Officer, Chief Financial Officer, President, Secretary, Treasurer, and
from our Board of Directors. There were no disagreements between Mr. Williams
and us regarding any matter relating to our operations, policies or practices.
Mr. Andriy Volianuk, was appointed to our Board of Directors as our Chief
Executive Officer, Chief Financial Officer, President, Treasurer in place of Mr.
Williams. Since 2000, Mr. Volianuk has owned and operated Volja History College,
a private college in Ternopil, Ukraine that teaches the history of the Ukraine.
There is currently no compensatory arrangement with Mr. Volianuk for acting as
our officer or director.
Concurrently with the change of our President, we moved our principal executive
offices to: Zivova Street 26, Suite #8, Ternopil, Ukraine 282001. Our new
telephone number is 011-38-0352-520-416. This location is the office our new
President Mr. Volianuk.
8
PLAN OF OPERATION
Based on the recommendations of our consulting geologist, we have decided to
abandon our exploration program on the Columbia VI Project.
In April 2009 we selected the Bittern Lake Project that consists of one claim of
256 hectares. This claim was registered on March 30, 2009 in the name of Duncan
Bain, 49 Midale Crescent, London, Ontario, Canada N5X 3C2. Title to the claim
was subsequently transferred to Nova Mining Corp., Zivova Street 25, Suite #8
Ternopil, Ukraine, in April 2009.
The Fort a la Corne kimberlite field is one of the world's largest known
resources of diamondiferous kimberlite, and is located in east-central
Saskatchewan, Canada. Currently 75 kimberlite bodies have been confirmed by
drilling since the initial discovery in 1988. The main kimberlite field seems to
follow a NNW-oriented trend. The Bittern Lake Property lies along trend NNW from
the main field.
The Fort a la Corne area of Saskatchewan is easily accessible by road. The
southern half of the area consists of agricultural land, while the northern half
is of provincial forest. The kimberlite bodies have no surface expression and
are covered by 100 m, on average, of glacial overburden. The Fort a la Corne
Joint Venture of Cameco Corp., De Beers Canada Exploration Inc. and Kensington
Resources Ltd., holds 63 drill-tested kimberlite bodies. Eight kimberlite bodies
are held by Shore Gold Inc., one by Consolidated Pine Channel/Shane
Resources/United Carina, and one by Forest Gate Resources. Three kimberlites,
held by Great Western Minerals Corp/War Eagle Mining make up one of several
sub-clusters of kimberlite bodies found around the main field.
The Bittern Lake Property was staked to explore for diamond-bearing kimberlite
bodies of the Fort a la Corne type. The property consists of one claim which was
staked by Duncan Bain in March 2009. The claim covers an area of 256 hectares in
Townships 58, Range 27, Section 1West of the Second Meridian, and falls within
N.T.S. map sheet 73H/13. The property lies approximately 60 kilometers NNW of
Shore Gold's Star kimberlite body, 75 kilometres NNW of Kensington/DeBeers'
140/141 kimberlites and 25 kilometres W of the Kennecott/War Eagle/Great West
Gold kimberlite bodies C-28, 29 and 30.
No exploration work has been carried out on the Bittern Lake property. Fifteen
kilometers to the N an airborne magnetic survey was conducted in 1994. From that
work three small claim blocks were staked and surveyed with ground-based
magnetics. Targets selected from this work were drill tested but no kimberlite
was noted. The Bittern Lake project area was selected due to the presence of a
circular strong positive gravity anomaly on the edge of a positive linear
magnetic anomaly along trend of the main kimberlite field. Accessibility was
also a factor in selecting the area.
A thick mantle of glacial till up to 50 m in depth covers the project area.
There is no bedrock exposure. The known Fort a la Corne kimberlite bodies, which
are thought to have been emplaced during the interval 95 to 115 million years
ago, are hosted by Cretaceous Lower Colorado Group and underlying Mannville
Group sediments. This is indicated from water well records and work by Shore
Gold and Kensington/DeBeers. From similar drillholes the bedrock under the
project is Mannville Formation shallow-water fine marine clastic sediments.
A Phase 1 ground-based gravity survey is recommended to provide detail over the
known gravity/magnetic anomaly. The estimated cost of the Phase 1 program is
$16,000.00 + GST.
On May 31, 2009, we had cash on hand of $246 and a working capital deficit of
$133,378. As such, we anticipate that we will require substantial financing in
the near future in order to meet our current obligations and to continue our
operations. In addition, in the event that we are successful in identifying
suitable alternative business opportunities, of which there is no assurance, we
anticipate that we will need to obtain additional financing in order to pursue
those opportunities.
Currently, we do not have any financing arrangements in place and there are no
assurances that we will be able to obtain sufficient financing on terms
acceptable to us, if at all.
9
Due to the lack of our operating history and our present inability to generate
revenues, our auditors have stated in their audit report included in our audited
financial statements for the year ended February 28, 2009 that there currently
exists substantial doubt about our ability to continue as a going concern.
FINANCING REQUIREMENTS
From inception to May 31, 2009, we have suffered cumulative losses in the amount
of $264,178. We expect to continue to incur substantial losses as we continue
the development of our business. Since our inception, we have funded operations
through common stock issuances, related party loans, and the support of
creditors in order to meet our strategic objectives. Our management believes
that sufficient funding will be available to meet our business objectives,
including anticipated cash needs for working capital, and are currently
evaluating several financing options, including a public offering of securities.
However, we do not have any financing arrangements currently in place and there
can be no assurance that we will be able to obtain sufficient financing when
needed. As a result of the foregoing, our independent auditors believe there
exists substantial doubt about our ability to continue as a going concern.
There is no assurance that we will be able to obtain additional financing if and
when required. We anticipate that additional financing may come in the form of
sales of additional shares of our common stock which may result in dilution to
our current shareholders.
OFF-BALANCE SHEET ARRANGEMENTS
We have no significant off-balance sheet arrangements that have or are
reasonably likely to have a current or future effect on our financial condition,
changes in financial condition, revenues or expenses, results of operations,
liquidity, capital expenditures or capital resources that is material to
stockholders.
CRITICAL ACCOUNTING POLICIES
The preparation of financial statements in conformity with United States
generally accepted accounting principles requires our management to make
estimates and assumptions that affect the reported amount 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. Actual results could differ from those estimates.
Our management routinely makes judgments and estimates about the effects of
matters that are inherently uncertain.
We have identified certain accounting policies, described below, that are most
important to the portrayal of our current financial condition and results of
operation.
USE OF ESTIMATES
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. Actual results could differ from those estimates.
10
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not Applicable.
ITEM 4T. CONTROLS AND PROCEDURES
EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES
Disclosure controls and procedures are designed to ensure that information
required to be disclosed in the reports filed or submitted under the Exchange
Act is recorded, processed, summarized and reported, within the time period
specified in the SEC's rules and forms. Disclosure controls and procedures
include, without limitation, controls and procedures designed to ensure that
information required to be disclosed in the reports filed under the Exchange Act
is accumulated and communicated to management, including the Chief Executive
Officer covered by this report, we carried out an evaluation, under the
supervision and with the participation of our management, including our Chief
Executive Officer and Chief Financial Officer, of the effectiveness of the
design and operation of our disclosure controls and procedures. Based upon and
as of the date of that evaluation, the Chief Executive Officer and Chief
Financial Officer concluded that our disclosure controls and procedures were not
effective because of the identification of a material weakness in our internal
control over financial reporting which is identified in our Management's Report
on Internal Control Over Financial Reporting included with our Annual Report on
Form 10-K for the fiscal year ended February 28, 2009, which we view as an
integral part of our disclosure controls and procedures.
CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING
There were no changes in our internal control over financial reporting
identified in connection with our evaluation of these controls as of the end of
the period covered by this report that could have affected those controls
subsequent to the date of the evaluation referred to in the previous paragraph,
including any correction action with regard to deficiencies and material
weakness.
LIMITATIONS ON THE EFFECTIVENESS OF CONTROLS
Our management, including our Chief Executive Officer and Chief Financial
Officer, does not expect that our Disclosure Controls and internal controls will
prevent all errors and all fraud. A control system, no matter how well conceived
and operated, can provide only reasonable, not absolute, assurance that the
objectives of the control system are met. Further, the design of a control
system must reflect the fact that there are resource constraints, and the
benefits of controls must be considered relative to their costs. Because of the
inherent limitations in all control systems, no evaluation of controls can
provide absolute assurance that all control issues and instances of fraud, if
any, within the Company have been detected. These inherent limitations include
the realities that judgments in decision-making can be faulty, and that
breakdowns can occur because of a simple error or mistake. Additionally,
controls can be circumvented by the individual acts of some persons, by
collusion of two or more people, or by management or board override of the
control.
The design of any system of controls also is based in part upon certain
assumptions about the likelihood of future events, and there can be no assurance
that any design will succeed in achieving its stated goals under all potential
future conditions; over time, controls may become inadequate because of changes
in conditions, or the degree of compliance with the policies or procedures may
deteriorate. Because of the inherent limitations in a cost-effective control
system, misstatements due to error or fraud may occur and not be detected.
11
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS
31 Section 302 Certification of Chief Executive Officer and Chief Financial
Officer
32 Section 906 Certification of Chief Executive Officer and Chief Financial
Officer
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
NOVA MINING CORPORATION
Date: July 13, 2009 By: /s/ Andriy Volianuk
-------------------------------------------------
Andriy Volianuk
Chief Executive Officer, Chief Financial Officer,
President, Secretary and Treasurer
(Principal Executive Officer
and Principal Accounting Officer)
12