As filed with the Securities and Exchange Commission on March 29, 2012
Registration No. 333-172989
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-1/A
AMENDMENT NO. 4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
MONTE RESOURCES INC.
(Exact name of Registrant as Specified in its Charter)
NEVADA 1000 APPLIED FOR
(State or other jurisdiction of (Primary Standard Industrial (IRS Employer
incorporation or organization) Classification Code Number) Identification No.)
1002 Ermine Court
South Lake Tahoe, CA 96150
Telephone 530-577-4141
(Address, including zip code, and telephone number, including area code,
of registrant's principal executive Offices)
Corporate Services of Nevada
502 North Division Street
Carson City, Nevada, 89703
Telephone 775-684-5708
(Name, address, including zip code, and telephone number, including area code
of Agent for Service
Copies of all communication to:
Frederick C. Bauman
Rosenfeld & Rinato
9029 S. Pecos Road, Suite 2800
Henderson, NV 89074
Tel: (702) 386-8637
Fax: (702) 385-3025
Approximate date of commencement of proposed sale to the public: As soon as
declared effective
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933 check the following box. [ ]
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration number of the earlier effective registration statement for the same
offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under
the Securities Act, check the following box and list the Securities Act
registration number of the earlier effective registration statement for the same
offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434, check
the following box. [ ]
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. (Check one):
Large accelerated filer [ ] Accelerated filer [ ]
Non-accelerated filer [ ] Smaller reporting company [X]
(Do not check if a smaller reporting company)
CALCULATION OF REGISTRATION FEE
========================================================================================================
Title of Each Proposed Maximum Proposed Maximum
Class of Securities Amount to be Offering Price Aggregate Offering Amount of
To be Registered Registered Per Share(1) Price(1) Registration Fee
--------------------------------------------------------------------------------------------------------
Common Stock, $.001
par value(2) 7,000,000 $0.001 $7,000 $0.81*
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Total Registration Fee $7,000 $0.81*
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(1) Estimated solely for the purpose of determining the registration fee
pursuant to Rule 457(o) promulgated under the Securities Act of 1933, as
amended. Includes stock to be sold by the selling stockholder.
(2) The shares of common stock being registered hereunder are being registered
for resale by a certain selling stockholder named in the prospectus.
* Estimate amount
The registrant hereby amends this registration statement on such date or dates
as may be necessary to delay its effective date until the registrant shall file
a further amendment which specifically states that this registration statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
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THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.
DEALER PROSPECTUS DELIVERY OBLIGATION
Until April 30, 2012, all dealers that effect transactions in these securities,
whether or not participating in this offering, may be required to deliver a
prospectus. This is in addition to the dealers' obligation to deliver a
prospectus when acting as underwriters and with respect to their unsold
allotments or subscriptions.
SUBJECT TO COMPLETION, DATED MARCH 29, 2012
PROSPECTUS
MONTE RESOURCES INC.
7,000,000 SHARES OF COMMON STOCK
The selling stockholder named in this prospectus, namely Edwin Morrow, our sole
executive officer and director, is offering 7,000,000 shares of common stock of
Monte Resources Inc. at a fixed price of $0.001 per common share for the
duration of the offering. Mr. Morrow currently holds 100% of our common stock.
The Company will not receive any of the proceeds from the sale of these shares.
The shares were acquired by the selling stockholder directly from us in a
private offering of our common stock that was exempt from registration under the
securities laws. The selling stockholder has set an offering price for these
securities of par value $0.001 per common share and an offering period of 28
days from the date of this prospectus. This is a fixed price for the duration of
the offering. The Selling stockholder is an underwriter, within the meaning of
Section 2(11) of the Securities Act. Any broker-dealers or agents that
participate in the sale of the common stock or interests therein are also be
deemed to be an "underwriter" within the meaning of Section 2(11) of the
Securities Act. Any discounts, commissions, concessions or profit earned on any
resale of the shares may be underwriting discounts and commissions under the
Securities Act. The Selling stockholder, who is an "underwriter" within the
meaning of Section 2(11) of the Securities Act, is subject to the prospectus
delivery requirements of the Securities Act. See "Security Ownership of Certain
Beneficial Owners" for more information about the selling stockholder. Please
note that this registration statement covers the sale of 45% of the Company's
outstanding securities. All of the outstanding shares are currently held by the
selling shareholder, Mr. Morrow, the Company's sole director, officer,
stockholder, and promoter, and these shares were obtained after our date of
inception of April 19, 2010.
Our common stock is presently not traded on any market or securities exchange.
The offering price at a par value $0.001 per common share may not reflect the
market price of our shares after the offering.
AN INVESTMENT IN OUR COMMON STOCK INVOLVES A HIGH DEGREE OF RISK. PLEASE REFER
TO "RISK FACTORS" ON PAGE 6 OF THIS PROSPECTUS FOR DETAILS REGARDING THE RISKS
RELATED TO OUR FINANCIAL CONDITION AND BUSINESS MODEL AS WELL AS RISKS GENERALLY
ASSOCIATED WITH THE MINING EXPLORATION INDUSTRY.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION DOES NOT PASS UPON THE
MERITS OF OR GIVE ITS APPROVAL TO ANY SECURITIES OFFERED OR THE TERMS OF THE
OFFERING, NOR DOES IT PASS UPON THE ACCURACY OR COMPLETENESS OF ANY OFFERING
CIRCULAR OR OTHER SELLING LITERATURE.
The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities and is not soliciting an offer to buy these securities
in any state where the offer or sale is not permitted.
Proceeds to the selling stockholder do not include offering costs, including
filing fees, printing costs, legal fees, accounting fees, and transfer agent
fees estimated at $6,240.39 The Company will pay these expenses.
This Prospectus is dated March 29, 2012
TABLE OF CONTENTS
Page
----
PROSPECTUS SUMMARY 3
RISK FACTORS 6
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS 12
USE OF PROCEEDS 12
DETERMINATION OF OFFERING PRICE 13
DILUTION 13
SELLING SECURITY HOLDER 13
PLAN OF DISTRIBUTION 14
DESCRIPTION OF SECURITIES TO BE REGISTERED 16
INTERESTS OF NAMED EXPERTS AND COUNSEL 16
INFORMATION WITH RESPECT TO THE REGISTRANT 17
DESCRIPTION OF BUSINESS 17
MANAGEMENTS DISCUSSION AND ANALYSIS 24
DIRECTORS AND EXECUTIVE OFFICERS 26
EXECUTIVE COMPENSATION AND CORPORATE GOVERNANCE 28
FINANCIAL STATEMENTS F-1
2
SUMMARY INFORMATION
The following summary highlights some of the information in this prospectus. It
may not contain all of the information that is important to you. To understand
this offering fully, it is important that you read the entire prospectus
carefully, including the "RISK FACTORS" and our financial statements and the
notes accompanying the financial statements that appear elsewhere in this
prospectus. Unless otherwise specifically noted, the terms "Company," "we," "us"
or "our" refers to Monte Resources Inc.
CORPORATE BACKGROUND AND INFORMATION
MONTE RESOURCES INC.
Monte Resources Inc., was organized under the laws of the State of Nevada on
April 19, 2010 to explore mineral properties in North America.
Monte Resources Inc. is engaged in the exploration for molybdenite and other
minerals. The Company has acquired sixteen (16) claim units located about three
(3) kilometers southwest of the town of Westwold, British Columbia, Canada. The
total claim area is approximately 617 hectares. We refer to these mining claims
as the Monte Property.
We are an exploration stage company and we have not realized any revenues to
date. We do not have sufficient capital to enable us to commence and complete
our exploration program. We will require financing in order to conduct the
exploration program described in the section entitled, "Business of the Issuer."
Our auditors have issued a going concern opinion, raising substantial doubt
about Monte's financial prospects and the Company's ability to continue as a
going concern. We require an estimated total of $334,925 to implement the three
phases of our business plan. We currently have not implemented our business
plan.
We are not a "blank check company," as we do not intend to participate in a
reverse acquisition or merger transaction. Securities laws define a "blank check
company" as a pre-exploration stage company that has no specific business plan
or purpose or has indicated that its business plan is to engage in a merger or
acquisition with an unidentified company or companies, or other entity or
person.
With its current assets, the Company can remain operational through 2012 if it
does not complete Phase 1 of its program and only pays the government fees to
keep the claims valid. However, the Company plans to raise the capital necessary
to fund our business through a private placement and public offering of our
common stock. The Company intends to work directly with private placees once
this registration statement is declared effective. The Company anticipates that
they will have either a private placement or additional funding from its founder
by Summer 2012 in order to conducts its operations. The founder of the company,
Mr Morrow, is under no obligation to provide any funding to the company.
Our offices are located at 1002 Ermine Court, South Lake Tahoe, CA 96158 USA.
Our telephone number is 530-577-4141.
3
THE OFFERING
Securities offered 7,000,000 shares of common stock
Selling stockholder Edwin Morrow
Offering price $0.001 per share
Shares outstanding prior to the
offering 14,750,000 shares of common stock
Shares to be outstanding after
the offering 14,750,000 shares of common stock
Use of proceeds The Company will not receive any proceeds
from the sale of the common stock by the
selling stockholder.
4
SUMMARY FINANCIAL INFORMATION
The following tables set forth the summary financial information for the
Company. You should read this information together with the financial statements
and the notes thereto appearing elsewhere in this prospectus and the information
under "Plan of Operation."
CONSOLIDATED STATEMENTS OF INCOME
Period From
Inception
Year Ended April 19, 2010 to
November 30, 2011 November 30, 2011
----------------- -----------------
Revenues $ 0 $ 0
Operating expenses $ 7,295 $ 16,936
Net loss from operations $ (7,295) $ (16,936)
Loss per share - basic and diluted $ (0.000) $ (0.000
Weighted average shares outstanding
basic and diluted 14,750,000 1,912,111
BALANCE SHEET DATA
At At
November 30, 2011 November 30, 20110
----------------- -----------------
Cash $ 2,186 $ 5,109
5,109
Total assets $ 2,186 $
Total assets $ 2,186 $ 5,109
Total liabilities $ 4,372 $ 0
Common stock $ 14,750 $ 14,750
Deficit accumulated during
pre-exploration period $ (16,936) $ (9,641)
Total stockholders' equity
(deficiency) $ (2,186) $ 5,109
5
RISK FACTORS
Investing in our securities involves a high degree of risk. In addition to the
other information contained in this registration statement, prospective
purchasers of the securities offered hereby should consider carefully the
following factors in evaluating the Company and its business.
The securities we are offering through this registration statement are
speculative by nature and involve an extremely high degree of risk and should be
purchased only by persons who can afford to lose their entire investment. We
also caution prospective investors that the following risk factors could cause
our actual future operating results to differ materially from those expressed in
any forward looking statements, oral, written, made by or on behalf of us. In
assessing these risks, we suggest that you also refer to other information
contained in this registration statement, including our financial statements and
related notes.
RISKS RELATED TO OUR COMPANY AND OUR INDUSTRY
THE COMPANY HAS NEVER EARNED A PROFIT AND WE ARE CURRENTLY OPERATING UNDER A NET
LOSS. THERE IS NO GUARANTEE THAT WE WILL EVER EARN A PROFIT.
From our inception on April 19, 2010 to November 30, 2011 the Company has not
generated any revenue. Rather, the Company incurred a net loss of $16,936 from
inception through November 30, 2011. The Company does not currently have any
revenue producing operations. The Company is not currently operating profitably,
and it should be anticipated that it will operate at a loss at least until such
time when the production stage is achieved, if production is, in fact, ever
achieved.
IF WE DO NOT OBTAIN ADDITIONAL FINANCING, OUR BUSINESS WILL FAIL.
We will need to obtain additional financing in order to complete our business
plan. We currently do not have any operations and we have no income. We are an
exploration stage company and we have not realized any revenues to date. We do
not have sufficient capital to enable us to commence and complete our
exploration program and based on our current operating plan, we do not expect to
generate revenue that is sufficient to cover our expenses for at least the next
twelve months. We will require financing in order to conduct the exploration
program described in the section entitled, "Business of the Issuer." We need to
raise $29,925 to complete the first phase of our exploration program and
$334,935 to complete all three phases of our program. We do not have any
arrangements for financing and we may not be able to find such financing if
required. We will need to obtain additional financing to operate our business
for the next twelve months, and if we do not our business will fail. We will
raise the capital necessary to fund our business through a Prospectus and public
offering of our common stock. Obtaining additional financing would be subject to
a number of factors, including investor acceptance of mineral claims and
investor sentiment. These factors may adversely affect the timing, amount,
terms, or conditions of any financing that we may obtain or make any additional
financing unavailable to us.
OUR COMPANY WAS RECENTLY FORMED, AND WE HAVE NOT PROVEN THAT WE CAN GENERATE A
PROFIT. IF WE FAIL TO GENERATE INCOME AND ACHIEVE PROFITABILITY AN INVESTMENT IN
OUR SECURITIES MAY BE WORTHLESS.
We have no operating history and have not proved we can operate successfully. We
face all of the risks inherent in a new business. If we fail, your investment in
our common stock will become worthless. From inception of April 19, 2010 to
November 30, 2011, we incurred a net loss of $16,936 and did not earn any
revenue. The Company does not currently have any revenue producing operations.
6
WE HAVE NO OPERATING HISTORY. THERE CAN BE NO ASSURANCE THAT WE WILL BE
SUCCESSFUL IN OUR MINERAL EXPLORATION ACTIVITIES.
The Company has no history of operations. As a result of our brief operating
history, there can be no assurance that that we will be successful exploring for
molybdenite or other minerals. Our future performance will depend upon our
management and its ability to locate and negotiate additional exploration
opportunities in which we can participate. There can be no assurance that we
will be successful in these efforts. Our inability to locate additional
opportunities, to hire additional management and other personnel, or to enhance
our management systems, could have a material adverse effect on our results of
operations. There can be no assurance that the Company's operations will be
profitable.
WE ARE CONTROLLED BY MR. EDWIN G. MORROW, OUR SOLE EXECUTIVE OFFICER AND
DIRECTOR, AND, AS SUCH, YOU MAY HAVE NO EFFECTIVE VOICE IN OUR MANAGEMENT.
Upon the completion of this offering, Mr. Edwin G. Morrow, our sole Executive
Officer Director, will beneficially own approximately 52.5% of our issued and
outstanding common stock. Mr. Morrow will exercise control over all matters
requiring stockholder approval, including the possible election of additional
directors and approval of significant corporate transactions. If you purchase
shares of our common stock, you may have no effective voice in our management.
WE ARE SOLELY GOVERNED BY MR. EDWIN G. MORROW, OUR SOLE EXECUTIVE OFFICER AND
DIRECTOR, AND, AS SUCH, THERE MAY BE SIGNIFICANT RISK TO THE COMPANY OF A
CONFLICT OF INTEREST.
Mr. Edwin G. Morrow, our sole Executive Officer and Director, makes decisions
such as the approval of related party transactions, the compensation of
Executive Officers, and the oversight of the accounting function. There will be
no segregation of executive duties and there may not be effective disclosure and
accounting controls to comply with applicable laws and regulations, which could
result in fines, penalties and assessments against us. Accordingly, the inherent
controls that arise from the segregation of executive duties may not prevail. In
addition, Mr. Morrow will exercise full control over all matters that typically
require the approval of a Board of Directors. Mr. Morrow's actions are not
subject to the review and approval of a Board of Directors and, as such, there
may be significant risk to the Company of a conflict of interest.
Our sole Executive Officer and Director exercises control over all matters
requiring stockholder approval including the election of Directors and the
approval of significant corporate transactions. Insofar as Mr. Edwin G. Morrow
makes all decisions as to which projects the Company undertakes, there is a risk
of a conflict of interest arising between the duties of Mr. Morrow in his role
as our sole Executive Officer and his own personal financial and business
interests in other business ventures distinct and separate from the interests of
the Company. His personal interests may not, during the ordinary course of
business, coincide with the interests of the stockholders and, in the absence of
the effective segregation of such duties, there is a risk of a conflict of
interest. We have not voluntarily implemented various corporate governance
measures. As such, stockholders have limited protections against the
transactions implemented by Mr. Morrow, conflicts of interest and similar
matters.
We have not adopted corporate governance measures such as an audit or other
independent committees as we presently only have one independent director.
Stockholders should bear in mind our current lack of corporate governance
measures in formulating their investment decisions.
7
Specifically, Mr. Morrow is presently involved in the management of two
companies - Liberty Coal Energy Corp. and Siga Resources Inc. Any duties
performed for these two companies may conflict with the interest and needs of
Monte Resources Inc. For example if Mr. Morrow seeks funding for his companies
there may be a conflict in favoring one of his other companies as a source of
funds instead of Monte Resources Inc. It should be noted however, that Monte
Resources is primarily a molybdenum property, and the other two companies are
engaged in coal and gold exploration respectively.
BECAUSE EDWIN G. MORROW, OUR SOLE EXECUTIVE OFFICER AND DIRECTOR, HAS OTHER
BUSINESS INTERESTS, HE MAY NOT BE ABLE OR WILLING TO DEVOTE A SUFFICIENT AMOUNT
OF TIME TO OUR BUSINESS OPERATIONS, WHICH MAY CAUSE OUR BUSINESS TO FAIL.
It is possible that the demands on Mr. Edwin G. Morrow, our sole Executive
Officer and Director, from other obligations could increase with the result that
he would no longer be able to devote sufficient time to the management of our
business. Mr. Morrow will devote fewer than 12-15 hours per month or 3-4 per
week to the affairs of the Company. In addition, Mr. Morrow may not possess
sufficient time to manage our business if the demands of managing our business
increased substantially.
THE IMPRECISION OF MINERAL DEPOSIT ESTIMATES MAY PROVE ANY RESOURCE CALCULATIONS
THAT WE MAKE TO BE UNRELIABLE.
Mineral deposit estimates and related databases are expressions of judgment
based on knowledge, mining experience, and analysis of drilling results and
industry practices. Valid estimates made at a given time may significantly
change when new information becomes available. By their nature, mineral deposit
estimates are imprecise and depend upon statistical inferences, which may
ultimately prove unreliable. Mineral deposit estimates included here, if any,
have not been adjusted in consideration of these risks and, therefore, no
assurances can be given that any mineral deposit estimate will ultimately be
reclassified as reserves. If the Company's exploration program locates a mineral
deposit, there can be no assurances that any of such deposits will ever be
classified as reserves.
MR. EDWIN MORROW HAS NOT PHYSICALLY INSPECTED THE SUBJECT PROPERTY AND DOES NOT
HAVE CURRENT PLANS TO VISIT THE PROPERTY.
Mr. Morrow has not visited the property, but has relied on property reports and
other consultants who are knowledgeable with the property. With respect to the
further exploration of the property, Mr. Morrow does not have any current plans
to visit the property but instead intends to hire various professionals and
consultants to further explore the property as this work is required. As the
Company will rely on third parties, the costs of exploration may be higher than
if the Company and its employees engaged in the work themselves. By not visiting
the property directly, Mr. Morrow will be unable to personally verify the
information and results that are presented by third parties.
WE ARE SENSITIVE TO FLUCTUATIONS IN THE PRICE OF MOLYBDENITE, WHICH IS BEYOND
OUR CONTROL. THE PRICE OF MOLYBDENITE IS VOLATILE AND PRICE CHANGES ARE BEYOND
OUR CONTROL.
8
The price of molybdenite and other minerals can fluctuate. The prices of
molybdenite and other minerals have been and will continue to be affected by
numerous factors beyond the Company's control. Factors that affect the price of
molybdenite include the demand from consumers for products that use molybdenite,
economic conditions, over supply from secondary sources and costs of production.
Price volatility and downward price pressure, which can lead to lower prices,
could have a material adverse effect on the costs or the viability of our
projects.
MINERAL EXPLORATION AND PROSPECTING IS A HIGHLY COMPETITIVE AND SPECULATIVE
BUSINESS AND WE MAY NOT BE SUCCESSFUL IN SEEKING AVAILABLE OPPORTUNITIES.
The process of mineral exploration and prospecting is a highly competitive and
speculative business. Individuals are not subject to onerous accreditation and
licensing requirements prior to beginning mineral exploration and prospecting
activities. As such, the company, in seeking available opportunities, will
compete with a numerous individuals and companies, including established,
multi-national companies that have more experience and resources than the
Company. The exact number of active competitors at any one time is heavily
dependant on current economic conditions; however, statistics provided by the
AEBC (The Association for Mineral Exploration, British Columbia), state that
approximately 1000 mining companies operate in BC. Each one of these companies
can be considered to be in competition with our company for mineral resources in
British Columbia. Moreover, the Government of Canada at,
http://mmsd1.mms.nrcan.gc.ca/mmsd/exploration/default_e.asp, reports that in
2006, CDN $140.6 billion was spent in mineral exploration activities in British
Columbia.
Because we may not have the financial and managerial resources to compete with
other companies, we may not be successful in our efforts to acquire projects of
value, which may, ultimately, become productive. However, while we compete with
other exploration companies for the rights to explore other claims, there is no
competition for the exploration or removal of mineral from our claims from other
companies, as we have no agreements or obligations that limit our right to
explore or remove minerals from our claims.
COMPLIANCE WITH ENVIRONMENTAL CONSIDERATIONS AND PERMITTING COULD HAVE A
MATERIAL ADVERSE EFFECT ON THE COSTS OR THE VIABILITY OF OUR PROJECTS. THE
HISTORICAL TREND TOWARD STRICTER ENVIRONMENTAL REGULATION MAY CONTINUE, AND, AS
SUCH, REPRESENTS AN UNKNOWN FACTOR IN OUR PLANNING PROCESSES.
All mining is regulated by the government agencies at the Federal and Provincial
levels of government in Canada. Compliance with such regulation has a material
effect on the economics of our operations and the timing of project development.
Our primary regulatory costs have been related to obtaining licenses and permits
from government agencies before the commencement of mining activities. An
environmental impact study that must be obtained on each property in order to
obtain governmental approval to mine on the properties is also a part of the
overall operating costs of a mining company.
The possibility of more stringent regulations exists in the areas of worker
health and safety, the dispositions of wastes, the decommissioning and
reclamation of mining and milling sites and other environmental matters, each of
which could have an adverse material effect on the costs or the viability of a
particular project. Compliance with environmental considerations and permitting
could have a material adverse effect on the costs or the viability of our
projects.
MINING AND EXPLORATION ACTIVITIES ARE SUBJECT TO EXTENSIVE REGULATION BY FEDERAL
AND PROVINCIAL GOVERNMENTS IN CANADA. ANY FUTURE CHANGES IN GOVERNMENTS,
REGULATIONS AND POLICIES, COULD ADVERSELY AFFECT THE COMPANY'S RESULTS OF
OPERATIONS FOR A PARTICULAR PERIOD AND ITS LONG-TERM BUSINESS PROSPECTS.
9
Mining and exploration activities are subject to extensive regulation by
government. Such regulation relates to production, development, exploration,
exports, taxes and royalties, labor standards, occupational health, waste
disposal, protection and remediation of the environment, mine and mill
reclamation, mine and mill safety, toxic substances and other matters.
Compliance with such laws and regulations has increased the costs of exploring,
drilling, developing, constructing, operating mines and other facilities.
Furthermore, future changes in governments, regulations and policies, could
adversely affect the Company's results of operations in a particular period and
its long-term business prospects.
The development of mines and related facilities is contingent upon governmental
approvals, which are complex and time consuming to obtain and which, depending
upon the location of the project, involve various governmental agencies. The
duration and success of such approvals are subject to many variables outside the
Company's control.
RISKS RELATED TO OUR FINANCIAL CONDITION AND BUSINESS MODEL
THE COMPANY HAS NOT PAID ANY CASH DIVIDENDS ON ITS SHARES OF COMMON STOCK AND
DOES NOT ANTICIPATE PAYING ANY SUCH DIVIDENDS IN THE FORESEEABLE FUTURE.
ACCORDINGLY, INVESTORS WILL ONLY SEE A RETURN ON THEIR INVESTMENTS IF THE VALUE
OF THE SHARES APPRECIATES.
Payment of future dividends, if any, will depend on earnings and capital
requirements of the Company, the Company's debt facilities and other factors
considered appropriate by the Company's Board of Directors. To date, the Company
has not paid any cash dividends on the Company's Common Stock and does not
anticipate paying any such dividends in the foreseeable future. Accordingly,
investors will only see a return on their investments if the value of the
Company's shares appreciates.
IF WE DO NOT CONDUCT MINERAL EXPLORATION ON OUR MINERAL CLAIMS AND KEEP THE
CLAIMS IN GOOD STANDING, THEN OUR RIGHT TO THE MINERAL CLAIMS WILL LAPSE AND WE
WILL LOSE EVERYTHING THAT WE HAVE INVESTED AND EXPENDED TOWARDS THESE CLAIMS.
We must complete mineral exploration work on our mineral claims and keep the
claims in good standing. If we do not fulfill our work commitment requirements
on our claims or pay the fee to keep the claims in good standing, then our right
to the claims will lapse and we will lose all interest that we have in these
mineral claims. We are obligated to pay $2,468.65 in lieu of work to the British
Columbia Provincial government on an annual basis to keep our claims in good
standing.
BECAUSE OF OUR LIMITED RESOURCES AND THE SPECULATIVE NATURE OF OUR BUSINESS,
THERE IS A SUBSTANTIAL DOUBT AS TO OUR ABILITY TO OPERATE AS A GOING CONCERN.
The report of our independent auditors, on our audited financial statements for
the audited period ended November 30, 2011 indicates that there are a number of
factors that raise substantial doubt about our ability to continue as a going
concern. Our continued operations are dependent on our ability to obtain
financing and upon our ability to achieve future profitable operations from the
development of our mineral properties. If we are not able to continue as a going
concern, it is likely investors will lose their investment.
10
RISKS RELATED TO THIS OFFERING AND OUR STOCK
WE WILL NEED TO RAISE ADDITIONAL CAPITAL, IN ADDITION TO THE FINANCING AS
REPORTED IN THIS REGISTRATION STATEMENT. IN SO DOING, WE WILL FURTHER DILUTE THE
TOTAL NUMBER OF SHARES ISSUED AND OUTSTANDING. THERE CAN BE NO ASSURANCE THAT
THIS ADDITIONAL CAPITAL WILL BE AVAILABLE OR ACCESSIBLE BY US.
Monte Resources Inc. will need to raise additional capital, in addition to the
financing as reported in this registration statement, by issuing additional
shares of common stock and will, thereby, increase the number of common shares
outstanding. There can be no assurance that this additional capital will be
available to meet these continuing exploration and development costs or, if the
capital is available, that it will be available on terms acceptable to the
Company. If the Company is unable to obtain financing in the amounts and on
terms deemed acceptable, the business and future success of the Company will
almost certainly be adversely affected. If we are able to raise additional
capital, we cannot be assured that it will be on terms that enhance the value of
our common shares.
IF WE COMPLETE A FINANCING THROUGH THE SALE OF ADDITIONAL SHARES OF OUR COMMON
STOCK IN THE FUTURE, THEN OUR STOCKHOLDERS WILL EXPERIENCE DILUTION.
The most likely source of future financing presently available to us is through
the sale of shares of our common stock. Any sale of common stock will result in
dilution of equity ownership to stockholders. This means that if we sell shares
of our common stock, more shares will be outstanding and each stockholder will
own a smaller percentage of the shares then outstanding. To raise additional
capital we may have to issue additional shares, which may substantially dilute
the interests of stockholders. Alternatively, we may have to borrow large sums,
and assume debt obligations that require us to make substantial interest and
capital payments.
THERE IS NO MARKET FOR OUR COMMON STOCK, WHICH LIMITS OUR STOCKHOLDERS ABILITY
TO RESELL THEIR SHARES OR PLEDGE THEM AS COLLATERAL.
There is currently no public market for our shares, and we cannot assure you
that a market for our stock will develop. Consequently, investors may not be
able to use their shares for collateral or loans and may not be able to
liquidate at a suitable price in the event of an emergency. In addition,
investors may not be able to resell their shares at or above the price they paid
for them or may not be able to sell their shares at all.
IF A PUBLIC MARKET FOR OUR STOCK IS DEVELOPED, FUTURE SALES OF SHARES COULD
NEGATIVELY AFFECT THE MARKET PRICE OF OUR COMMON STOCK.
If a public market for our stock is developed, then sales of Common Stock in the
public market could adversely affect the market price of our Common Stock. There
are at present 14,750,000 shares of Common Stock issued and outstanding.
OUR STOCK IS A PENNY STOCK. TRADING OF OUR STOCK MAY BE RESTRICTED BY THE SEC'S
PENNY STOCK REGULATIONS AND THE NASD'S SALES PRACTICE REQUIREMENTS, WHICH MAY
LIMIT A STOCKHOLDER'S ABILITY TO BUY AND SELL OUR STOCK.
The Company's common shares may be deemed to be "penny stock" as that term is
defined in Regulation Section "240.3a51-1" of the Securities and Exchange
Commission (the "SEC"). Penny stocks are stocks: (a) with a price of less than
U.S. $5.00 per share; (b) that are not traded on a "recognized" national
exchange; (c) whose prices are not quoted on the NASDAQ automated quotation
system (NASDAQ - where listed stocks must still meet requirement (a) above); or
(d) in issuers with net tangible assets of less than U.S. $2,000,000 (if the
issuer has been in continuous operation for at least three years) or U.S.
$5,000,000 (if in continuous operation for less than three years), or with
average revenues of less than U.S. $6,000,000 for the last three years.
11
Stockholders should be aware that, according to Securities and Exchange
Commission Release No. 34-29093, dated April 17, 1991, the market for penny
stocks has suffered in recent years from patterns of fraud and abuse. Such
patterns include:
(i) control of the market for the security by one or a few broker-dealers
that are often related to the promoter or issuer
(ii) manipulation of prices through prearranged matching of purchases and
sales and false and misleading press releases
(iii)boiler room practices involving high-pressure sales tactics and
unrealistic price projections by inexperienced sales persons
(iv) excessive and undisclosed bid-ask differential and markups by selling
broker-dealers
(v) the wholesale dumping of the same securities by promoters and
broker-dealers after prices have been manipulated to a desired level,
along with the resulting inevitable collapse of those prices and with
consequent investor losses.
Our management is aware of the abuses that have occurred historically in the
penny stock market. Although we do not expect to be in a position to dictate the
behavior of the market or of broker-dealers who participate in the market,
management will strive within the confines of practical limitations to prevent
the described patterns from being established with respect to our securities.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus contains forward-looking statements that involve risks and
uncertainties. Forward-looking statements in this prospectus include, among
others, statements regarding our capital needs, business plans and expectations.
Such forward-looking statements involve assumptions, risks and uncertainties
regarding, among others, the success of our business plan, availability of
funds, government regulations, operating costs, our ability to achieve
significant revenues, our business model and products and other factors. Any
statements contained herein that are not statements of historical facts may be
deemed to be forward-looking statements. In some cases, you can identify
forward-looking statements by terminology such as "may", "will", "should",
"expect", "plan", "intend", "anticipate", "believe", "estimate", "predict",
"potential" or "continue", the negative of such terms or other comparable
terminology. These forward-looking statements address, among others, such issues
as:
>> the amount and nature of future exploration, development and other
capital expenditures,
>> mining claims to be drilled,
>> future earnings and cash flow,
>> development projects,
>> exploration prospects,
12
>> drilling prospects,
>> development and drilling potential,
>> business strategy,
>> expansion and growth of our business and operations, and
>> our estimated financial information.
In evaluating these statements, you we believe that it is important that you
consider various factors, including the assumptions, risks and uncertainties
outlined in this prospectus under "Risk Factors". These factors or any of them
may cause our actual results to differ materially from any forward-looking
statement made in this prospectus. While these forward-looking statements, and
any assumptions upon which they are based, are made in good faith and reflect
our current judgment regarding future events, our actual results will likely
vary, sometimes materially, from any estimates, predictions, projections,
assumptions or other future performance suggested herein. The forward-looking
statements in this prospectus are made as of the date of this prospectus and we
do not intend or undertake to update any of the forward-looking statements to
conform these statements to actual results, except as required by applicable
law, including the securities laws of the United States.
USE OF PROCEEDS TO ISSUER
We will not receive any proceeds from the sale of the common stock offered
through this prospectus by the selling stockholder.
DETERMINATION OF OFFERING PRICE
The shares of common stock covered by this prospectus will be offered for sale
at a fixed price of $0.001 per share. As the Company has yet to generate any
revenue, and has not begun business operations, the Company has deemed its par
value to be an appropriate offering price.
DILUTION
The common stock to be sold by the selling stockholder is common stock that is
currently issued and outstanding. Accordingly, there will be no dilution to
stockholders.
SELLING SECURITY HOLDER
Edwin G. Morrow Chief Executive Officer, Chief Financial Officer,
President, Secretary, Treasurer and Director
(Principal Executive Officer and Principal Accounting Officer)
Amount of shares owned 14,750,000 (100% of issued) shares of
By Mr. Morrow prior to the common stock.
offering.
13
Securities offered 7,000,000 (47.5% of issued) shares of
common stock
Selling stockholder(s) Edwin Morrow
Offering price $0.001 per share
Shares outstanding prior to the
offering 14,750,000 shares of common stock
Shares to be outstanding after the
offering 14,750,000 shares of common stock
Percentage of the class to be owned 52.5%
by selling stockholder after the
offering
Use of proceeds The Company will not receive any proceeds
from the sale of the common stock by the
selling stockholder.
PLAN OF DISTRIBUTION
The selling stockholder or their donees, pledges, transferees or other
successors-in-interest selling shares received after the date of this prospectus
from a selling stockholder as a gift, pledge, distribution or otherwise, may,
from time to time, sell any or all of their shares of common stock on any stock
exchange, market or trading facility on which the shares are traded or in
private transactions. These sales will be at par value $0.001. The Company has
not yet applied for quotation on any stock exchange, market, or trading
facility. The selling stockholder may use any one or more of the following
methods when selling shares:
>> ordinary brokerage transactions and transactions in which the
broker-dealer solicits purchasers;
>> block trades in which the broker-dealer will attempt to sell the
shares as agent but may position and resell a portion of the block as
principal to facilitate the transaction;
>> purchases by a broker-dealer as principal and resale by the
broker-dealer for its own account;
>> an exchange distribution following the rules of the applicable
exchange;
>> privately negotiated transactions;
>> short sales that are not violations of the laws and regulations of any
state of the United States;
>> through the writing or settlement of options or other hedging
transactions, whether through an options exchange or otherwise;
>> broker-dealers may agree with the selling stockholder to sell a
specified number of such shares at par value $0.001; and
>> a combination of any such methods of sale or any other lawful method.
The selling stockholder may, from time to time, pledge or grant a security
interest in some or all of the shares of common stock owned by them and, if they
default in the performance of their secured obligations, the pledgees or secured
parties may offer and sell the shares of common stock, from time to time, under
this prospectus, or under an amendment to this prospectus under Rule 424(b)(3)
or other applicable provision of the Securities Act amending the list of selling
stockholder to include the pledgee, transferee or other successors-in-interest
14
as selling stockholder under this prospectus. The selling stockholder also may
transfer the shares of common stock in other circumstances, in which case the
transferees, pledgees or other successors-in-interest will be the selling
beneficial owners for purposes of this prospectus.
In connection with the sale of our common stock or interests therein, the
selling stockholder may enter into hedging transactions with broker-dealers or
other financial institutions, which may in turn engage in short sales of the
common stock in the course of hedging the positions they assume. The selling
stockholder also may sell shares of our common stock short and deliver these
securities to close out their short positions, or loan or pledge the common
stock to broker-dealers that in turn may sell these securities. The selling
stockholder also may enter into option or other transactions with broker-dealers
or other financial institutions for the creation of one or more derivative
securities which require the delivery to the broker-dealer or other financial
institution of shares offered by this prospectus, which shares the broker-dealer
or other financial institution may resell pursuant to this prospectus (as
supplemented or amended to reflect the transaction).
The aggregate proceeds to the selling stockholder from the sale of the common
stock offered by them will be the purchase price of the common stock less
discounts or commissions, if any. A selling stockholder reserves the right to
accept and, together with its agents from time to time, to reject, in whole or
in part, any proposed purchase of common stock to be made directly or through
agents. We will not receive any of the proceeds from this offering.
The selling stockholder and any underwriters, broker-dealers or agents that
participate in the sale of the common stock or interests therein will be deemed
an "underwriters" within the meaning of Section 2(11) of the Securities Act. Any
discounts, commissions, concessions or profit they earn on any resale of the
shares will be underwriting discounts and commissions under the Securities Act.
A selling stockholder that is an "underwriter" within the meaning of Section
2(11) of the Securities Act will be subject to the prospectus delivery
requirements of the Securities Act.
To the extent required, the shares of our common stock to be sold, the names of
the selling stockholder, the respective purchase prices and public offering
prices, the names of any agents, dealers or underwriters, and any applicable
commissions or discounts with respect to a particular offer, will be set forth
in an accompanying prospectus supplement or, if appropriate, a post-effective
amendment to the registration statement that includes this prospectus.
The selling stockholder also may transfer the shares of common stock in other
circumstances, in which case the transferees, pledges or other
successors-in-interest will be the selling beneficial owners for purposes of
this prospectus. The Company will file a Rule 424(b) prospectus supplement to
post-effectively update the selling shareholder table to reflect a transfer from
a previously identified selling shareholder.
REGULATION M
We plan to advise the selling stockholder that the anti-manipulation rules of
Regulation M under the Exchange Act may apply to sales of shares in the market
and to the activities of the selling security holders and their affiliates.
Regulation M under the Exchange Act prohibits, with certain exceptions,
participants in a distribution from bidding for, or purchasing for an account in
which the participant has a beneficial interest, any of the securities that are
the subject of the distribution. Accordingly, the selling stockholder are not
permitted to cover short sales by purchasing shares while the distribution it
taking place. Regulation M also governs bids and purchases made in order to
stabilize the price of a security in connection with a distribution of the
15
security. In addition, we will make copies of this prospectus available to the
selling stockholder for the purpose of satisfying the prospectus delivery
requirements of the Securities Act.
STATE SECURITIES LAWS
Under the securities laws of some states, the shares may be sold in such states
only through registered or licensed brokers or dealers. In addition, in some
states the common shares may not be sold unless the shares have been registered
or qualified for sale in the state or an exemption from registration or
qualification is available and is complied with.
EXPENSES OF REGISTRATION
We are bearing substantially all costs relating to the registration of the
shares of common stock offered hereby. These expenses are estimated to be
$6,240.39, including, but not limited to, legal, accounting, printing and
mailing fees. The selling stockholder, however, will pay any commissions or
other fees payable to brokers or dealers in connection with any sale of such
shares common stock.
DESCRIPTION OF SECURITIES TO BE REGISTERED
The authorized capital stock of the Company at the end of the audited period on
November 30, 2010, consists of 75,000,000 shares of common stock, par value
$0.001 per share, of which there are 14,750,000 shares issued and outstanding.
The following summarizes provisions of the Company's capital stock.
COMMON STOCK
Holders of shares of common stock are entitled to one vote for each share on all
matters to be voted on by the stockholders; have no preemptive rights; have no
conversion or redemption rights or sinking fund; do not have cumulative voting
rights; and share ratably in dividends, if any, as may be declared from time to
time by the Board of Directors in its discretion from funds legally available
therefore. In the event of a liquidation, dissolution or winding up of the
company, the holders of common stock are entitled to share pro rata all assets
remaining after payment in full of all liabilities. All of the outstanding
shares of common stock are fully paid and non-assessable.
DIVIDENDS
Dividends, if any, will be contingent upon the Company's revenues and earnings,
if any, and capital requirements and financial conditions. The payment of
dividends, if any, will be within the discretion of the Company's Board of
Directors. The Company presently intends to retain all earnings, if any, and
accordingly the Board of Directors does not anticipate declaring any dividends.
INTERESTS OF NAMED EXPERTS AND COUNSEL
Our audited financial statements as of November 30, 2011 have been audited by
Madsen & Associates CPA's Inc., as set forth in its report. The financial
statements have been included in reliance upon the authority of Madsen &
Associates CPA's, Inc. as experts in accounting and auditing.
16
COUNSEL
Mr. Frederick C. Bauman, Attorney at Law, of Rosenfeld & Rinato, 9029 S. Pecos
Road, Suite 2800, Henderson, NV 89074, has provided an opinion upon certain
matters relating to the legality of the common stock offered hereby for us.
INFORMATION WITH RESPECT TO THE REGISTRANT
We have not previously been subject to the reporting requirements of the
Securities and Exchange Commission. We have filed with the Commission a
registration statement on Form S-1 under the Securities Act with respect to the
shares offered hereby. This prospectus does not contain all of the information
set forth in the registration statement and the exhibits and schedules thereto.
For further information with respect to our securities and us you should review
the registration statement and the exhibits and schedules thereto. Statements
made in this prospectus regarding the contents of any contract or document filed
as an exhibit to the registration statement are not necessarily complete. You
should review the copy of such contract or document so filed.
You can inspect the registration statement and the exhibits and the schedules
thereto filed with the commission, without charge, at the office of the
Commission at 100 F Street, NE, Washington, D.C. 20549. You can also obtain
copies of these materials from the public reference section of the commission at
100 F Street, NE, Washington, D.C. 20549, at prescribed rates. You can obtain
information on the operation of the Public Reference Room by calling the SEC at
1-800-SEC-0330. The Commission maintains a web site on the Internet that
contains reports, proxy and information statements, and other information
regarding issuers that file electronically with the Commission at
http://www.sec.gov
DESCRIPTION OF BUSINESS
Monte Resources Inc. was incorporated in the State of Nevada on April 19, 2010.
The Company was incorporated for the sole purpose of engaging in mineral
exploration. It has always maintained the same business plan from inception to
present. Since inception, the Company has not filed for bankruptcy, receivership
or similar proceeding; and there has not been any material reclassification,
merger, consolidation, or purchase or sale of a significant amount of assets not
in the ordinary course of business.
Monte Resources Inc., which is also referred to herein as Monte or the Company,
is engaged in the exploration for molybdenite and other minerals The Company has
acquired a molybdenite prospect consisting of sixteen (16) claim units located
about three (3) kilometers southwest of the town of Westwold, British Columbia,
Canada. The total claim area is approximately 617 hectares. We refer to these
mining claims as the Monte Property.
The Company was incorporated for the purpose of exploring mineral claims in
North America. The short-term strategy of the Company is to explore and further
develop the Monte property and to explore its commercial viability. The
long-term strategy of the Company is to continue to acquire additional mineral
claims that complement its core business.
We are an exploration stage company and we cannot provide assurance to investors
that our mineral claims contain a commercially exploitable mineral deposit, or
reserve, until appropriate exploratory work is done and an economic evaluation
based on such work concludes economic feasibility.
17
PROPERTY ACQUISITION DETAILS
Monte Resources Inc. purchased the Monte Property for USD $8,500.
Land Status, Location and Access, Topography
[MAP SHOWING LAND STATUS, LOCATION AND ACCESS, TOPOGRAPHY]
18
Land Status: the Monte Property comprises three MTO mineral claims totaling
617.329 hectares.
Tenure No. Claim Name Map No. Issue Date Good to Date Area (ha)
---------- ---------- ------- ---------- ------------ ---------
595538 KENALLAN 082L Dec 5, 2008 2012/Feb/28 82.303
681143 KENALLAN 2 082L Dec 8, 2009 2012/Feb/28 82.318
753342 KENALLAN 3 082L Apr 20, 2010 2012/Apr/20 452.708
TOTAL 617.329
Location and Access: The Monte Property is located approximately three
kilometers by road southwest of the town of Westwold, British Columbia. Westwold
is located on highway 97, approximately 48 kilometers from Kamloops. Access is
available by paved road from Westwold and thence over logging routes on the
property using a 4 WD vehicle. Several campsite locations with good water
supplies can be found on or near the property. Supplies and services are
available in Westwold, Kamloops and Vernon.
[MAP SHOWING LOCATION AND ACCESS]
Topography: the Monte Property covers the southeast facing slope along the west
side of the Salmon River. The terrain is rugged. Elevations over the ground vary
between 800 and 1,500 meters above sea level. The known molybdenite showings are
located in the central sector of the claim at about the 850-875 meter elevation.
The climate is typical of the interior of BC, generally mild and dry overall
with some snowfall in the winter months. The summers are usually hot with
limited precipitation. Vegetation is a sparse growth of coniferous forest,
mostly consisting of pine.
REGIONAL AND LOCAL GEOLOGICAL SETTING
The claim group is underlain by Tertiary volcanic of the Kamloops group, a
portion of which have been eroded to expose a small window of older rocks. These
older rocks consist of Cache Creek sediments intruded by a small granitic stock.
A portion of the property dealt with in this report lies completely within the
area of the Cache Creek rocks.
19
The area is underlain by a sequence of fine grained cherty silt stones and
argillites in places converted to hornfels, and several bands of recrystallized
limestone which strike slightly east and west of north and dip moderately to the
west.
Portions of the limestone have been converted to skarn. The skarn is primarily
found in two zones which parallel the general altitude of the sediments. The
skarn varies from less than a foot to over 8 feet in thickness, pinching and
swelling over short distances. It is a greenish-brown rock made up predominantly
of diopside and garnet with lesser quartz, calcite and wollastonite.
The metasediments are cut by a number of irregular `dikes' of granitic rock
which varies from pegmatitic granite to granodiroite, and quartz diorites. These
`dikes" are considered to be apophyses of the small stock which outcrops
somewhat north of the map area.
It appears that the limy zones are more resistant to both amalgamations by the
intrusive, as well as present day erosion. This is exemplified by the limy
ridges extending into the intrusive stock, while topographically lower areas,
the less limy rock types, indicate the intrusive's facility in assimilating the
silty rocks, as these areas extend as empayments into these metasediments.
The limestone quarry, at the northeast corner of the Monte Property derived its
white rock from a north-south trending ridge of coarsely crystallized rock which
at its northern extremity contact with the granitic intrusive. The contact is
intensely altered to skarn.
The west side of the Monte Property shows a southerly leading road, which
follows a valley. A steep vertical western aspect of the white bluff appears to
be aligned with this valley. Drilling indicates that a well developed fault zone
contacts younger volcanic rocks (to the west) with older sediments underlying a
low lying ridge (to the east). This zone appears to underlie the valley, and
exhibits its attitude at the quarry wall. There is presence of a granitic
intrusive along the north portion of the Monte Property.
Molybdenite and lesser chalcopyrite are found irregularly distributed in the
skarn. The molybdenite occurs as clusters of coarse books and rosettes as well
as finely disseminated grains. Chalcopyrite is found as small disseminated
grains as well as larger blebs.
The mineralization is principally found in two narrow zones which are separated
by about 500 feet of barren sediments. The east zone is about 800 feet long and
has been explored by eight prospect pits and 30 to 40 foot incline near the
northeast corner of the Monte Property. The mineral bearing skarn varies from
about 6 feet to less than one food in width; however it is not mineralized over
the entire strike length.
The west zone is about 1,100 feet long and has been exposed by numerous pits,
two bulldozer trenches, an adit, and a 20-40 foot inclined shaft. The skarn
varies from about 6 inches to more than 8 feet and molybdenite and copper are
irregularly distributed there being many barren areas between the mineralized
lenses.
Both of these skarn lenses appear to die out to the south, although crystalline
limestone banks extend some distance beyond the limits of the skarn. To the
north, the skarn extends some distance beyond the Monte Property.
Minor amounts of molybdenum were found in two of the intrusive `dikes' near the
north boundary of the Monte Property. This is significant as it indicates that
the source of all molybdenum and copper mineralization was probably the
20
intrusive stock outcropping to the north of the Monte Property. Minor pyrite and
pyrrhotite were found in some of the intensely hornfels sediments.
A grab sample of garnet rich skarn and hornfels sediment from a rock dump in the
vicinity of the collars of D.D. Holes 80-2 and 80-3. The sample assayed as
follows:
Mineral Amount
------- ------
Gold 0.002 ounces/st
Silver 0.10 ounces/st
Copper 0.02%
Molybdenum 0.038%
The widespread occurrence, albeit low tenor, of molybdenite in the roof pendant,
garnet rich skarn zones and the observation that molybdenite was found in a
granitoid dyke suggest that the basement granitic intrusive are the source of
the molybdenum mineralization.
PREVIOUS WORK AND COST ESTIMATES OF EXPLORATION PROGRAMS
The present Monte Property claim area was originally discovered in the late
1890's. Since that time it has been known as the Kenallen property and has been
the subject of interest by several mining companies.
Following the discovery, test pitting, trenching and two small shafts have been
sunk on the two zones of molybdenite mineralization. John S. Stevenson gave a
detailed account of the showings in British Columbia Mines Bulletin No. 9 in
1939. Prior to this in 1925, the Mines Branch at Ottawa had examined this
showing and the description by V.L. Eardley-Wilmot is given in Bulletin 592.
J.A. Millican described the property in a report on the GUS and CHIP claims.
In 1964, Northwest Ventures Ltd. Optioned what was then known as the BRENDA
group covering the Monte Property area. This company trenched the molybdenite
zones and drilled a total of about 300 meters diamond drilling in two holes.
Moly-Win Mines Ltd. Optioned the ground in 1966 which was then known as the WIN
group under the direction of DR. H.A Quin. Subsequently, Dresser Industries was
reported to have carried out geological, geochemical and magnetometer surveys
over the mineralized zones under the direction of James M. Dawson.
Agricultural limestone has been produced in limited quantities from a quarry at
the north end of the West Zone of the molybdenite mineralization in the area of
diamond drill holes 80-7 and 80-8. This work was reported done by the Kamloops
Marble Company.
John C. Turner did rock trenching over the west zone in the spring of 1978.
Denar Mines Ltd. Optioned the Monte Property in 1979 and commenced a program of
diamond drilling. That year, two holes totaling 184 meters of diamond drilling
were completed. In the spring of 1980, Denar Mines drilled fourteen NQ core size
diamond drill holes totaling 1,155 meters for a total of 1,330 meters during the
period September 1979 through July 1980. The program in 1980 was directed by
G.E.A. von Rosen, P.Eng.
The following is a summary of the results of the 1980 program of diamond
drilling as reported by G.E.A. von Rosen, P.Eng., on pages 10 and 11 of his
report to Denar Mines Ltd., dated August 29,1980. The diamond drill hole numbers
referenced are as per Figure 5.
21
* Several holes were laid out, collared in the small linear valley to
the west, oriented easterly about 45 degrees, to intersect the dip of
the sediments.
* Results of ground magnetic survey indicated a buildup of magnetic
content of the area to the west of this valley. The EM 16 profiles
showed a strong conductivity "high" coinciding with the small valley.
For these reasons several holes were finally drilled as shown on
Section F-F.
* One hole was drilled farther south in Section G-G.
* One hole was drilled farther north of the main section (Section E-E)
to test the strong anomaly.
* However, a second, steep hole, from farther west was abandoned after
the results at Section F-F were obtained.
* Section D-D was drilled at the west to probe the area described by
Dawson as being interesting due to the occurrence of molybdenum in the
intrusive, and to the east to test the southern extension of the
interestingly mineralized east zone.
* Section C-C tested the down-dip continuation of the skarn near the
inclined adit.
* Section B-B shows one drill hole exploring the vicinity of the contact
of intrusive rock to the north, and limy sediments (forming glassy
skarn near the contact) to the south.
* Section A-A explores the fault continuation (valley) and intrusive
skarn relation to the north of the Monte Property.
Location Results of 1980 Diamond Drilling
-------- --------------------------------
Section A-A Both holes cored intrusive rock only, indicating that the
(DDH #7) intrusive reaches further south than expected.
(DDH #8)
Section B-B The hole did intersect both intrusive and skarn rocks,
(DDH #9 however metallic mineralization was scant, not assayed.
Section C-C Several section of skarn and garnet rich skarn were
DDH #10 encountered - not assayed.
Section D-D To the west, the hole cored fine grained intrusive dike
DDH #6 rock, aw well as several skarn intersections - not assayed
the DDH #11
To the east, a thick section of granitic intrusive was cut,
as well as extension of the east - zone skarn beds - not
assayed.
Section E-E The west hole was assayed. Showing silver in the volcanic
DDH 79-2 rock, and some mineralized skarn at the toe of the hole. #12
DDH 80-5 and #13 encountered skarn which shoed mineralization in #13.
DDH 80-12
DDH 80-13
Section F-F Displays 5 holes in section with the inclined shaft. The
DDH 79-1 last hole #14 was not assayed. Hole #3 displayed longer
DDH 80-1 sections of metallic mineralization.
DDH 80-2
DDH 80-3
DDH 80-14
Section G-G Skarn encountered - assayed.
DDH 80-4
The 1980 program of exploration consisted of geologizing the northern portion of
the map area to determine the location of the intrusive. It included the
measuring of ground EM signals over three east - west sections. This helped
determine the electrical conductivity of the underlying material and thereby the
finding conductivity correlation with the possible economically mineralized
22
horizons. 10 sites were selected which are suitable for drill testing the ore
making possibilities of the various skarn zones, as well as the intervening
horfelsed areas.
During the period of October 10 through October 25, 1981, a combined
magnetometer and VLF - Electromagnetic survey over the Monte Property was
completed by Geo-Teck Services Ltd., PO Box 172, Watson Lake, Yukon Territories,
Canada, under contract to Turnex Exploration Services Ltd. Suite 704-525 Seymour
Street, Vancouver, British Columbia.
The 710 magnetometer readings were taken at 50 meter intervals along east-west
lines spaced 100 meters apart. A total of 35.6 kilometers of chain and compass
line were traversed over the claim area. A north-south baseline was established
in the center of the claim area.
The range of magnetic response varied between 56,031 and 63,977 gammas. The
total magnetic relief was found to be 7,946 gammas.
The trend of the magnetic response over the claim is north - northwesterly.
In the central portion of the claim area an area of magnetically "Low" response
was found trending slightly to the north and is generally coincident with the
West zone of garnet rich skarn and molybdenite mineralization. The trend of the
skarn is sub-parallel to the magnetic response.
An area of Nicola volcanics to the southwest sector of the claim area has a
magnetically "High" response. The magnetic pattern for this area of the property
is typical of the Nicola volcanic environment.
710 VLF - electromagnetic conductor readings were taken at 50 meter intervals
along 35.6 kilometers of east-west chain and compass lines 100 meters apart.
A zone of apparent electromagnetic conductor zones was found trending northerly
through the central and east sectors of the property. The East and West zones of
skarn rich mineralization appear to be reflected in the electromagnetic
response.
The general rise in electromagnetic field strength towards the west coincides
somewhat with the westerly rise in topographic relief over the Monte Property
claim area.
The Monte Property claim is considered to be under-explored.
The presence of molybdenite in the granitoid intrusive rocks underlying the
property and the observation that the granitic intrusive in the Westwold area do
display an affinity form molybdenum suggests the Monte Property deserves a
thorough search potential mineral targets.
A proposed initial work program includes a geochemical soil survey for
molybdenum and copper is proposed as a first phase to testing the full potential
of the claim area for new mineral targets of merit. Any anomalous zones
resulting from the geochemical survey should be tested by drilling.
The second phase is proposed to test the granitic intrusive below the East and
West zones for molybdenite-bearing phases of the granite.
The property has been physically examined by Donald W. Tully, P.Eng., of Don
Tully Engineering Ltd.
23
PHASE 1
Geochemical soil survey for molybdenum and copper. 10 days on site, two days
travel, three days report preparation.
Senior Geologist -10 days @ $1,000/day $ 10,000
Consultant/Project Manager - 10 days @ $800/day $ 8,000
Blaster/Geological Assistant - 7 days @ $350/day $ 2,450
Truck rental - 1000 km @ $ 0.75/km inclusive $ 750
Boat Rental with fuel - 7 days@ $150.00/day $ 1,050
Rock samples - 50 @ $50.00 per sample $ 2,500
BC Ferries $ 300
Per Diem (with camp rental) - 21 man-days @ $125.00/day $ 2,625
Misc. sampling and field supplies $ 750
Report and reproduction costs $ 1,500
--------
TOTAL $ 29,925
========
PHASE 2
Construction of a 10 km cutline geophysical grid
(EM, Magnetometer), geochemical soil sampling,
staking additional claims. $ 75,000
PHASE 3
1000 metres of diamond drilling @ $100.00 per metre,
geological supervision, camp and supplies, transportation,
assays, report and other ancillary costs. $230,000
--------
TOTAL $334,925
========
COMPLIANCE WITH GOVERNMENT REGULATION
We will be required to conduct all mineral exploration activities in accordance
with government regulations. Such operations are subject to various laws
governing land use, the protection of the environment, production, exports,
taxes, labor standards, occupational health, waste disposal, toxic substances,
well safety and other matters. Unfavorable amendments to current laws,
regulations and permits governing operations and activities of resource
exploration companies, or more stringent implementation thereof, could have a
materially adverse impact and cause increases in capital expenditures which
could result in a cessation of operations.
EMPLOYEES
At present, we have no employees. We anticipate that we will be conducting most
of our business through agreements with consultants and third parties.
OVERVIEW OF THE EXPLORATION AND MINING PERMIT REQUIREMENTS FOR COMPANIES
OPERATING IN BRITISH COLUMBIA.
Two types of applications can be made to obtain a Mines Act Permit:
* EXPLORATION AND SMALL MINES
- A `Notice of Work' (NOW) is filed with the Mining Operations
Branch District Manager for coal or mineral exploration programs
and for approvals of placer mining, or sand and gravel pits and
quarries in accordance with the Act.
24
* MAJOR MINES
- A detailed `Mine Plan and Reclamation Program' must be submitted
to the Mining Operations Branch Regional Manager for proposed
coal or hardrock mineral mines, major expansions or modifications
of producing coal and hardrock mineral mines, and large pilot
projects, bulk samples, trial cargoes or test shipments.
Information requirements for these applications are summarized in
the Act. Mines Act permit applications are required whether or
not proposed developments fall under the Environmental Assessment
Act ("EAA").
Permit applications for projects under the EAA may be submitted concurrently
with the Project Report; however, a Project Approval Certificate must be
obtained prior to Mines Act permit issuance. No work is permitted on a mine site
without a valid Mines Act Permit.
MAJOR MINE PERMIT APPLICATION INFORMATION REQUIREMENTS
In general, the information requirements under the Code for a Major Mine Mines
Act permit application include the following:
1. a map or air photo showing the location and extent of the mine;
2. particulars of the design, construction, operation and closure of mine
components, taking into consideration the safety of the public, mine
workers, and the protection of the environment;
3. particulars of the nature and present uses of the land to be used for
the mine;
4. particulars of the nature of the mine and the extent of the area to be
occupied by the mine;
5. a program for the protection and reclamation of the land and
watercourses during the construction and operational phases of the
mining operation;
6. a conceptual final reclamation plan for the closure or abandonment of
the mining operation;
7. an estimate of the annual cost of outstanding reclamation obligations
over the planned life of the mine including the cost of long-term
monitoring and abatement; and
8. any other relevant information that may be required by an Inspector.
DESCRIPTION OF PROPERTY
Our offices are located at 1002 Ermine Court, South Lake Tahoe, CA 96150.
Telephone: (530) 721-1584. Our mailing address is PO Box 9963, South Lake Tahoe,
CA 96158.
LEGAL PROCEEDINGS
The Company is not a party to any legal proceeding. No property of the Company
is the subject of a pending legal proceeding.
MARKET PRICE OF DIVIDENDS ON THE REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDERS MATTERS
DIVIDENDS
The Company has never paid cash dividends on common stock, and does not expect
to pay such dividends in the foreseeable future.
25
MARKET INFORMATION
The Company's common shares do not trade and are not listed or quoted on any
public market.
STOCKHOLDERS
There is one stockholder of the Company's common stock.
MANAGEMENTS DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
The following discussion of our financial condition and results of operations
should be read in conjunction with our consolidated financial statements and the
notes to those statements included elsewhere in this prospectus. In addition to
the historical consolidated financial information, the following discussion and
analysis contains forward-looking statements that involve risks and
uncertainties. Our actual results may differ materially from those anticipated
in these forward-looking statements as a result of certain factors, including
those set forth under "Risk Factors" and elsewhere in this prospectus.
PLAN OF OPERATIONS
Our business plan is to proceed with the exploration of the Monte Property to
determine whether there is any potential for copper, molybdenite or other metals
located on the properties that comprise the mineral claims. If the Company is
successful in raising adequate capital through private placements or debt
financing, the Company anticipates completing the first phase in Spring and
Summer of 2012 and commencing the Second and Third phases in the Summer and Fall
of 2012. We have decided to proceed with the exploration program recommended by
the geological report. We anticipate that the three phases of the recommended
geological exploration program will cost approximately $29,925, $75,000 and
$230,000 respectively. Currently we have $2,209 in cash and cannot commence
exploration until sufficient funds have been raised. The lack of cash has kept
us from conducting any exploration work on the property. If the Company is
unsuccessful in raising the capital to commence its exploration program, the
Company will be required to pay a government fee of $2,468.65 in order to keep
the claims valid. The Company currently has enough cash on hand to pay this fee.
We anticipate that we will incur the following expenses over the next twelve
months:
>> $2,468.65 to be paid to the British Columbia Provincial Government to
keep the claims valid;
>> $29,925 in connection with the completion of Phase 1 of our planned
geological work program;
>> $75,000 in connection with the completion of Phase 2 of our planned
geological work program;
>> $230,000 for Phase 3 of our planned geological work program; and
>> $65,000 for operating expenses, including professional legal and
accounting expenses associated with compliance with the periodic
reporting requirements after we become a reporting issuer under the
Securities Exchange Act of 1934, but excluding expenses of the
offering.
If we determine not to proceed with further exploration of our mineral claims
due to a determination that the results of our initial geological program do not
warrant further exploration or due to an inability to finance further
exploration, we plan to pursue the acquisition of an interest in other mineral
claims. We anticipate that any future acquisition would involve the acquisition
26
of an option to earn an interest in a mineral claim as we anticipate that we
would not have sufficient cash to purchase a mineral claim of sufficient merit
to warrant exploration. This means that we might offer shares of our stock to
obtain an option on a property. Once we obtain an option, we would then pursue
finding the funds necessary to explore the mineral claim by one or more of the
following means: engaging in an offering of our stock; engaging in borrowing; or
locating a joint venture partner or partners.
RESULTS OF OPERATIONS
We have not yet earned any revenues. We anticipate that we will not earn
revenues until such time as we have entered into commercial production, if any,
of our mineral properties. We are presently in the pre-exploration stage of our
business and we can provide no assurance that we will discover commercially
exploitable levels of mineral resources on our properties, or if such resources
are discovered, that we will enter into commercial production of our mineral
properties.
LIQUIDITY AND CAPITAL RESOURCES
The company has current assets of $2,186 consisting only of cash as of November
30, 2011 ($5,109 as of November 30, 2010). The Company has incurred a net loss
of $16,936 for the period from April 19, 2010 (inception) to November 30, 2011
($9,641 for the period from April 19, 2010 (inception) to November 30, 2010).
The Company has no revenues as of November 30, 2011 or November 30, 2010 and has
incurred expenses of $16,936 since inception ($9,641 since inception to November
30, 2010). There were liabilities of $4,372 as of November 30, 2011 (no current
or long-term liabilities as of November 30, 2010). The company issued to the
founder 14,750,000 common shares of stock for $14,750. As of November 30, 2011
and November 30, 2010, there are Fourteen Million, seven hundred and fifty
thousand (14,750,000) shares issued and outstanding at a value of $0.001 per
share. There are no preferred shares authorized. The Company has no stock option
plan, warrants or other dilutive securities.
The Company plans to raise the capital necessary to fund our business through a
private placement and public offering of our common stock. The Company intends
to work directly with private placees once this registration statement is
declared effective. The Company anticipates that they will have either a private
placement or additional funding from its founder by Spring 2012 in order to
conducts its operations.
Based on our current operating plan, we do not expect to generate revenue that
is sufficient to cover our expenses for at least the next twelve months. In
addition, we do not have sufficient cash and cash equivalents to execute our
operations for at least the next twelve months. We will need to obtain
additional financing to operate our business for the next twelve months. We will
raise the capital necessary to fund our business through a private placement and
public offering of our common stock. Additional financing, whether through
public or private equity or debt financing, arrangements with stockholders or
other sources to fund operations, may not be available, or if available, may be
on terms unacceptable to us. Our ability to maintain sufficient liquidity is
dependent on our ability to raise additional capital. If we issue additional
equity securities to raise funds, the ownership percentage of our existing
stockholders would be reduced. New investors may demand rights, preferences or
privileges senior to those of existing holders of our common stock. Debt
incurred by us would be senior to equity in the ability of debt holders to make
claims on our assets. The terms of any debt issued could impose restrictions on
our operations. If adequate funds are not available to satisfy either short or
long-term capital requirements, our operations and liquidity could be materially
adversely affected and we could be forced to cease operations. The financial
statements do not include any adjustments relating to the recoverability and
classification of recorded assets, or the amounts of and classification of
liabilities that might be necessary in the event the Company cannot continue in
existence.
27
CHANGES AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE
For the period ended November 30, 2011, we engaged Madsen & Associates CPA's,
Inc. as our principal accountant for the purposes of auditing our financial
statements. There are not and have not been any disagreements between the
Company and our accountants on any matter of accounting principles, practices or
financial statement disclosure.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company currently has no revenues. The Company's financial instruments are
comprised of trade accounts receivables and payables which are subject to normal
credit risks.
DIRECTORS AND EXECUTIVE OFFICERS
1. EXECUTIVE OFFICERS
The Company's Executive Officers are as follows:
Name Age Position
---- --- --------
Edwin G. Morrow 67 Chief Executive Officer, Chief Financial Officer,
President, Secretary, Treasurer and Director
(Principal Executive Officer and Principal
Accounting Officer)
BIOGRAPHY OF EDWIN G. MORROW
Mr. Edwin Morrow founded the Company on April 19, 2010, and has acted as its
sole officer and director since inception.
From 1999 to Oct 2005, Mr. Morrow was retained the Director of Planning and
Environmental affairs for Kirkwood Mountain Resort a medium sized ski resort and
real estate development in the Sierra Nevada of California. This assignment
involved a variety of geological, environmental and developmental activities
including (a) Leaking underground fuel storage tank removal and abandonment per
the local and state regulations, (b) creating subdivisions from raw private
land, and overseeing the design, permitting, entitlement and early construction
of access and basic utility infrastructure, (c) completed and successfully
approved a new master plan for the resort, which plan provided full build-out
potential for the Resorts private lands of approx 1400 units. The plans had to
be shepherded through the approval process of Amador, El dorado and Alpine
counties, all which have various parts of the development within their
boundaries and jurisdictions. The residential lots created are designed to sell
for up to $1 million each.
From Oct. 2005 through Oct 2009, in addition to mineral consulting, Mr. Morrow
was contracted as the General Manager, reporting directly to the Board of
Directors of the 1800 unit Tahoe Keys Property Owners Association. The Tahoe
Keys, the only waterfront boat in/boat out residential development in Lake
Tahoe, was in need of knowledgeable technical management and oversight of
general operations. In addition to managing a private water company, the GM is
responsible for maintenance operations and oversight of the many approvals,
permits and environmental issues that result from the resort's several miles of
waterways, marinas and waterfront development, in one of the most regulated
environments in the US.
In October of 2005, Mr. Morrow's contract ended, and he returned to full time
consulting in the resource industries. He has been President, CEO and a Director
of Liberty Coal Energy Corp, an OTC publicly held coal exploration and
development company from May of 2010 to the present. Liberty is an early stage
coal company which currently has an exploration coal resource located in
Wyoming.
28
In September of 2010 and until the present, Mr. Morrow has served as President
and a Director of Siga Resources Inc, an OTC publicly held precious metal
exploration and development company. Siga is developing a gold Placer at Hope
British Columbia
Mr. Morrow holds a Bachelor of Science in Geology from Mackay School of Mines,
University of Nevada, Reno, with post graduate study in finance and mineral
economics. Mr. Morrow has held positions of increasing responsibility in the
mining and minerals industry, and in addition he has significant experience in
real estate acquisition, planning, entitlement, permitting, and engineering and
construction management.
A registered Professional Geologist, Mr. Morrow is a member of the Society for
Mineral Exploration of the American Institute of Mining Engineers, has served on
the Board of Directors of the California Mining Association and as an Executive
Council Member of the Industry Advisory Board, University of Nevada, Reno,
Mackay School of Mines.
Mr. Morrow has worked as an employee or consultant for over 35 years in
exploration, development and production in the natural resources area in many
commodities. Mr. Morrow managed Laminco Resources Inc, (a TSE listed public
company) beginning in October of 1995 under a consulting agreement as President
and Chief Operating Officer. He was named Chief Executive Officer in September
of 1996. Laminco developed precious metals and copper resources in Canada, and
North and South America. Laminco Resources was merged with a Norwegian public
company in 2001, and he served as Chief operating officer and on the Board of
Directors of the merged company until December 2005.
Prior to joining Laminco, Mr. Morrow served from 1993 to late 1995 as Director
of Geology Services at Homestake Mining Company's flagship mine in Lead, South
Dakota. In this position he was responsible for the mine's geology, exploration
and grade control programs. The Homestake mine, in operation for over 120 years,
produced in excess of 500,000 ounces of gold annually from both underground and
open pit sources.
In 1981, Mr. Morrow was retained to initiate a new US based hard minerals
division for Asamera Oil Inc, a Canadian Oil producer. Starting with himself and
one assistant, until mid 1993 he held multiple positions with Asamera Minerals
U.S., Inc., including General Manager, Minerals, and General Manager of
Exploration and Acquisition. Asamera held interests in precious metals,
strategic and industrial minerals projects. Asamera was working globally and had
active projects in Canada, the USA, Mexico, Guatemala, West Germany, South East
Asia and Australia. Under Mr. Morrow's direction, Asamera discovered and placed
into production the Cannon Gold Mine in Wenatchee Washington, U.S.A. Asamera
also acquired and operated the Gooseberry Mine, an underground gold/silver
property near Reno, Nevada. Asamera was acquired by Gulf Canada in 1989, and the
mineral operation was wound up except the Cannon mine by mid 1993.
From 1974 to 1981, Mr. Morrow held several exploration and production management
positions with industrial mineral producers, Interpace refractories in
California and Federal Bentonite Corporation in South Dakota, Montana and
Wyoming. Mr. Morrow was responsible for multiple exploration and production
operations in diverse areas, producing a variety of commodities, including high
duty refractories, specialty clays for engineering and construction uses, glass
sand, limestone and coal.
From mid 1970 until early 1974, Mr. Morrow was an exploration geologist with
Utah Construction and Mining Co./Utah International Inc, working on uranium
projects in Wyoming and the pacific northwest. During this time the Big Eagle
Mine near Jeffrey City WY was discovered by the company.
29
Directly out of University, Mr Morrow served until mid 1970 years as Asst
Manager of Sonoma International's Altoona Mine, an underground mercury producer
in Northern California.
Mr. Morrow did not agree to purchase the Company's shares or serve as a director
and officer with the intention to sell the enterprise to a third party looking
to obtain a public reporting entity and he has no such present intention.
2. DIRECTORS
Name Position
---- --------
Edwin G. Morrow sole Director
See biography above.
Mr. Morrow's specific experience, qualifications, attributes and skills for
being a director of a mining company are as follows:
1. Mr. Morrow holds a bachelors degree in Geology from the Mackay School
of Mines at the University of Nevada, Reno, Nevada;
2. Mr. Morrow is a registered Professional Geologist a member of the
Society for Mineral Exploration of the American Institute of Mining
Engineers, has served on the Board of Directors of the California
Mining Association and as an Executive Council Member of the Industry
Advisory Board, University of Nevada, Reno, Mackay School of Mines;
3. Mr. Morrow has over 35 years of experience in the mining industry
including:
a. Director, President, and/or CEO of Zaruma Resources Inc.
(previously Laminco Resources Ltd.) a Toronto Stock Exchange
Company from 1995 through 2005.
b. 1993 to late 1995 as Director of Geology Services at Homestake
Mining Company's flagship mine in Lead, South Dakota;
c. From 1981 - 1995 In 1981, Mr. Morrow held multiple positions with
Asamera Minerals U.S., Inc., including General Manager, Minerals,
and General Manager of Exploration and Acquisition;
4. Currently, Mr. Morrow is serving on two other Boards for Siga
Resources Inc. since late 2010 and Liberty Coal Energy Corp. since mid
2010.
5. No events have occurred in the last 10 years that are material to the
ability and integrity of Mr. Morrow.
EXECUTIVE COMPENSATION AND CORPORATE GOVERNANCE
Summary Compensation Table
(All figures are in US dollars)
Summary Compensation Table (All figures are in US dollars) The following table
sets forth the overall compensation earned in the fiscal year that ended
November, 2011 and November 30, 2010 by (1) each person who served as the
principal executive officer of the Company for fiscal year 2010 and 2011; (2)
the Company's most highly compensated executive officers with compensation of
$100,000 or more during 2011 and 2010 fiscal years; and (3) those individuals,
if any, who would have otherwise been in included in section (2) above but for
the fact that they were not serving as an executive of the Company as of MONTE.
30
Non-Equity Nonqualified
Name and Incentive Deferred
Principal Fiscal Stock Option Plan Compensation All Other
Position Year Salary($) Bonus($) Awards($) Awards($) Compensation($) Earnings($) Compensation($)
-------- ---- --------- -------- --------- --------- --------------- ----------- ---------------
Edwin G. Morrow 2010 Nil Nil Nil Nil Nil Nil Nil
Chief Executive and
Officer, Chief 2011
Financial Officer,
President, Secretary,
Treasurer and
Director
(Principal Executive
Officer and Principal
Accounting Officer)
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
As of March 29, 2011, there were Fourteen Million Seven Hundred and Fifty
Thousand (14,750,000) shares of common stock issued and outstanding.
(1) This table is based on Fourteen Million Seven Hundred and Fifty Thousand
(14,750,000) shares of common stock issued and outstanding.
As of the date of this prospectus, we had the following security holder holding
greater than 5%:
Percentage of Class
-------------------
Name & Address of Owner and Amount and Nature of Before After
Position if Applicable Beneficial Ownership Offering Offering
---------------------- -------------------- -------- --------
Edwin G. Morrow 14,750,000 100% 52.5%
1002 Ermine Court
South Lake Tahoe, CA 96150
Chief Executive Officer,
Chief Financial Officer,
President, Secretary, Treasurer
and Director (Principal Executive
Officer and Principal Accounting
Officer)
Total Officers, Directors & 14,750,000 100% 52.5%
Significant Shareholders as a
group
31
TRANSACTIONS WITH RELATED PERSONS, PROMOTERS AND CERTAIN CONTROL PERSONS
As of the date of this statement, the Company has entered into an agreement
whereby it has sold 14,750,000 shares to its founder for total proceeds of
$14,750.
There are no, and have not been since inception, any other material agreements
or proposed transactions, whether direct or indirect, with any of the following:
* Any of our directors or officers;
* Any nominee for election as a director;
* The principal security holder(s) identified in the preceding Security
Ownership of Certain Beneficial Owners and Management " section; or
* Any relative or spouse, or relative of such spouse, of the above
referenced persons;
* Any promoters.
The Company is paying the costs of this offering on behalf of our founder who is
the selling shareholder. The Company is anticipating that once the company
becomes reporting, it will be more attractive to potential investors. As a
result, the Company has agreed to pay the costs of this registration statement.
32
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and
Stockholders of Monte Resources Inc.
(a Pre-Exploration Stage Company)
We have audited the accompanying balance sheets of Monte Resources Inc. (a
Pre-Exploration Stage Company) at November 30, 2011 and 2010 and the related
statements of operations, stockholders' equity, and cash flows for year ended
November 30, 2011, period April 19, 2010 (date of inception) to November 30,
2010, and for the period April 19, 2010 (date of inception) to November 30,
2011. The Company's management is responsible for these financial statements.
Our responsibility is to express an opinion on these financial statements based
on our audit.
We conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. The Company is not required to
have nor were we engaged to perform an audit of its internal control over
financial reporting. Our audit included consideration of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness for the company's internal control over financial
reporting. Accordingly, we express no such opinion. An audit includes examining,
on a test basis, evidence supporting the amounts and disclosures in the
financial statements, assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Monte Resources Inc. (a
Pre-Exploration Stage Company) at November 30, 2011 and 2010 and the results of
its operations and its cash flows for the year ended November 30, 2011, period
April 19, 2010 (date of inception) to November 30, 2010, and for the period
April 19, 2010 (date of inception) to November 30, 2011, in conformity with
accounting principles generally accepted in the United States of America.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. The Company will need additional
working capital for its planned activity, which raises substantial doubt about
its ability to continue as a going concern. Management's plans in regard to
these matters are described in the notes to the financial statements. These
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.
/s/ Madsen & Associates CPA's, Inc.
-----------------------------------------------------
Madsen & Associates CPA's, Inc.
Salt Lake City, Utah
March 22, 2012
F-1
MONTE RESOURCES INC.
Pre-exploration Stage Company
BALANCE SHEET
November 30, 2011
--------------------------------------------------------------------------------
November 30, November 30,
2011 2010
-------- --------
ASSETS
CURRENT ASSETS
Cash $ 2,186 $ 5,109
-------- --------
TOTAL CURRENT ASSETS 2,186 5,109
-------- --------
TOTAL ASSETS $ 2,186 $ 5,109
======== ========
LIABILITIES AND STOCKHOLDERS' (DEFICIENCY) EQUITY
CURRENT LIABILITIES
Accounts payable $ 1,275 $ --
Advances 3,097 --
-------- --------
TOTAL CURRENT LIABILITIES 4,372 --
-------- --------
STOCKHOLDERS' (DEFICIENCY) EQUITY
Common stock
75,000,000 shares authorized, at $.001 par value
14,750,000 shares issued and outstanding on
November 30,2011 and November 30, 2010 14,750 14,750
Additional paid-in capital -- --
Accumulated deficit during the pre-exploration stage (16,936) (9,641)
-------- --------
TOTAL STOCKHOLDERS' (DEFICIENCY) EQUITY (2,186) 5,109
-------- --------
TOTAL LIABILITIES AND STOCKHOLDERS' (DEFICIENCY) EQUITY $ 2,186 $ 5,109
======== ========
The accompanying notes are an integral part of these financial statements
F-2
MONTE RESOURCES INC.
Pre-exploration Stage Company
STATEMENT OF OPERATIONS
--------------------------------------------------------------------------------
April 19, 2010 April 19, 2010
(date of (date of
Year ended inception) to inception) to
November 30, November 30, November 30,
2011 2010 2011
------------ ------------ ------------
REVENUES $ -- $ -- $ --
------------ ------------ ------------
EXPENSES
Impairment loss on mineral claim
(Note 3) -- 8,500 8,500
Exploration costs 2,737 -- 2,737
General and administrative 4,558 1,141 5,699
------------ ------------ ------------
NET LOSS $ (7,295) $ (9,641) $ (16,936)
============ ============ ============
NET LOSS PER SHARE (BASIC AND DILUTED) $ (0.00) $ (0.00) $ (0.00)
============ ============ ============
WEIGHTED AVERAGE NUMBER OF SHARES
OUTSTANDING (BASIC AND DILUTED) 14,750,000 1,912,111
============ ============
The accompanying notes are an integral part of these financial statements
F-3
MONTE RESOURCES INC.
Pre-Exploration Stage Company
STATEMENT OF STOCKHOLDERS' (DEFICIENCY) EQUITY
For the Period April 19, 2010 (date of inception) to November 30, 2011
--------------------------------------------------------------------------------
Accumulated
Deficit
Common Stock Additional During the
--------------------- paid-in Pre-Exploration
Shares Amount Capital Stage Total
------ ------ ------- ----- -----
BALANCE APRIL 19, 2010 (date of inception) -- $ -- $ -- $ -- $ --
Issuance of common stock for cash
at $.001 14,750,000 14,750 -- -- 14,750
Net loss - period ended November 30, 2010 -- -- -- (9,641) (9,641)
---------- -------- -------- -------- --------
Balance November 30, 2010 14,750,000 14,750 -- (9,641) (5,109)
Net operating loss - year ended
November 30, 2011 -- -- -- (7,295) (7,295)
---------- -------- -------- -------- --------
BALANCE NOVEMBER 30, 2011 14,750,000 $ 14,750 $ -- $(16,936) $ (2,186)
========== ======== ======== ======== ========
The accompanying notes are an integral part of these financial statements
F-4
MONTE RESOURCES INC.
Pre-exploration Stage Company
STATEMENT OF CASH FLOWS
--------------------------------------------------------------------------------
April 19, 2010 April 19, 2010
(date of (date of
Year ended inception) to inception) to
November 30, November 30, November 30,
2011 2010 2011
-------- -------- --------
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (7,295) $ (9,641) $(16,936)
Adjustments to reconcile net loss to net cash
provided by operating activities
Impairment loss on mineral claim -- 8,500 8,500
Change in operating assets and liabilities
Accounts payable 1,275 -- 1,275
-------- -------- --------
NET CASH FLOWS USED IN OPERATING ACTIVITIES (6,020) (1,141) (7,161)
-------- -------- --------
CASH FLOWS FROM INVESTING ACTIVITIES
Investment in mineral claim -- (8,500) (8,500)
-------- -------- --------
NET CASH FLOWS USED IN INVESTING ACTIVITIES -- (8,500) (8,500)
-------- -------- --------
CASH FLOWS FROM FINANCING ACTIVITIES
Advances 3,097 -- 3,097
Proceeds from issuance of common stock -- 14,750 14,750
-------- -------- --------
NET CASH FLOWS PROVIDED BY FINANCING ACTIVITIES 3,097 14,750 17,847
-------- -------- --------
Net Change in Cash (2,923) 5,109 2,186
Cash at Beginning of Period 5,109 -- --
-------- -------- --------
CASH AT END OF PERIOD $ 2,186 $ 5,109 $ 2,186
======== ======== ========
The accompanying notes are an integral part of these financial statements
F-5
MONTE RESOURCES INC.
Pre-exploration Stage Company
NOTES TO FINANCIAL STATEMENTS
November 30, 2011
--------------------------------------------------------------------------------
1. ORGANIZATION
The Company was incorporated under the laws of the state of Nevada on April 19,
2010 and as of November 30, 2011, has 75,000,000 authorized common shares with a
par value of $.001.
The company was organized for the purpose of commencing a mining operation in
central British Columbia, Canada. The Company has a November 30 fiscal year and
is in the pre-exploration stage.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Accounting Method
The Company recognizes income and expenses based on the accrual method of
accounting.
Dividend Policy
The Company has not yet adopted a policy regarding payment of dividends.
Income Taxes
The Company utilizes the liability method of accounting for income taxes. Under
the liability method deferred tax assets and liabilities are determined based on
the differences between financial reporting and the tax bases of the assets and
liabilities and are measured using the enacted tax rates and laws that will be
in effect, when the differences are expected to reverse. An allowance against
deferred tax assets is recorded, when it is more likely than not, that such tax
benefits will not be realized.
On November 30, 2011, the Company had a net operating loss available for
carry-forward of $16,936. The income tax benefit of approximately $6,000 from
the carry-forward has been fully offset by a valuation reserve because the use
of the future tax benefit is doubtful since the Company has been unable to
project a reliable estimated net income for the future. The net operating loss
will begin to expire in 2030.
F-6
MONTE RESOURCES INC.
Pre-exploration Stage Company
NOTES TO FINANCIAL STATEMENTS
November 30, 2011
--------------------------------------------------------------------------------
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Financial and Concentrations Risk
The Company has no financial and concentration risks.
Basic and Diluted Net Income (Loss) Per Share
Basic net income (loss) per share amounts are computed based on the weighted
average number of shares actually outstanding. Diluted net income (loss) per
share amounts are computed using the weighted average number of common shares
and common equivalent shares outstanding as if shares had been issued on the
exercise of any common share rights unless the exercise becomes anti-dilutive
and then the basic and diluted per share amounts are the same.
Statement of Cash Flows
For the purposes of the statement of cash flows, the Company considers all
highly liquid investments with a maturity of three months or less to be cash
equivalents.
Foreign Currency Translations
The books of the Company are maintained in United States dollars and this is the
Company's functional and reporting currency. Transactions denominated in other
than the United States dollar are translated as follows with the related
transaction gains and losses being recorded in the Statement of Operations:
(i) Monetary items are recorded at the rate of exchange prevailing as at
the balance sheet date;
(ii) Non-Monetary items including equity are recorded at the historical
rate of exchange; and
(iii) Revenues and expenses are recorded at the period average in which the
transaction occurred.
Revenue Recognition
Revenue will be recognized on the sale and delivery of a product or the
completion of a service provided.
F-7
MONTE RESOURCES INC.
Pre-exploration Stage Company
NOTES TO FINANCIAL STATEMENTS (Continued)
November 30, 2011
--------------------------------------------------------------------------------
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Estimates and Assumptions
Management uses estimates and assumptions in preparing financial statements in
accordance with accounting principles generally accepted in the United States of
America. Those estimates and assumptions affect the reported amounts of the
assets and liabilities, the disclosure of contingent assets and liabilities, and
the reported revenues and expenses. Actual results could vary from the estimates
that were assumed in preparing these financial statements.
Fair Value of Financial Instruments
The carrying amounts of financial instruments are considered by management to be
their estimated fair values due to their short term maturities.
Mineral Property Costs
Mineral property acquisition costs are initially capitalized when incurred.
These costs are then assessed for impairment when factors are present to
indicate the carrying costs may not be recoverable. Mineral exploration costs
are expensed when incurred.
Environmental Requirements
At the report date environmental requirements related to the mineral claim
acquired are unknown and therefore any estimate of any future cost cannot be
made.
Recent Accounting Pronouncements
The Company does not expect that the adoption of any recent accounting
pronouncements will have a material impact on its financial statements.
F-8
MONTE RESOURCES INC.
Pre-exploration Stage Company
NOTES TO FINANCIAL STATEMENTS (Continued)
November 30, 2011
--------------------------------------------------------------------------------
3. INVESTMENT IN MINING PROPERTIES
The Company has entered into an Asset Purchase Agreement to acquire three mining
claims near Merritt, British Columbia Canada for CAD. The size of these claims
is approximately 617 hectares. The mining claims will expire unless renewed in
February 2013 (for Tenures 585538 and 681143) and in April 2012 (for Tenure
753342). The mining regulations call for annual fees of $4 per hectare for the
first three years and $8 per hectare thereafter. Payment can also be made by way
of qualified work on the property.
Tenure No. Claim Name Map No. Issue Date Good to Date Area (ha) Annual fees
---------- ---------- ------- ---------- ------------ --------- -----------
595538 KENALLAN 082L 2008/Dec/05 2012/Feb/28 82.303 $ 329
681143 KENALLAN 2 082L 2009/Dec/08 2012/Feb/28 82.318 329
753342 KENALLAN 3 082L 2010/Apr/20 2011/Apr/20 452.708 1,811
TOTAL 617.329 HA $ 2,469*
Expenditures
Claim Name Mining Claims Exploration Total
---------- ------------- ----------- -----
Kenallan Claims $8,500 $ -- $8,500
----------
* Plus filing fees of $268
During the year ended November 30, 2011, the Company has made payments in lieu
of work of $2,737. These amounts are shown as exploration costs in the statement
of operations.
Subsequent to November 30, 2011, the Company made a payment of $802 to extend
the lease for Tenures 595538 and 681143 to February 28, 2013.
4. ADVANCES
During the year ended November 30, 2011, the Company received advances of $3,097
from a third party. These advances are non-interest bearing and payable on
demand.
5. CAPITAL STOCK
From its inception the Company has issued 14,750,000 common shares for $14,750.
6. SIGNIFICANT TRANSACTIONS WITH RELATED PARTIES
Officer-directors have acquired 100% of the Company's outstanding common stock.
F-9
MONTE RESOURCES INC.
Pre-exploration Stage Company
NOTES TO FINANCIAL STATEMENTS (Continued)
November 30, 2011
--------------------------------------------------------------------------------
7. GOING CONCERN
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. The Company does not have sufficient
working capital for its planned activity, which raises substantial doubt about
its ability to continue as a going concern.
Continuation of the Company as a going concern is dependent upon obtaining
additional working capital and the management of the Company has developed a
strategy, which it believes will accomplish this objective through short term
loans from an officer-director, and additional equity investment, which will
enable the Company to continue operations for the coming year.
F-10
PART II--INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The expenses to be paid by us in connection with the securities being registered
are as follows:
Amount
------
Securities and Exchange Commission Registration Fee............. $ 0.81
Audit Fees and Expenses......................................... 3,500.00
Legal Fees and Expenses......................................... 1,500.00
Transfer Agent and Registrar Fees and Expenses.................. 400.00
Miscellaneous Expenses.......................................... 840.00
----------
Total.......................................................... $ 6,240.81*
----------
* Estimated amount
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 78.7502 of the Nevada Revised Statutes and Article VII of our Articles
of Incorporation permit us to indemnify our officers and directors and certain
other persons against expenses in defense of a suit to which they are parties by
reason of such office, so long as the persons conducted themselves in good faith
and the persons reasonably believed that their conduct was in our best interests
or not opposed to our best interests and, with respect to any criminal action or
proceeding, had no reasonable cause to believe their conduct was unlawful. See
our Articles of Incorporation filed as Exhibit 2.1 to this registration
statement.
Indemnification is not permitted in connection with a proceeding by us or in our
right in which the officer or director was adjudged liable to us or in
connection with any other proceeding charging that the officer or director
derived an improper personal benefit, whether or not involving action in an
official capacity.
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES
The Company issued 14,750,000 shares of common stock to the founder, Edwin G.
Morrow, on April 19, 2010, at a price of $0.001 per share, for total proceeds of
$14,750. These shares were issued pursuant to Section 4(2) of the Securities
Act. The 14,750,000 shares of common stock are restricted shares as defined in
the Securities Act. This issuance was made to the Company's founder who is a
sophisticated investor. As promoter of our Company since our inception, the
founder is in a position of access to relevant and material information
regarding our operations.
II-1
ITEM 16. EXHIBITS
The following exhibits are included as part of this Form S-1 or are incorporated
by reference to our previous filings:
Exhibit No. Description
----------- -----------
3.1 Articles of Incorporation*
3.2 Bylaws*
5.1 Legal Opinion of Fred Bauman, Attorney, March 29, 2012
10.1 Asset Purchase Agreement*
23.1 Consent of Madsen & Associates, CPA's, March 29, 2012
----------
* Incorporated by reference to the S-1 Registration Statement Filed March 14,
2011.
ITEM 17. UNDERTAKINGS
The undersigned registrant hereby undertakes to provide to the underwriter at
the closing specified in the underwriting agreements certificates in such
denominations and registered in such names as required by the underwriter to
permit prompt delivery to each purchaser.
The undersigned registrant hereby undertakes:
a. To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
1. To include any propectus required by section 10(a)(3) of the
Securities Act of 1933;
2. To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in
the aggregate, the changes in volume and price represent no more than
20% change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective registration
statement.
3. To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement;
II-2
DEALER PROSPECTUS DELIVERY OBLIGATION
Until April 30, 2012, all dealers that effect transactions in these securities,
whether or not participating in this offering, may be required to deliver a
prospectus. This is in addition to the dealers' obligation to deliver a
prospectus when acting as underwriters and with respect to their unsold
allotments or subscriptions.
II-3
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant has
duly caused this registration statement Form S-1 to be signed on its behalf by
the undersigned, in the City of South Lake Tahoe, CA, on March 29, 2012.
MONTE RESOURCES INC.
By: /s/ Edwin G. Morrow
-------------------------------------------------
Edwin G. Morrow,
Chief Executive Officer, Chief Financial Officer,
(Principal Executive Officer and Principal
Accounting Officer)
Pursuant to the requirements of the Securities Act of 1933, this registration
statement has been signed by the following person, in the capacity and on the
date indicated.
Signature Title Date
--------- ----- ----
/s/ Edwin G. Morrow Chief Executive Officer, March 29, 2012
-------------------------- Chief Financial Officer, President,
Edwin G. Morrow Secretary, Treasurer and Director
(Principal Executive Officer and
Principal Accounting Officer)
II-4