As filed with the Securities and Exchange Commission on January 25, 2013
Registration No. 333-______
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-1
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
JEWEL EXPLORATIONS 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.)
#2-556 Furby Street,
Winnipeg, Manitoba R3B 2V8
(Address, including zip code, and telephone number, including area code,
of registrant's principal executive Offices)
Business Filings Incorporated
311 S Division Street
Carson City, Nevada 89703
Telephone 800-981-7183
(Name, address, including zip code, and telephone number, including area code
of Agent for Service)
Copies of all communication to:
Diane D. Dalmy
Attorney at Law
2000 East 12th Avenue
Suite 32/10B
Denver, Colorado 80206
303.985.9324 (telephone)
303.988.6954 (facsimile)
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, or a smaller reporting company. See 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
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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) 10,000,000 $0.002 $20,000 $2.73*
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Total Registration Fee $20,000 $2.73*
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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.
* Estimated 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 February 22, 2013, 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 JANUARY 25, 2013
PROSPECTUS
JEWEL EXPLORATIONS INC.
10,000,000 SHARES OF COMMON STOCK
$0.002 PER SHARE
The selling stockholder named in this prospectus, namely Sydney Kraft, our sole
executive officer and director, is offering 10,000,000 shares of common stock of
Jewel Explorations Inc. at $0.002 per common share. Mr. Kraft currently holds
100% of our issued and outstanding 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 $0.002 per common
share and an offering period of 28 days from the initial effectiveness date of
this prospectus. This is a fixed price for the duration of the offering. The
selling stockholder does not intend to extend the offering beyond the 28 day
offering period. The selling stockholder, Mr. Kraft, 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, Mr. Kraft, 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 50%
of the Company's outstanding securities. All of the outstanding shares are
currently held by the selling shareholder, Mr. Kraft, the Company's sole
director, officer, stockholder, and promoter, and these shares were obtained
after our date of inception of May 31, 2012.
Our common stock is presently not traded on any market or securities exchange.
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.
Jewel Explorations Inc. qualifies as an "emerging growth company" as defined in
the Jumpstart our Business Startups Act (the "JOBS Act"), and will therefore be
subject to reduced public company reporting requirements.
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 $5,675. The Company will pay these expenses.
This Prospectus is dated January 25, 2013
TABLE OF CONTENTS
Page
----
PROSPECTUS SUMMARY 3
RISK FACTORS 6
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS 12
USE OF PROCEEDS 13
DETERMINATION OF OFFERING PRICE 13
DILUTION 13
SELLING SECURITY HOLDER 14
PLAN OF DISTRIBUTION 14
DESCRIPTION OF SECURITIES TO BE REGISTERED 16
INTERESTS OF NAMED EXPERTS AND COUNSEL 16
INFORMATION WITH RESPECT TO THE REGISTRANT 16
DESCRIPTION OF BUSINESS 17
MANAGEMENTS DISCUSSION AND ANALYSIS 31
DIRECTORS AND EXECUTIVE OFFICERS 33
EXECUTIVE COMPENSATION AND CORPORATE GOVERNANCE 34
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 JEWEL EXPLORATIONS INC.
CORPORATE BACKGROUND AND INFORMATION
JEWEL EXPLORATIONS INC.
Jewel Explorations Inc. was organized under the laws of the State of Nevada on
May 31, 2012, to explore mineral properties in North America.
Jewel Explorations Inc. is engaged in the exploration for gold and other
minerals. The Company has acquired one Mineral Titles Online "MTO" mineral claim
totaling 164.52 hectares.The Mystic Gold Property is located on Northern
Vancouver Island adjacent to Klootchlimmis Creek, which drains north ward into
Quatsino Sound. The property is accessible from the town of Port Alice via
logging roads. We refer to these mining claims as the Mystic Gold Property. This
property is without known reserves. To current date the Company has never
commenced any operational/exploration activity other than issuing shares.
The Mystic Gold Property comprises one mineral claim composed of 8 MTO cell
claim units totaling 164.52 hectares;
BC Tenure # Work Due Date Units Total Area (Ha.)
----------- ------------- ----- ----------------
998882 June 19, 2013 8 164.52
We require an estimated total of $281,000 to implement the three phases of our
exploration plan. We have not yet commenced our exploration plan.
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 Jewel Explorations Inc.'s financial prospects and the Company's ability to
continue as a going concern.
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 development 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 the end of 2012 in order to conducts its operations.
Our offices are located at: #2-556 Furby Street, Winnipeg, Manitoba R3B 2V8
3
THE OFFERING
Securities offered 10,000,000 shares of common stock
Selling stockholder Sydney Kraft
Offering price $0.002 per share
Shares outstanding prior
to the offering 24,000,000 shares of common stock
Shares to be outstanding
after the offering 24,000,000 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 Ended
August 31, 2012
---------------
Revenues 0
Operating expenses 5,675
Net loss from operations 5,675
Net loss before taxes 5,675
Loss per share - basic and diluted 0.00
Weighted average shares outstanding basic 24,000,000
BALANCE SHEET DATA
At August 31, 2012
------------------
Cash and cash equivalents 18,825
Total current assets 18,825
Mineral Property 8,500
-------
Total assets 27,325
Accounts payable 3,000
Current liabilities 3,000
Total liabilities 3,000
Common stock 24,000
Additional paid-in capital 6,000
Deficit accumulated during exploration period (5,675)
-------
Total stockholder's equity 24,325
-------
Total liabilities and stockholder's equity 27,325
=======
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 to the period ended on August 31, 2012 the Company has not
generated any revenue. Rather, the Company incurred a net loss of $5,675 from
inception (May 31, 2012) through August 31, 2012. The Company does not currently
have any revenue producing operations. The Company is currently not 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 $26,000 to complete the first phase of our exploration program and
$255,000 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. The Company
reasonably believes that it will have either a private placement or additional
funding from its founder by Spring 2013 in order to conduct its operations.
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 (May 31, 2012) to the
period ended on August 31, 2012, we incurred a net loss of $5,675 and did not
earn any revenue. The Company does not currently have any revenue producing
operations.
WE HAVE NO OPERATING HISTORY. THERE CAN BE NO ASSURANCE THAT WE WILL BE
SUCCESSFUL IN OUR MINERAL EXPLORATION ACTIVITIES.
6
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
gold 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. SYDNEY KRAFT, 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. Sydney Kraft, our sole Executive
Officer Director, will beneficially own 50% of our issued and outstanding common
stock, assuming he is able to sell all of the shares in this offering. If he
does not sell all of the shares in this offering, he will own more that 50% of
the shares. Mr. Kraft may exercise some control as a significant shareholder
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. SYDNEY KRAFT, OUR SOLE EXECUTIVE OFFICER AND
DIRECTOR, AND, AS SUCH, THERE MAY BE SIGNIFICANT RISK TO THE COMPANY OF A
CONFLICT OF INTEREST.
Mr. Sydney Kraft, our sole Executive Officer and Director, makes decisions such
as the approval of related party transactions, the compensation of Executive
Officers, and the overseeing 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. Kraft will exercise full control over all matters that typically
require the approval of a Board of Directors. Mr. Kraft'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. Sydney Kraft
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. Kraft 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. Kraft, conflicts of interest and similar matters.
We have not adopted corporate governance measures such as an audit or other
independent committees and we presently only have one director. Stockholders
should bear in mind our current lack of corporate governance measures in
formulating their investment decisions.
BECAUSE SYDNEY KRAFT, 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.
7
It is possible that the demands on Mr. Sydney Kraft, 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. Kraft will devote fewer than 12-15 hours per month or 3-4 hours
per week to the affairs of the Company. In addition, Mr. Kraft may not possess
sufficient time to manage our business if the demands of managing our business
increased substantially.
SYDNEY KRAFT, OUR SOLE EXECUTIVE OFFICER AND DIRECTOR, LACKS TECHNICAL TRAINING
IN MINERAL EXPLORATION OR MINING, AND MAY NOT BE FULLY AWARE OF THE REQUIREMENTS
WITHIN THE MINING INDUSTRY.
The management of the Company, our sole executive officer and director, Mr.
Kraft, despite being in the mining industry, has no technical training in
minerals exploration or mining, or technical training in exploring for,
starting, or operating a mine, and that with no direct training in these areas,
and as such, may not be fully aware of many of the specific requirements related
to working within the mining industry.
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. SYDNEY KRAFT HAS NOT PHYSICALLY INSPECTED THE SUBJECT PROPERTY AND DOES NOT
HAVE CURRENT PLANS TO VISIT THE PROPERTY.
Mr. Kraft has not visited the property, but has relied on property reports
prepared by people who are knowledgeable with the property. With respect to the
further exploration of the property, Mr. Kraft 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. Kraft 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 MINERALS, WHICH IS BEYOND OUR
CONTROL. THE PRICE OF GOLD AND OTHER MINERALS ARE VOLATILE AND PRICE CHANGES ARE
BEYOND OUR CONTROL.
The price of gold and other minerals can fluctuate. The prices these minerals
have been and will continue to be affected by numerous factors beyond the
Company's control. Factors that affect the price of these minerals include the
demand from consumers for products that use gold and other minerals, 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.
8
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 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
dependent 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.mMr.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.
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
9
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 $1,500 in lieu of work to the British
Columbia Provincial government on an annual basis to keep our claims in good
standing. Our claims are due on June 19, 2013.
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 August 31, 2012 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.
RISKS RELATED TO THIS OFFERING AND OUR STOCK
WE WILL NEED TO RAISE ADDITIONAL CAPITAL. 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.
Jewel Explorations Inc. will need to raise additional capital 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.
10
IF WE COMPLETE 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 24,000,000 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. $2,675,000 for the last three years.
Section "15(g)" of the United States Securities Exchange Act of 1934, as
amended, and Regulation Section "240.15g(c)2" of the SEC require broker dealers
dealing in penny stocks to provide potential investors with a document
disclosing the risks of penny stocks and to obtain a manually signed and dated
written receipt of the document before effecting any transaction in a penny
stock for the investor's account. Potential investors in the Company's common
shares are urged to obtain and read such disclosure carefully before purchasing
any common shares that are deemed to be "penny stock".
Moreover, Regulation Section "240.15g-9" of the SEC requires broker dealers in
penny stocks to approve the account of any investor for transactions in such
stocks before selling any penny stock to that investor. This procedure requires
the broker dealer to: (a) obtain from the investor information concerning his or
her financial situation, investment experience and investment objectives; (b)
reasonably determine, based on that information, that transactions in penny
11
stocks are suitable for the investor and that the investor has sufficient
knowledge and experience as to be reasonably capable of evaluating the risks of
penny stock transactions; (c) provide the investor with a written statement
setting forth the basis on which the broker dealer made the determination in
(ii) above; and (d) receive a signed and dated copy of such statement from the
investor confirming that it accurately reflects the investor's financial
situation, investment experience and investment objectives. Compliance with
these requirements may make it more difficult for investors in the Company's
common shares to resell their common shares to third parties or to otherwise
dispose them of. 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,
* drilling prospects,
12
* development and drilling potential,
* business strategy,
* expansion and growth of our business and operations, and
* our estimated financial information.
In evaluating these statements, 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 $0.002 per share. As the Company has yet to generate any
revenue, and has not begun business operations, the Company has deemed this 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.
13
SELLING SECURITY HOLDER
Sydney Kraft Chief Executive Officer, Chief Financial
Officer, President, Secretary, Treasurer and
Director (Principal Executive Officer and
Principal Accounting Officer)
Securities offered 10,000,000 shares of common stock
Selling stockholder(s) Sydney Kraft
Offering price $0.002 per share
Shares outstanding prior
to the offering 24,000,000 shares of common stock
Shares to be outstanding
after the offering 24,000,000 shares of common stock
Percentage of the class to be
owned by selling stockholder
after the offering 50%
Use of proceeds Jewel Explorations Inc. 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 $0.002 for an offering period of 28
days from the initial effectiveness date of this prospectus. 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 $0.002; and
* a combination of any such methods of sale or any other lawful method.
14
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
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, Mr. Kraft, and any underwriters, broker-dealers or
agents that participate in the sale of the common stock or interests therein are
"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 may 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.
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 of 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
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
15
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
$5,675, 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
August 31, 2012, consists of 75,000,000 shares of common stock, par value $0.001
per share, of which there are 24,000,000 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
De Joya Griffith, LLC, our independent registered public accountant, has audited
our financial statements included in this prospectus and Registration Statement
to the extent and for the periods set forth in their audit report. De Joya
Griffith, LLC has presented its report with respect to our audited financial
statements.
Ms. Diane Dalmy, Attorney at Law, 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
16
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
Jewel Explorations Inc. was incorporated in the State of Nevada on May 31, 2012.
It 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.
Jewel Explorations Inc., which is also referred to herein as Jewel Explorations
Inc. or the Company, is engaged in the exploration for gold and other minerals.
The Company has acquired one MTO mineral claim totaling 164.52 hectares. The
Mystic Gold Property is located on Northern Vancouver Island adjacent to
Klootchlimmis Creek, which drains northward into Quatsino Sound. The property is
accessible from the town of Port Alice via logging roads. We refer to these
mining claims as the Mystic Gold Property. This property is without known
reserves. This property was purchased from Jervis Explorations Inc. The
exploration plan for the property was provided to the Company by the vendor of
the Property, Jervis Explorations Inc. The exploration program was developed by
Gregory R. Thomson, Geoscientist and Consulting Geologist, who developed an
exploration program in 2007 for the Property prior to the Company purchasing
these mineral claims.
The Company was incorporated for the purpose of exploring mineral claims in
North America. The short-term strategy of the Company is to explore the Bristol
Gold 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 have not yet commenced our exploration plan.
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.
PROPERTY ACQUISITION DETAILS
Jewel Explorations Inc. purchased the MYSTIC GOLD PROPERTY from Jervis
Explorations Inc. for $8,500.00 USD on May 31, 2012. The Company owns 100% of
the rights to the property, subject to a 3% net smelter royalty. There are no
other underlying rights or royalties on this property. In British Columbia, the
acquisition of mineral claims is done using an online application whereby a
company or individual can stake claims online. A mineral tenure is granted the
available subsurface rights at the time of issuance. For our property, the
tenure includes all subsurface minerals, as there were no other tenures on the
property at time of staking. The mineral rights must be renewed on June 19,
2013. The tenure includes both mineral and placer mineral rights on the
property.
17
In order to keep these claims in good standing, the Company must either complete
and report work on the property or pay a renewal fee prior to the expiry date on
June 19, 2013.
In British Columbia, a mineral or placer claim has a set expiry date, and in
order to maintain the claim beyond that expiry date, the recorded holder (or an
agent) must, on or before the expiry date, register either, exploration and
development work that was performed on the claim, or a payment instead of
exploration and development. Failure to maintain a claim results in automatic
forfeiture at the end (midnight) of the expiry date; there is no notice to the
claim holder prior to forfeiture.
When exploration and development work or a payment instead of work is
registered, the claimholder may advance the claim forward to any new date. With
a payment instead of work the minimum requirement is 6 months, and the new date
cannot exceed one year from the current expiry date; with work, it may be any
date up to a maximum of ten years beyond the current anniversary year.
"Anniversary year" means the period of time from the last expiry date to the
next immediate expiry date.
All recorded holders of a claim must hold a valid miner's certificate when
either work or a payment is registered on the claim.
Clients need to register a certain value of work or a "cash-in-lieu of work"
payment to their claims in MTO. The following are the costs required to maintain
a claim for one year:
* MINERAL CLAIM - WORK REQUIREMENT:
* $5 per hectare for anniversary years 1 and 2;
* $10 per hectare for anniversary years 3 and 4;
* $15 per hectare for anniversary years 5 and 6; and
* $20 per hectare for subsequent anniversary years
* MINERAL CLAIM - CASH-IN-LIEU OF WORK:
* $10 per hectare for anniversary years 1 and 2;
* $20 per hectare for anniversary years 3 and 4;
* $30 per hectare for anniversary years 5 and 6; and
* $40 per hectare for subsequent anniversary years
* PLACER CLAIM - WORK REQUIREMENT:
* $20 per hectare
* PLACER CLAIM - CASH-IN-LIEU OF WORK:
* $40 per hectare
Exploration and development work is defined in section 1 of the MINERAL TENURE
ACT REGULATION as either physical exploration and development or technical
exploration and development.
"PHYSICAL EXPLORATION AND DEVELOPMENT" includes:
a. if the work is related to a mineral claim, any of the following:
i. trenching, open cuts, adits, pits, shafts and other underground
activity for the purposes of collecting samples or other
geological or technical information;
ii. reclamation related to exploration and development activities;
iii. ground control surveys, line cutting and grids that support an
activity described in paragraphs (b) to (h) of the definition of
technical exploration and development;
iv. precision survey techniques such as global positioning or surveys
conducted by a practising land surveyor;
v. global positioning surveys in accordance with section 20;
18
b. if the work is related to a placer claim, any of the following:
i. activities referred to in paragraph (a);
ii. panning, digging or washing of gravels to test for the presence
of economically significant minerals;
"TECHNICAL EXPLORATION AND DEVELOPMENT" for mineral claims and placer claims
includes:
a. archaeological impact assessments;
b. geological surveys and studies;
c. mineral resource or ore reserve calculations and related work;
d. geophysical surveys;
e. geochemical surveys;
f. drilling, including drilling for the purposes of collecting
samples, core logging or other geological or technical
information;
g. analysis of mineral or rock samples including a bulk sample to
assess characteristics pertinent to the assessment of the mineral
resource, including acid base accounting, metallurgical,
mineralogical, beneficiation and petrological studies;
h. prospecting and exploring;
i. environmental baseline studies;
j. construction and maintenance of roads, trails, helicopter landing
sites, drill sites and drill core storage if required to support
an activity described in any of paragraphs (b) to (i);
k. preparation and geological interpretation of air photo, satellite
or other remotely sensed images that support an activity
described in paragraphs (a) to (i);
l. preparation of orthophoto and topological surveys that support an
activity described in paragraphs (a) to (i);
m. compilations of previous exploration and development studies and
reports if those compilations lead to new exploration and
development;
n. any other similar activity that may be approved by the chief gold
commissioner before the exploration and development is done;
There were some significant changes in the fore-going that were introduced in
January 2005:
* Road and trail work, whether construction or upgrading, cannot be
registered on its own as physical work; road and trail work is
only acceptable when it is part of a technical work program.
* Travel and accommodation costs are not acceptable on their own;
if other physical or technical work was performed, travel and
accommodation costs may be included.
* General property evaluations and similar activities are not
acceptable.
* Ground control surveys, line cutting and grids cannot be
registered as stand-alone physical work, but only as part of a
technical work program.
19
[MAP SHOWING THE MYSTIC GOLD PROPERTY]
FIG.1 MYSTIC GOLD PROPERTY BC LOCATION MAP
20
[MAP SHOWING THE REGIONAL PROPERTY LOCATION]
FIG. 2 MYSTIC GOLD REGIONAL LOCATION MAP
1.2 LOCATION AND ACCESS
The Mystic Gold Property is located on Northern Vancouver Island adjacent to
Klootchlimmis Creek, which drains northward into Quatsino Sound. The property is
accessible from the town of Port Alice situated about 15 kilometers to the
southeast, via a system of logging roads around the south end of Neroutsos
Inlet.
1.3 TOPOGRAPHY, CLIMATE, VEGETATION
Topography within the claims area is relatively mountainous with the elevation
from 50 to 1000m above sea level. The climate is mild and typical of low
elevation areas on the West Coast of Vancouver Island. Rainfall is, at times,
heavy and continuous. Sporadic snowfall can occur in the winter months but
seldom persists at lower elevations. Vegetation is largely spruce, fir and cedar
in the property area and, in general, the forest is thick and slow to traverse,
unless recently logged. Wildlife noted includes black bear, black-tail deer,
elk, and rarely cougar.
21
[MAP SHOWING THE MYSTIC GOLD PROPERTY]
FIG. 3 MYSTIC GOLD PROPERTY MAP
1.4 PROPERTY STATUS
The Mystic Gold Property comprises one mineral claim composed of 8 MTO
cell claim units totaling 164.52 hectares;
BC Tenure # Work Due Date Units Total Area (Ha.)
----------- ------------- ----- ----------------
998882 June 19, 2013 8 164.52
1.5 PREVIOUS WORK
The Mystic Gold Property area, which included the Mystic and Bluebird claims,
was first staked in May, 1902 by P. Cramer and O. Strandwald. The claims were
located about one-half mile up the Ingersol River (now Klootchlimmis Creek) from
the outlet on Quatsino Sound, on the eastern side of the river at several
hundred feet elevation. A tunnel was run 30 feet into a zone carrying magnetite
with copper and gold values. The mineralized zone was reported to assay up to
58% iron and $9.00 in gold (at $20.00/oz gold). Additional work by other
prospectors in the area followed the zone across the river where it averaged 40
feet in width. Eventually, a small rush of prospectors ensued and the mineral
zone was traced over 15 claims (about 7 km).
22
By 1906, the Mystic and Bluebird claims had been trenched and stripped on
surface and an additional 7 feet of tunnel was driven. The adjoining Ingersol,
Stella and Olga claims had 8 feet of tunnel driven and surface open cuts and
stripping done on the mineralized zone. Further up the Ingersol River, at least
three other similar properties were being developed. No additional work was
recorded in the area until 1968, when Highpoint Mines Ltd. staked the property.
Five months were spent by a crew of eight doing geological mapping, soil
geochemistry, magnetometer geophysics, and drilling a total of 840 feet in three
holes. Mineralization was described as pyrite and chalcopyrite in skarn
developed in limestone. No copies of the final report have been located as yet.
In 1988, prospectors James Laird and David Ridley examined the area in an
attempt to locate the Mystic tunnel and take samples. Several zones of
magnetite, pyrite and chalcopyrite-bearing outcrops and a 1968 drill site were
found. The main tunnel was not located due to heavy forest overgrowth.
Mineralization found occurs in brecciated basic volcanic and limestone intruded
by monzonite.
2.0 GEOLOGICAL OVERVIEW
The Mystic Gold Property is underlain by volcanic and sedimentary rocks of the
Triassic-Jurassic Vancouver and Bonanza Groups, intruded by Jurassic and younger
granitic rocks. Mineralized skarn zones containing precious and base metals form
near the intrusive contact areas, particularly in limestone or limey volcanic
rocks. The 160,000 tonne Yreka Copper Mine, located 8 kilometers to the
southeast of the Mystic Gold Property, is typical of this type of deposit. The
Mystic Gold Property hosts deposits containing gold, silver, copper and iron.
2.1 REGIONAL GEOLOGY
The area is underlain by a conformable sequence of volcanic and sediments of
Upper Triassic to Late Jurassic age, known as the Vancouver and Bonanza Groups.
These rocks were deposited in a dominantly marine environment and have been cut
by several generations of structures and basic to felsic intrusive, accompanied
by distinctive mineral deposits. The bedded rocks have been regionally
block-tilted and generally strike northwest with moderate southwest dips. The
Vancouver Group is comprised of the Karmutsen Formation basaltic volcanic and
Quatsino Formation Limestone. The Bonanza Group is comprised of the Parsons Bay
Formation limestone and sediments, and the dominantly andesitic Bonanza
Volcanic.
The Upper Triassic Karmutsen Formation is estimated to be 2-5 kilometers thick
in this area. Karmutsen rocks include amygdaloidal and feldspar-porphyritic
basalt flows, pillow lavas and breccias, aqua gene tuffs and thin limestone
layers near the top of the sequence. The upper flows and sediments are host to
concentrations of disseminated and massive chalcocite, chalcopyrite and bornite
with minor native copper and vanadium minerals. Gold and copper values are
sometimes related to propylitic (quartz-epidote) alteration zones in basalt flow
tops. Massive magnetite skarn zones are sometimes present in the upper section.
The Quatsino Formation is estimated to be 1 kilometer thick in the map area, and
is composed of thick-bedded to massive grey to white limestone. The limestone
has commonly been bleached and re-crystallized within thermal halos related to
23
regional intrusive activity. Many of the major skarn-type mineral deposits on
Vancouver Island and adjacent islands are hosted in Quatsino Formation
limestone.
The Parsons Bay Formation is a complex limestone and sediment package with rapid
vertical and lateral changes in facies. Rock types include black limestone,
thin-bedded cherty tuffaceous limestone, agglomeratic limestone, grey coralline
limestone reefs, thin-bedded calcareous argillite, and other water-lain chemical
and clastic sediments. The Parsons Bay Formation varies from less than 10 metres
southeast of Merry Widow Mountain to more than 300 meters in thickness near
Victoria Lake. The depositional environment is interpreted to represent a shall
owing marine basin or shelf. Fine clastic sediments were eroded from the
uplifted Karmutsen Range to the east and transported westward into the basin,
intermixing with ongoing chemical carbonate deposition. Marine fossils are
common in some units and are usually well preserved. The 160,000 tonne Yreka
Copper Mine on Neroutsos Inlet across from Port Alice is hosted by Parsons Bay
Formation limey sediments and Bonanza tuffs.
24
[MAP SHOWING THE PROPERTY REGIONAL GEOLOGY]
FIG. 4 MYSTIC GOLD PROPERTY REGIONAL GEOLOGY MAP
At the close of the Triassic period, andesitic volcanic of the Bonanza Volcanic
began to fill the basin with hetero lithic fragmental breccias, tuffs and flows.
The volcanics and lesser inter-bedded limestone and sediments are up to 3km in
thickness on parts of Vancouver Island. Near the base, the flows are green to
maroon in color and are commonly feldspar porphyritic, sometimes with hexagonal
25
jointing or rarely pillows. Towards the top felsic volcanic become more common,
and the final phases of volcanism are locally sub-aerial. The breccias and tuffs
often contain disseminations of hematite, pyrite, pyrrhotite, magnetite, jasper
and chalcopyrite. The Bonanza Volcanics host the major Island Copper Mine
porphyry copper-gold deposit located near Port Hardy.
[MAP SHOWING THE PROPERTY REGIONAL STRATIGRAPHY]
FIG. 5 MYSTIC GOLD PROPERTY REGIONAL STRATIGRAPHY
26
2.2 PROPERTY GEOLOGY
The Mystic Gold Property is underlain by sediments of the Parsons Bay Formation
inter layered with andesitic volcanic of the Bonanza Group. The sediments and
volcanic have been intruded and metamorphosed by monzonite, diorite and
granodiorite of the Jurassic Island Intrusions plutonic suite. Mineralization in
the form of skarn-hosted magnetite, pyrite, chalcopyrite and hematite occurs
within the sediments and volcanic.
Sediments of the Parsons Bay Formation observed on the property include black
limestone, pebble conglomerate and limey tuffs. Interbedded with the sediments
are andesitic volcanic of the Bonanza Group including andesite flows, tuffs and
breccias.
Both rock packages are metamorphosed by many small intrusions of monzonite,
diorite and granodiorite. Metamorphism of skarn grade has produced the minerals
garnet, epidote, actinolite, chlorite, magnetite, pyrite, chalcopyrite and
hematite. Graphite was also noted in sheared black limestone beds which can have
a serious effect on accurate gold assays. Large volume (1 Assay Tonne) fire
assays are recommended rather than ICP- type aqua regia digestion.
Several areas containing mineralization were located during the 1988 prospecting
and geological mapping program. Adjacent to Kloochlimmis Creek under the main
logging road bridge, lenses of magnetite form in sheared andesitic rock intruded
by monzonite and granodiorite. Northeast of the bridge showings, a tributary
creek flowing into Kloochlimmis Creek has several showings of chalcopyrite,
pyrite, magnetite and hematite in skarned black limestone and limey sediments.
An old skid road and a drill site were found near the lowermost showings. This
was probably the site of the reported 1968 drill program. The upper showings
contain magnetite, pyrite, chalcopyrite and hematite over a width of at least 12
meters. The Mystic Gold tunnel may be located in this area but it was not found
due to heavy forest cover.
3.0 CONCLUSIONS AND RECOMMENDATIONS
The property requires a program of concentrated grassroots exploration and the
establishment a survey control grid. The grid area should be thoroughly
prospected and geologically mapped with commensurate soil sampling surveys, IP
and magnetometer geophysical surveys. Based on a compilation of these results, a
diamond drill program would be designed to explore and define the potential
resources. The anticipated costs of this development are presented in three
results-contingent stages.
PHASE 1 COST ESTIMATE
Reconnaissance geological mapping, prospecting, rock, silt
and soil sampling; five days on site, two days travel. $ 26,000.00
PHASE 2
Detailed geological mapping and rock sampling, grid
construction, soil and silt geochemical survey, IP and
magnetometer surveys, establish drill and trenching
targets, four-man crew with camp and supplies,
transportation, report; estimated 14 day program. $ 85,000.00
27
PHASE 3
1000 meters of diamond drilling @ $100.00 per meter,
plus geological supervision, assistant, camp and supplies,
transportation, assays, report and other ancillary costs;
estimated 21 day program. $170,000.00
-----------
TOTAL $281,000.00
===========
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.
British Columbia's reclamation laws ensure that, once operations cease, mine
site lands are returned to a useful and productive state. Before any work on a
new mine site can commence, the company or individual doing the work must post a
security which is held in trust by the Ministry of Energy and Mines. This
security is returned only once the mine site is reclaimed to a satisfactory
level and there are no ongoing monitoring or maintenance requirements. If a mine
site is not reclaimed properly, the security money may be used by the Ministry
to complete the remediation work. The intent of the Province's reclamation
legislation is to ensure that modern mine sites in B.C. do not leave an ongoing
legacy or require public funds for clean-up activities.
The Mines and Mineral Resources Division (MMD) of the Ministry of Energy and
Mines (MEM) is responsible for the regulation of mining in British Columbia. The
Mines Act and accompanying Health, Safety and Reclamation Code for Mines in
British Columbia (the Code) provide the legislative framework and apply equally
to all operations.
Legislation requires all mining operations to carry out a program of
environmental protection and reclamation to ensure that upon termination of
mining, land, watercourses and cultural heritage resources will be returned to a
safe and environmentally sound state and to an acceptable end land use. MMD is
responsible for issuing and administering Mines Act permits. Before the
commencement of any work in or about a mine, the owner, agent, manager or person
acting on behalf of the company must hold a permit issued by the Chief Inspector
of Mines (pursuant to Section 10 of the Mines Act).
MEM seeks to provide reasonable assurance that the Province will not have to
contribute to the costs of reclamation if a mining company defaults on its
reclamation obligations. As a condition of Mines Act permits, the permittee must
post financial security in an amount and form acceptable to the Chief Inspector
of Mines. This security is held by the government until the Chief Inspector is
satisfied that all reclamation requirements for the operation have been
fulfilled.
Every mine site has unique management requirements and operational constraints;
thus, the assessment of financial security is done on a site-specific basis. The
security is set at a level that reflects all outstanding reclamation and closure
obligations. For example, mines that require long-term drainage treatment for
metal leaching and/or acid rock drainage require full security to cover
outstanding liability and ongoing management. The Chief Inspector of Mines
accepts the following forms of reclamation security: cash, certified cheques ,
bank drafts, term deposits (i.e., GICs), Government of Canada bonds and
irrevocable standby letters of credit (ISLOCs).
28
Term deposits and bonds may be held in a Safekeeping Agreement where the
interest accrues on the deposit. In some cases, funds may be deposited to the
Mine Reclamation Fund (pursuant to Section 12 of the Mines Act) or within a
Qualified Environmental Trust. These funds allow interest to accrue to the
credit of the account. For ISLOCs, confirmation is provided by the client's
financial institution that sufficient funds exist and will be kept available by
the financial institution to meet MEMPR's requirements.
Reclamation securities can only be released by the authority of the Chief
Inspector of Mines.
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.
DESCRIPTION OF PROPERTY
Our offices are located at: #2-556 Furby Street, Winnipeg, Manitoba R3B 2V8.
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.
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.
EMERGING GROWTH COMPANY STATUS UNDER THE JOBS ACT
Jewel Explorations Inc. qualifies as an "emerging growth company" as defined in
the Jumpstart our Business Startups Act (the "JOBS Act"). As an "emerging growth
company", the exemptions listed below are all available to the Company as a
Smaller Reporting Company.
The JOBS Act creates a new category of issuers known as "emerging growth
companies." Emerging growth companies are those with annual gross revenues of
less than $1 billion (as indexed for inflation) during their most recently
completed fiscal year. The JOBS Act is intended to facilitate public offerings
by emerging growth companies by exempting them from several provisions of the
Securities Act of 1933 and its regulations. An emerging growth company will
retain that status until the earliest of:
* The first fiscal year after its annual revenues exceed $1 billion;
* The first fiscal year after the fifth anniversary of its IPO;
29
* The date on which the company has issued more than $1 billion in
non-convertible debt during the previous three-year period; and
* The first fiscal year in which the company has a public float of at
least $700 million.
FINANCIAL AND AUDIT REQUIREMENTS
Under the JOBS Act, emerging growth companies are subject to scaled financial
disclosure requirements. Pursuant to these scaled requirements, emerging growth
companies may:
* Provide only two rather than three years of audited financial
statements in their IPO Registration Statement;
* Provide selected financial data only for periods no earlier than those
included in the IPO Registration Statement in all SEC filings, rather
than the five years of selected financial data normally required;
* Delay compliance with new or revised accounting standards until they
are made applicable to private companies; and
* Be exempted from compliance with Section 404(b) of the Sarbanes-Oxley
Act, which requires companies to receive an outside auditor's
attestation regarding the issuer's internal controls.
OFFERING REQUIREMENTS
In addition, during the IPO offering process, emerging growth companies are
exempt from:
* Restrictions on analyst research prior to and immediately after the
IPO, even from an investment bank that is underwriting the IPO;
* Certain restrictions on communications to institutional investors
before filing the IPO registration statement; and
* The requirement initially to publicly file IPO Registration
Statements. Emerging growth companies can confidentially file draft
Registration Statements and any amendments with the SEC. Public
filings of the draft documents must be made at least 21 days prior to
commencement of the IPO "road show."
OTHER PUBLIC COMPANY REQUIREMENTS
Emerging growth companies are also exempt from other ongoing obligations of most
public companies, such as:
* The requirements under Section 14(i) of the Exchange Act and Section
953(b)(1) of the Dodd-Frank Act to disclose executive compensation
information on pay-for-performance and the ratio of CEO to median
employee compensation;
* Certain other executive compensation disclosure requirements, such as
the compensation discussion and analysis, under Item 402 of Regulation
S-K; and
* The requirements under Sections 14A(a) and (b) of the Exchange Act to
hold advisory votes on executive compensation and parachute payments.
ELECTION UNDER SECTION 107(B) OF THE JOBS ACT
As an emerging growth company we have made the irrevocable election to not adopt
the extended transition period for complying with new or revised accounting
standards under Section 107(b), as added by Section 102(b), of the JOBS Act.
30
This election allows companies to delay the adoption of new or revised
accounting standards that have different effective dates for public and private
companies until those standards apply to private companies.
MANAGEMENT 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 financial statements and the notes to
those statements included elsewhere in this prospectus. In addition to the
historical 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 our property as outlined
above. If the Company is successful in raising adequate capital through private
placements or debt financing, the Company anticipates completing the first phase
in Spring 2013 and commencing the second and third phase in Summer and Fall2013.
We have decided to proceed with the exploration program provided to the Company
by the vendor of the Property, Jervis Explorations Inc. The exploration program
was developed by Gregory R Thomson, Geoscientist and Consulting Geologist, who
developed an exploration program in 2006 for the Property prior to the Company
purchasing these mineral claims. The proposed work program includes prospecting,
geological mapping and rock sampling of any mineralized surface showings,
construction of a control grid, geochemical soil sampling, and geophysical
surveys. Based on the compilation of these results, a diamond drill program
would be designed to explore and define the potential resources. The anticipated
costs of this development are presented in three results-contingent stages.
This program is exploratory in nature. The anticipated costs of this exploration
are presented in three results-contingent stages.
PHASE 1 COST ESTIMATE
Reconnaissance geological mapping, prospecting, rock, silt
and soil sampling; five days on site, two days travel. $ 26,000.00
PHASE 2
Detailed geological mapping and rock sampling, grid
construction, soil and silt geochemical survey, IP and
magnetometer surveys, establish drill and trenching
targets, four-man crew with camp and supplies,
transportation, report; estimated 14 day program. $ 85,000.00
PHASE 3
1000 meters of diamond drilling @ $100.00 per meter,
plus geological supervision, assistant, camp and supplies,
transportation, assays, report and other ancillary costs;
estimated 21 day program. $170,000.00
-----------
TOTAL $281,000.00
===========
We anticipate that the phases of the recommended geological exploration program
will cost approximately $281,000. We had $18,825 in cash reserves as of August
31, 2012. 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
31
its exploration program, the Company will be required to pay a government fee of
$1,500 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:
* $1,500 to be paid to the British Columbia Provincial Government to
keep the claims valid on or before June 19, 2013;
* $26,000 in connection with the completion of Phase 1 of our planned
geological work program;
* $85,000in connection with the completion of Phase 2 of our planned
geological work program;
* $170,000 for Phase 3 of our planned geological work program, and
* $5,675 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
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 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 had current assets of $18,825 consisting only of cash as of August
31, 2012. The Company has incurred a net loss of $5,675 for the period from
inception (May 31, 2012) to August 31, 2012. Income represents all of the
company's revenue less all its expenses in the period incurred. The Company has
no revenues as of August 31, 2012 and has incurred expenses of $5,675 since
inception (May 31, 2012). There are no current or long-term liabilities. The
company issued to the founder 24,000,000 common shares of stock for $30,000. As
of August 31, 2012, there are Twenty-four Million (24,000,000) shares issued and
outstanding at a par value of $0.001 per share. There are no preferred shares
authorized. The Company has no stock option plan, warrants or other dilutive
securities.
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, as well as the $5,675 for operating costs, 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, plus the expenses of the offering.
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
32
is declared effective. The Company anticipates that they will have either a
private placement or additional funding from its founder by late Spring 2013 in
order to conduct 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.
CHANGES AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE
For the audited period ended August 31, 2012, we engaged De Joya Griffith LLC,
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 payables which are subject to normal credit risks.
DIRECTORS AND EXECUTIVE OFFICERS
1. EXECUTIVE OFFICERS
The Company's Executive Officers are as follows:
Sydney Kraft Chief Executive Officer, Chief Financial Officer,
President, Secretary, Treasurer and Director
(Principal Executive Officer and Principal
Accounting Officer)
BIOGRAPHY OF SYDNEY KRAFT
Sydney Kraft, aged 55
Sydney Kraft founded the Company on May 31, 2012, and has acted as its sole
officer and director since inception.
33
Mr. Kraft has spent over the past 20 years, employed in private practice as a
Tax Accountant, specializing mainly in Tax Recovery. Mr. Kraft has a Diploma in
Business Administration from Technical College and has received Certification as
a Chartered Financial Planner. Mr. Kraft has been engaged as an independent
consultant engaged in consolidating mining projects in North America.
2. DIRECTORS
Name Position
---- --------
Sydney Kraft Sole Director
See biography above.
As sole director and officer shareholder, Mr. Kraft is not an independent
director that is independent under the independence standards applicable to the
registrant under paragraph (a)(1) of Item 407(a) of regulation S-K or under
NASDAQ Listing Rule 5605(b)(1).
EXECUTIVE COMPENSATION AND CORPORATE GOVERNANCE
Summary Compensation Table
(All figures are in US dollars)
The following table sets forth the overall compensation earned in the period
from inception(May 31, 2012) to August 31, 2012 by (1) each person who served as
the principal executive officer of the Company for fiscal year 2012; (2) the
Company's most highly compensated executive officers with compensation of
$100,000 or more during 2012 fiscal year; and (3) those individuals, if any, who
would have otherwise been in included in section (2) above but for the fact that
they were not serving as an executive of the Company as of August 31, 2012.
Non-Equity Nonqualified
Name and Incentive Deferred
Principal Fiscal Stock Option Plan Compensation All Other
Position Year Salary($) Bonus($) Awards($) Awards($) Compensation($) Earnings($) Compensation($)
-------- ---- --------- -------- --------- --------- --------------- ----------- ---------------
Sydney Kraft 2012 3,000 Nil Nil Nil Nil Nil Nil
Chief Executive
Officer, Chief
Financial Officer,
President, Secretary,
Treasurer and
Director
(Principal Executive
Officer and Principal
Accounting Officer)
34
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
As of August 31, 2012, there were Twenty-four Million (24,000,000) shares of
common stock were issued and outstanding.
(1) This table is based on Twenty-four Million (24,000,000) shares of common
stock 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 Amount and Nature of Before After
and Position if Applicable Beneficial Ownership Offering Offering
-------------------------- -------------------- -------- --------
Sydney Kraft 24,000,000 100% 50%
#2-556 Furby Street,
Winnipeg, Manitoba R3B 2V8
Chief Executive Officer,
Chief Financial Officer, President,
Secretary, Treasurer and Director
(Principal Executive Officer and
Principal Accounting Officer)
Total Officers, Directors & 24,000,000 100% 50%
Significant Shareholders as
a group
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 24,000,000 shares to its founder for total proceeds of
$30,000.
The Company entered into a one-year renewable management contract with our
director, Sydney Kraft, whereby it agreed to pay him $3,000 upon signing of the
contract, and $8,000 upon completion.
Outside of the above noted transactions, 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.
35
Jewel Explorations Inc.
(An Exploration Stage Company)
Financial Statements
For the period May 31, 2012 (inception)
through August 31, 2012
Report of Independent Registered Public Accounting Firm F-2
Balance Sheets F-3
Statement of Operations F-4
Statement of Stockholder's Equity F-5
Statement of Cash Flows F-6
Notes to the Financial Statements F-7
F-1
[LETTERHEAD OF DE JOYA GRIFFITH, LLC]
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders
Jewel Explorations Inc.
We have audited the accompanying balance sheet of Jewel Explorations Inc. (An
Exploration Stage Company) as of August 31, 2012 and the related statements of
operations, stockholders' equity (deficit), and cash flows from inception (May
31, 2012) to August 31, 2012. Jewel Explorations Inc.'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 of the company's internal control over the
financial reporting. Accordingly, we express no such opinion. An audit also
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 provide 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 Jewel Explorations Inc. (An
Exploration Stage Company) as of August 31, 2012 and the result of its
operations and its cash flows from inception (May 31, 2012) to August 31, 2012,
in conformity with accounting principles generally accepted in the United States
of America.
The accompanying financial statements have been prepared assuming the Company
will continue as a going concern. As discussed in Note 2 to the financial
statements, the Company has suffered recurring losses from operations, which
raise substantial doubt about its ability to continue as a going concern.
Management's plans in regard to these matters are also described in Note 2. The
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.
/s/ De Joya Griffith, LLC
----------------------------------
Henderson, Nevada
January 08, 2013
F-2
Jewel Explorations Inc.
(An Exploration Stage Company)
Balance Sheet
(Stated in US Dollars)
Audited
August 31, 2012
---------------
Assets
Current assets
Cash $ 18,825
--------
Total current assets 18,825
Mineral property 8,500
--------
Total Assets $ 27,325
========
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable $ 3,000
--------
Total current liabilities 3,000
--------
Total liabilities 3,000
--------
Stockholders' Equity
Common stock, $0.001 par value
75,000,000 common shares authorized
24,000,000 shares issued and outstanding 24,000
Additional paid-in capital 6,000
Deficit accumulated during exploration stage (5,675)
--------
Total stockholders' equity 24,325
--------
Total Liabilites and Stockholders' Equity $ 27,325
========
The accompanying notes are an integral part of these financial statements.
F-3
Jewel Explorations Inc.
(An Exploration Stage Company)
Statement of Operations
(Stated in US Dollars)
Audited
From inception
(May 31, 2012) to
August 31, 2012
---------------
Expenses
General & administrative $ 675
Professional fees 5,000
-----------
Total expenses 5,675
Net loss from operations (5,675)
-----------
Net loss $ (5,675)
===========
Basic & diluted loss per common share $ (0.00)
-----------
Weighted average number of common shares 24,000,000
===========
The accompanying notes are an integral part of these financial statements.
F-4
Jewel Explorations Inc.
(An Exploration Stage Company)
Statement of Stockholders' Equity
From Inception (May 31, 2012) to August 31, 2012
Audited
Deficit
Accumulated
Common Stock During Total
-------------------- Paid in Exploration Stockholder's
Shares Amount Capital Stage Equity
------ ------ ------- ----- -----
Issuance of 24,000,000 shares
at $0.00125 per share for cash 24,000,000 $ 24,000 $ 6,000 $ -- $ 30,000
Net loss (5,675) (5,675)
----------- -------- ------- -------- --------
Balance, August 31, 2012 24,000,000 $ 24,000 $ 6,000 $ (5,675) $ 24,325
=========== ======== ======= ======== ========
The accompanying notes are an integral part of these financial statements.
F-5
Jewel Explorations Inc.
(An Exploration Stage Company)
Statement of Cash Flows
(Stated in US Dollars)
Audited
From inception
(May 31, 2012) to
August 31, 2012
---------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (5,675)
Adjustments to reconcile net loss to net
cash used in operating activities:
Changes in operating assets and liabilities
Increase in account payable 3,000
--------
NET CASH USED IN OPERATING ACTIVITIES (2,675)
CASH FLOW FROM INVESTING ACTIVITIES
Purchase of mineral claim (8,500)
--------
NET CASH USED IN INVESTING ACTIVITIES (8,500)
CASH FLOW FROM FINANCING ACTIVITIES
Proceeds from shares issuances 30,000
--------
NET CASH PROVIDED BY FINANCING ACTIVITIES 30,000
INCREASE IN CASH 18,825
Cash at beginning of period --
--------
CASH AT END OF PERIOD $ 18,825
========
Cash Paid For:
Interest $ --
========
Income tax $ --
========
The accompanying notes are an integral part of these financial statements.
F-6
Jewel Explorations Inc.
(An Exploration Stage Company)
Notes to Financial Statements
August 31, 2012
1. ORGANIZATION
The company was incorporated under the laws of the state of Nevada on May 31,
2012 with 75,000,000 authorized common shares with a par value of $0.001.
The company was organized for the purpose of acquiring, exploring and developing
mineral claims. The company has acquired a mineral claim with unknown reserves.
The company does not presently have any operations and is considered to be in
the exploration stage.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The financial statements of the Company have been prepared in accordance with
generally accepted accounting principles in the United States of America and are
presented in US dollars. In the opinion of management, all adjustments
considered necessary for a fair presentation of the results of operations and
financial position have been included and all such adjustments are of a normal
recurring nature.
Basis of accounting
The Company's financial statements are prepared using the accrual method of
accounting.
Dividend policy
The company has not yet adapted a policy regarding payment of dividends.
Cash and cash equivalent
The Company considers all highly liquid instruments with a maturity of three
months or less at the time of issuance to be cash equivalents. As of August 31,
2012, there were no cash equivalents.
Income tax
The Company follows ASC Topic 740 for recording the provision for income taxes.
Deferred tax assets and liabilities are computed based upon the difference
between the financial statement and income tax basis of assets and liabilities
using the enacted marginal tax rate applicable when the related asset or
liability is expected to be realized or settled. Deferred income tax expenses or
benefits are based on the changes in the asset or liability each period. If
available evidence suggests that it is more likely than not that some portion or
all of the deferred tax assets will not be realized, a valuation allowance is
required to reduce the deferred tax assets to the amount that is more likely
than not to be realized. Future changes in such valuation allowance are included
in the provision for deferred income taxes in the period of change.
F-7
Jewel Explorations Inc.
(An Exploration Stage Company)
Notes to Financial Statements
August 31, 2012
2. SIGNIFICANT ACCOUNTING POLICIES continued....
Deferred income taxes may arise from temporary differences resulting from income
and expense items reported for financial accounting and tax purposes in
different periods. Deferred taxes are classified as current or non-current,
depending on the classification of assets and liabilities to which they relate.
Deferred taxes arising from temporary differences that are not related to an
asset or liability are classified as current or non-current depending on the
periods in which the temporary differences are expected to reverse.
The Company applies a more-likely-than-not recognition threshold for all tax
uncertainties. ASC Topic 740 only allows the recognition of those tax benefits
that have a greater than fifty percent likelihood of being sustained upon
examination by the taxing authorities.
On August 31, 2012, the Company had a net operating loss available for carry
forward of $5,675.
Basic and Diluted Net Income (loss) Per Share
The Company computes net income (loss) per share in accordance with ASC 260,
Earnings per Share. ASC 260 requires presentation of both basic and diluted
earnings per share ("EPS") on the face of the income statement. Basic EPS is
computed by dividing net income (loss) available to common shareholders
(numerator) by the weighted average number of shares outstanding (denominator)
during the period. Diluted EPS gives effect to all dilutive potential common
shares outstanding during the period using the treasury stock method and
convertible preferred stock using the if-converted method. In computing diluted
EPS, the average stock price for the period is used in determining the number of
shares assumed to be purchased from the exercise of stock options or warrants.
Diluted EPS excludes all dilutive potential shares if their effect is anti
dilutive.
Earnings per share
The Company follows ASC Topic 260 to account for the earnings per share. Basic
loss per common share (" EPS") calculations are determined by dividing loss
available to common stockholders by the weighted average number of common shares
outstanding for the period. Diluted net income / (loss) per share amounts are
computed using the weighted average number of common and common equivalent
shares outstanding as if shares had been issued on the exercise of the common
share rights unless the exercise becomes anti-dilutive and then only the basic
per share amounts are shown in the report. Because the Company does not have any
potentially dilutive securities, the accompanying presentation is only of basic
loss per common share.
Revenue recognition
We recognize revenue when all of the following conditions are satisfied: (1)
there is persuasive evidence of an arrangement; (2) the product or service has
been provided to the customer; (3) the amount of fees to be paid by the customer
is fixed or determinable; and (4) the collection of our fees is probable.
F-8
Jewel Explorations Inc.
(An Exploration Stage Company)
Notes to Financial Statements
August 31, 2012
2. SIGNIFICANT ACCOUNTING POLICIES continued....
Impairment of long-lived Assets
The Company reviews and evaluates long-lived assets for impairment when events
or changes in circumstances indicate that the related carrying amounts may not
be recoverable. The assets are subject to impairment consideration under ASC
360-10-35-17 if events or circumstances indicate that their carrying amount
might not be recoverable. When the Company determines that an impairment
analysis should be done, the analysis will be performed using the rules of ASC
930-360-35, Asset Impairment, and 360-10-15-3 through 15-5, Impairment or
Disposal of Long-Lived Assets.
Environmental requirements
At the report date environmental requirements related to a formally held mineral
claim are unknown and therefore any estimate of future costs cannot be made.
Mineral property acquisitions costs
Costs of acquisition and option costs of mineral rights are capitalized upon
acquisition. Mine development costs incurred to develop new ore deposits, to
expand the capacity of mines, or to develop mine areas substantially in advance
of current production are also capitalized once proven and probable reserves
exist and the property is a commercially mineable property. Costs incurred to
maintain current production or to maintain assets on a standby basis are charged
to operations. If the Company does not continue with exploration after the
completion of the feasibility study, the mineral rights will be expensed at that
time. Costs of abandoned projects are charged to mining costs including related
property and equipment costs. To determine if these costs are in excess of their
recoverable amount, periodic evaluation of carrying value of capitalized costs
and any related property and equipment costs are based upon expected future cash
flows and/or estimated salvage value in accordance with Accounting Standards
Codification (ASC) 360-10-35-15, Impairment or Disposal of Long-Lived Assets.
Various factors could impact our ability to achieve forecasted production
schedules. Additionally, commodity prices, capital expenditure requirements and
reclamation costs could differ from the assumptions the Company may use in cash
flow models from exploration stage as mineral interests involves further risks
in addition to those factors applicable to mineral interests where proven and
proven and probable reserves have been identified, due to the lower level of
confidence that the identified mineralized material can ultimately be mined
economically.
Estimates and Assumptions
Management uses estimates and assumptions in preparing financial statements in
accordance with generally accepted accounting principles. 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.
F-9
Jewel Explorations Inc.
(An Exploration Stage Company)
Notes to Financial Statements
August 31, 2012
2. SIGNIFICANT ACCOUNTING POLICIES continued....
Financial Instruments
The carrying amounts of financial instruments are considered by management to be
their estimated fair values due to their short term maturities. Fair value
estimates discussed herein are based upon certain market assumptions and
pertinent information available to management as of July, 2012. The respective
carrying value of certain on-balance-sheet financial instruments approximated
their fair values. These financial instruments include cash, prepaid expenses
and accounts payable. Fair values were assumed to approximate carrying values
for cash and payables because they are short term in nature and their carrying
amounts approximate fair values or they are payable on demand.
Level 1: The preferred inputs to valuation efforts are "quoted prices in active
markets for identical assets or liabilities," with the caveat that the reporting
entity must have access to that market. Information at this level is based on
direct observations of transactions involving the same assets and liabilities,
not assumptions, and thus offers superior reliability. However, relatively few
items, especially physical assets, actually trade in active markets.
Level 2: FASB acknowledged that active markets for identical assets and
liabilities are relatively uncommon and, even when they do exist, they may be
too thin to provide reliable information. To deal with this shortage of direct
data, the board provided a second level of inputs that can be applied in three
situations.
Level 3: If inputs from levels 1 and 2 are not available, FASB acknowledges that
fair value measures of many assets and liabilities are less precise. The board
describes Level 3 inputs as "unobservable," and limits their use by saying they
"shall be used to measure fair value to the extent that observable inputs are
not available." This category allows "for situations in which there is little,
if any, market activity for the asset or liability at the measurement date".
Earlier in the standard, FASB explains that "observable inputs" are gathered
from sources other than the reporting company and that they are expected to
reflect assumptions made by market participants.
Going concern
The accompanying financial statements have been prepared assuming that the
company will continue as a going concern. The Company does not have a sufficient
working capital for its planned activities and to service its debt, and has
incurred a loss of $5,675since inception (May 31, 2012) 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 investments, which will
enable the company to continue operations for the coming year.
F-10
Jewel Explorations Inc.
(An Exploration Stage Company)
Notes to Financial Statements
August 31, 2012
2. SIGNIFICANT ACCOUNTING POLICIES continued....
These financial statements do not include any adjustments relating to the
recoverability and classification of recorded asset amounts, or amounts and
classification of liabilities that might result from this uncertainty.
Recent Accounting Pronouncements
The Company does not expect that the adoption of other recent accounting
pronouncements will have a material impact on its financial statements.
3. ACQUISITION OF A MINERAL CLAIM
During 2012 the company acquired mineral claims for $8,500 known as the Mystic
Gold Property.
The Mystic Gold Property is located on Northern Vancouver Island adjacent to
Klootchlimmis Creek, which drains northward into Quatsino Sound. The property is
accessible from the town of Port Alice via logging roads. The property comprises
one Mineral Titles Online "MTO mineral claim containing 8 cell claim units
totaling 164.52 hectares in area. The property is without known reserves.
4. CAPITAL STOCK
The authorized capital is 75,000,000 shares of common stock at $0.001 par value.
On May 31, 2012, the company issued 24,000,000 private placement common shares
at $0.00125 to its founder for cash of $30,000.
5. SIGNIFICANT TRANSACTIONS WITH RELATED PARTIES
Officer-directors have acquired 100% of the outstanding common capital stock of
the company. During the year ended August 31, 2012, $3,000 was payable to Chief
Executive Officer on account of services rendered during the period.
F-11
Jewel Explorations Inc.
(An Exploration Stage Company)
Notes to Financial Statements
August 31, 2012
6. INCOME TAX
The Company has $5,675 of net operating losses carried forward to offset taxable
income in future years which expire commencing in fiscal 2026. The income tax
benefit differs from the amount computed by applying the US federal income tax
rate of 35% to net loss before income taxes. As at August 31, 2012, the Company
had no uncertain tax positions.
May 31, 2012
(inception)
Through
August 31, 2012
---------------
Net Loss Before Taxes $ 5,675
Statutory Rate 35%
Computed expected tax recovery 1,986
Change in valuation allowance (1,986)
-------
Income tax provision $ --
=======
The valuation allowance for deferred tax assets as of August 31, 2012 was
$1,986. In assessing the recovery of the deferred tax assets, management
considers whether it is more likely than not that some portion or all of the
deferred tax assets will not be realized. The ultimate realization of deferred
tax assets is dependent upon the generation of future taxable income in the
periods in which those temporary differences become deductible. Management
considers the scheduled reversals of future deferred tax liabilities, projected
future taxable income, and tax planning strategies in making this assessment. As
a result, management determined it was more likely than not the deferred tax
assets would not be realized as of August 31, 2012 and recorded a full valuation
allowance.
7. SUBSEQUENT EVENTS
The Company has evaluated subsequent events from the balance sheet date through
to the date of this report and has found no material event to report.
F-12
DEALER PROSPECTUS DELIVERY OBLIGATION
Until February 22, 2013, 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.
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.......... $ 2.73*
Audit Fees and Expenses...................................... 3,500.00
Legal Fees and Expenses...................................... 1,000.00
Transfer Agent and Registrar Fees and Expenses............... 560.00
Miscellaneous Expenses....................................... 940.00
----------
Total....................................................... $ 6002.73*
==========
----------
* Estimated amount
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 78.7502 of the Nevada Revised Statutes and Article IX of our Corporate
Bylaws 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.
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 24,000,000 shares of common stock to the founder, Sydney
Kraft, at a price of $0.00125per share, for total proceeds of $30,000. These
shares were issued pursuant to Section 4(2) of the Securities Act. The
24,000,000 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.
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 Diane Dalmy, Attorney at Law, January 25, 2013
10.1 Asset Purchase Agreement
23.1 Consent of De Joya Griffith LLC, January 25, 2013
II-1
ITEM 17. UNDERTAKINGS
The undersigned registrant hereby undertakes to provide to selling stockholder
Mr. Kraft, 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:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of the Securities Act
of 1933;
(ii) 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) (ss.230.424(b) of this
chapter) 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.
(iii) 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;
(2) That, for the purpose of determining any liability under the Securities Act
of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any of
the securities being registered which remain unsold at the termination of the
offering.
(4) If the registrant is a foreign private issuer, to file a post-effective
amendment to the registration statement to include any financial statements
required by "Item 8.A. of Form 20-F (17 CFR 249.220f)" at the start of any
delayed offering or throughout a continuous offering. Financial statements and
information otherwise required by Section 10(a)(3) of the Act need not be
furnished, PROVIDED that the registrant includes in the prospectus, by means of
a post-effective amendment, financial statements required pursuant to this
paragraph (a)(4) and other information necessary to ensure that all other
information in the prospectus is at least as current as the date of those
financial statements. Notwithstanding the foregoing, with respect to
registration statements on Form F-3 (ss.239.33 of this chapter), a
post-effective amendment need not be filed to include financial statements and
information required by Section 10(a)(3) of the Act or ss.210.3-19 of this
chapter if such financial statements and information are contained in periodic
reports filed with or furnished to the Commission by the registrant pursuant to
section 13 or section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the Form F-3.
(5) That, for the purpose of determining liability under the Securities Act of
1933 to any purchaser:
II-2
(i) If the registrant is relying on Rule 430B (ss.230.430B of this chapter):
(A) Each prospectus filed by the registrant pursuant to Rule 424(b)(3)
(ss.230.424(b)(3) of this chapter) shall be deemed to be part of the
registration statement as of the date the filed prospectus was deemed part of
and included in the registration statement; and
(B) Each prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or
(b)(7) (ss.230.424(b)(2), (b)(5), or (b)(7) of this chapter) as part of a
registration statement in reliance on Rule 430B relating to an offering made
pursuant to Rule 415(a)(1)(i), (vii), or (x) (ss.230.415(a)(1)(i), (vii), or (x)
of this chapter) for the purpose of providing the information required by
section 10(a) of the Securities Act of 1933 shall be deemed to be part of and
included in the registration statement as of the earlier of the date such form
of prospectus is first used after effectiveness or the date of the first
contract of sale of securities in the offering described in the prospectus. As
provided in Rule 430B, for liability purposes of the issuer and any person that
is at that date an underwriter, such date shall be deemed to be a new effective
date of the registration statement relating to the securities in the
registration statement to which that prospectus relates, and the offering of
such securities at that time shall be deemed to be the initial BONA FIDE
offering thereof. PROVIDED, HOWEVER, that no statement made in a registration
statement or prospectus that is part of the registration statement or made in a
document incorporated or deemed incorporated by reference into the registration
statement or prospectus that is part of the registration statement will, as to a
purchaser with a time of contract of sale prior to such effective date,
supersede or modify any statement that was made in the registration statement or
prospectus that was part of the registration statement or made in any such
document immediately prior to such effective date; or
(ii) If the registrant is subject to Rule 430C (ss.230.430C of this chapter),
each prospectus filed pursuant to Rule 424(b) as part of a registration
statement relating to an offering, other than registration statements relying on
Rule 430B or other than prospectuses filed in reliance on Rule 430A (ss.230.430A
of this chapter), shall be deemed to be part of and included in the registration
statement as of the date it is first used after effectiveness. PROVIDED,
HOWEVER, that no statement made in a registration statement or prospectus that
is part of the registration statement or made in a document incorporated or
deemed incorporated by reference into the registration statement or prospectus
that is part of the registration statement will, as to a purchaser with a time
of contract of sale prior to such first use, supersede or modify any statement
that was made in the registration statement or prospectus that was part of the
registration statement or made in any such document immediately prior to such
date of first use.
(6) That, for the purpose of determining liability of the registrant under the
Securities Act of 1933 to any purchaser in the initial distribution of the
securities:
The undersigned registrant undertakes that in a primary offering of securities
of the undersigned registrant pursuant to this registration statement,
regardless of the underwriting method used to sell the securities to the
purchaser, if the securities are offered or sold to such purchaser by means of
any of the following communications, the undersigned registrant will be a seller
to the purchaser and will be considered to offer or sell such securities to such
purchaser:
II-3
(i) Any preliminary prospectus or prospectus of the undersigned registrant
relating to the offering required to be filed pursuant to Rule 424 (ss.230.424
of this chapter);
(ii) Any free writing prospectus relating to the offering prepared by or on
behalf of the undersigned registrant or used or referred to by the undersigned
registrant;
(iii) The portion of any other free writing prospectus relating to the offering
containing material information about the undersigned registrant or its
securities provided by or on behalf of the undersigned registrant; and
(iv) Any other communication that is an offer in the offering made by the
undersigned registrant to the purchaser
II-4
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 Winnipeg, Manitoba on January 25, 2013.
JEWEL EXPLORATIONS INC.
By: /s/ Sydney Kraft
-----------------------------------------
Sydney Kraft,
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/ Sydney Kraft Chief Executive Officer, January 25, 2013
--------------------------- Chief Financial Officer, President,
Sydney Kraft Secretary, Treasurer and Director
(Principal Executive Officer and
Principal Accounting Officer)
II-5