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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM SB-2/A
Amendment No. 2
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
PIONEER EXPLORATION INC.
---------------------------------------------
(Name of small business issuer in its charter)
Nevada 1000 98-0491551
- ------------------------- ----------------------- ------------------------
State or jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or Classification Code Number) Identification No.)
organization
700 West Pender St., Suite 520,
Vancouver BC V6C 1G8
604-618-0948
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(Address and telephone number of principal executive offices)
700 West Pender St., Suite 520,
Vancouver BC V6C 1G8
604-618-0948
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(Address of principal place of business or intended principal
place of business)
Laughlin Associates, Inc.
2533 N. Carson St.,
Carson City, Nevada 89706
888-273-8152
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(Name, address and telephone number of agent for service)
Approximate date of proposed sale to the public: As soon as practicable after
the registration statement becomes 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 (the "Securities Act"), other than securities offered only in connection
with dividend or interest reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please 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 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(d) 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 delivery of the prospectus is expected to be made pursuant to Rule 434, check
the following box. [ ]
<page>
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CALCULATION OF REGISTRATION FEE
<table>
<caption>
Proposed maximum
Title of each class Proposed maximum aggregate Amount of
of securities to be Amount to be offering price offering registration
registered(1) registered per share price fee(3)
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<s> <c> <c> <c> <c>
Common Stock to be 8,264,500 $0.25 (2) $2,066,125 $221.08
offered by Selling
Stockholders
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Total Registration Fee $221.08
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</table>
(1) An indeterminate number of additional shares of common stock shall
be issuable pursuant to Rule 416 to prevent dilution resulting from
stock splits, stock dividends or similar transactions and in such an
event the number of shares registered shall automatically be increased
to cover the additional shares in accordance with Rule 416 under the
Securities Act.
(2) Based on the last sales price on March 31, 2006. The selling
stockholders will sell their shares of our common stock at a price of
$0.25 per share until shares of our common stock are quoted on the OTC
Bulletin Board, and thereafter at prevailing market prices or privately
negotiated prices. Our common stock is presently not traded on any
market or securities exchange, and we have not applied for listing or
quotation on any public market.
(3) Estimated in accordance with Rule 457(o) solely for the purpose of
computing the amount of the registration fee based on a bona fide
estimate of the maximum offering price.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON THE 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 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON THE
DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
COPIES OF COMMUNICATIONS TO:
Gary R. Henrie, Esq.
8275 S. Eastern Ave., Suite 200
Las Vegas, NV 89123
Phone: 702-616-3093.
Fax: 435-753-2947
<page>
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PROSPECTUS
Subject to Completion
_____________, 2007
PIONEER EXPLORATION INC.
A NEVADA CORPORATION
8,264,500 SHARES OF COMMON STOCK OF PIONEER EXPLORATION INC.
OFFERED BY SELLING STOCKHOLDERS
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This prospectus relates to the 8,264,500 shares of common stock of Pioneer
Exploration Inc., a Nevada Corporation, which may be resold by the selling
stockholders. We have been advised by the selling stockholders that they may
offer to sell all or a portion of their shares of common stock being offered in
this prospectus from time to time. The shares being resold constitute
approximately 73.3% of the total outstanding shares of our common stock. The
selling stockholders will sell their shares of our common stock at a price of
$0.25 per share until shares of our common stock are quoted on the OTC Bulletin
Board, and thereafter at prevailing market prices or privately negotiated
prices. There can be no assurance that we will be able to obtain an OTCBB
listing. Our common stock is presently not traded on any market or securities
exchange, and we have not applied for listing or quotation on any public market.
We will not receive any proceeds from the resale of shares of common stock by
the selling stockholders. However, we have received proceeds from the sale of
shares of common stock that are presently outstanding. We will pay for expenses
of this offering.
In connection with any sales, any broker or dealer participating in such sales
may be deemed to be an underwriter within the meaning of the Securities Act.
Our business is subject to many risks and an investment in our common stock will
also involve a high degree of risk. You should invest in our common stock only
if you can afford to lose your entire investment. You should carefully consider
the various Risk Factors described beginning on page 10 before investing in our
common stock.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offence.
The date of this prospectus is__________, 2007.
<page>
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The following table of contents has been designed to help you find important
information contained in this prospectus. We encourage you to read the entire
prospectus.
<table>
<caption>
TABLE OF CONTENTS
PAGE NUMBER
<s> <c>
PROSPECTUS SUMMARY 6
Our Business 6
The Offering 6
Summary Financial Data 6
RISK FACTORS 7
Risks Associated with Our Business 7
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We have a limited operating history with losses and expect
losses to continue which raise concerns about our investors 7
receiving a return on their investments.
We will require additional financing to develop our existing 7
exploration claims or acquire additional resource assets.
If we are unable to extend the expiration date for our mineral
claim, we will lose our mineral interest and any prospects
of commercial success will be unlikely. 7
Because our Officers and Directors have other business
interests, they may not be able or willing to devote a 8
sufficient amount of time to our business operations, causing
our business to fail
We have no known mineral resources and if we cannot find any
mineral resources we may have to cease operations. 8
As the Province of British Columbia owns the land covered by our 8
mineral claims and native land claims might affect our title to the
mineral claims or to British Columbia's title to the property, our
business plan may fail.
Mining risks and insurance could have an adverse effect on our 8
business.
We are dependent on key personnel, the loss of whom could have an 8
adverse effect.
Risks Associated with Our Common Stock 8
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There is no active trading market for our common stock and you 8
may be unable to sell your shares of our common stock if a
market does not develop for our common stock.
If the selling shareholders sell a large number of shares all 9
at once or in blocks, the market price of our shares would
most likely decline
</table>
<page>
-5-
<table>
<caption>
<s> <c>
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. 9
Other Risks 9
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Because all of our officers and directors are located in
non-U.S. jurisdictions, you may have no effective recourse
against the management for misconduct and may not be able to
enforce judgement and civil liabilities against our officers,
directors, experts and agents. 9
FORWARD-LOOKING STATEMENTS 9
SECURITIES AND EXCHANGE COMMISSION'S PUBLIC REFERENCE 10
THE OFFERING 10
USE OF PROCEEDS 10
DETERMINATION OF OFFERING PRICE 10
DILUTION 10
DIVIDEND POLICY 10
BUSINESS 11
PLAN OF OPERATIONS 18
PROPERTY 19
MANAGEMENT 19
EXECUTIVE COMPENSATION 20
DISCLOSURE OF SEC POSITION OF INDEMNIFICATION FOR SECURITIES ACT LIABILITIES 21
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT 21
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS 22
PLAN OF DISTRIBUTION 22
SELLING STOCKHOLDERS 25
DESCRIPTION OF SECURITIES 27
LEGAL PROCEEDINGS 28
LEGAL MATTERS 28
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE 28
EXPERTS 28
INTEREST OF NAMED EXPERTS AND COUNSEL 28
MARKET FOR OUR COMMON STOCK AND RELATED SHAREHOLDER MATTERS 29
WHERE YOU CAN FIND MORE INFORMATION 30
FINANCIAL STATEMENTS 31
</table>
<page>
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As used in this prospectus, the terms "we", "us", "our", and "Pioneer
Exploration" mean Pioneer Exploration Inc. unless otherwise indicated.
All dollar amounts refer to US dollars unless otherwise indicated.
PROSPECTUS SUMMARY
Pioneer Exploration is an exploration stage company and we have no revenues to
date. The following summary is qualified in its entirety by the more detailed
information and financial statements and notes thereto appearing elsewhere in
this prospectus. Consequently, this summary does not contain all of the
information that you should consider before investing in our common stock. You
should carefully read the entire prospectus, including the "Risk Factors"
section and the documents and information incorporated by reference into it.
Our Business
Pioneer Exploration is a Nevada corporation with its business offices located at
700 West Pender St., Suite 520, Vancouver BC V6C 1G8. Our telephone number is
(604) 618-0948. We were incorporated in Nevada on June 9, 2005. Since our
inception, Pioneer Exploration has been engaged in the business of exploring for
minerals, primarily nickel and molybdenum, and acquiring, exploring and
developing mineral properties in Canada, solely in British Columbia. We hold a
100% beneficial interest in three mineral exploration claims named Pipe 1
(Tenure No. 525619), Queen 1 (Tenure No. 525620) and Queen 2 (Tenure No.
525623), that are collectively known as the Pipe Property and which are situated
along Sawmill Creek, a tributary of the Fraser River, approximately 6.3 km (3.9
miles) northwest of Yale, B.C. in the New Westminster mining division of British
Columbia. We are exploring for nickel and molybdenum on the property. We have
not generated any revenue or conducted any development operations since
inception. We intend to conduct exploration activities during 2007 and beyond.
We acquired the Pipe Property pursuant to a purchase agreement dated August 25,
2005. Thomas J. Brady, a director of our company, is holding the property in
trust for us. As of August 31, 2006 we have total assets of $23,991 and no
liabilities.
The Offering
This prospectus relates to 8,264,500 shares of our common stock to be sold by
the selling stockholders identified in this prospectus. There are currently
11,264,500 shares of our common stock issued and outstanding and we have no
other securities issued and outstanding. The selling stockholders will sell
their shares of our common stock at a price of $0.25 per share until shares of
our common stock are quoted on the over-the-counter bulletin board. We intend to
apply to the over-the-counter bulletin board to allow for the trading of our
common stock upon our becoming a reporting entity under the Securities Exchange
Act of 1934. If our common stock becomes so traded and a market for the stock
develops, the actual price of stock will be determined by prevailing market
prices at the time of sale or by private transactions negotiated by the selling
shareholders named in this prospectus. The offering price would thus be
determined by market factors and the independent decisions of the selling
shareholders named in this prospectus. There can be no assurances, however, that
we will be able to obtain a listing on the over-the-counter bulletin board. Our
common stock is presently not traded on any market or securities exchange, and
we have not applied for listing or quotation on any public market. We will not
receive any of the proceeds of the shares of common stock offered by the selling
stockholders.
Summary Financial Data
The summarized financial data presented below is derived from and should be read
in conjunction with our audited financial statements, including the notes to
those financial statements which are included elsewhere in this prospectus along
with the section entitled "Plan of Operations" beginning on page 18 of this
prospectus.
<page>
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<table>
<caption>
For the Year Ended August For the period from June
31, 2006 9, 2005 (inception) to
August 31, 2005
<s> <c> <c>
Revenue $Nil $Nil
Net Loss for the Period $(54,679) $(6,681)
Loss Per Share - basic and diluted - -
August 31, 2006 At August 31, 2005
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Working Capital $20,791 $6,594
Total Assets $23,991 $16,331
Total Stockholders' Equity $20,791 $6,594
Deficit Accumulated in the Exploration Stage $61,360 $6,681
</table>
RISK FACTORS
An investment in our common stock involves a number of very significant risks.
You should carefully consider the following risks and uncertainties in addition
to other information in this prospectus in evaluating Pioneer Exploration and
its business before purchasing shares of common stock. Our business, operating
results and financial condition could be seriously harmed due to any of the
following risks. You could lose all or part of your investment due to any of
these risks.
Risks Associated with our Business
- ----------------------------------
We have a limited operating history with losses and expect losses to continue,
which raise concerns about investors receiving a return on their investments.
We have not generated any revenues since our incorporation and we will, in all
likelihood, continue to incur operating expenses without revenues until and
unless we are able to successfully commercialize our exploration claims. We
intend to enter into a two phase exploration program to locate and define three
previously discovered mineralized breccia zones and prospect for new zones.
Phase I is estimated to cost approximately $4,750 (CDN$ 5,280.00) and Phase II
is estimated to cost approximately $40,486 (CDN$ 45,000.00). If significant
mineralization is discovered, then we will need to incur significant additional
exploration expenditures to fully define such mineralization. We have incurred
operating losses of $33,238 since inception. We may not be able to successfully
commercialize our exploration claims or ever become profitable, in which event
our shareholders will lose their investments.
We will require additional financing to develop our existing exploration claims
or acquire additional resource assets.
Because we have not generated any revenue from our business and we cannot
anticipate when we will be able to generate revenue from our business, we will
need to raise additional funds for the development and production (if any) of
our exploration claims. We will not be raising any funds in this offering. We do
not currently have sufficient financial resources to fund the acquisition of
additional exploration or development claims. We anticipate that we will need to
raise further financing after the next 12 month period. We do not currently have
any arrangements for financing and we can provide no assurance to investors that
we will be able to find such financing if required. The most likely source of
future funds presently available to us is through the sale of equity capital. If
we are unable to raise additional capital, it is likely our business will fail.
If we are unable to extend the expiration date for our mineral claim, we will
lose our mineral interest and any prospects of commercial success will be
unlikely.
The Pipe Property claims expire on July 16, 2007. If we are unable to extend
the expiration date, we will lose our mineral claim. In order to renew our
mineral claim and keep it in good standing, we have to pay approximately $4,673
(CDN $5,194) to the British Columbia Mineral Titles Branch each year or instead,
complete and file an assessment report detailing the equivalent in work on the
claims for each year prior to the expiry date. After three years we are required
to complete work in the amount of approximately $9,346 (CDN $ 10,388) each year
on the Pipe Property claims. A recording fee of approximately $0.36 (CDN$ 0.40)
per hectare is charged by the British Columbia government. If the annual filing
fees are not paid to keep the property in good standing, we may lose the
property.
<page>
-8-
Because our Officers and Directors have other business interests, they may not
be able or willing to devote a sufficient amount of time to our business
operations, causing our business to fail.
Mr. Robb presently spends approximately 5% of his business time on business
management services for our Company and Mr. Brady plans to spend 15% of his time
on the affairs of Pioneer Exploration. While Messrs. Robb and Brady presently
possess adequate time to attend to our interests, it is possible that future
demands on them from their other obligations could increase with the result that
they would no longer be able to devote sufficient time to the management of our
business. In addition, Messrs. Robb and Brady may not possess sufficient time
for our business if the demands of managing our business increased substantially
beyond current levels. Competing demands on their business time may cause them
to have differing interest in approving significant corporate transactions from
those of other stockholders.
We have no known mineral resources and if we cannot find any mineral resources
we may have to cease operations.
Our mineral claims are at the exploration stage as opposed to the development
stage and they do not have a known body of commercial ore. If we do not find a
mineral body or bodies containing valuable minerals or metals or if we cannot
conduct further exploration of any discovered minerals, either because we do not
have money to do it or because it is not economically feasible to do it, we may
have to cease operations and you may lose your investment.
As the Province of British Columbia owns the land covered by our mineral claims
and native land claims might affect our title to the mineral claims or to
British Columbia's title to the property, our business plan may fail.
We are unaware of any outstanding native land claims on the Pipe Property
claims. However, it is possible that a native land claim could be made in the
future. The federal and provincial government policy at this time is to consult
with all potentially affected native bands and other stakeholders in the area of
any potential mining. Should we encounter a situation where a native person or
group claims an interest in our claims, we may be able to provide compensation
to the affected party in order to continue with our exploration work, or if such
an option is not available, we may have to relinquish our interest in these
claims. In either case, the costs and/or losses could be greater than our
financial capacity and our business could fail.
Mining risks and insurance could have an adverse effect on our business.
Our operations are subject to all of the operating hazards and risks normally
incident to exploring for and developing mineral properties, such as unusual or
unexpected geological formations, environmental pollution, personal injuries,
flooding, cave-ins, changes in technology or mining techniques, periodic
interruptions because of inclement weather and industrial accidents. We do not
currently maintain insurance to ameliorate any of these risks. Such insurance
may not be available in the future at economically feasible rates or, if
economically feasible, may not be adequate to cover the risks and potential
liabilities associated with exploring, owning and operating our properties.
Either of these events could cause us to curtail or cease our business
operations.
We are dependent on key personnel, the loss of whom could have an adverse
effect.
We are dependent on the services of certain key executives, including Warren
Robb, President and Director, and Thomas Brady, Secretary-Treasurer and
Director. The loss of either of these individuals could force us to curtail our
business and operations. We currently do not have key person insurance on these
individuals.
Risks Associated with our Common Stock
- --------------------------------------
There is no active trading market for our common stock and you may be unable to
sell your shares of our common stock if a market does not develop for our common
stock.
There is currently no active trading market for our common stock and such a
market may not develop or be sustained. If we establish a trading market for our
common stock, the market price of our common stock may be significantly affected
by factors such as actual or anticipated fluctuations in our operation results,
general market conditions and other factors. In addition, the stock market has
from time to time experienced significant price and volume fluctuations that
have particularly affected the market prices for the shares of developmental
stage companies such as our company, which may materially adversely affect the
market price of our common stock.
<page>
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If the selling shareholders sell a large number of shares all at once or in
blocks, the market price of our shares would most likely decline.
The selling shareholders are offering 8,264,500 shares of our common stock
through this prospectus. Our common stock is presently not traded or quoted on
any market or securities exchange, but should a market develop, shares sold at a
price below the current market price at which the common stock is quoted will
cause that market price to decline. Moreover, the offer or sale of a large
number of shares at any price may cause the market price to fall. The
outstanding shares of common stock covered by this prospectus represent
approximately 73.3% of the common shares outstanding as of the date of this
prospectus.
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.
Our stock is a penny stock. (See "Market for our Common Stock and Related
Stockholder Matters".) Our securities are subject to the penny stock rules
promulgated by the Securities and Exchange Commission, which impose additional
sales practice disclosure requirements. These disclosure requirements may have
the effect of reducing the level of trading activity in the secondary market for
the stock that is subject to these penny stock rules. Consequently, these penny
stock rules may affect the ability of broker-dealers to trade our securities. We
believe that the penny stock rules have the effect of discouraging investor
interest in and limiting the marketability of our common stock and adversely
affect the price of our shares.
In addition to the "penny stock" rules, the NASD has adopted rules that require
that in recommending an investment to a customer, a broker-dealer must have
reasonable grounds for believing that the investment is suitable for the
customer. The NASD requirements make it more difficult for broker-dealers to
recommend that their customers buy our common stock, which may limit your
ability to buy and sell our stock and have an adverse effect on the market for
our shares.
Other Risks
- -----------
Because all of our officers and directors are located in non-U.S. jurisdictions,
you may have no effective recourse against the management for misconduct and may
not be able to enforce judgment and civil liabilities against our officers,
directors, experts and agents.
All of our directors and officers are nationals and/or residents of countries
other than the United States, and all or a substantial portion of such persons'
assets are located outside the United States. As a result, it may be difficult
for investors to enforce within the United States any judgments obtained against
our officers or directors, including judgments predicated upon the civil
liability provisions of the securities laws of the United States or any state
thereof.
Please read this prospectus carefully. You should rely only on the information
contained in this prospectus. We have not authorized anyone to provide you with
different information. You should not assume that the information provided by
the prospectus is accurate as of any date other than the date on the front of
this prospectus.
FORWARD-LOOKING STATEMENTS
This prospectus contains forward-looking statements. These statements relate to
future events or our future financial performance. In some cases, you can
identify forward-looking statements by terminology such as "may", "should",
"expects", "plans", "anticipates", "believes", "estimates", "predicts",
"potential" or "continue" or the negative of these terms or other comparable
terminology. These statements are only predictions and involve known and unknown
risks, uncertainties and other factors, including the risks in the section
entitled "Risk Factors", that may cause our or our industry's actual results,
levels of activity, performance or achievements to be materially different from
any future results, levels of activity, performance or achievements expressed or
implied by these forward-looking statements.
While these forward-looking statements, and any assumptions upon which they are
based, are made in good faith and reflect our current judgment regarding the
direction of our business, actual results will almost always vary, sometimes
materially, from any estimates, predictions, projections, assumptions or other
future performance suggested herein. Except as required by applicable law,
including the securities laws of the United States, we do not intend to update
any of the forward-looking statements to conform these statements to actual
results.
<page>
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SECURITIES AND EXCHANGE COMMISSION'S PUBLIC REFERENCE
Any member of the public may read and copy any materials filed by us with the
Securities and Exchange Commission (the "SEC") at the SEC's Public Reference
Room at 100 F Street N.E., Washington, D.C. 20549. Information on the operation
of the Public Reference Room may be obtained by calling the SEC at
1-800-SEC-0330. The SEC maintains an Internet web site (http://www.sec.gov) that
contains reports, proxy and information statements, and other information
regarding issuers that file electronically with the SEC.
THE OFFERING
This prospectus covers the resale by certain selling stockholders of 8,264,500
shares of common stock, which were issued pursuant to private placement
offerings made by Pioneer Exploration pursuant to Regulation S promulgated under
the Securities Act of 1933.
USE OF PROCEEDS
The shares of common stock offered hereby are being registered for the account
of the selling stockholders identified in this prospectus. All proceeds from the
sales of the common stock will go to the respective selling stockholders. We
will not receive any proceeds from the resale of the common stock by the selling
stockholders.
DETERMINATION OF OFFERING PRICE
The selling stockholders may sell their shares of our common stock at a fixed
price of $0.25 per share until shares of our common stock are quoted on the OTC
Bulletin Board, and thereafter at prevailing market prices or privately
negotiated prices. There can be no assurance that we will be able to obtain an
OTC Bulletin Board listing. The offering price of $0.25 per share is based on
the last sales price of our common stock on March 31, 2006 and does not have any
relationship to any established criteria of value, such as book value or
earnings per share. Additionally, because we have no significant operating
history and have not generated any material revenues to date, the price of the
common stock is not based on past earnings, nor is the price of the common stock
indicative of the current market value of the assets owned by us. No valuation
or appraisal has been prepared for our business and potential business
expansion. Our common stock is presently not traded on any market or securities
exchange and we have not applied for listing or quotation on any public market.
We intend to apply to the OTC Bulletin Board to allow the quotation of our
common stock upon us becoming a reporting entity under the Securities Exchange
Act of 1934. We intend to file a registration statement under the Exchange Act
concurrently with the effectiveness of the registration statement of which this
prospectus forms a part. If our common stock becomes so quoted and a market for
the stock develops, the actual price of stock will be determined by prevailing
market prices at the time of sale or by private transactions negotiated by the
selling shareholders. The offering price would thus be determined by market
factors and the independent decisions of the selling shareholders.
DILUTION
Since all of the shares being registered are already issued and outstanding, no
dilution will result from this offering.
DIVIDEND POLICY
We have not declared or paid any cash dividends since inception. We intend to
retain future earnings, if any, for use in the operation and expansion of our
business and do not intend to pay any cash dividends in the foreseeable future.
Although there are no restrictions that limit our ability to pay dividends on
our common stock, we intend to retain future earnings for use in our operations
and the expansion of our business.
<page>
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BUSINESS
GLOSSARY
alteration - Any physical or chemical change in a rock or mineral subsequent to
its formation.
amphibolites - A metamorphic rock composed chiefly of amphibole with minor
plagioclase and little quartz.
anomaly - Any departure from the norm which may indicate the presence of
mineralization in the underlying bedrock.
assay - A chemical test performed on a sample of ores or minerals to determine
the amount of valuable metals contained.
biotite - A dark-brown or dark-green to black mica found in igneous and
metamorphic rocks.
blebs - a small, usually rounded inclusion of one mineral in another.
breccia - A rock in which angular fragments are surrounded by a mass of
fine-grained minerals.
claim - A portion of land held either by a prospector or a mining company.
Cretaceous - Of or belonging to the geologic time, system of rocks, and
sedimentary deposits of the third and last period of the Mesozoic Era.
crystalline - Pertaining to or having the nature of a crystal, or formed by
crystallization.
dilution (of shares) - A decrease in the value of a company's shares caused by
the issue of treasury shares.
diorite - An intrusive igneous rock.
disseminated - Said of a mineral deposit (esp. of metals) in which the desired
minerals occur as small, scattered particles spread more or less uniformly
through the host rock.
equity financing - The provision of funds by selling of shares by the Company.
exploration - Prospecting, sampling, mapping, diamond drilling and other work
involved in searching for ore.
fault - A break in the Earth's crust caused by tectonic forces which have moved
the rock on one side with respect to the other.
float - Pieces of rock that have been broken off and moved from their original
location by natural forces such as frost or glacial action.
geochemistry - the study of the chemical properties of rocks.
geology - The science concerned with the study of the rocks which compose the
Earth.
geophysics - The study of the physical properties of rocks and minerals.
geophysical survey - A scientific method of prospecting that measures the
physical properties of rock formations. Common properties investigated include
magnetism, specific gravity, electrical conductivity and radioactivity.
glacio-fluvial - pertaining to the deposits and landforms produced by the
combined action of glaciers and streams.
hectare - a metric unit of area measuring 100 by 100 meters (equivalent to 2.471
acres).
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host rock - Loosely used to describe the general mass of rock adjacent to an
orebody. Also known as the country rock.
induced polarization or I.P. - A method of ground geophysical surveying
employing an electrical current to determine indications of mineralization.
intrusive - A body of igneous rock formed by the consolidation of magma intruded
into other rocks.
limonite - A brown, hydrous iron oxide.
magnetometer - An instrument used to measure the magnetic attraction of
underlying rocks.
matrix - The rock material in which a mineral is embedded.
metamorphic rock - a rock that has undergone a change in structure or
composition as a result of heat and/or pressure.
mineralization - Usually refers to valuable metals or minerals distributed
within a rock.
mineral resource - Mineral Resources are sub-divided, in order of increasing
confidence, into Inferred, Indicated and Measured categories. An Inferred
Resource is an early stage estimate based on limited sampling and reasonably
assumed geological continuity while a Measured Resource has sufficient sampling
to allow production planning and evaluation of the economic viability of the
deposit.
mineral reserve - Mineral Reserves are the economically mineable part of a
Measured or Indicated Mineral Resource, sub-divided in order of increasing
confidence into Probable Mineral Reserves (from Indicated Resources) and Proven
Mineral Reserves (from Measured Resources).
orebody - A natural concentration of mineralization that can be extracted and
sold at a profit.
physiography - the study of physical features of the earth's surface.
plagioclase - Any of a common rock-forming series of triclinic feldspars,
consisting of mixtures of sodium and calcium aluminum silicates
pluton - A body of igneous rock formed beneath the surface of the earth by
consolidation of magma.
porphyry - Any igneous rock in which relatively large crystals are set in a
fine-grained groundmass.
reclamation - The restoration of a site after mining or exploration activity is
completed.
rhyolite - A fine-grained, extrusive igneous rock which has the same chemical
composition as granite.
schists - Any of various medium-grained to coarse-grained metamorphic rocks
composed of laminated, often flaky parallel layers of minerals.
sulphide - A mineral compound of sulphur and some other element.
topographic - Graphic representation of the surface features of a place or
region on a map, indicating their relative positions and elevations.
vent - An opening in the Earth's surface through which lava, gases, and hot
particles are expelled.
vug - A small unfilled cavity in rock, usually lined with crystalline layer of
different composition from surrounding rock.
<page>
-13-
working capital - The liquid resources a company has to meet day-to-day expenses
of operation; defined as the excess of current assets over current liabilities.
General
- -------
Pioneer Exploration Inc. (the "company" or "Pioneer") was incorporated in the
State of Nevada on June 9, 2005. We are an exploration stage company. We
maintain our statutory registered agent's office at Laughlin Associates, Inc.
2533 N. Carson St., Carson City, Nevada 89706. We maintain our principal
executive offices and our principal place of business at 700 West Pender St.,
Suite 520, Vancouver BC V6C 1G8. Our telephone number is (604) 618-0948. Our
company has been registered in British Columbia as an extraprovincial company
under the Business Corporations Act (British Columbia) with an assumed name of
PEI Pioneer Exploration Inc.
Business
- --------
Our company's business is to engage in the acquisition and exploration of
mineral exploration properties. We hold a 100% beneficial interest in three
mineral exploration claims named Pipe 1, Queen 1 and Queen 2, which are
collectively known as the "Pipe Property" and which are situated along Sawmill
Creek, a tributary of the Fraser River, approximately 6.3 km (3.9 miles)
northwest of Yale, B.C. in the New Westminster mining division of British
Columbia, Canada.
The claims were staked January, 2005 to cover an area identified as containing a
large area of anomalous porphyry molybdenum mineralization.
We acquired the Pipe Property pursuant to a purchase agreement dated August 25,
2005. Thomas J. Brady, a director of our company, is holding the property for us
in trust.
To our knowledge, this property does not have any proven mineral reserves or
mineral resources.
The Pipe Property:
- ------------------
Claim Acquisition and Information
- ---------------------------------
The Pipe property consists of three mineral exploration claims known as Pipe 1,
Queen 1 and Queen 2. The claims cover 1298.46 hectares. The claims were acquired
from David Deering. They were acquired by Tom Brady in trust for the Company for
an initial payment of $3,750 on or before October 25, 2005 and a further $3,750
payable on or before February 25, 2006. These amounts have been paid. Mr.
Deering retains a 2% Net Smelter Return. The claims were transferred to Tom
Brady, a Director of Pioneer Exploration Inc. who holds them in trust for the
company. Title to the claims lapsed in January 2006 and they were re-staked by
Mr. Brady in January 2006 who continues to hold them in trust for our company.
The claims are located in the New Westminster Mining Division of British
Columbia at coordinates: Latitude 49(degree) 27' N and longitude 121(degree) 28'
W and on map sheet NTS: 92H/11W. All claims are contiguous and were staked
utilizing the Mineral Titles Online cell staking system.
The pertinent property information is as follows:
<table>
<caption>
------------------------- ----------------------- ------------------------ -------------------------
Claim Name Tenure No. Hectares Anniversary Date
<s> <c> <c> <c>
------------------------- ----------------------- ------------------------ -------------------------
Pipe 1 525619 523.43 July 16, 2007
------------------------- ----------------------- ------------------------ -------------------------
Queen 1 525620 502.71 July 16, 2007
------------------------- ----------------------- ------------------------ -------------------------
Queen 2 525623 272.32 July 16, 2007
------------------------- ----------------------- ------------------------ -------------------------
</table>
In British Columbia, for assessment purposes in the first three years,
approximately $3.60 (CDN$ 4.00) per hectare of work or cash in lieu per unit
plus approximately $0.36 (CDN$ 0.40) per hectare filing fees are due to maintain
the claims in good standing. Thereafter it rises to approximately $7.20 (CDN$
8.00) per hectare plus approximately $0.36 (CDN$ 0.40) per hectare filing fees.
The claims have not been legally surveyed.
<page>
-14-
Until physical disturbance (i.e. road building, blasting, drillpads, timber
felling) is initiated on the claims, no permitting or bonding is required for
initial stage sampling, geological mapping, or ground geophysics.
Location and Access
- -------------------
The Pipe property on Sawmill Creek is situated 6.3 km (3.9 miles) northwest of
Yale, BC. The property lies on the north and south slopes of Sawmill Creek, a
tributary of the Fraser River.
Access to the property is by rough logging road from Yale.
Climate, Local Resources, Infrastructure and Physiography
- ---------------------------------------------------------
The Pipe property lies on the north and south slopes of Sawmill Creek between
elevations 760 m and 1370 m (2,500 and 4,500 feet). Topography is rugged,
typical of the Coast Range Mountains.
Much of the lower slope of Sawmill Creek has been logged off, vegetation on
parts of the claim area has been destroyed by forest fires but the northern part
of the claim group is covered by virgin hemlock and balsam fir.
Outcrops are numerous above a terrace of glacio-fluvial gravels which masks
slopes 90 m to 120 m above the valley floor.
The climate is typical of south-western British Columbia. Summers are warm with
temperatures averaging 22(degree)C during late-May to late-September.
Precipitation is moderate during these periods. Fall is typified with heavier
rainfall, snow accumulation in the upper slopes generally does not commence
until mid-November. Snowpacks of 1 to 3 m will accumulate and stay until late
March into April.
Yale is a 15 minute drive north of Hope, BC along the TransCanada Highway 1.
Hope is a community of 6,000 that is primarily logging related. Local services
such as police, fire, hospitals, supplies, and equipment contractors are
available here. The city of Vancouver, BC, 2 hours by road west, has assay
facilities and drilling companies.
History
- -------
The Pipe property was discovered in 1971 along a new logging roadcut. Over the
next 8 years a series of limited programs were undertaken to define the
mineralization. Soil geochemistry, geological mapping, magnetometer and induced
polarization geophysical surveys, and 3 short diamond drillholes were all
completed highlighted by the discover of 3 mineralized breccia pipes and one
drillhole intersection of 0.138% molybdenum over 2 metres. There are still
mineralized float samples upslope of the discovered zones for which the source
has not been located.
Several companies operated within the vicinity of the Pipe Property in the late
1960s through the 1970s. The original Pipe claims were staked by John McGoran in
1971. In 1976 Amax staked the ground and completed 3 work programs including
initial diamond drilling. The claims were allowed to lapse and were later
included in a larger land package assembled by Lacana Mining Corporation in
1987.
The ground presently covered by the Pipe and Queen claims has been dormant for
several years until recently acquired.
Regional Geology
- ----------------
The Pipe property lies in the eastern margin of the Spuzzum pluton, a phase of
the Coast Crystalline Belt. Dates on the pluton range from 70 to 103 m.y. with
most between 79 and 89 m.y. Quartz diorite is the most abundant phase in the
pluton. The Hope fault, part of the Fraser River fault system, lies about 1.6 km
(one mile) east of the claim group and bounds the eastern edge of the Spuzzum
pluton. Schists and amphibolites border the pluton to the east, west and south.
The younger Scuzzy pluton (35 m.y.) forms the northern contact.
<page>
-15-
Property Geology
- ----------------
On the Pipe property, the main breccia zone covers an area of 42,000 square feet
intrusive into biotite quartz diorite. This breccia is made up of fragments of
coarse-grained quartz diorite, rhyolite and porphyry, in a matrix of
fine-grained quartz diorite, quartz and limonite. Vugs with crystals of quartz
and pyrite are common. It is interpreted that the breccia is an intrusive
breccia, probably a vent associated with younger intrusive rock within the
Spuzzum Pluton. The other 2 breccias are similar in geology albeit somewhat
smaller in surface expression.
On the south side of Sawmill Creek, approximately 2000 feet east of the breccia
zone, a fault, which trends north-south and dips easterly at 60(degree), has
been inferred from the topographic expression.
Mineralization
- --------------
Sulphide mineralization is common within the breccia. It occurs either
disseminated, within vugs or as irregular blebs. This sulphide is primarily iron
with modest copper and molybdenum content. Molybdenum bearing rocks have been
found 1000 feet northwest of the breccia. This occurs as float and the source
has not yet been discovered.
The Gem molybdenum prospect is located 12 miles north-westerly and the Giant
Nickel Mine is located nine miles southerly.
The Pipe claims cover three known mineralized breccia pipes hosted in Cretaceous
intrusive rocks. Limited early work helped define the parameters of
mineralization. The property occurs within a mineralized geological region which
hosts former producing mines and showings. There remains undiscovered sources
for the mineralized float boulders discovered on the property.
Our independent geologist has recommended that the mineralized zones be
relocated and the boundaries defined by cut line. Cut lines at 100 m spacing
should cross these and 3D induced polarization geophysical surveys be completed
in preparation for additional diamond drilling. Road rehabilitation will be
necessary. Three or four days of prospecting is needed to locate the source of
mineralized float boulders upslope of the known showings.
Budget
- ------
Based on early results, Phase I will include locating and defining three
previously discovered mineralized breccia zones and prospecting for new
mineralized zones. This cost is estimated at approximately $4,750 (CDN$ 5,280)
as follows:
<table>
<caption>
<s> <c> <c>
Geological Technician 4 days @ $400/day CDN$ 1,600
Prospector 4 days @ $300/day 1,200
Truck Rental 4 days @ $100/day 400
Room and Board 8 man days @ $60/man/day 480
Field Supplies 100
Summary Report 1,000
Contingency @ 10% 500
TOTAL CDN$ 5,280
Phase II will consist of 10 line kilometres of cut line and I.P. geophysics at a
cost of approximately $40,486 (CDN$ 45,000) as follows:
CDN$ 15,000
10 km cut line @ $1,500/km
I.P. Geophysics @ $3,000/km 30,000
TOTAL CDN$ 45,000
</table>
Competitive Factors
- -------------------
The nickel and molybdenum mining industry includes companies of all sizes, from
the large production and exploration companies to the smallest companies. We are
within the latter group, but all major companies have had a small or at least
modest beginning. We compete with other exploration companies looking for
nickel, molybdenum and other commodities. We are one of the smallest exploration
<page>
-16-
companies in existence. We are a very small participant in the nickel and
molybdenum mining exploration business. While we compete with other exploration
companies, there is no competition for the exploration or removal of mineral
from out of our property. Readily available nickel and molybdenum markets exist
in Canada, the United States and around the world for the sale of nickel and
molybdenum. Therefore, we will be able to sell any nickel or molybdenum that we
are able to recover.
Regulations
- -----------
We will be required to comply with all regulations, rules and directives of
governmental authorities and agencies applicable to the exploration of minerals
in the Province of British Columbia. In addition, if we progress to the
production phase, production of minerals in the Province of British Columbia
will require prior approval of applicable governmental regulatory agencies. We
cannot be certain that such approvals will be obtained. The cost and delay
involved in attempting to obtain such approvals cannot be known in advance.
The main agency that governs the exploration of minerals in the Province of
British Columbia is the Ministry of Energy and Mines ("MEM").
MEM manages the development of British Columbia's mineral resources, and
implements policies and programs respecting their development while protecting
the environment. In addition, MEM regulates and inspects the exploration and
mineral production industries in British Columbia to protect workers, the public
and the environment.
The material legislation applicable to us is the Mineral Tenure Act,
administered by the Mineral Titles Branch of MEM. The initial phase of our
exploration program will consist of locating and defining three previously
discovered mineralized breccia zones and prospecting for new mineralized zones.
Should a follow-up exploration program be undertaken, it would be intended to
define the boundaries of mineralized zones by cut lines and complete induced
polarization geophysical surveys in preparation for additional diamond drilling.
The area of the Pipe Claim is currently not permitted for mining.
In addition, MEM administers the Mines Act, the Health, Safety and Reclamation
Code and the Mineral Exploration Code. Ongoing exploration programs would likely
be expanded to include activities such as line cutting, machine trenching and
drilling. In that event a reclamation deposit is usually required in the amount
of approximately $2,700 (CDN $3,000) to $4,500 (CDN $5,000). The process of
requesting permission and posting the deposit usually takes about two weeks. The
deposit is refundable under a MEM inspector's determination that the exploration
program has resulted in no appreciable disturbance to the environment.
The Mineral Tenure Act and its regulations govern the procedures involved in the
location, recording and maintenance of mineral and placer titles in British
Columbia. The Mineral Tenure Act also governs the issuance of mining leases,
which are long term entitlements to minerals, designed as production tenures. At
this phase in the process, a baseline environmental study would have to be
produced. Such a study could take many months and cost in excess of $90,000
($CDN 100,000). However, we are only in the preliminary stages of the first
stage exploration program on the Pipe claim, and there can be no assurance that
we will ever get beyond that stage. The standards set out here are for general
information purposes only and have no affect on our current operations.
All mineral exploration activities carried out on a mineral claim or mining
lease in British Columbia must be in compliance with the Mines Act. The Mines
Act applies to all mines during exploration, development, construction,
production, closure, reclamation and abandonment. Additionally, the provisions
of the Health, Safety and Reclamation Code for mines in British Columbia contain
standards for employment, occupational health and safety, accident
investigation, work place conditions, protective equipment, training programs,
and site supervision. Also, the Mineral Exploration Code contains standards for
exploration activities including construction and maintenance, site preparation,
drilling, trenching and work in and about a water body.
Additional approvals and authorizations may be required from other government
agencies, depending upon the nature and scope of the proposed exploration
program. If the exploration activities require the falling of timber, then
either a free use permit or a license to cut must be issued by the Ministry of
Forests. Items such as water and waste approvals may be required from the
Ministry of the Environment, Lands and Parks if the proposed exploration
activities are significantly large enough to warrant them.
<page>
-17-
We will also have to sustain the cost of reclamation and environmental
remediation for all exploration work undertaken. Both reclamation and
environmental remediation refer to putting disturbed ground back as close to its
original state as possible. Other potential pollution or damage must be cleaned
up and renewed along standard guidelines outlined in the usual permits.
Reclamation is the process of bringing the land back to its natural state after
completion of exploration activities. Environmental remediation refers to the
physical activity of taking steps to remediate, or remedy, any environmental
damage caused, i.e., refilling trenches after sampling or cleaning up fuel
spills.
Our initial exploration program does not require any reclamation or remediation
because of minimal disturbance to the ground. The amount of these costs is not
known at this time as we do not know the extent or the exploration program we
will undertake, beyond completion of the recommended exploration phase described
above, or if we will enter into production on the property. Because there is
presently no information on the size, tenor or quality of any resource or
reserve at this time, it is impossible to assess the impact of any capital
expenditures on our earnings or competitive position in the event a potentially
economic deposit is discovered.
Employees and Employment Agreements
- -----------------------------------
Initially, we intend to use the services of sub-contractors for manual labour
exploration work and drilling on our properties and expect to enter into
contracts with such sub-contractors if, as and when needed. Currently we do not
have any employees other than our officers, Messrs. Robb and Brady, and have not
entered into any employment agreements.
History of Chilco River Holdings Inc. ("Chilco")
- ------------------------------------------------
Chilco was incorporated on May 8, 2003 under the laws of the state of Nevada.
Chilco was organized by Robert Krause, Thomas Brady and Gavin Roy. Mr. Krause
and Mr. Brady both have strong backgrounds in mining and mineral development and
were the initial officers and directors of Chilco. Mr. Krause and Mr. Brady each
owned 100,000 shares of stock in Chilco, relatively small capital positions
compared to Mr. Roy's 1,800,000 shares. Mr. Roy was the primary principal and
control person of Chilco. According to Chilco's amended SB-2 registration
statement filed August 6, 2004, Mr. Roy held 59.4% of Chilco's outstanding
shares. Following its incorporation, Chilco purchased all right, title and
interest in one unpatented claim consisting of 16 units located in southwestern
British Columbia, Canada, from Nicholson & Associates by agreement dated
November 3, 2003. Chilco's business operations were then to carry out an initial
exploration program on the claim in order to ascertain whether it possessed
commercially exploitable quantities of nickel, copper, palladium, platinum,
cobalt, chromium, silver and gold.
On March 8, 2004, Chilco filed a registration statement on Form SB-2 registering
the shares of 45 selling shareholders, which registration was declared effective
in August, 2004. On May 10, 2005, Mr. Brady resigned his positions as an officer
and as a director of Chilco. Mr. Brady resigned because he was not in agreement
with the direction that Chilco was taking. He was replaced by Mr. Roy. Mr. Roy
had extensive experience in the financial services business and joined Chilco's
board to assist in raising the funds to enable the Company to locate and acquire
additional mineral resource properties or other assets of interest. Mr. Roy held
at the time over 50% of Chilco's common stock. Thereafter, Mr. Brady had no
input into the actions of Chilco and no input with respect to the content of the
reports filed by Chilco with the Securities and Exchange Commission.
On or about July 15, 2005, being approximately two months after Mr. Brady's
resignation, Chilco entered into a Share Exchange Agreement with KUBUK
International, Inc., a California Registrant. Following the share exchange, the
shareholders of KUBUK held a majority of the issued and outstanding shares of
Chilco and the business operations of KUBUK became the business operations of
Chilco. In addition, the principals of KUBUK assumed the management of Chilco.
Due to the change in the management of Chilco in connection with the share
exchange, the reorganization between Chilco and KUBUK was typified as a reverse
merger. Since the share exchange, Chilco has been in the business of owning and
operating the Bruce Hotel and Casino. The Bruce Hotel and Casino is located at
Jiron Francisco Bolognesi #171-191 in the Miraflores District, Province and
Department of Lima, Peru.
Connections between Companies
- -----------------------------
Pioneer and Chilco have the following connections:
Thomas Brady was an initial organizer, officer and director of both companies.
Fourteen of Chilco's 45 selling shareholders and of Pioneer's 38 selling
shareholders are the same people. These fourteen people are: R. D. Anthony,
Evelyn Brookes, Gordon Cartwright, Clive T. Celaire, Tennyson Choo, Diane Hart,
Warren Hart, Robert Krause, Glen MacDonald, Cheryl McKeeman, William Murray,
Barry Muttart, Bob Nadon, Brock Smither (via Quaser Developments Ltd.) and Jack
Tillar.
<page>
-18-
Robert Krause who was an initial organizer, officer and director of Chilco is a
selling shareholder of Pioneer.
Thomas Brady's interest in both companies stems from his desire to be part of
building a mining company. Mr. Brady's career has been in the mining industry
and he has been a principal in several mining companies over the years that have
begun as exploration companies and have become producing companies. Chilco went
a different direction after Mr. Brady was no longer associated with Chilco.
Mr. Brady has been instrumental in the startup of both Chilco and Pioneer. In
each instance, Mr. Brady, as well as other organizers, approached persons they
knew that they thought might be interested in investing in a startup mining
company. The fourteen shareholders that are common to both companies were
approached in each case by Mr. Brady. They are people he knows and in each
instance the fourteen persons agreed to invest in a company he was part of.
Rule 419
- --------
Rule 419 promulgated under the Securities Act of 1933 pertains to the
registration of securities by companies designated as blank check companies. For
purposes of Rule 419, a blank check company is 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. Pioneer is not a blank check company and
therefore not subject to Rule 419 because it has a specific business plan to
engage in the mineral exploration industry. If the mineral studies provide the
necessary grades of minerals in the claims in which Pioneer has an interest,
Pioneer plans on developing the mineral interests in a commercially viable
manner. Mr. Brady has a background of developing mineral and mining companies
and plans to develop the mineral interests of Pioneer. It is possible that
Pioneer will acquire additional mineral deposits, other mineral assets and even
producing mines as the company matures.
Despite the similarities between Chilco and Pioneer, Chilco's reverse merger
activities are not indicative of Pioneer's proposed activities. A similarity
between Chilco and Pioneer is that Pioneer's business plan to develop mineral
interests is the same as Chilco's original business plan. Another similarity
between Chilco and Pioneer is the fact that Thomas Brady and thirteen of his
acquaintances were involved in the early management and funding of each of the
respective companies. However, Chilco's reverse merger activities are not
indicative of Pioneer's proposed activities since Mr. Brady's intentions are to
remain in control of Pioneer and to pursue its business plan as a mineral and
mining company, unlike the direction Chilco pursued after Mr. Brady had left
Chilco.
PLAN OF OPERATIONS
We are a start-up exploration-stage company, and have not yet generated or
realized any revenues from our business operations. We are not a blank check
company and have no intention of acting as a blank check company as that term is
defined under Rule 419 of Regulation C under the Rules of the Securities Act of
1933. We have acquired the right to explore the mineral property containing
three claims, situated in the New Westminster mining division of British
Columbia. Our detailed business plan is discussed herein.
(Please see "Business" and the information provided below.)
Most of our overhead expenses for the period from June 9, 2005 (date of
inception) to August 31, 2006 are for professional fees. Our entire loss for
this period totals $61,360 including $39,048 for professional fees, $7,500 for
donated services and $7,500 impairment loss on mineral properties.
We expect to commence exploration activities in 2007 and this will cause us to
incur exploration and property costs for the year ending August 31, 2007.
Exploration expenditures for Phase I and Phase II of our exploration program
have a preliminary budget of approximately $45,236 (CDN$ 50,280). In order to
renew our mineral claim and keep it in good standing, we have to pay
approximately $4,673 (CDN$ 5,194) each year to the British Columbia Mineral
Titles Branch or instead, complete and file an assessment report detailing the
equivalent in work on the claims for each year. Operational overhead for all of
2007 should be less than $35,000. We currently do not have sufficient funds to
conduct our planned 2007 exploration program and we will need to raise
additional funding for our intended corporate and exploration activities in the
next 12 months.
<page>
19
Purchase or Sale of Equipment
At this time we do not expect to purchase or sell any plant or significant
equipment.
Results of Operations
Our company was formed in June 2005. We acquired our mining interest located in
the New Westminster mining division of British Columbia and intend to commence
exploration on this property. By the end of March 2006 we had raised funds
totalling approximately $70,900 through private placements. During 2007 we
intend to conduct exploration activities on our mineral exploration property.
Liquidity and Capital Resources
At August 31, 2006, we had $23,991 in cash. We anticipate that our total
operating expenses will be between $30,000 and $35,000 for the next twelve
months. Available funds will not satisfy our working capital requirements for
the balance of 2007 and we will need to raise additional capital in the next 12
months for exploration expenses and operations including legal and accounting
expenses and to maintain our British Columbia claims in good standing. As of
August 31, 2006 our total assets were $23,991 and we had no liabilities.
PROPERTY
Pioneer Exploration uses office space located at 700 West Pender St., Suite 520,
Vancouver BC V6C 1G8, and our monthly rental, which is donated to us, is
recognized at $250 on a month-to-month basis.
MANAGEMENT
Directors and Executive Officers of Pioneer Exploration
All directors of our company hold office until the next annual meeting of the
stockholders or until their successors have been elected and qualified. The
officers of our company are appointed by our Board of Directors and hold office
until their death, resignation or removal from office. There are no arrangements
or understandings regarding the length of time a director of our company is to
serve in such a capacity. Neither of our directors holds a directorship in any
other company that has to comply with the reporting requirements of the
Securities Exchange Act of 1934,
Our directors and executive officers, their ages, positions held, and duration
as such, are as follows:
<table>
<caption>
Positions held with our Date first
Name company Age elected or appointed
<s> <c> <c> <c>
Warren Robb Director, President, CEO, 46 Director and President since June
and CFO 2005
Thomas Brady Director, Secretary and 54 Director, Secretary and Treasurer
Treasurer since June 2005
</table>
Business Experience
The following is a brief account of the education and business experience during
at least the past five years of each director, executive officer and key
employee, indicating the principal occupation during that period, and the name
and principal business of the organization in which such occupation and
employment were carried out.
Warren Robb, Director, President, Chief Executive Officer and Chief Financial
Officer
Mr. Robb is the president, chief executive officer, chief financial officer and
a director of Pioneer Exploration Inc. From January to December 2005 he was the
senior consulting geologist for Majestic Gold Corp. From April 1997 to January
2003 he was the vice-president of investor relations for Trivalence Mining Corp.
From April 2004 to June 2004 Mr. Robb provided investor relations services for
BM Diamond Gold Corp. Mr. Robb is a professional geoscientist and has been a
member of the Association of Professional Engineers and Geoscientists of British
Columbia since 1992. Mr. Robb holds a Bachelor of Science degree from the
University of British Columbia.
Thomas Brady, Director and Secretary-Treasurer
<page>
-20-
Mr. Brady is the secretary-treasurer and a director of Pioneer Exploration Inc.
Mr. Brady has been the vice-president, communications for TTM Resources Inc.
since May 2004. From May 2001 to May 2004 he was the manager of information
systems for Starfield Resources Inc. Mr. Brady was a director of GTO Resources
Inc. from July 2003 to December 2003. Mr. Brady has been a consultant to Wyn
Developments Inc., United Resource Group Inc. and Sonora Gold Corp. (formerly
International Coromandel Resources Ltd.) from May 2004 to present. From May 2003
to May 2005 he was a director and the secretary-treasurer of Chilco River
Holdings Inc. Mr. Brady has served as president of BBX Marketing Corp. (formerly
Momentum Marketing Corporation) from 1992 to present. He has been Vice
President-Communications of Red Tusk Resources Inc. since May 2004. Mr. Brady
has been the president of the Vancouver Petroleum Club since July 2006. Mr.
Brady holds a Bachelor of Commerce degree from the University of Manitoba.
Committees of the Board
We do not have an audit or compensation committee at this time.
Family Relationships
There are no family relationships between any director or executive officer.
Conflicts of Interest
We believe that Warren Robb or Thomas Brady could have conflict of interest
relationships with other mineral exploration companies. Mr. Robb and Mr. Brady
will continue to be involved in the mineral exploration business for other
entities and their involvement could create conflicts of interest. At the
present time, we do not foresee any direct conflicts because we intend to
explore and develop our own mineral claims. However, in the future, we may enter
into joint venture relationships with companies with which Mr. Robb and/or Mr.
Brady is affiliated. The only conflicts that we foresee is Mr. Robb's and Mr.
Brady's devotion to time to other mineral exploration projects that do not
involve us.
EXECUTIVE COMPENSATION
To date, our directors do not currently receive and have never received any
compensation for serving as a director of our company. In addition, at present,
there are no ongoing plans or arrangements for compensation of any of our
officers. Presently, there are no plans or agreements for compensation of our
officers and directors even if certain milestones are achieved in the business
plan. However, we expect to adopt a plan of reasonable compensation to our
officers and employees when and if we become operational and profitable.
The following table summarizes the compensation of our President (Principal
Executive Officer) and other officers and directors during the period from June
9, 2005 (incorporation) to August 31, 2005 and for the year ended August 31,
2006.
Annual Compensation
<table>
<caption>
All Other
Name and Principal ($) Number of shares Compensation
Position Year Salary Bonus Underlying Options (#)
<s> <c> <c> <c> <c> <c>
Warren Robb 2006 $Nil Nil Nil Nil
Director, President
(Principal Executive 2005 $Nil Nil Nil Nil
Officer), Chief Executive
Officer, Chief Financial
Officer
Thomas Brady 2006 $Nil Nil Nil Nil
Director, Secretary & 2005 $Nil Nil Nil Nil
Treasurer
</table>
We have not entered into any employment or consulting agreements with our
directors or executive officers. There are no arrangements or plans in which we
provide pension, retirement or similar benefits for directors or executive
officers. Our directors and executive officers may receive stock options at the
discretion of our board of directors in the future, but no such options have
been issued at this time. We do not have any material bonus or profit sharing
plans pursuant to which cash or non-cash compensation is or may be paid to our
directors or executive officers, except that stock options may be granted at the
<page>
-21-
discretion of our board of directors. We do not presently have a stock option
plan but intend to develop an incentive based stock option plan for our
officers, directors, employees and consultants in the future.
Directors' Compensation
We reimburse our directors for expenses incurred in connection with attending
board meetings but did not pay director's fees or other cash compensation for
services rendered as a director in the period from June 9, 2005 (incorporation)
to August 31, 2006.
We have no formal plan for compensating our directors for their service in their
capacity as directors. In the future we may grant to our directors options to
purchase shares of common stock as determined by our Board of Directors or a
compensation committee, which may be established in the future. Directors are
entitled to reimbursement for reasonable travel and other out-of-pocket expenses
incurred in connection with attendance at meetings of our board of directors.
The board of directors may award special remuneration to any director
undertaking any special services on behalf of Pioneer Exploration other than
services ordinarily required of a director. Other than indicated in this
prospectus, no director received and/or accrued any compensation for his or her
services as a director, including committee participation and/or special
assignments.
DISCLOSURE OF SEC POSITION OF
INDEMNIFICATION FOR SECURITIES ACT LIABILITIES
The General Corporate Law of Nevada empowers a company incorporated in Nevada,
such as Pioneer Exploration, to indemnify its directors and officers under
certain circumstances.
Our Certificate of Incorporation and Articles provide that no director or
officer shall be personally liable to Pioneer Exploration or any of its
stockholders for damages for breach of fiduciary duty as a director or officer
involving any act or omission of such director or officer unless such acts or
omissions involve material misconduct, fraud or a knowing violation of law, or
the payment of dividends in violation of the General Corporate Law of Nevada.
Our Bylaws provide that no officer or director shall be personally liable for
any obligations of Pioneer Exploration or for any duties or obligations arising
out of any acts or conduct of the officer or director performed for or on behalf
of Pioneer Exploration. The Bylaws also state that we will indemnify and hold
harmless each person and their heirs and administrators who shall serve at any
time hereafter as a director or officer from and against any and all claims,
judgments and liabilities to which such persons shall become subject by reason
of their having heretofore or hereafter been a director or officer, or by reason
of any action alleged to have heretofore or hereafter taken or omitted to have
been taken by him or her as a director or officer. We will reimburse each such
person for all legal and other expenses reasonably incurred by him or her in
connection with any such claim or liability, including power to defend such
persons from all suits or claims as provided for under the provisions of the
General Corporate Law of Nevada; provided, however, that no such persons shall
be indemnified against, or be reimbursed for, any expense incurred in connection
with any claim or liability arising out of his (or her) own negligence or wilful
misconduct. Our Bylaws also provide that we, our directors, officers, employees
and agents will be fully protected in taking any action or making any payment,
or in refusing so to do in reliance upon the advice of counsel.
Insofar as indemnification for liabilities arising under the Securities Act may
be permitted to directors, officers and controlling persons of Pioneer
Exploration under Nevada law or otherwise, Pioneer Exploration has been advised
the opinion of the Securities and Exchange Commission is that such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Principal Stockholders
The following table sets forth, as of August 31, 2006, certain information with
respect to the beneficial ownership of our common stock by each stockholder
known by us to be the beneficial owner of more than 5% of our common stock and
by each of our current directors and executive officers. Each person has sole
voting and investment power with respect to the shares of common stock, except
as otherwise indicated. Beneficial ownership consists of a direct interest in
the shares of common stock, except as otherwise indicated.
<page>
-22-
<table>
<caption>
Name and Address of Amount and Nature of Percentage
Beneficial Owner Beneficial Ownership of Class(1)
<s> <c> <c>
Warren Robb 500,000 common shares 4.4%
Maple Ridge, BC, Canada
Thomas Brady 2,500,000 common shares 22.2%
Vancouver, BC, Canada
Directors and Executive Officers as a 3,000,000 common shares 26.6%
Group
</table>
(1) Based on 11,264,500 shares of common stock issued and outstanding
as of August 31, 2006. Except as otherwise indicated, we believe that
the beneficial owners of the common stock listed above, based on
information furnished by such owners, have sole investment and voting
power with respect to such shares, subject to community property laws
where applicable. Beneficial ownership is determined in accordance with
the rules of the SEC and generally includes voting or investment power
with respect to securities.
Changes in Control
We are unaware of any contract or other arrangement the operation of which may
at a subsequent date result in a change of control of Pioneer Exploration.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
We have not been a party to any transaction, proposed transaction, or series of
transactions in which the amount involved exceeds $60,000, and in which, to our
knowledge, any of our directors, officers, five percent beneficial security
holders, or any member of the immediate family of the foregoing persons has had
or will have a direct or indirect material interest.
Our directors, Warren Robb and Thomas J. Brady, initiated the founding and
organizing of our company and may be considered to be the promoters of our
company. Mr. Brady holds the Pipe property in trust for us and pursuant to a
declaration of trust dated January 16, 2006, Mr. Brady has agreed to deliver
full title to the Pipe property claims to us on demand for as long as the claims
are good standing with the Province of British Columbia and provided that we
have made all required payments to the vendor of the claims. We have not paid
and are not required to pay any consideration to Mr. Brady for his holding the
Pipe property in trust for us.
PLAN OF DISTRIBUTION
Summary
- -------
We have agreed to register for public resale, our common shares which have been
issued to the selling stockholders. The offering will remain open for 20 months,
and may be extended an additional 60 days in our sole discretion. The selling
stockholders will receive all of the net proceeds from their sales. Prior to
having its shares quoted on over the counter bulletin board, the selling
stockholders may, from time to time, sell all or a portion of the shares of
common stock of our Company that they own at $0.25 per share. If and when our
common shares are quoted for trading on the over the counter bulletin board, the
selling stockholders may sell their shares at the then market prices on the over
the counter bulletin board or privately negotiated prices, which may be less
than or greater than $0.25 per share. At present, a total of 11,025,000 shares
of our common stock are available for resale to the public, in accordance with
the volume and trading limitations of Rule 144 of the Securities Act of 1933.
The selling stockholders may sell their shares of common stock of our company
directly to purchasers or may use brokers, dealers, underwriters or agents to
sell such shares. Brokers or dealers may receive commissions, discounts or
concessions from a selling shareholder or, if any such broker or dealer acts as
agent for the purchaser of such shares, from a purchaser in amounts to be
negotiated. Such compensation may, but is not expected to, exceed that which is
customary for the types of transactions involved.
<page>
-23-
The selling stockholders and any brokers, dealers or agents that participate
with the selling stockholders in sales of their shares of common stock of our
Company may be deemed to be "underwriters" within the meaning of the Securities
Act of 1933 in connection with such sales. In such event, any commissions
received by such brokers, dealers or agents and any profit on the resale of such
shares purchased by them may be deemed to be underwriting commissions or
discounts under the Securities Act of 1933.
We are required to pay all fees and expenses incident to the registration of our
shares of common stock offered hereby other than broker or dealer discounts and
commissions.
Selling shareholder's "Underwriter" Status; prospectus Delivery Requirement
- ---------------------------------------------------------------------------
All stockholders as of the date of this prospectus who resell such shares may be
deemed to be statutory "underwriters" (as defined in Securities Act of 1933
Section 2(11)) and "engaged in a public distribution". Accordingly, Pioneer
Exploration intends to mail a prospectus to each shareholder. Each selling
shareholder should review it carefully and deliver it to any broker or dealer
engaged to sell stock or to any buyer in a direct sale. Selling stockholders and
certain brokers and dealers are required to deliver a prospectus 48 hours prior
to confirming sales. See the back cover page of the prospectus. Additional
copies of the prospectus may be printed by accessing it on the SEC website at
http://www.sec.gov, or it may be obtained by writing or calling Pioneer
Exploration at 700 West Pender St., Suite 520, Vancouver BC V6C 1G8 Canada,
telephone (604) 618-0948. See "Selling Stockholders" above for information as to
the largest stockholders, the amounts owned, and any relationships with Pioneer
Exploration.
Suggested Selling Shareholder's Underwriting Compliance Procedures
- ------------------------------------------------------------------
Except as indicated under "Selling Stockholders" none of the stockholders is
known to Pioneer Exploration to be a broker or dealer or to have any experience
in the distribution of securities or to have any material relationships with
Pioneer Exploration. Pioneer Exploration is not aware of any intent by a
shareholder to engage in passive market making transactions as permitted by Rule
10b-6A under the Securities Exchange Act of 1934 or in stabilization or other
transactions affecting the market price. We are not aware of any intent by our
officers, directors or principal stockholders to purchase shares from selling
stockholders.
It is suggested to selling stockholders that, to avoid technical violations of
underwriting regulations, they should observe the prospectus delivery
requirement described above and on the back cover of the prospectus, as well as
the following suggested procedures, and also consult legal counsel. These
suggestions do not constitute legal advice nor any representation or warranty
that these are necessary or sufficient to comply with, or avoid enforcement
action (civil or criminal) for alleged violations of, any type of law.
Stockholders engaging in any direct or indirect transactions of any nature as to
any of Pioneer Exploration's securities do so at their own risk and expense. All
sales should be conducted through brokers or dealers, who should be given a copy
of the prospectus and advised of the SEC and NASD position that such sales may
be deemed to be part of a "public distribution" by statutory "underwriters"
(selling stockholders). No purchases of shares or other transactions having the
purpose or effect of affecting the price should be engaged in by or on behalf of
stockholders before or after the sale. Pioneer Exploration's public reporting
status should be brought to the brokers' or dealers' and buyers' attention.
Updated information about Pioneer Exploration will be in its reports to the SEC
at http://www.sec.gov. See "Available Information" near the end of the
prospectus, for further details on how to obtain copies of such reports.
Although isolated resales often are exempt from state "blue sky" securities
regulation and registration requirements, and the reporting company status of an
issuer broadens the availability of resale exemptions, selling stockholders
should be cautious in view of their "underwriter" status in the eyes of the SEC
and NASD. They are urged to consult qualified local securities counsel. Pioneer
Exploration is not undertaking, and it will be the selling stockholders'
responsibility, to file any necessary state exemption, qualification, or
registration statements or notices (such as Form U-1) and offering documents
(such as this prospectus) if needed for resales in a particular state.
The selling stockholders may offer their shares of common stock at various times
in one or more of the following transactions:
- in over-the-counter market;
- in private transactions other than in the over-the-counter market;
- in connection with short sales of our shares;
- by pledge to secure debts and other obligations; or
- in a combination of any of the above transactions.
<page>
-24-
The selling stockholders may sell their shares at market prices prevailing at
the time of the sale, at prices related to such prevailing market prices, at
negotiated prices or fixed prices. Until the shares of our company are quoted
for trading on the over the counter bulletin board, the selling stockholders
will sell their shares at a price of $0.25 per share. After the shares of our
company are quoted for trading on the over the counter bulletin board, the
selling stockholders may sell their shares at the then market prices on the over
the counter bulletin board or privately negotiated prices, which may be less
than or greater than $0.25 per share.
The selling stockholders may use brokers or dealers to sell their shares. Sales
through brokers or dealers may involve one or more of the following:
- block trades in which the broker or dealer so engaged will attempt to
sell the selling shareholder's shares as agent but may position and
resell a portion of the block as principal to facilitate the
transaction;
- purchases by a broker or dealer as principal and resale by such broker
or dealer for its own account pursuant to this prospectus; or
- ordinary brokerage transactions and transactions in which the broker
solicits purchasers.
If a broker or dealer is engaged by a selling shareholder, such broker or dealer
may either receive discounts or commissions from the selling stockholders, or
they will receive commissions from purchasers of shares for whom they acted as
agents. Affiliates of one or more of the selling stockholders may act as
principals or agents in connection with the offer or sale of shares by selling
stockholders.
Selling stockholders also may resell all or a portion of the shares in open
market transactions in reliance upon Rule 144 under the Securities Act of 1933,
as amended, provided that they meet the criteria and conform to the requirements
of that Rule.
Selling stockholders have been advised that during the time each is engaged in
distribution of the securities covered by this prospectus, to the extent
applicable, each must comply with Regulation M under the Securities Exchange Act
of 1934, as amended, and pursuant to such Regulation:
- shall not engage in any stabilization activity in connection
with our securities;
- shall furnish each broker through which securities covered
by this prospectus may be offered the number of copies of this
prospectus which are required by each broker; and
- shall not bid for or purchase any of our securities or attempt
to induce any person to purchase any of our securities other
than as permitted under the Securities Exchange Act of 1934, as
amended.
The selling stockholders and any brokers, dealers or agents that participate
with the selling shareholder in sales of the shares may be deemed to be
underwriters within the meaning of the Securities Act in connection with such
sales and subject to any liabilities under such Act. Any commissions received by
such brokers, dealers or agents and any profit on the resale of the shares
purchased by them may be deemed to be underwriting commissions or discounts
under the Securities Act.
Canadian Securities Law
- -----------------------
Selling stockholders who are residents of British Columbia will need to rely on
an exemption from prospectus and registration requirements of B.C. securities
laws to sell their shares which are being registered for resale by this
prospectus. The selling stockholders may rely on the B.C. Securities
Commission's Instrument 72-502 "Trade In Securities of U.S. Registered Issuers"
to comply with B.C. securities laws to resell their shares.
According to BC Instrument 72-502, a B.C. resident who acquired securities under
a prospectus exemption in a company that is not a reporting issuer under the
B.C. Securities Act may sell those securities without filing a prospectus under
the Act, if the following conditions are met:
(1) The securities of the company are registered under section 12 of the U.S.
Securities Exchange Act of 1934, as amended, or the company is required to file
reports under section 15(d) of that Act.
(2) The seller's residential address or registered office is in British
Columbia.
(3) A 4-month period has passed since the date the company issued the securities
to the seller, or a control person sold the securities to the seller.
(4) If the seller is a control person of the company, then the seller has held
the securities for at least 6 months.
(5) The number of securities the seller proposes to sell under BCI 72-502,
plus the number of securities of the company of the same class that the seller
has sold in the preceding 12-month period, does not exceed 5% of the company's
outstanding securities of the same class.
(6) The seller sells the securities through a registered investment dealer.
(7) The registered investment dealer executes the trade through an exchange, or
market, outside Canada.
<page>
-25-
(8) There has been no unusual effort made to prepare the market or create a
demand for the securities.
(9) The seller has not paid any extraordinary commission or other consideration
for the trade.
(10) If the seller is an insider of the company, the seller reasonably believes
that the company is not in default of the securities legislation (including U.S.
federal and state securities legislation) that governs the company.
SELLING STOCKHOLDERS
All of the shares of common stock issued are being offered by the selling
stockholders listed in the table below. None of the selling stockholders are
broker-dealers or affiliated with broker-dealers.
The selling stockholders may offer and sell, from time to time, any or all of
their common stock. Because the selling stockholders may offer all or only some
portion of the shares of common stock listed in the table, no estimate can be
given as to the amount or percentage of these shares of common stock that will
be held by the selling stockholders upon termination of the offering.
The following table sets forth certain information regarding the beneficial
ownership of shares of common stock by the selling stockholders as of August 31,
2006, and the number of shares of common stock covered by this prospectus. The
number of shares in the table represents an estimate of the number of shares of
common stock to be offered by the selling stockholders. Other than as disclosed
herein, none of the selling stockholders holds any position, office or other
material relationship with the Company or its affiliates.
<table>
<caption>
Percent of Total
Issued &
Name of Selling Outstanding Number of Shares Owned by
Stockholder and Position, Number of Shares Shares Owned by Selling Stockholder &
Office or Material Owned by Selling Selling Percent of Total Issued
Relationship with Pioneer Stockholder Stockholder Total Shares and Outstanding After
Exploration Before Offering Before Offering Being Offered Offering(1)
- ----------------------------------------------------------------------------------------------------------------
<s> <c> <c> <c> <c> <c>
# of Shares % of Class
R. D. Anthony 502,000 4.46% 502,000
0 0.00%
- ----------------------------------------------------------------------------------------------------------------
Linda Ashe (sister of 1,600 0.01% 1,600 0.00%
Thomas Brady, a director 0
of our company)
- ----------------------------------------------------------------------------------------------------------------
Rev Ashe (brother-in-law 1,600 0.01% 1,600 0.00%
of Thomas Brady, a 0
director of our company)
- ----------------------------------------------------------------------------------------------------------------
Kasandra Ashe (niece of 1,200 0.01% 1,200 0 0.00%
Thomas Brady, a director
of our company)
- ----------------------------------------------------------------------------------------------------------------
Jaymee Ashe (niece of 1,200 0.01% 1,200 0 0.00%
Thomas Brady, a director
of our company)
- ----------------------------------------------------------------------------------------------------------------
</table>
<page>
-26-
<table>
<caption>
<s> <c> <c> <c> <c> <c>
- ----------------------------------------------------------------------------------------------------------------
Winifred Brady (mother 1,600 0.01% 1,600 0 0.00%
of Thomas Brady, a
director of our company)
- ----------------------------------------------------------------------------------------------------------------
Evelyn Brookes 20,000 0.18% 20,000 0 0.00%
- ----------------------------------------------------------------------------------------------------------------
Art Brown 20,000 0.18% 20,000 0 0.00%
- ----------------------------------------------------------------------------------------------------------------
Gordon Cartwright 450,000 3.99% 450,000 0 0.00%
- ----------------------------------------------------------------------------------------------------------------
Clive T. Celaire 500,000 4.44% 500,000 0 0.00%
- ----------------------------------------------------------------------------------------------------------------
Tennyson Choo 375,000 3.33% 375,000 0 0.00%
- ----------------------------------------------------------------------------------------------------------------
Elouise Davey 500,000 4.44% 500,000 0 0.00%
- ----------------------------------------------------------------------------------------------------------------
Jo Ditommaso 500,000 4.44% 500,000 0 0.00%
- ----------------------------------------------------------------------------------------------------------------
Chad Eberle 4,000 0.04% 4,000 0 0.00%
- ----------------------------------------------------------------------------------------------------------------
Katherine Garford 2,000 0.02% 2,000 0 0.00%
- ----------------------------------------------------------------------------------------------------------------
Denis Gaucher 2,000 0.02% 2,000 0 0.00%
- ----------------------------------------------------------------------------------------------------------------
Diane Hart 8,000 0.07% 8,000 0 0.00%
- ----------------------------------------------------------------------------------------------------------------
Warren Hart 500,000 4.44% 500,000 0 0.00%
- ----------------------------------------------------------------------------------------------------------------
Ritsuko Kisegawa 8,000 0.07% 8,000 0 0.00%
- ----------------------------------------------------------------------------------------------------------------
Robert Krause 518,000 4.60% 518,000 0 0.00%
- ----------------------------------------------------------------------------------------------------------------
Robin Lockhart 1,000 0.01% 1,000 0 0.00%
- ----------------------------------------------------------------------------------------------------------------
Glen MacDonald 20,000 0.18% 20,000 0 0.00%
- ----------------------------------------------------------------------------------------------------------------
Kathy Mangan 500,000 4.44% 500,000 0 0.00%
- ----------------------------------------------------------------------------------------------------------------
Cheryl McKeeman 352,000 3.12% 352,000 0 0.00%
- ----------------------------------------------------------------------------------------------------------------
Carol Moffat 3,300 0.03% 3,300 0 0.00%
- ----------------------------------------------------------------------------------------------------------------
Darren Moran 500,000 4.44% 500,000 0 0.00%
- ----------------------------------------------------------------------------------------------------------------
William Murray 500,000 4.44% 500,000 0 0.00%
- ----------------------------------------------------------------------------------------------------------------
Barry Muttart 408,000 3.62% 408,000 0 0.00%
- ----------------------------------------------------------------------------------------------------------------
Bob Nadon 2,000 0.02% 2,000 0 0.00%
- ----------------------------------------------------------------------------------------------------------------
Larry Okotinsky 300,000 2.66% 300,000 0 0.00%
- ----------------------------------------------------------------------------------------------------------------
Quasar Developments Ltd. 16,000 0.14% 16,000 0 0.00%
(beneficial owner is
Brock Smither)
- ----------------------------------------------------------------------------------------------------------------
Wendy Robb, spouse of 40,000 0.36% 40,000 0 0.00%
director & officer,
Warren Robb
</table>
<page>
-27-
<table>
<caption>
<s> <c> <c> <c> <c> <c>
- ----------------------------------------------------------------------------------------------------------------
Mavis Robinson 40,000 0.36% 40,000 0 0.00%
- ----------------------------------------------------------------------------------------------------------------
Lawrence Stephenson 16,000 0.14% 16,000 0 0.00%
- ----------------------------------------------------------------------------------------------------------------
Jack Tillar 500,000 4.44% 500,000 0 0.00%
- ----------------------------------------------------------------------------------------------------------------
Marc Tran 150,000 1.33% 150,000 0 0.00%
- ----------------------------------------------------------------------------------------------------------------
David R.C. Wright 500,000 4.44% 500,000 0 0.00%
- ----------------------------------------------------------------------------------------------------------------
Rick Young 500,000 4.44% 500,000 0 0.00%
- ----------------------------------------------------------------------------------------------------------------
73.38 % 8,264,500 0 0.00%
================================================================================================================
</table>
(1) Based on the assumption that the selling shareholders will sell all
of their shares offered in this prospectus. However, we do not know
whether the selling shareholders will sell all or less than all of
their shares.
We may require the selling security holders to suspend the sales of the
securities offered by this prospectus upon the occurrence of any event that
makes any statement in this prospectus or the related registration statement
untrue in any material respect or that requires the changing of statements in
these documents in order to make statements in those documents not misleading.
DESCRIPTION OF SECURITIES
Capital Stock
Our authorized capital stock consists of 65,000,000 shares of common stock,
$0.001 par value and 10,000,000 shares of preferred stock, $0.001 par value. As
of August 31, 2006, there were 11,264,500 shares of common stock issued and
outstanding. We have not issued any shares of preferred stock. Each stockholder
is entitled to one vote for each share of common stock held on all matters
submitted to a vote of stockholders, including the election of directors.
Each stockholder is entitled to receive the dividends as may be declared by our
board of directors out of funds legally available for dividends and, in the
event of liquidation, to share pro rata in any distribution of our assets after
payment of liabilities. Our board of directors is not obligated to declare a
dividend. Any future dividends will be subject to the discretion of our board of
directors and will depend upon, among other things, future earnings, the
operating and financial condition of Pioneer Exploration, its capital
requirements, general business conditions and other pertinent factors. It is not
anticipated that dividends will be paid in the foreseeable future.
Stockholders do not have pre-emptive rights to subscribe for additional shares
of common stock if issued by us. There are no conversion, redemption, sinking
fund or similar provisions regarding the common stock.
Options and Warrants
We do not presently have any options or warrants authorized or any securities
that may be convertible into common stock. However, our board of directors may
later determine to authorize options and warrants for our Company.
Dividend Policy
We have not previously paid any cash dividends on our common stock and do not
anticipate or contemplate paying dividends on our common stock in the
foreseeable future. Our present intention is to utilize all available funds for
the development of our business. There is no assurance that we will ever have
excess funds available for the payment of dividends. The only legal restrictions
that limit the ability to pay dividends on common equity or that are likely to
do so in the future, are those restrictions imposed by state laws. Under Nevada
corporate law, no dividends or other distributions may be made which would
render our company insolvent or reduce assets to less than the sum of its
liabilities plus the amount needed to satisfy any outstanding liquidation
preferences.
<page>
-28-
Anti-Takeover State Laws
Nevada Revised Statutes sections 78.378 to 78.379 provide state regulation over
the acquisition of a controlling interest in certain Nevada corporations unless
the articles of incorporation or bylaws of the corporation provide that the
provisions of these sections do not apply. Our Articles of Incorporation and
bylaws do not state that these provisions do not apply. The statute creates a
number of restrictions on the ability of a person or entity to acquire control
of a Nevada company by setting down certain rules of conduct and voting
restrictions in any acquisition attempt, among other things. The statute is
limited to corporations that are organized in the state of Nevada and that have
200 or more stockholders, at least 100 of whom are stockholders of record and
residents of the State of Nevada; and does business in the State of Nevada
directly or through an affiliated corporation. Because of these conditions, the
statute currently does not apply to our company.
LEGAL PROCEEDINGS
We know of no material, active or pending legal proceedings against us, nor are
we involved as a plaintiff in any material proceedings or pending litigation.
There are no proceedings in which any of our directors, officers or affiliates,
or any registered or beneficial shareholders are an adverse party or have a
material interest adverse to us.
Our agent for service of process is Laughlin Associates, Inc. of 2533 N. Carson
St., Carson City, NV 89706.
LEGAL MATTERS
The validity of the shares of common stock offered by the selling stockholders
will be passed upon by Gary R. Henrie, Esq., 8275 S. Eastern Ave., Suite 200,
Las Vegas, Nevada 89123.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURE
We engaged Manning Elliott LLP, Chartered Accountants, to audit our financial
statements for the period June 9, 2005 (inception) to August 31, 2006. There has
been no change in the accountants and no disagreements with Manning Elliott LLP,
Chartered Accountants on any matter of accounting principles or practices,
financial statement disclosure, or auditing scope procedure.
EXPERTS
Our financial statements for the period from June 9, 2005 (inception) to August
31, 2006 included in this prospectus and registration statement have been
audited by Manning Elliott LLP, Chartered Accountants, as set forth in their
report accompanying the financial statements and are included in reliance upon
the report, given on the authority of the firm, as experts in accounting and
auditing.
INTEREST OF NAMED EXPERTS AND COUNSEL
No expert or counsel named in this prospectus as having prepared or certified
any part of this prospectus or having given an opinion upon the validity of the
securities being registered or upon other legal matters in connection with the
registration or offering of the common stock was employed on a contingency basis
or had, or is to receive, in connection with the offering, a substantial
interest, directly or indirectly, in the registrant or any of its parents or
subsidiaries. Nor was any such person connected with the registrant or any of
its parents, subsidiaries as a promoter, managing or principal underwriter,
voting trustee, director, officer or employee.
Measurement Conversion Information
In this Form SB-2, metric measures are used with respect to mineral properties
described herein. For ease of reference, the following conversion factors are
provided:
Imperial Measure Metric Unit
1 mile 1.609 kilometres
1 yard 0.9144 metre
1 acre 0.405 hectare
<page>
-29-
Currency
The Company's reporting currency is the United States dollar. References to "CDN
Dollars", or "CDN$" are to the currency of Canada. Solely for the convenience of
the reader, this Form SB-2 contains translations of certain US Dollar amounts
into CDN Dollar amounts at specified rates.
Currency Exchange Rate Information:
The rate of exchange means that noon buying rate in New York City for cable
transfer in Canadian dollars as certified for customs proposed by the Federal
Reserve Bank of New York. The average rate means the average of the noon buying
rates on each currency exchange date during the period.
<table>
<caption>
2006 2005 2004 2003 2002
<s> <c> <c> <c> <c> <c>
High 1.1726 1.2703 1.3970 1.5750 1.6128
Low 1.0989 1.1507 1.1775 1.4008 1.5108
Average for Period 1.1340 1.2115 1.3017 1.5494 1.5704
End of Period 1.1652 1.1656 1.2034 1.2923 1.5800
</table>
The exchange rate on July 5, 2006 was $1.1115.
The high and low exchange rates for the most recent six months are as follows:
<table>
<caption>
June 2006 May 2006 Apr 2006 Mar 2006 Feb 2006 Jan 2006
<s> <c> <c> <c> <c> <c> <c>
High 1.1652 1.1474 1.1384 1.1272 1.1312 1.1415
Low 1.1415 1.1275 1.1154 1.1052 1.1066 1.1112
</table>
MARKET FOR OUR COMMON STOCK AND RELATED STOCKHOLDER MATTERS
No Public Market for Common Stock
Currently there is no established public trading market for our common stock. We
do not have any common stock subject to outstanding options or warrants to
purchase and there are no securities outstanding that are convertible into our
common stock. At present, a total of 11,025,000 shares of our common stock are
available for resale to the public, in accordance with the volume and trading
limitations of Rule 144 of the Securities Act of 1933. We are registering
8,264,500 shares of our common stock under the Securities Act for sale by the
selling securities holders. There are current forty-one (41) holders of record
of our common stock.
Rule 144
At present, a total of 11,025,000 shares of our common stock are available for
resale to the public, in accordance with the volume and trading limitations of
Rule 144 of the Securities Act of 1933. After March 31, 2007, 11,264,500 shares
of our common stock will be available for resale to the public in accordance
with the volume and trading limitations of Rule 144.
In general, under Rule 144, a person who has beneficially owned shares for at
least one year is entitled to sell, within any three-month period, a number of
shares that does not exceed the greater of (1) one percent of the then
outstanding shares of common stock, which in our case is equal to approximately
31,130 shares as of the date of this prospectus; or (2) the average weekly
trading volume in the common stock in the over-the-counter market during the
four calendar weeks preceding the date on which notice of the sale is filed,
provided several requirements concerning availability of public information,
manner of sale and notice of sale are satisfied. In addition, our affiliates
must comply with the restrictions and requirements of Rule 144, other than the
one-year holding period requirement, in order to sell shares of common stock
which are not restricted securities.
Under Rule 144(k), a person who is not an affiliate and has not been an
affiliate for at least three months prior to the sale and who has beneficially
owned shares for at least two years may resell their shares without compliance
with the foregoing requirements. In meeting the one- and two-year holding
periods described above, a holder of shares can include the holding periods of a
prior owner who was not an affiliate. The one- and two-year holding periods
described above do not begin to run until the full purchase price or other
consideration is paid by the person acquiring the shares from the issuer or an
affiliate.
<page>
-30-
There is presently no agreement by any holder, including our "affiliates", of
"restricted" shares not to sell their shares.
Dividends
We have not declared any dividend on our common stock since the inception of our
company on June 9, 2005. There is no restriction in our Articles of
Incorporation and Bylaws that will limit our ability to pay dividends on our
common stock. However, we do not anticipate declaring and paying dividends to
our shareholders in the near future.
Penny Stock Regulation
The U.S. Securities and Exchange Commission has adopted regulations which
generally define "penny stock" to be any equity security that has a market price
(as defined) less than $5.00 per share or an exercise price of less than $5.00
per share, subject to certain exceptions. If we establish a trading market for
our common stock, our common stock will most likely be covered by the penny
stock rules, which impose additional sales practice requirements on
broker-dealers who sell to persons other than established customers and
"accredited investors." The term "accredited investor" refers generally to
institutions with assets in excess of $5,000,000 or individuals with a net worth
in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 jointly
with their spouse. The penny stock rules require a broker-dealer, prior to a
transaction in a penny stock not otherwise exempt from the rules, to deliver a
standardized risk disclosure document in a form prepared by the SEC that
provides information about penny stocks and the nature and level of risks in the
penny stock market. The broker-dealer also must provide the customer with
current bid and offer quotations for the penny stock, the compensation of the
broker-dealer and its salesperson in the transaction and monthly account
statements showing the market value of each penny stock held in the customer's
account. The bid and offer quotations, and the broker-dealer and salesperson
compensation information, must be given to the customer orally or in writing
prior to effecting the transaction and must be given to the customer in writing
before or with the customer's confirmation. In addition, the penny stock rules
require that prior to a transaction in a penny stock not otherwise exempt from
these rules, the broker-dealer must make a special written determination that
the penny stock is a suitable investment for the purchaser and receive the
purchaser's written agreement to the transaction. These disclosure requirements
may have the effect of reducing the level of trading activity in the secondary
market for the stock that is subject to these penny stock rules. Consequently,
these penny stock rules may affect the ability of broker-dealers to trade our
securities. We believe that the penny stock rules discourage investor interest
in and limit the marketability of our common stock.
WHERE YOU CAN FIND MORE INFORMATION
We are not required to deliver an annual report to our stockholders. We are
required to file annual, quarterly and current reports, proxy statements and
other information with the Securities and Exchange Commission. Our Securities
and Exchange Commission filings are available to the public over the Internet at
the SEC's website at http://www.sec.gov.
You may also read and copy any materials we file with the Securities and
Exchange Commission at the SEC's public reference room at 100 F Street N.E.,
Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further
information on the operation of the public reference rooms.
We have filed with the Securities and Exchange Commission a registration
statement on Form SB-2, under the Securities Act with respect to the securities
offered under this prospectus. This prospectus, which forms a part of that
registration statement, does not contain all information included in the
registration statement. Certain information is omitted and you should refer to
the registration statement and its exhibits. With respect to references made in
this prospectus to any contract or other document of Pioneer Exploration, the
references are not necessarily complete and you should refer to the exhibits
attached to the registration statement for copies of the actual contract or
document. Our filings and the registration statement can also be reviewed by
accessing the SEC's website at http://www.sec.gov.
No finder, dealer, sales person or other person has been authorized to give any
information or to make any representation in connection with this offering other
than those contained in this prospectus and, if given or made, such information
or representation must not be relied upon as having been authorized by Pioneer
Exploration Inc. This prospectus does not constitute an offer to sell or a
solicitation of an offer to buy any of the securities offered hereby by anyone
<page>
-31-
in any jurisdiction in which such offer or solicitation is not authorized or in
which the person making such offer or solicitation is not qualified to do so or
to any person to whom it is unlawful to make such offer or solicitation. Neither
the delivery of this prospectus nor any sale made hereunder shall, under any
circumstances, create any implication that the information contained herein is
correct as of any time subsequent to the date of this prospectus.
FINANCIAL STATEMENTS
Our financial statements are stated in United States Dollars (US$) and are
prepared in accordance with United States Generally Accepted Accounting
Principles.
The following Financial Statements pertaining to Pioneer Exploration are filed
as part of this Prospectus:
Pioneer Exploration Inc.
(An Exploration Stage Company)
August 31, 2006
Index
Report of Independent Registered Public Accounting Firm.....................F-1
Balance Sheets..............................................................F-2
Statements of Operations....................................................F-3
Statements of Cash Flows....................................................F-4
Statement of Stockholders' Equity...........................................F-5
Notes to the Financial Statements...........................................F-6
<page>
MANNINNG ELLIOTT 11th floor, 1050 West Pender Street,
Vancouver, BC,Canada V6E 3S7
CHARTERED ACCOUNTANTS Phone: 604.714.3600 Fax:604.714.3669
Web: manningelliott.com
Report of Independent Registered Public Accounting Firm
To the Board of Directors and Stockholders of
Pioneer Exploration Inc. (An Exploration Stage Company)
We have audited the accompanying balance sheets of Pioneer Exploration Inc. (An
Exploration Stage Company) as of August 31, 2006 and 2005 and the related
statements of operations, cash flows and stockholders' equity for the year ended
August 31, 2006, the period from June 9, 2005 (Date of Inception) to August 31,
2005 and accumulated from June 9, 2005 to August 31, 2006. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits 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. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits 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 Pioneer Exploration Inc. as of
August 31, 2006 and 2005, and the results of its operations and its cash flows
for the year ended August 31, 2006, the period from June 9, 2005 to August 31,
2005 and accumulated from June 9, 2005 to August 31, 2006, in conformity with
accounting principles generally accepted in the United States.
The accompanying financial statements have been prepared assuming the Company
will continue as a going concern. As discussed in Note 1 to the financial
statements, the Company has not generated any revenue and has incurred losses
from operations since inception. These factors raise substantial doubt about the
Company's ability to continue as a going concern. Management's plans in regard
to these matters are also discussed in Note 1. The financial statements do not
include any adjustments that might result from the outcome of this uncertainty.
MANNING ELLIOTT LLP
CHARTERED ACCOUNTANTS
Vancouver, Canada
December 8, 2006
F-1
<page>
Pioneer Exploration Inc.
(An Exploration Stage Company)
Balance Sheets
(Expressed in U.S. dollars)
<table>
<caption>
August 31, August 31,
2006 2005
$ $
<s> <c> <c>
ASSETS
Current Assets
Cash 23,991 16,331
- ----------------------------------------------------------------------------------------------------------------------
Total Assets 23,991 16,331
- ----------------------------------------------------------------------------------------------------------------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable 3,000 -
Accrued liabilities 200 3,737
Loans payable (Note 5) - 6,000
- ----------------------------------------------------------------------------------------------------------------------
Total Liabilities 3,200 9,737
- ----------------------------------------------------------------------------------------------------------------------
Contingencies (Note 1)
Stockholders' Equity
Preferred Stock, 10,000,000 shares authorized, $0.001 par value; Nil shares
issued and outstanding - -
Common Stock, 65,000,000 shares authorized, $0.001 par value; 11,264,500 and
11,025,000 shares issued and outstanding respectively 11,265 11,025
Additional Paid-in Capital 59,636 -
Donated Capital (Note 3) 11,250 2,250
Deficit Accumulated During the Exploration Stage (61,360) (6,681)
- ----------------------------------------------------------------------------------------------------------------------
Total Stockholders' Equity 20,791 6,594
- ----------------------------------------------------------------------------------------------------------------------
Total Liabilities and Stockholders' Equity 23,991 16,331
- ----------------------------------------------------------------------------------------------------------------------
</table>
(The accompanying notes are an integral part of these financial statements.)
F-2
<page>
Pioneer Exploration Inc.
(An Exploration Stage Company)
Statements of Operations
(Expressed in U.S. dollars)
<table>
<caption>
Period from Accumulated from
For the June 9, 2005 June 9, 2005
Year Ended (Date of Inception) (Date of Inception)
August 31, to August 31, to August 31,
2006 2005 2006
$ $ $
<s> <c> <c> <c>
Revenue - - -
- --------------------------------------------------------------------------------------------------------------------
Expenses
Donated rent (Note 3) 3,000 750 3,750
Donated services (Note 3) 6,000 1,500 7,500
General and administrative 1,961 1,153 3,114
Impairment loss on mineral properties 7,500 - 7,500
Mineral exploration costs 448 - 448
Professional fees 35,770 3,278 39,048
- --------------------------------------------------------------------------------------------------------------------
Total Expenses 54,679 6,681 61,360
- --------------------------------------------------------------------------------------------------------------------
Net Loss (54,679) (6,681) (61,360)
- --------------------------------------------------------------------------------------------------------------------
Net Loss Per Share - Basic and Diluted - -
- --------------------------------------------------------------------------------------------------------------------
Weighted Average Shares Outstanding 11,154,000 7,038,000
- --------------------------------------------------------------------------------------------------------------------
</table>
(The accompanying notes are an integral part of these financial statements.)
F-3
<page>
Pioneer Exploration Inc.
(An Exploration Stage Company)
Statements of Cash Flows
(Expressed in U.S. dollars)
<table>
<caption>
Period from Accumulated from
For the June 9, 2005 June 9, 2005
Year Ended (Date of Inception) (Date of Inception)
August 31, to August 31, to August 31,
2006 2005 2006
$ $ $
<s> <c> <c> <c>
Operating Activities
Net loss (54,679) (6,681) (61,360)
Adjustments to reconcile net loss to net
cash used in operating activities
Donated services and rent 9,000 2,250 11,250
Impairment loss on mineral properties 7,500 - 7,500
Changes in operating assets and liabilities
Accounts payable 3,000 - 3,000
Accrued liabilities (3,537) 3,737 200
- ----------------------------------------------------- ------------------------ ----------------------- ------------------------
Net Cash Used In Operating Activities (38,716) (694) (39,410)
- ----------------------------------------------------- ------------------------ ----------------------- ------------------------
Investing Activities
Acquisition of mineral properties (7,500) - (7,500)
- ----------------------------------------------------- ------------------------ ----------------------- ------------------------
Net Cash Used in Investing Activities (7,500) - (7,500)
- ----------------------------------------------------- ------------------------ ----------------------- ------------------------
Financing Activities
Proceeds from loan payable - 6,000 6,000
Proceeds from issuance of common stock 53,876 11,025 64,901
- ----------------------------------------------------- ------------------------ ----------------------- ------------------------
Net Cash Flows Provided By Financing Activities 53,876 17,025 70,901
- ----------------------------------------------------- ------------------------ ----------------------- ------------------------
Increase in Cash 7,660 16,331 23,991
Cash - Beginning of Period 16,331 - -
- ----------------------------------------------------- ------------------------ ----------------------- ------------------------
Cash - End of Period 23,991 16,331 23,991
- ----------------------------------------------------- ------------------------ ----------------------- ------------------------
Non-cash Investing and Financing Activities
Common shares issued for loans payable 6,000 - 6,000
- ----------------------------------------------------- ------------------------ ----------------------- ------------------------
Supplemental Disclosures
Interest paid - - -
Income taxes paid - - -
- -------------------------------------------------------------------------------------------------------------------------------
</table>
(The accompanying notes are an integral part of these financial statements.)
F-4
<page>
Pioneer Exploration Inc.
(An Exploration Stage Company)
Statement of Stockholders' Equity
For the Period from June 9, 2005 (Date of Inception) to February 28, 2006
(Expressed in U.S. dollars)
<table>
<caption>
Deficit
Accumulated
Additional During the
Common Stock Paid-In Donated Exploration
Shares Par Value Capital Capital Stage Total
# $ $ $ $ $
<s> <c> <c> <c> <c> <c> <c>
Balance - June 9, 2005 (Date of Inception) - - - - - -
Common stock issued for cash
at $0.001 per share 11,025,000 11,025 - - - 11,025
Donated services and rent - - - 2,250 - 2,250
Net loss for the period - - - - (6,681) (6,681)
- ---------------------------------------------------------------------------------------------------------------------
Balance - August 31, 2005 11,025,000 11,025 - 2,250 (6,681) 6,594
Common stock issued for cash
at $0.25 per share 215,500 216 53,660 - - 53,876
Common stock issued for cash for stock
subscriptions received recorded as
loans payable 24,000 24 5,976 - - 6,000
Donated services and rent - - - 9,000 - 9,000
Net loss for the year - - - - ( 54,679) (54,679)
- ----------------------------------------------------------------------------------------------------------------------
Balance - August 31, 2006 11,264,500 11,265 59,636 11,250 (61,360) 20,791
- ----------------------------------------------------------------------------------------------------------------------
</table>
(The accompanying notes are an integral part of these financial statements.)
F-5
<page>
Pioneer Exploration Inc.
(An Exploration Stage Company)
Notes to the Financial Statements
(Expressed in U.S. dollars)
1. Nature of Operations and Continuance of Business
The Company was incorporated in the State of Nevada on June 9, 2005. The
Company is an Exploration Stage Company, as defined by Statement of
Financial Accounting Standard ("SFAS") No.7 "Accounting and Reporting by
Development Stage Enterprises". The Company's principal business is the
acquisition and exploration of mineral resources. The Company has not
presently determined whether its properties contain mineral reserves that
are economically recoverable.
These financial statements have been prepared on a going concern basis,
which implies the Company will continue to realize its assets and discharge
its liabilities in the normal course of business. The Company has never
generated revenues since inception and has never paid any dividends and is
unlikely to pay dividends or generate earnings in the immediate or
foreseeable future. The continuation of the Company as a going concern is
dependent upon the continued financial support from its shareholders, the
ability of the Company to obtain necessary equity financing to continue
operations, confirmation of the Company's interests in the underlying
properties, and the attainment of profitable operations. As at August 31,
2006, the Company has working capital of $20,791 and accumulated losses of
$61,360 since inception. These factors raise substantial doubt regarding
the Company's ability to continue as a going concern. These financial
statements do not include any adjustments to the recoverability and
classification of recorded asset amounts and classification of liabilities
that might be necessary should the Company be unable to continue as a going
concern.
2. Summary of Significant Accounting Policies
a) Basis of Presentation
These financial statements and related notes are presented in
accordance with accounting principles generally accepted in the United
States, and are expressed in U.S. dollars. The Company's fiscal
year-end is August 31.
b) Use of Estimates
The preparation of financial statements in conformity with U.S.
generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets
and liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual results could
differ from those estimates.
c) Basic and Diluted Net Income (Loss) Per Share
The Company computes net income (loss) per share in accordance with
SFAS No. 128, "Earnings per Share". SFAS No. 128 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.
d) Comprehensive Loss
SFAS No. 130, "Reporting Comprehensive Income," establishes standards
for the reporting and display of comprehensive loss and its components
in the financial statements. As at August 31, 2006 and 2005, the
Company has no items that represent a comprehensive loss and,
therefore, has not included a schedule of comprehensive loss in the
financial statements.
e) Cash and Cash Equivalents
The Company considers all highly liquid instruments with maturity of
three months or less at the time of issuance to be cash equivalents.
<page>
Pioneer Exploration Inc.
(An Exploration Stage Company)
Notes to the Financial Statements
(Expressed in U.S. dollars)
2. Summary of Significant Accounting Policies (continued)
f) Mineral Property Costs
The Company has been in the exploration stage since its inception on
June 9, 2005 and has not yet realized any revenues from its planned
operations. It is primarily engaged in the acquisition and exploration
of mining properties. Mineral property exploration costs are expensed
as incurred. Mineral property acquisition costs are initially
capitalized when incurred using the guidance in EITF 04-02, "Whether
Mineral Rights Are Tangible or Intangible Assets". The Company assesses
the carrying costs for impairment under SFAS No. 144, "Accounting for
Impairment or Disposal of Long Lived Assets" at each fiscal quarter
end. When it has been determined that a mineral property can be
economically developed as a result of establishing proven and probable
reserves, the costs then incurred to develop such property, are
capitalized. Such costs will be amortized using the units-of-production
method over the estimated life of the probable reserve. If mineral
properties are subsequently abandoned or impaired, any capitalized
costs will be charged to operations.
g) Long-Lived Assets
In accordance with Financial Accounting Standards Board ("FASB") SFAS
No. 144, "Accounting for the Impairment or Disposal of Long-Lived
Assets", the carrying value of intangible assets and other long-lived
assets is reviewed on a regular basis for the existence of facts or
circumstances that may suggest impairment. The Company recognizes
impairment when the sum of the expected undiscounted future cash flows
is less than the carrying amount of the asset. Impairment losses, if
any, are measured as the excess of the carrying amount of the asset
over its estimated fair value.
h) Financial Instruments
The fair values of financial instruments, which include cash, accounts
payable, accrued liabilities and loans payable, were estimated to
approximate their carrying values due to the immediate or short-term
maturity of these financial instruments. Foreign currency transactions
are primarily undertaken in Canadian dollars. The financial risk is the
risk to the Company's operations that arise from fluctuations in
foreign exchange rates and the degree of volatility of these rates.
Currently, the Company does not use derivative instruments to reduce
its exposure to foreign currency risk.
i) Income Taxes
Potential benefits of income tax losses are not recognized in the
accounts until realization is more likely than not. The Company has
adopted SFAS No. 109 "Accounting for Income Taxes" as of its inception.
Pursuant to SFAS No. 109 the Company is required to compute tax asset
benefits for net operating losses carried forward. The potential
benefits of net operating losses have not been recognized in these
financial statements because the Company cannot be assured it is more
likely than not it will utilize the net operating losses carried
forward in future years.
j) Foreign Currency Translation
The Company's functional and reporting currency is the United States
dollar. Monetary assets and liabilities denominated in foreign
currencies are translated in accordance with SFAS No. 52 "Foreign
Currency Translation", using the exchange rate prevailing at the
balance sheet date. Gains and losses arising on settlement of foreign
currency denominated transactions or balances are included in the
determination of income. Foreign currency transactions are primarily
undertaken in Canadian dollars. The Company has not, to the date of
these financials statements, entered into derivative instruments to
offset the impact of foreign currency fluctuations.
k) Recent Accounting Pronouncements
In September 2006, the FASB issued SFAS No. 158, "Employers' Accounting
for Defined Benefit Pension and Other Postretirement Plans - an
amendment of FASB Statements No. 87, 88, 106, and 132(R)". This
statement requires employers to recognize the overfunded or underfunded
status of a defined benefit postretirement plan (other than a
multiemployer plan) as an asset or liability in its statement of
financial position and to recognize changes in that funded status in
the year in which the changes occur through comprehensive income of a
business entity or changes in unrestricted net assets of a
not-for-profit organization. This statement also requires an employer
to measure the funded status of a plan as of the date of its year-end
statement of financial position, with limited exceptions. The
provisions of SFAS No. 158 are effective for employers with publicly
traded equity securities as of the end of the fiscal year ending after
December 15, 2006. The adoption of this statement is not expected to
have a material effect on the Company's future reported financial
position or results of operations.
<page>
Pioneer Exploration Inc.
(An Exploration Stage Company)
Notes to the Financial Statements
(Expressed in U.S. dollars)
2. Summary of Significant Accounting Policies (continued)
k) Recent Accounting Pronouncements (continued)
In September 2006, the FASB issued SFAS No. 157, "Fair Value
Measurements". The objective of SFAS No. 157 is to increase consistency
and comparability in fair value measurements and to expand disclosures
about fair value measurements. SFAS No. 157 defines fair value,
establishes a framework for measuring fair value in generally accepted
accounting principles, and expands disclosures about fair value
measurements. SFAS No. 157 applies under other accounting
pronouncements that require or permit fair value measurements and does
not require any new fair value measurements. The provisions of SFAS No.
157 are effective for fair value measurements made in fiscal years
beginning after November 15, 2007. The adoption of this statement is
not expected to have a material effect on the Company's future reported
financial position or results of operations.
In June 2006, the FASB issued FASB Interpretation No. 48, "Accounting
for Uncertainty in Income Taxes, an interpretation of FASB Statements
No. 109" ("FIN 48"). FIN 48 clarifies the accounting for uncertainty in
income taxes by prescribing a two-step method of first evaluating
whether a tax position has met a more likely than not recognition
threshold and second, measuring that tax position to determine the
amount of benefit to be recognized in the financial statements. FIN 48
provides guidance on the presentation of such positions within a
classified statement of financial position as well as on derecognition,
interest and penalties, accounting in interim periods, disclosure, and
transition. FIN 48 is effective for fiscal years beginning after
December 15, 2006. The adoption of this statement is not expected to
have a material effect on the Company's future reported financial
position or results of operations.
In March 2006, the FASB issued SFAS No. 156, "Accounting for Servicing
of Financial Assets, an amendment of FASB Statement No. 140, Accounting
for Transfers and Servicing of Financial Assets and Extinguishments of
Liabilities". This statement requires all separately recognized
servicing assets and servicing liabilities be initially measured at
fair value, if practicable, and permits for subsequent measurement
using either fair value measurement with changes in fair value
reflected in earnings or the amortization and impairment requirements
of Statement No. 140. The subsequent measurement of separately
recognized servicing assets and servicing liabilities at fair value
eliminates the necessity for entities that manage the risks inherent in
servicing assets and servicing liabilities with derivatives to qualify
for hedge accounting treatment and eliminates the characterization of
declines in fair value as impairments or direct write-downs. SFAS No.
156 is effective for an entity's first fiscal year beginning after
September 15, 2006. The adoption of this statement is not expected to
have a material effect on the Company's future reported financial
position or results of operations.
In February 2006, the FASB issued SFAS No. 155, "Accounting for Certain
Hybrid Financial Instruments-an amendment of FASB Statements No. 133
and 140", to simplify and make more consistent the accounting for
certain financial instruments. SFAS No. 155 amends SFAS No. 133,
"Accounting for Derivative Instruments and Hedging Activities", to
permit fair value re-measurement for any hybrid financial instrument
with an embedded derivative that otherwise would require bifurcation,
provided that the whole instrument is accounted for on a fair value
basis. SFAS No. 155 amends SFAS No. 140, "Accounting for the Impairment
or Disposal of Long-Lived Assets", to allow a qualifying
special-purpose entity to hold a derivative financial instrument that
pertains to a beneficial interest other than another derivative
financial instrument. SFAS No. 155 applies to all financial instruments
acquired or issued after the beginning of an entity's first fiscal year
that begins after September 15, 2006, with earlier application allowed.
The adoption of this statement is not expected to have a material
effect on the Company's future reported financial position or results
of operations.
In December 2004, the FASB issued SFAS No. 123R, "Share Based Payment".
SFAS No. 123R is a revision of SFAS No. 123 "Accounting for Stock-Based
Compensation", and supersedes APB Opinion No. 25, "Accounting for Stock
Issued to Employees" and its related implementation guidance. SFAS No.
123R establishes standards for the accounting for transactions in which
an entity exchanges its equity instruments for goods or services. It
also addresses transactions in which an entity incurs liabilities in
exchange for goods or services that are based on the fair value of the
entity's equity instruments or that may be settled by the issuance of
those equity instruments. SFAS No. 123R focuses primarily on accounting
for transactions in which an entity obtains employee services in
share-based payment transactions. SFAS No. 123R requires a public
entity to measure the cost of employee services received in exchange
for an award of equity instruments based on the grant-date fair value
of the award (with limited exceptions). That cost will be recognized
over the period during which an employee is required to provide service
in exchange for the award - the requisite service period (usually the
vesting period). SFAS No. 123R requires that the compensation cost
relating to share-based payment transactions be recognized in financial
statements. That cost will be measured based on the fair value of the
equity or liability instruments issued. Public entities that file as
small business issuers will be required to apply SFAS No. 123R in the
first reporting period that begins after December 15, 2005. The
adoption of this standard did not have a material effect on the
Company's results of operations or financial position.
<page>
Pioneer Exploration Inc.
(An Exploration Stage Company)
Notes to the Financial Statements
(Expressed in U.S. dollars)
3. Related Party Transactions
The Company recognizes donated rent at $250 per month, donated services
provided by the President of the Company at $250 per month and donated
services provided by a Director of the Company at $250 per month. During
the year ended August 31, 2006, the Company recognized $3,000 (period ended
August 31, 2005 - $750) in donated rent and $6,000 (period ended August 31,
2005 - $1,500) in donated services.
4. Mineral Properties
The Company entered into an Agreement dated August 25, 2005 to acquire a
100% interest in three mineral claims located near Yale, British Columbia,
Canada, in consideration for $7,500, of which $3,750 is due within 60 days
of the agreement (paid) and the balance of $3,750 is due with in 180 days
of the agreement (paid). The claims are registered in the name of the
Secretary of the Company, who has executed a trust agreement whereby the
Secretary agreed to hold the claims in trust on behalf of the Company. The
Vendor retains a 2% net smelter royalty. The cost of the mineral property
was initially capitalized. The Company has recognized an impairment loss of
$7,500, as it has not yet been determined whether there are proven or
probable reserves on the property.
5. Loans Payable
At August 31, 2005, the Company had received proceeds of $6,000 for a
private placement of common stock at $0.25 per share. Pursuant to the terms
of the subscription agreements, the Company was entitled to recognize the
subscription proceeds as a short-term interest free loan until such time as
the Company accepted the subscription agreements and the shares were
issued. On September 15, 2005, the Company issued 24,000 shares of common
stock pursuant to these subscription agreements..
6. Common Stock
a) On March 31, 2006, the Company issued 80,000 shares of common stock
at a price of $0.25 per share for proceeds of $20,000.
b) On March 10, 2006, the Company issued 119,500 shares of common stock
at a price of $0.25 per share for proceeds of $29,875.
c) On September 15, 2005, the Company issued 40,000 shares of common
stock at a price of $0.25 per share for proceeds of $10,000.
d) On July 15, 2005, the Company issued 8,025,000 shares of common stock
at a price of $0.001 per share for proceeds of $8,025.
e) On June 23, 2005, the Company issued 3,000,000 shares of common
stock at a price of $0.001 per share for proceeds of $3,000.
<page>
Pioneer Exploration Inc.
(An Exploration Stage Company)
Notes to the Financial Statements
(Expressed in U.S. dollars)
7. Income Taxes
Potential benefits of income tax losses are not recognized in the accounts
until realization is more likely than not. The Company has net operating
losses of $50,100, which commence expiring in 2025. Pursuant to SFAS No.
109 the Company is required to compute tax asset benefits for net operating
losses carried forward. Potential benefit of net operating losses have not
been recognized in these financial statements because the Company cannot be
assured it is more likely than not it will utilize the net operating losses
carried forward in future years. For the year ended August 2006 and period
ended August 31, 2005, the valuation allowance established against the
deferred tax assets increased by $15,960 and $1,540, respectively.
The components of the net deferred tax asset at August 31, 2006 and 2005
and the statutory tax rate, the effective tax rate and the elected amount
of the valuation allowance are scheduled below:
August 31, August 31,
2006 2005
$ $
Net Operating Losses 50,100 4,400
Statutory Tax Rate 35% 35%
Effective Tax Rate - -
Deferred Tax Asset 17,500 1,540
Valuation Allowance (17,500) (1,540)
- ------------------------------------------------------------------------------
Net Deferred Tax Asset - -
- ------------------------------------------------------------------------------
<page>
-32-
8,264,500 SHARES OF
PIONEER EXPLORATION INC.
COMMON STOCK
------------------------
PROSPECTUS
------------------------
Date: , 2007
------------------
Until ______________, 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 dealer's obligation to deliver a
prospectus when acting as underwriters and with respect to their unsold
allotments or subscriptions.
- ----------------------------------
<page>
-33-
PART II - INFORMATION NOT REQUIRED IN PROSPECTUS
Item 24 Indemnification of Directors and Officers.
Nevada corporation law provides that:
a corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative, except an action by or in the right of the corporation,
by reason of the fact that he is or was a director, officer, employee
or agent of the corporation, or is or was serving at the request of the
corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise,
against expenses, including attorneys' fees, judgments, fines and
amounts paid in settlement actually and reasonably incurred by him in
connection with the action, suit or proceeding if he acted in good
faith and in a manner which he reasonably believed to be in or not
opposed to the best interests of the corporation, and, with respect to
any criminal action or proceeding, had no reasonable cause to believe
his conduct was unlawful;
a corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed
action or suit by or in the right of the corporation to procure a
judgment in its favor by reason of the fact that he is or was a
director, officer, employee or agent of the corporation, or is or was
serving at the request of the corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture,
trust or other enterprise against expenses, including amounts paid in
settlement and attorneys' fees actually and reasonably incurred by him
in connection with the defence or settlement of the action or suit if
he acted in good faith and in a manner which he reasonably believed to
be in or not opposed to the best interests of the corporation.
Indemnification may not be made for any claim, issue or matter as to
which such a person has been adjudged by a court of competent
jurisdiction, after exhaustion of all appeals therefrom, to be liable
to the corporation or for amounts paid in settlement to the
corporation, unless and only to the extent that the court in which the
action or suit was brought or other court of competent jurisdiction
determines upon application that in view of all the circumstances of
the case, the person is fairly and reasonably entitled to indemnity for
such expenses as the court deems proper; and
to the extent that a director, officer, employee or agent of a
corporation has been successful on the merits or otherwise in defence
of any action, suit or proceeding, or in defence of any claim, issue or
matter therein, the corporation shall indemnify him against expenses,
including attorneys' fees, actually and reasonably incurred by him in
connection with the defence.
We may make any discretionary indemnification only as authorized in the specific
case upon a determination that indemnification of the director, officer,
employee or agent is proper in the circumstances. The determination must be
made:
by our stockholders;
by our Board of Directors by majority vote of a quorum consisting of
directors who were not parties to the action, suit or proceeding;
if a majority vote of a quorum consisting of directors who were not
parties to the action, suit or proceeding so orders, by independent
legal counsel in a written opinion;
if a quorum consisting of directors who were not parties to the action,
suit or proceeding cannot be obtained, by independent legal counsel in
a written opinion; or
by court order.
<page>
-34-
Our Articles provide that no director or officer shall be personally liable to
Pioneer Exploration or any of its stockholders for damages for breach of
fiduciary duty as a director or officer involving any act or omission of such
director or officer unless such acts or omissions involve material misconduct,
fraud or a knowing violation of law, or the payment of dividends in violation of
the General Corporate Law of Nevada.
Our Bylaws provide that no officer or director shall be personally liable for
any obligations of Pioneer Exploration or for any duties or obligations arising
out of any acts or conduct of the officer or director performed for or on behalf
of Pioneer Exploration. The Bylaws also state that we will indemnify and hold
harmless each person and their heirs and administrators who shall serve at any
time hereafter as a director or officer from and against any and all claims,
judgments and liabilities to which such persons shall become subject by reason
of their having heretofore or hereafter been a director or officer, or by reason
of any action alleged to have heretofore or hereafter taken or omitted to have
been taken by him or her as a director or officer. We will reimburse each such
person for all legal and other expenses reasonably incurred by him in connection
with any such claim or liability, including power to defend such persons from
all suits or claims as provided for under the provisions of the General
Corporate Law of Nevada; provided, however, that no such persons shall be
indemnified against, or be reimbursed for, any expense incurred in connection
with any claim or liability arising out of his (or her) own negligence or wilful
misconduct. Our By-Laws also provide that we, our directors, officers, employees
and agents will be fully protected in taking any action or making any payment,
or in refusing so to do in reliance upon the advice of counsel.
Insofar as indemnification for liabilities arising under the Securities Act may
be permitted to directors, officers and controlling persons of Pioneer
Exploration under Nevada law or otherwise, Pioneer Exploration has been advised
the opinion of the Securities and Exchange Commission is that such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event a claim for indemnification against
such liabilities (other than payment by Pioneer Exploration for expenses
incurred or paid by a director, officer or controlling person of Pioneer
Exploration in successful defence of any action, suit, or proceeding) is
asserted by a director, officer or controlling person in connection with the
securities being registered, Pioneer Exploration will, unless in the opinion of
its counsel the matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction, the question of whether such indemnification
by it is against public policy in said Act and will be governed by the final
adjudication of such issue.
Item 25 Other Expenses of Issuance and Distribution
The following table sets forth the costs and expenses payable by us in
connection with the issuance and distribution of the securities being registered
hereunder. All of the amounts shown are estimates, except for the SEC
Registration Fees.
<table>
<caption>
<s> <c>
SEC registration fees $ 221.08
Printing and shipping expenses 300.00(1)
Accounting fees and expenses 12,000.00(1)
Legal fees and expenses 55,000.00(1)
Transfer agent and registrar fees 2,000.00(1)
Fees and expenses for qualification under state securities laws 0.00
Miscellaneous 1,000.00(1)
-----------
Total $70,521.08
</table>
(1) We have estimated these amounts
<page>
-35-
We are paying all expenses of the offering listed above. No portion of these
expenses will be borne by the selling shareholders named in this prospectus. The
selling shareholders, however, will pay any other expenses incurred in selling
their common stock, including any brokerage commissions or costs of sale.
Item 26 Recent Sales of Unregistered Securities - Last Three Years
On June 23, 2005, we accepted subscription agreements that sold shares of our
common stock, having a par value of $0.001 per share, at the offering price of
$0.001 per share for gross offering proceeds of $3,000. On July 15, 2005, we
accepted subscription agreements that sold shares of our common stock, having a
par value of $0.001 per share, at the offering price of $0.001 per share for
gross offering proceeds of $8,025. On September 15, 2005, we accepted
subscription agreements that sold shares of our common stock, having a par value
of $0.001 per share, at the offering price of $0.25 per share for gross offering
proceeds of $10,000. On March 10, 2006, we accepted subscription agreements that
sold shares of our common stock, having a par value of $0.001 per share, at the
offering price of $0.25 per share for gross offering proceeds of $29,875. On
March 31, 2006, we accepted subscription agreements that sold shares of our
common stock, having a par value of $0.001, per share at the offering price of
$0.25 per share for gross offering proceeds of $20,000. Since inception, we have
sold a total of 11,264,500 shares of common stock.
All these were offshore transactions pursuant to Rule 903 of Regulation S of the
Securities Act of 1933. At the time of these sales, the Company was not subject
to the reporting requirements of the Securities Exchange Act of 1934 and the
total amount received by the Company from all these sales was less than
$1,000,000. No underwriters were involved with the sale of these securities. No
general solicitation was made to the public and no advertising was conducted for
the offering. None of the subscribers were U.S. persons as that term is defined
in Regulation S. No directed selling efforts were made in the United States by
the Company, any distributor, any of their respective affiliates or any person
acting on behalf of any of the foregoing. We are subject to Category 3 of Rule
903 of Regulation S and accordingly we implemented the offering restriction
referred to by Category 3 of Rule 903 of Regulation S by including a legend on
all offering materials, documents and the share certificates that the shares
have not been registered under the Securities Act of 1933 and may not be offered
or sold in the United States or to US persons unless the shares are registered
under the Securities Act of 1933, or an exemption from the registration
requirement of the Securities Act of 1933 is available. The offering price for
the offshore transactions was established on an arbitrary basis.
The following is a list of the subscribers and the number of shares each
subscriber purchased:
<table>
<caption>
Name of Stockholder Residency Number of Shares Subscribed
<s> <c> <c>
R. D. Anthony Canada 502,000
Linda Ashe Canada 1,600
Rev Ashe Canada 1,600
Kasandra Ashe Canada 1,200
Jaymee Ashe Canada 1,200
Winifred Brady Canada 1,600
Evelyn Brookes Canada 20,000
Art Brown Canada 20,000
</table>
<page>
-36-
<table>
<caption>
Name of Stockholder Residency Number of Shares Subscribed
<s> <c> <c>
Gordon Cartwright Canada 450,000
Clive T. Celaire Canada 500,000
Tennyson Choo Canada 375,000
Elouise Davey Canada 500,000
Jo Ditommaso Canada 500,000
Chad Eberle Canada 4,000
Katherine Garford Canada 2,000
Denis Gaucher Canada 2,000
Diane Hart Canada 8,000
Warren Hart Canada 500,000
Robert Krause Canada 18,000
Ritsuko Kisegawa Canada 8,000
Robert Krause Canada 518,000
Robin Lockhart Canada 1,000
Glen MacDonald Canada 20,000
Kathy Mangan Canada 500,000
Cheryl McKeeman Canada 352,000
Carol Moffat Canada 3,300
Darren Moran Canada 500,000
William Murray Canada 500,000
Barry Muttart Canada 408,000
Bob Nadon Canada 2,000
Larry Okotinsky Canada 300,000
Quasar Developments Lt Canada 16,000
Wendy Robb Canada 40,000
Mavis Robinson Canada 40,000
Lawrence Stephenson Canada 16,000
Jack Tillar Canada 500,000
Marc Tran Canada 150,000
David R.C. Wright Canada 500,000
Rick Young Canada 500,000
</table>
<page>
-37-
No commissions or finder`s fees were paid to anyone in connection with the sale
of shares and no general solicitations were made to anyone.
Item 27 Exhibits
The following Exhibits are filed with this Prospectus:
Exhibit Description
Number
3.1 Articles of Incorporation.
3.2 Bylaws.
5.1 Opinion of Gary R. Henrie, Esq. with consent to use.
10.1 Property purchase agreement dated August 25, 2005 between the
Company and David Deering
10.2 Declaration of Trust of Thomas Brady, dated January 16, 2006 that
he is holding the mineral titles on behalf of Pioneer Exploration
Inc.
10.3 Geological Report on the Pipe Claims
23.1 Consent of Manning Elliott LLP, Chartered Accountants.
23.2 Consent of George E. Nicholson, P.Geo, Geologist.
Item 28 Undertakings
The undersigned Company hereby undertakes that it will:
(1) file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement to:
(a) include any prospectus required by Section 10(a)(3) of the
Securities Act;
(b) reflect in the prospectus any facts or events which,
individually or together, represent a fundamental change in
the information in the registration statement. Notwithstanding
the foregoing, any increase or decrease in volume of
securities offered (if the total dollar value of securities
offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum
offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) if, in the
aggregate, the changes in volume and price represent no more
than a 20% change in the aggregate offering price set forth in
the "Calculation of Registration Fee" table in the effective
registration statement; and
(c) include any material information with respect to on the
plan of distribution not previously disclosed in the
registration statement or any material change to such
information in the registration statement;
<page>
-38-
(2) for the purpose of determining any liability under the Securities
Act, each of the post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and
the offering of the securities at that time shall be deemed to be the
initial bona fide offering thereof; and
(3) remove from registration by means of a post-effective amendment any
of the securities being registered that remain unsold at the
termination of the offering.
Insofar as indemnification for liabilities arising under the Securities Act may
be permitted to directors, officers and controlling persons of Pioneer
Exploration pursuant to the foregoing provisions, or otherwise, Pioneer
Exploration has been advised that in the opinion of the Commission that type of
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against said liabilities (other than the payment by Pioneer Exploration of
expenses incurred or paid by a director, officer or controlling person of
Pioneer Exploration in the successful defence of any action, suit or proceeding)
is asserted by the director, officer or controlling person in connection with
the securities being registered, Pioneer Exploration will, unless in the opinion
of our counsel the matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question whether such indemnification by
it is against public policy as expressed in the Securities Act and will be
governed by the final adjudication of the issue.
SIGNATURES
In accordance with the requirements of the Securities Act, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements of filing on Form SB-2 and authorized this registration statement
to be signed on its behalf by the undersigned, in the City of Vancouver, British
Columbia on January 15, 2007.
PIONEER EXPLORATION INC.
a Nevada corporation
/s/ Warren Robb
- ---------------------------
By: Warren Robb, President and Director
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person who signature appears below
constitutes and appoints Warren Robb as his true and lawful attorney-in-fact and
agent, with full power of substitution and re-substitution, for him and in his
name, place and stead, in any and all capacities, to sign any and all amendments
(including post-effective amendments) to this registration statement, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in connection therewith,
as fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorney-in-fact and agent or any of
them, or of their substitute or substitutes, may lawfully do or cause to be done
by virtue hereof.
Pursuant to the requirements of the Securities Act, this registration statement
has been signed by the following persons in the capacities and on the dates
stated.
<page>
-39-
Signatures Date
/s/ Warren Robb
- ---------------------------
Warren Robb, President (Principal Executive January 15, 2007.
Officer), Chief Executive Officer, Chief
Financial Officer and Director
/s/ Thomas Brady
- ---------------------------
Thomas Brady, Secretary, Treasurer and Director January 15, 2007.