UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A
[ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended August 31, 2008
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ________ to ________
Commission file # 000-53310
CASTMOR RESOURCES LTD.
(Exact Name of Registrant as Specified in its Charter)
NEVADA
(State or other jurisdiction of incorporation or organization)
98-0471928
(I.R.S. Employer Identification number)
4620 MANILLA ROAD SE, SUITE 10, CALGARY, ALBERTA T2G 4B7
(Address of principal executive offices) (zip code)
Registrant's telephone number, including area code: 403.561.8907
Securities to be registered pursuant to Section 12(b) of the Act: None
Securities to be registered under Section 12(g) of the Act:
Common stock, $0.0001 par value per share
(Title of class)
Indicate by check mark if the registrant is a well-known seasoned issuer, as
defined in Rule 405 of the Securities Act.
Yes [ ] No [X]
Indicate by check mark if the registrant is not required to file reports
pursuant to Section 13 or Section 15(d) of the Act.
Yes [ ] No [X]
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes [X] No [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]
Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of "large accelerated filer," "accelerated filer" and "smaller
reporting company in Rule 12b-2 of the Act (Check one):
[ ] Large Accelerated Filer [ ] Accelerated Filer
[ ] Non-accelerated Filer [ X ] Smaller reporting company
Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). Yes [ ] No [ X ]
As of October 31, 2008, the registrant had 12,435,000 shares of its Common Stock
outstanding. As of October 31, 2008, the aggregate market value of the
registrant's Common Stock held by non-affiliates of the registrant (without
admitting that any person whose shares are not included in such calculation is
an affiliate) was $301,250 based on the last sale price as reported by the
American Stock Exchange on such date.
FORWARD LOOKING STATEMENTS
Certain statements made in this Annual Report are "forward-looking statements"
(within the meaning of the Private Securities Litigation Reform Act of 1995)
regarding the plans and objectives of management for future operations. Such
statements involve known and unknown risks, uncertainties and other factors that
may cause actual results, performance or achievements of the Company to be
materially different from any future results, performance or achievements
expressed or implied by such forward-looking statements. The forward-looking
statements made in this Report are based on current expectations that involve
numerous risks and uncertainties. The Company's plans and objectives are based,
in part, on assumptions involving the growth and expansion of business.
Assumptions relating to the foregoing involve judgments with respect to, among
other things, future economic, competitive and market conditions and future
business decisions, all of which are difficult or impossible to predict
accurately and many of which are beyond the control of the Company. Although the
Company believes that its assumptions underlying the forward-looking statements
are reasonable, any of the assumptions could prove inaccurate and, therefore,
there can be no assurance that the forward-looking statements made in this
Report will prove to be accurate. In light of the significant uncertainties
inherent in the forward-looking statements made in this Report, the inclusion of
such information should not be regarded as a representation by the Company or
any other person that the objectives and plans of the Company will be achieved.
As used in this annual report, the terms "we", "us", "our", "Company" and
"Castmor" means Castmor Resources Ltd., unless otherwise indicated.
PART I
ITEM 1. BUSINESS.
GENERAL
We were incorporated in the State of Nevada on June 27, 2005. Our office is
located at 4620 Manilla Road SE, Suite 10, Calgary, Alberta T2G 4B7. We have
no subsidiaries. Our telephone number is 403.561.8907. Our facsimile number is
403.451.1661.
We are an exploration stage company in that we are engaged in the search for
mineral deposits that are not in either the development or production stage,
with a view to exploiting any mineral deposits we discover that demonstrate
economic feasibility. Since we are an exploration stage company, there is no
assurance that commercially exploitable reserves of valuable minerals exist on
our property. We need to do further exploration before a final evaluation of
the economic and legal feasibility of our future exploration is determined.
To date, our activities have been limited to organizational matters, acquiring
our mineral claims, obtaining a geology report and the preparation and filing of
our information circular and our registration statement. Our assets are limited
to our mineral claims, the acquisition of which have been recorded as an expense
in our financial statements in accordance with our accounting policy. We have
not commenced exploration of our claims.
By a Transfer of Mineral Disposition dated November 7, 2005, from a
non-affiliated third party, we acquired a 100% interest in the White Bear Arm
Property: two non-contiguous mineral exploration licenses (license numbers
011117M and 011300M) comprising 17 claims located along southeastern coastal
Labrador, approximately 13 kilometers northeast of the community of
Charlottetown in Labrador, Canada, having a total area of 425 hectares (1,054.8
acres). One of the licenses (license number 011300M), comprising eight claims,
was inadvertently allowed to expire and was cancelled on January 24, 2007. We
reacquired a 100% interest in the same eight claims under a new mineral license
(license number 013632M) by a Transfer of Mineral Disposition dated July 16,
2007, from a non-affiliated third party. The mineral licenses underlying the
White Bear Arm Property are registered with the Government of Newfoundland and
Labrador and are presently in good standing.
Mineral property exploration is typically conducted in phases. Each subsequent
phase of exploration work is recommended by a geologist based on the results
from the most recent phase of exploration. We have not commenced the initial
phase of exploration on the White Bear Arm Property. Upon completion of each
phase of exploration, we will make a decision as to whether or not we will
proceed with each successive phase based upon the analysis of the results of
that program. Our directors will make this decision based upon the
recommendations of an independent geologist who will oversee the program and
record the results.
We presently have no known reserves of any type of mineral. We plan to conduct
appropriate exploration work on the White Bear Arm Property in order to
ascertain whether it possesses commercially exploitable reserves of valuable
minerals. There can be no assurance that commercially exploitable reserves of
valuable minerals exist on the White Bear Arm Property or that we will discover
them, if they exist. If we are unable to find reserves of valuable minerals or
we cannot remove the minerals because we either do not have the capital to do
so, or because it is not economically feasible to do so, then we will cease
operations and our shareholders may lose their investment.
Even if Phase I of our proposed exploration program identifies high priority
geological targets suitable for a Phase II diamond drilling program, we will
need to raise additional funding to finance the Phase II drilling program and
any additional drilling and engineering studies that are required before we will
know if we have commercially exploitable reserves of valuable minerals. We
anticipate that any additional funding that we require will be in the form of
equity financing from the sale of our common stock. There is no assurance,
however, that we will be able to raise sufficient funding from the sale of our
common stock. The risky nature of this enterprise and lack of tangible assets
places debt financing beyond the credit-worthiness required by most banks or
typical investors of corporate debt until such time as an economically viable
mine can be demonstrated. We do not have any arrangements in place for any
future equity financing. If we are unable to secure additional funding, we will
cease or suspend operations. We have no plans, arrangements or contingencies in
place in the event that we cease operations.
MINERAL CLAIMS
The White Bear Arm Property consists of two non-contiguous mineral exploration
licenses comprising a total of 17 claims having a total area of 425 hectares
(mineral rights licence numbers 011117M and 013632M), wholly owned by us. We
hold all of our mineral titles free and clear of any encumbrances or liens.
The following table sets out all the mineral exploration licenses that currently
compose the White Bear Arm Property.
- -------------------------------------------------------------------------------------------
MINERAL NATIONAL
EXPLORATION NUMBER TOPOGRAPHIC
LICENSE OF AREA SERIES MAP
NUMBER LICENSEE HOLDER CLAIMS (HECTARES) SHEET ISSUANCE DATE
- -------------------------------------------------------------------------------------------
011117M Castmor Resources Ltd. (100%) 9 225 13A/16 July 13, 2005
013632M Castmor Resources Ltd. (100%) 8 200 13A/16, 3D13 June 4, 2007
- -------------------------------------------------------------------------------------------
TOTALS 17 425
(1,054 acres)
===========================================================================================
Our mineral exploration licenses entitle us to explore the claims composing the
White Bear Arm Property subject to the laws and regulations of the Province of
Newfoundland and Labrador. Title to mineral claims are issued and administered
by the Mineral Lands Division of the Ministry of Natural Resources, and title
must comply with all provisions under the Mineral Act of Newfoundland and
Labrador.
Under Newfoundland law, our mineral licenses may be held for one year after the
Issuance Date, and thereafter from year to year if, on or before the anniversary
date, we perform assessment work on the underlying claims having a minimum value
of not less than C$200 per claim in the first year, C$250 per claim in the
second year, and C$300 per claim in the third year. If we are unable to
complete the assessment work required to be done in any twelve month period, we
can maintain our claims in good standing by posting a cash security deposit for
the amount of the deficiency. When the deficient work is completed and accepted
the security deposit will be refunded. Otherwise, the security deposit will be
forfeited. If we do not comply with these maintenance requirements, then we
will forfeit our claims at the end of the anniversary date for each respective
claim. All of our claims are presently in good standing.
GLOSSARY OF TECHNICAL TERMS
The following are the definitions of certain technical and geological terms used
in this registration statement:
AMPHIBOLE: Family of silicate minerals forming prism or needle-like crystals.
Amphibole minerals generally contain iron, magnesium, calcium and aluminum in
varying amounts, along with water.
AMPHIBOLITE: A dark-colored metamorphic rock of mafic composition consisting
mainly of the minerals hornblende and plagioclase.
ANATECTIC: Having melted from preexistent rock.
ASSAY: A chemical analysis that determines the amount of easily extractable
elements in a sample (of rock, soil, till, silt, etc.). The concentrations of
precious metals such as gold and silver are typically reported as grams of metal
per tonne of rocks; base metal assays (copper, lead, zinc, etc.) are given in
weight percent. Assay sheets from laboratories typically give gold
concentrations in parts per billion (ppb). 1000 ppb equals 1 part per million
(ppm), equals 1 gram/tonne (there are about 34 grams in an ounce). Base metal
assays are typically measured in ppm (10,000 ppm equals one percent).
BIOTITE: common rock-forming mineral of the mica family. Biotite is a black or
dark brown silicate rich in iron, magnesium, potassium, aluminum, and, of
course, silica. Like other micas, it forms flat book-like crystals that peel
apart into individual sheets on cleavage planes.
BOREAL: Referring to the northern forests.
CO: The chemical symbol for Cobalt.
CONTACT: The surface of delimitation between a vein and its wall, or country
rock.
CU: The chemical symbol for Copper.
DERIVATIVE: A rock composed of materials derived from the weathering of older
rocks, a sedimentary rock, or a rock formed of material that has not been in a
state of fusion immediately before its accumulation.
DYKES: Tabular igneous intrusions that cut across the bedding or foliation of
the country rock.
ECOCLIMATE: Climate operating as an ecological factor. The sum of the
meteorological factors within a habitat.
ESKERS: A long, narrow ridge of coarse gravel deposited by a stream flowing in
or under a decaying glacial ice sheet.
FACIES: The overall characteristics of a rock unit that reflect its origin and
differentiate the unit from others around it. Mineralogy and sedimentary source,
fossil content, sedimentary structures and texture distinguish one facies from
another.
FELSIC: Igneous rock composed principally of feldspars and quartz.
FERROMAGNESION: Containing iron and magnesium.
FLUVIOGLACIAL: Pertaining to the meltwater streams flowing from wasting glacier
ice and esp. To the deposits and landforms produced by such streams, as kame
terraces and outwash plains; relating to the combined action of glaciers and
streams.
FOLIATED: Of a planar structure or any planar set of minerals in metamorphic
rocks that formed from direct pressure during deformation.
GABBRO: Coarse grained mafic intrusive rock composed mainly of plagioclase and
pyroxene.
GABBROIC: Having the quality of gabbro
GABBRONORITE: Gabbro containing orthopyroxene and labradorite, a plagioclasic
feldspar.
GARNET: Any of a group of hard silicate minerals having the general formula
asb2(sio4)3, occurring chiefly as well-formed crystals in metamorphic rocks.
GARNETIFEROUS: Containing garnets.
GEOPHYSICS: The study of the physical properties of the earth and the
composition and movement of its component rock. Geophysics is used extensively
in mineral exploration to detect mineralized rocks characterized by any one or
more of their physical properties.
GNEISS: A layered or banded crystalline metamorphic rock, the grains of which
are aligned or elongated into a roughly parallel arrangement.
GOSSAN: A rusty rock in which iron-bearing sulphide minerals have been oxidized
by air and water. Gossans may overlie a significant sulphide body.
GRANITE: Medium to coarse-grained felsic intrusive rock.
GRANITE: An igneous (formed from molten material) rock that solidified within
the Earth's crust and is principally composed of quartz, feldspar, and biotite.
GRANITIC: See Granitoid.
GRANITOID: Pertaining to or composed of granite.
GRANULITE: A relatively coarse, granular rock formed at high pressures and
temperatures, which may exhibit a crude gneissic structure due to the
parallelism of flat lenses of quartz or feldspar.
GRAPHITE: Native carbon mineral often with high conductance properties.
IGNEOUS: Rock or material, which solidified from molten material.
INTRUSION: A mass of rock that has been forced into or between other rocks.
INTRUSIVE: A body of igneous rock formed by the consolidation of magma intruded
into other rocks, in contrast to lavas, which are extruded upon the surface.
LITHOLOGY: The character of a rock described in terms of its structure, color,
mineral composition, grain size, and arrangement of its component parts; all
those visible features that in the aggregate impart individuality to the rock.
MAFIC: Pertaining to or composed of the ferromagnesian rock-forming silicates,
said of some igneous rocks and their constituent minerals.
MAGMA: Molten rock, formed within the inner parts of the Earth, which
crystallizes to form an igneous rock.
MAGMATIC SULPHIDE DEPOSIT: A deposit - usually of nickel, copper, cobalt or
platinum group elements - that is found in mafic or ultramafic igneous rocks.
MAGNETITE: Magnetic iron ore, being a black iron oxide containing 72.4% iron
when pure.
MASL: Metres above sea level.
MASS: A large irregular deposit of ore, which cannot be recognized as a vein or
bed.
METAMORPHIC: A rock that has been altered by physical and chemical processes
including heat, pressure, and fluids.
METASEDIMENTARY: Having the quality of a sediment or sedimentary rock that
shows evidence of having been subjected to metamorphism.
MIGMATITIC: Having the quality of a composite rock composed of igneous or
igneous-appearing and metamorphic materials that are generally distinguishable
megascopically.
MONZONITE: A granular plutonic rock containing approximately equal amounts of
orthoclase and plagioclase, and thus intermediate between syenite and diorite.
MORAINAL: Have the quality of a mass of rocks, gravel, sand, clay, etc.,
carried and deposited directly by a glacier.
NI: The chemical symbol for Nickel.
OLIVINE: A naturally occurring mineral (magnesium-iron silicate) that is
usually olive green.
PARAGNEISS: A gneiss formed by the metamorphism of a sedimentary rock.
PELITIC: A fine-grained sedimentary rock composed of more or less hydrated
aluminum silicates with which are mingled small particles of various other
minerals.
PLAGIOCLASE: Any of a series of triclinic minerals of the feldspar family,
ranging in composition from albite to anorthite and found in many rocks.
PSAMMITIC: Of or having the quality of fine-grained, clayey sandstone.
PYRITE: Iron sulphide.
QUARTZOFELDSPATHIC: Composition of a rock particularly rich in silica and
feldspar.
SULPHIDE: Minerals in which the metallic elements are chemically bound to
sulphur.
TERRACE: A raised portion of an ancient riverbed or a bank on which alluvial
deposits may be found.
TROCTOLITE: Igneous rock, found in the lunar highlands, composed of plagioclase
and olivine.
ULTRAMAFIC: An igneous rock composed chiefly of mafic minerals.
HISTORY OF THE CLAIMS
According to the geological report prepared by Jacques Whitford Limited,
previous exploration work in the area of the White Bear Arm Property extends
back to the 1950s, when various reconnaissance missions were performed
throughout the Province of Newfoundland and Labrador. Documented field work is
found back to the mid 1990s, when the massive Voisey's Bay nickel-copper
deposits were discovered, spurring an exploration rush throughout much of
Labrador.
In the immediate area of the White Bear Arm Property, detailed mineral
exploration work was completed by Noranda Mining and Exploration Inc. in 1995
and 1996. Geological mapping, prospecting, geochemical sampling, airborne
electromagnetics, and ground geophysics are some of the many surveys completed
over the property. Noranda explored the area for its magmatic Ni-Cu sulphide
potential.
Geological mapping and compilation has been completed by the Newfoundland and
Labrador Department of Mines and Energy. In the most recent mapping, the White
Bear Arm Complex ("WBAC") is described as being composed of gabbronorite,
olivine gabbronorite and troctolite, together with lesser monzonite and
metamorphic derivatives that in the south are strongly deformed and
metamorphosed to amphibolite intercalated with metasedimentary gneiss of the
Paradise River Metasedimentary Gneiss Belt (PRMBGB). Pronounced Ni, Co and Cu
lake bottom anomalies were also noted in the eastern end of the WBAC An assay
of 0.15% Cu and 0.13% Ni was historically returned from a gossan at Mountain
Brook in the WBAC.
LOCATION AND ACCESS
The White Bear Arm Property is located approximately 13 kilometers northeast of
the community of Charlottetown, Labrador, Canada. Charlottetown, located 290
kilometers east-southeast of the town of Goose Bay, has a gravel air strip for
scheduled air traffic, and is serviced by chartered float plane and scheduled
coastal boat traffic during ice free months (June to October). The town has a
motel, and some supplies and services can be procured there. The property is
approximately five kilometers from tidewater and is accessible by helicopter for
the purpose of an initial assessment.
TOPOGRAPHIC AND PHYSICAL ENVIRONMENT
The area is moderately to heavily wooded, with some open barren areas on ridges
and hilltops, and underlain by a thick layer of muskeg and caribou moss. The
topography of the area is locally rugged, with elevations ranging from up to 230
masl, locally. The area is heavily wooded.
The White Bear Arm Property is located within the Paradise River Ecoregion,
classified as having a maritime mid-boreal ecoclimate, with its forests
dominated by closed stands of balsam fir and black spruce. The region is
dominated by northwest trending lakes and bays that mimic the structural grain
of the bedrock. Relief is locally rugged, with elevations reaching 300 meters
above sea level. The area is heavily wooded, with some open barren areas on
ridges and hilltops.
Composed of granites, gneisses, and gabbroic intrusive rocks, the area is
generally rough and undulating with deeply dissected coastal margins. Its
surface rises rapidly from the sea coast to elevations of about 300 masl, and is
covered with sandy morainal deposits of variable thickness. Fluvioglacial
deposits are sporadically distributed in the form of eskers and river terraces.
The general area is marked by cool, rainy summers and cold winters. The mean
annual temperature is approximately 1 Celsius. The mean summer temperature is
11.5 Celsius and the mean winter temperature is -9 Celsius. The mean annual
precipitation ranges 800-1100 millimeters.
REGIONAL GEOLOGY
The White Bear Arm Property lies within the eastern portion of the Grenville
lithotectonic province of Labrador, within rocks of the PRMGB. The belt
consists of sulphide-bearing pelitic, migmatitic metasedeimentary gneiss and
minor psammitic gneiss at amphibolite to granulite facies, which are
intercalated with granitoid and mafic-ultramafic intrusives. The latter are
generally interpreted by field regional geophysics to be part of the WBAC, which
has locally intruded and assimilated the PRMGB, and is interpreted to underlie
it. According to Jacques Whitford Limited, the juxtaposition of a possible
nickel source (WRAC) with sulphidic host material (PRMGB), and the presence of
significant Ni-Cu-Co lake bottom anomalies provide an ideal exploration
environment for Ni-Cu magmatic sulphide deposits.
LOCAL GEOLOGY
Detailed geology in the vicinity of the White Bear Arm Property was extrapolated
by Jacques Whitford Limited from work completed by Noranda Mining and
Exploration Inc. Underlying the area, the principal lithology is a
quartzofeldspathic, frequently garnetiferous (some samples contain up to 50%
garnet), meta-sedimentary gneiss. The gneiss is foliated uniformly, trends
towards the northwest, and is steeply dipping. The outcrop consists of banded
pink and black, fine-grained garnet-biotite gneiss.
Locally, the spectacular flake graphite is developed, and can attain 5% of the
rock over narrow widths. Additionally, disseminated pyrite, commonly 2-3%
(occasionally up to 20%) as patches, occurs as rusty staining within the gneiss.
Traces of chalcopynte was locally noted to occur in the area.
Where exposure is adequate, amphibolite is seen to occur parallel to the
foliation, as narrow (amphibole and garnet mineralogy) dykes, comprising
dominantly amphibole, garnet and magnetite.
Granite in the area occurs both as granitic gneiss with banding and anatectic
(diffuse veining) textures, as well as totally undeformed dykes and masses with
sharp contacts. These late granites are found to cross-cut both the
paragneisses and amphibolites.
GEOLOGY REPORT
In January 2006, we retained Jacques Whitford Limited to complete an initial
evaluation of the White Bear Arm Property and to prepare a geological summary
report on it. No representative of Jacques Whitford Limited visited the
property prior to preparing the report.
Jacques Whitford Limited is a Canadian owned multidisciplinary environmental
engineering and sciences consulting firm providing solutions to clients in both
the public and private sectors. Formed in 1972, the firm has grown to more than
1,100 staff located in 40 offices across Canada, the United States and
internationally. Jacques Whitford is licensed to practice Professional
Geoscience in Newfoundland and Labrador.
RECOMMENDED EXPLORATION PROGRAM
Based on their review of data relating to the White Bear Arm Property, Jacques
Whitford concluded that the White Bear Arm Property warrants further exploration
because the regional and local geology indicate a prospective environment for
hosting Ni-Cu sulphide deposits or industrial minerals such as garnet. In
particular, the area contains sulphide-bearing rock, through which mafic,
Ni-bearing magma intrudes. Garnetiferous gneiss has also been mapped on the
property. Jacques Whitford recommended a two-phase exploration program to
further evaluate the property.
An estimated budget for our exploration program is set out in the following
table:
- --------------------------------------------------------------------------
PHASE I
- --------------------------------------------------------------------------
Geologist, sampling and mapping supervision $ 2,700
Geological assistant $ 1,500
Rock, stream sediment and till sampling $ 2,500
Room and board lodging in Charlottetown $ 1,000
Transportation from Goose Bay to project area $ 13,500
Permits, fees, filings, insurance and other administrative items 1,000
Reports and maps 1,000
Overhead $ 3,480
- --------------------------------------------------------------------------
TOTAL PHASE I COSTS: $ 26,680
- --------------------------------------------------------------------------
PHASE II
Diamond Drilling and Core Sampling $170,000
Overhead $ 25,500
- --------------------------------------------------------------------------
TOTAL PHASE II COSTS: $195,500
- --------------------------------------------------------------------------
TOTAL PROGRAM COSTS: $222,180
==========================================================================
The above budget was provided to us by Jacques Whitford and is contained in
their geological report respecting the White Bear Arm Property. Actual project
costs may exceed Jacques Whitford's estimates. In particular, the cost of fuel
has increased significantly since the above budget was prepared. In August and
September of 2008, helicopter transportation costs from Goose Bay to the project
area prohibitively exceeded our budget. If fuel costs continue to exceed our
budget for transportation, we will have insufficient capital to complete our
exploration program.
We anticipate that any additional funding that we require will be in the form of
equity financing from the sale of our common stock. There is no assurance,
however, that we will be able to raise sufficient funding from the sale of our
common stock. The risky nature of this enterprise and lack of tangible assets
places debt financing beyond the credit-worthiness required by most banks or
typical investors of corporate debt until such time as an economically viable
mine can be demonstrated. We do not have any arrangements in place for any
future equity financing. If we are unable to secure additional funding, we will
cease or suspend operations. We have no plans, arrangements or contingencies in
place in the event that we cease operations.
MANAGEMENT EXPERIENCE
Our management has no professional training or technical credentials in the
exploration, development, and operation of mines. Consequently, we may not be
able to recognize or take advantage of potential acquisition and exploration
opportunities in the sector without the aid of qualified geological consultants.
Moreover, with no direct training or experience, our management may not be fully
aware of the specific requirements related to working in this industry. They
may make mistakes in their decisions and choices that could cause our operations
and ultimate financial success to suffer irreparable harm.
GEOLOGICAL AND TECHNICAL CONSULTANTS
Since our officers and directors are inexperienced with exploration, we intend
to retain qualified persons on a contract basis to perform the surveying,
exploration, and excavating of the White Bear Arm Property as needed. We do not
presently have any verbal or written agreement regarding the retention of any
such person for the exploration program.
COMPETITIVE FACTORS
The mining industry is highly fragmented and we will be competing with many
other exploration companies looking for minerals. We are one of the smallest
exploration companies and are an infinitely small participant in the mineral
exploration business. While we will generally compete with other exploration
companies, there is no competition for the exploration of minerals from our
claims.
We are a junior mineral exploration company. We compete with other junior
mineral exploration companies for financing from a limited number of investors
that are prepared to make investments in junior mineral exploration companies.
The presence of competing junior mineral exploration companies may impact on our
ability to raise additional capital in order to fund our exploration programs if
investors are of the view that investments in competitors are more attractive
based on the merit of the mineral properties under investigation and the price
of the investment offered to investors.
We will also be competing with other junior and senior mineral companies for
available resources, including, but not limited to, professional geologists,
camp staff, mineral exploration supplies and drill rigs.
LOCATION CHALLENGES
We do not expect any major challenges in accessing the White Bear Arm Property
during the initial exploration stages.
REGULATIONS
Our mineral exploration program is subject to the regulations of the Department
of Natural Resources of Newfoundland & Labrador.
We will secure all necessary permits for exploration and, if development is
warranted on the property, we will file final plans of operation before we start
any mining operations. We anticipate no discharge of water into active stream,
creek, river, lake or any other body of water regulated by environmental law or
regulation. Restoration of the disturbed land will be completed according to
law. All holes, pits and shafts will be sealed upon abandonment of the
property. It is difficult to estimate the cost of compliance with the
environmental law since the full nature and extent of our proposed activities
cannot be determined until we start our operations and know what that will
involve from an environmental standpoint.
Exploration stage companies are not required to discuss environmental matters
except as they relate to exploration activities. The only "cost and effect" of
compliance with environmental regulations in Canada is returning the surface to
its previous condition upon abandonment of the property.
EMPLOYEES
We currently have no employees other than our two officers and directors, who
have not been paid for their services. We do not have any employment agreements
with our directors and officers. We do not presently have pension, health,
annuity, insurance, stock options, profit sharing or similar benefit plans;
however, we may adopt plans in the future. There are presently no personal
benefits available to our officers and directors.
We do not intend to hire additional employees at this time. All of the work on
the property will be conducted by unaffiliated independent contractors that we
will hire. The independent contractors will be responsible for surveying,
geology, engineering, exploration, and excavation. The geologists will evaluate
the information derived from the exploration and excavation and the engineers
will advise us on the economic feasibility of removing the mineralized material.
ITEM 1A. RISK FACTORS.
We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act
and are not required to provide the information required under this item.
ITEM 1B. UNRESOLVED STAFF COMMENTS.
We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act
and are not required to provide the information required under this item.
ITEM 2. PROPERTIES.
We have a 100% interest in the White Bear Arm Property, comprising 17 mineral
claims located along southeastern coastal Labrador, approximately 13 kilometers
northeast of the community of Charlottetown in Labrador, Canada, having a total
area of 425 hectares (1,054.8 acres). This interest only relates to the right to
explore for and extract minerals from the claims. We do not own any real
property interest in the claims. We do not own or lease any property other than
the White Bear Arm Property.
ITEM 3. LEGAL PROCEEDINGS
Neither Castmor Resources, nor any of its officers or directors is a party to
any material legal proceeding or litigation and such persons know of no material
legal proceeding or contemplated or threatened litigation. There are no
judgments against Castmor Resources or its officers or directors. None of our
officers or directors have been convicted of a felony or misdemeanor relating to
securities or performance in corporate office.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of the Company's shareholders during the
fiscal year ended August 31, 2008.
PART II
ITEM 5. MARKET FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER
PURCHASES OF EQUITY SECURITIES
Our stock is presently traded on the NASD over-the-counter bulletin board under
the trading symbol "CASL". As of August 31, 2008, there were 53 owners of
record of our common stock.
DIVIDEND POLICY
Our Board of Directors may declare and pay dividends on outstanding shares of
common stock out of funds legally available there for in our sole discretion;
however, to date no dividends have been paid on common stock and we do not
anticipate the payment of dividends in the foreseeable future.
RECENT SALES OF UNREGISTERED SECURITIES
On October 25, 2005, we issued 750,000 restricted common shares to a
non-affiliated person in exchange for cash of $15,000. The shares were issued
without registration under the Securities Act of 1933 in reliance on an
exemption from registration provided by Regulation S of the Securities Act. No
general solicitation was made in connection with the offer or sale of these
securities.
On October 31, 2005, we issued 180,000 restricted common shares to a
non-affiliated person in exchange for debt settlement in connection with the
acquisition of mineral claims for $3,600 (CAD$4,250). The shares were issued
without registration under the Securities Act of 1933 in reliance on an
exemption from registration provided by Regulation S of the Securities Act. No
general solicitation was made in connection with the offer or sale of these
securities.
From September 28, 2007 to November 28, 2007, we issued 1,205,000 free-trading
shares of our common stock at a price of $0.05 per share to 47 investors for
gross proceeds of $120,250 in reliance upon an exemption from registration under
Regulation A, promulgated under the Securities Act of 1933. Our Offering
Statement on Form 1-A was declared qualified by the Securities and Exchange
Commission (Commission File No. 024-10187) on September 28, 2007. No shares
were sold to residents of the United States.
PENNY STOCK REGULATION
Our shares must comply with the Penny Stock Reform Act of 1990, which may
potentially decrease our shareholders' ability to easily transfer their shares.
Broker-dealer practices in connection with transactions in "penny stocks" are
regulated. Penny stocks generally are equity securities with a price of less
than $5.00. 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 that provides information about penny
stocks and the 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. In addition, the penny stock rules generally require
that prior to a transaction in a penny stock, the broker-dealer 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 a stock that must comply with the
penny stock rules. Since our shares must comply with such penny stock rules,
our shareholders will in all likelihood find it more difficult to sell their
securities.
ITEM 6. SELECTED FINANCIAL DATA
We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act
and are not required to provide the information required under this item.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Our business plan is to explore the White Bear Arm Property to determine whether
it contains commercially exploitable reserves of valuable minerals. We intend
to proceed with Phase I of the exploration program recommended by Jacques
Whitford. Phase I will consist of expanded geological mapping, and geochemical
sampling that will cover previously established grid areas, as well as other
prospective sites that may be developed to delineate either base metals or
industrial minerals. Geochemical sampling will include rock, stream sediment
and till sampling. Several airborne electromagnetic anomalies will be
re-verified on the ground and mapped for size and extent. If Phase I develops
any high priority targets for further exploration, then we will proceed with
Phase II of the proposed exploration program, consisting of 800 to 1000 metres
of diamond drilling, mobilized to the nearest road by truck, then
helicopter-supported from that point.
Our budget for Phase I, as recommended by Jacques Whitford, is $26,660. Since
the date of the Jacques Whitford geological report, fuel costs and helicopter
transportation expenses have increased beyond our budgeted capital resources.
In August and September of 2008, helicopter transportation costs from Goose Bay
to the project area prohibitively exceeded our budget. We were therefore unable
to commence exploration of the White Bear Arm Property before the 2008 winter
season. Due to snow conditions, we do not expect to be able to commence
exploration of the White Bear Arm Property until May of 2009, subject to the
availability of a geologist and helicopter transportation. If fuel costs
continue to exceed our budget for transportation we will have insufficient
capital to complete our exploration program.
We anticipate that any additional funding that we require will be in the form of
equity financing from the sale of our common stock. There is no assurance,
however, that we will be able to raise sufficient funding from the sale of our
common stock. The risky nature of this enterprise and lack of tangible assets
places debt financing beyond the credit-worthiness required by most banks or
typical investors of corporate debt until such time as an economically viable
mine can be demonstrated. We do not have any arrangements in place for any
future equity financing. If we are unable to secure additional funding, we will
cease or suspend operations. We have no plans, arrangements or contingencies in
place in the event that we cease operations.
We do not have plans to purchase any significant equipment or to hire any
employees during the next 12 months and unless we have proved reserves.
RESULTS OF OPERATIONS
Our business is in the early stage of development. Since inception on June 27,
2005 we have not earned any revenue and we have not identified any commercially
exploitable reserves of valuable minerals on our property. We do not anticipate
earning revenue unless we enter into commercial production of the White Bear Arm
Property. We are presently in the exploration stage of our business and we can
provide no assurance that we will discover commercially exploitable reserves of
valuable minerals on the White Bear Arm Property, or that if such resources are
discovered that we will commercially produce them.
We incurred operating expenses in the amount of $19,035 for the year ended
August 31, 2008. These operating expenses included: (a) professional fees of
$14,573; (b) interest expenses of $2,086; (c) office expenses of $1,124; and (d)
other miscellaneous expenses of $1,252.
LIQUIDITY AND CAPITAL RESOURCES
Since inception on June 27, 2005 our activities have been financed from the
proceeds of share subscriptions and a promissory note for $15,000 issued to a
non-affiliated third party on July 31, 2007. The promissory note accrued
interest at the rate of 20% per annum, calculated semi-annually, and was due and
payable on July 31, 2008. The note plus accrued interest in the amount $2,336
was paid in full on May 1, 2008. Proceeds from the promissory note were used to
pay for offering expenses, claim renewal and working capital.
As of August 31, 2008 we had total assets of $49,618 comprised of $41,549 in
cash and $8,069 in the form of a security deposit on our mineral properties. We
have sufficient working capital to maintain our present level of operations for
the next 12 months, but due to increased fuel costs our available capital is
presently insufficient to complete Phase I of our proposed exploration program.
Unless fuel costs substantially decline, we will be required to seek additional
funding in order to complete Phase I of our exploration program.
We anticipate that any additional funding that we require will be in the form of
equity financing from the sale of our common stock. There is no assurance,
however, that we will be able to raise sufficient funding from the sale of our
common stock. The risky nature of this enterprise and lack of tangible assets
places debt financing beyond the credit-worthiness required by most banks or
typical investors of corporate debt until such time as an economically viable
mine can be demonstrated. We do not have any arrangements in place for any
future equity financing. If we are unable to secure additional funding, we will
cease or suspend operations. We have no plans, arrangements or contingencies in
place in the event that we cease operations.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act
and are not required to provide the information required under this item.
ITEM 8. FINANCIAL STATEMENTS
INDEX TO FINANCIAL STATEMENTS
CASTMOR RESOURCES LTD.
(A DEVELOPMENT STAGE COMPANY)
FINANCIAL STATEMENTS FOR THE YEARS ENDED AUGUST 31, 2007 AND AUGUST 31, 2008
Report of Independent Registered Public Accounting Firm
Balance Sheets
Statements of Stockholders Equity
Statements of Operations
Statements of Cash Flows
Notes to Financial Statements
CHANG LEE LLP
Chartered Accountants
505-815 Hornby Street
Vancouver, B.C., V6Z 2E6
Tel: 604-687-3776
Fax: 604-688-3373
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders of
CASTMOR RESOURCES LTD.
(An exploration stage company)
We have audited the accompanying balance sheets of Castmor Resources Ltd. (an
exploration stage company) as at August 31, 2008 and 2007 and the related
statements of stockholders' equity, operations and cash flows for the period
from June 27, 2005 (date of inception) to August 31, 2008. 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 audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform an audit to obtain reasonable assurance 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 audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of the Company as at August 31,
2008 and 2007 and the results of its operations and its cash flows for the
period from June 27, 2005 (date of inception) to August 31, 2008, in conformity
with accounting principles generally accepted in the United States of America.
The accompanying financial statements have been prepared assuming the Company
will continue as a going concern. As discussed in Note 1 to the financial
statements, the Company incurred losses from operations since inception, has not
attained profitable operations and is dependent upon obtaining adequate
financing to fulfill its exploration activities. 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.
Vancouver, Canada "CHANG LEE LLP"
November 14, 2008 Chartered Accountants
CASTMOR RESOURCES LTD.
(An exploration stage company)
Balance Sheets
August 31, 2008
(Expressed in U.S. Dollars)
- ---------------------------------------------------------------------------------------------
August 31 August 31
2008 2007
- ---------------------------------------------------------------------------------------------
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 41,549 $ 16,889
MINERAL RESOURCE SECURITY DEPOSIT 8,069 3,763
- ---------------------------------------------------------------------------------------------
TOTAL ASSETS $ 49,618 $ 20,652
=============================================================================================
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
CURRENT LIABILITIES
Accounts payable and accrued liabilities 5,628 2,877
Promissory note - 15,000
- ---------------------------------------------------------------------------------------------
TOTAL LIABILITIES 5,628 17,877
- ---------------------------------------------------------------------------------------------
STOCKHOLDERS' EQUITY
SHARE CAPITAL
Authorized:
50,000,000 preferred shares at a par value of $0.0001 per share
Issued and outstanding: Nil
100,000,000 common shares with a par value of $0.0001 per share
Issued and outstanding: 12,435,000 common shares 1,244 1,123
(August 31, 2007: 11,230,000)
ADDITIONAL PAID-IN CAPITAL 78,636 18,507
(DEFICIT) ACCUMULATED DURING THE EXPLORATION STAGE (35,890) (16,855)
- ---------------------------------------------------------------------------------------------
TOTAL STOCKHOLDERS' EQUITY 43,990 2,775
- ---------------------------------------------------------------------------------------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 49,618 $ 20,652
=============================================================================================
The accompanying notes are an integral part of these financial statements.
CASTMOR RESOURCES LTD.
(An exploration stage company)
Statements of Stockholders' Equity
For the period from June 27, 2005 (inception) to August 31, 2008
(Expressed in U.S. Dollars)
- ---------------------------------------------------------------------------------------------------------------------------
Deficit
accumulated Total
Additional during stockholders'
Preferred Stock Common Stock paid-in exploration equity
Shares Amount Shares Amount capital stage (deficiency)
- ---------------------------------------------------------------------------------------------------------------------------
Issuance of common stock for settlement
of debt July 16, 2005 ($0.0001 per share) - $ - 10,300,000 $ 1,030 $ - $ - $ 1,030
Loss and comprehensive loss for the period - - - - - (1,914) (1,914)
- ---------------------------------------------------------------------------------------------------------------------------
Balance, August 31, 2005 - - 10,300,000 $ 1,030 $ - $ (1,914) $ (884)
- ---------------------------------------------------------------------------------------------------------------------------
Issuance of common stock for cash
October 25, 2005 ($0.02 per share) - $ - 750,000 $ 75 $ 14,925 $ - $ 15,000
Issuance of common stock for settlement
of debt October 31, 2005 ($0.02 per share) - $ - 180,000 $ 18 $ 3,582 $ - $ 3,600
Loss and comprehensive loss for the year - - - - - (9,537) (9,537)
- ---------------------------------------------------------------------------------------------------------------------------
Balance, August 31, 2006 - $ - 11,230,000 $ 1,123 $ 18,507 $ (11,451) $ 8,179
- ---------------------------------------------------------------------------------------------------------------------------
Loss and comprehensive loss for the year - - - - - (5,404) (5,404)
- ---------------------------------------------------------------------------------------------------------------------------
Balance, August 31, 2007 - $ - 11,230,000 $ 1,123 $ 18,507 $ (16,855) $ 2,775
- ---------------------------------------------------------------------------------------------------------------------------
Issuance of common stock for cash
November 30, 2007 ($0.05 per share) - $ - 1,205,000 $ 121 $ 60,129 $ - $ 60,250
Loss and comprehensive loss for the year - - - - - (19,035) (19,035)
- ---------------------------------------------------------------------------------------------------------------------------
Balance, August 31, 2008 - $ - 12,435,000 $ 1,244 $ 78,636 $ (35,890) $ 43,990
===========================================================================================================================
The accompanying notes are an integral part of these financial statements
CASTMOR RESOURCES LTD.
(A exploration stage company)
Statements of Operations
(Expressed in U.S. Dollars)
- -------------------------------------------------------------------------------------------------------
Cumulative from
June 27, 2005
(inception) to Year ended Year ended
August 31, 2008 August 31, 2008 August 31, 2007
- -------------------------------------------------------------------------------------------------------
EXPENSES
Bank charges $ 248 $ 173 $ 51
Consulting fees 398 - -
Interest 2,336 2,086 250
Office expenses 6,155 1,124 1,684
Professional fees 20,674 14,573 2,500
Resource property acquisition and exploration costs 5,000 - 919
Transfer expenses 1,079 1,079 -
- -------------------------------------------------------------------------------------------------------
LOSS FROM OPERATIONS 35,890 19,035 5,404
- -------------------------------------------------------------------------------------------------------
NET LOSS AND COMPREHENSIVE LOSS FOR THE PERIOD $ (35,890) $ (19,035) $ (5,404)
- -------------------------------------------------------------------------------------------------------
BASIC AND DILUTED LOSS PER SHARE $ (0.00) $ (0.00)
=======================================================================================================
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING
- - basic and diluted 12,135,396 11,230,000
=======================================================================================================
The accompanying notes are an integral part of these financial statements
CASTMOR RESOURCES LTD.
(An exploration stage company)
Statements of Cash Flows
(Expressed in U.S. Dollars)
- ---------------------------------------------------------------------------------------------------
Cumulative from
June 27, 2005
(inception) to Year ended Year ended
Augusts 31, 2008 August 31, 2008 August 31, 2007
- ---------------------------------------------------------------------------------------------------
CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES
Net (Loss) for the period $ (35,890) $ (19,035) $ (5,404)
Changes in operating assets and liabilities
- - (increase) decrease in prepaid expenses - - 623
- - (increase) decrease in security deposit (8,069) (4,306) (2,110)
- - accounts payable and accrued liabilities 10,258 2,751 693
- ---------------------------------------------------------------------------------------------------
NET CASH (USED IN) OPERATING ACTIVITIES (33,701) (20,590) (6,198)
- ---------------------------------------------------------------------------------------------------
CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES
Proceeds from promissory note - (15,000) 15,000
Proceeds from issuance of common stock 75,250 60,250 -
- ---------------------------------------------------------------------------------------------------
NET CASH PROVIDED BY FINANCING ACTIVITIES 75,250 45,250 15,000
- ---------------------------------------------------------------------------------------------------
INCREASE IN CASH AND CASH EQUIVALENTS 41,549 24,660 8,802
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD - 16,889 8,087
- ---------------------------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 41,549 $ 41,549 $ 16,889
===================================================================================================
SUPPLEMENTAL CASH FLOW INFORMATION
Interest paid $ 2,336 $ 2,336 $ -
===================================================================================================
Income taxes paid $ - $ - $ -
===================================================================================================
The accompanying notes are an integral part of these financial statements
NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS
Castmor Resources Ltd. (hereinafter "the Company") was incorporated in the State
of Nevada, U.S.A., on June 27, 2005. The Company's fiscal year end is August
31.
The Company has been in the exploration stage since its formation and has not
yet realized any revenues from its operations. It is primarily engaged in the
acquisition and exploration of mining properties. Upon location of a
commercially minable reserve, the Company expects to actively prepare the site
for its extraction and enter a development stage. In 2005, the Company acquired
mineral interests in two non-contiguous properties located along southeastern
coastal Labrador, approximately 13 kilometers northeast of the community of
Charlottetown, Labrador, Canada and has not yet determined whether these
properties contain reserves that are economically recoverable.
These financial statements have been prepared in accordance with generally
accepted accounting principles in the United States of America applicable to a
going concern which assume that the Company will realize its assets and
discharge its liabilities in the normal course of business. The Company has
incurred accumulated losses of $35,890 since inception and has no source of
revenue. The future of the Company is dependent upon its ability to obtain
financing and upon future acquisition, exploration and development of profitable
operations from its mineral properties. These factors create doubt as to the
ability of the Company to continue as a going concern. Realization values may
be substantially different from the carrying values as shown in these financial
statements should the Company be unable to continue as a going concern.
Management is in the process of identifying sources for additional financing to
fund the ongoing development of the Company's business.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The financial statements of the Company have been prepared in accordance with
the generally accepted accounting principles in the United States of America.
Because a precise determination of many assets and liabilities is dependent upon
future events, the preparation of financial statements for a period necessarily
involves the use of estimates that have been made using careful judgment. The
financial statements have, in management's opinion been properly prepared within
reasonable limits of materiality and within the framework of the significant
accounting policies summarized below:
Accounting Method
The Company's financial statements are prepared using the accrual basis of
accounting in accordance with accounting principles generally accepted in the
United States of America.
Cash and Cash Equivalents
For purposes of the statement of cash flows, the Company considers all highly
liquid investments and short-term debt instruments with original maturities of
three months or less to be cash equivalents. As at August 31, 2008, there were
no cash equivalents.
Use of Estimates
The preparation of financial statements in conformity with 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 for the reporting period. Actual
results could differ from these estimates.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Concentration of Credit Risk
The Company places its cash and cash equivalents with high credit quality
financial institutions. As of August 31, 2008, the Company had no amounts in a
bank beyond insured limits.
Foreign Currency Transactions
The Company is located and operating outside of the United States of America.
It maintains its accounting records in U.S. Dollars as follows:
At the transaction date each asset, liability, revenue and expense is translated
into U.S. dollars by the use of the exchange rate in effect at that date. At
the period end, monetary assets and liabilities are re-measured by using the
exchange rate in effect at that date. The resulting foreign exchange gains and
losses are included in operations.
Fair Value of Financial Instruments
The Company's financial instruments as defined by Statement of Financial
Accounting Standards No. 107, "Disclosures about Fair Value of Financial
Instruments," include cash and cash equivalents and accounts payable and accrued
liabilities. Fair values were assumed to approximate carrying value for these
financial instruments, except where noted. Management is of the opinion that
the Company is not exposed to significant interest or credit risks arising from
these financial instruments. The Company is operating outside the United States
of America and has significant exposure to foreign currency risk due to the
fluctuation of currency in which the Company operates and U.S. dollars.
Mineral Property Payments and Exploration Costs
The Company expenses all costs related to the acquisition, maintenance and
exploration of mineral claims in which it has secured exploration rights prior
to establishment of proven and probable reserves. When it has been determined
that a mineral property can be economically developed as a result of
establishing proven and probable reserves, the costs 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. To
date, the Company has not established the commercial feasibility of its
exploration prospects; therefore, all costs are being expensed.
Long-lived assets impairment
Long-lived assets of the Company are reviewed for impairment whenever events or
circumstances indicate that the carrying amount of assets may not be
recoverable, pursuant to guidance established in SFAS No. 144, Accounting for
the Impairment or Disposal of Long-Lived Assets.
Management considers assets to be impaired if the carrying value exceeds the
future projected cash flows from related operations (undiscounted and without
interest charges). If impairment is deemed to exist, the assets will be written
down to fair value. Fair value is generally determined using a discounted cash
flow analysis.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Assets retirement obligations
The Company has adopted SFAS No 143, Accounting for Assets Retirement
Obligations which requires that the fair value of a liability for an asset
retirement obligation be recognized in the period in which it is incurred. SFAS
No. 143 requires the Company to record a liability for the present value of the
estimated site restoration costs with corresponding increase to the carrying
amount of the related long-lived assets. The liability will be accreted and the
asset will be depreciated over the life of the related assets. Adjustments for
changes resulting from the passage of time and changes to either the timing or
amount of the original present value estimate underlying the obligation will be
made. As at August 31, 2008, the Company does not have any asset retirement
obligations.
Costs associated with environmental remediation obligations will be accrued when
it is probable that such costs will be incurred and they can be reasonably
estimated.
Stock-Based Compensation
The Company adopted SFAS No. 123(revised), "Share-Based Payment", to account for
its stock options and similar equity instruments issued. Accordingly,
compensation costs attributable to stock options or similar equity instruments
granted are measured at the fair value at the grant date, and expensed over the
expected vesting period. SFAS No. 123(revised) requires excess tax benefits be
reported as a financing cash inflow rather than as a reduction of taxes paid.
The Company did not grant any stock options during the period ended August 31,
2008.
Comprehensive Income
The Company adopted Statement of Financial Accounting Standards No. 130 (SFAS
130), Reporting Comprehensive Income, which establishes standards for reporting
and display of comprehensive income, its components and accumulated balances.
The Company is disclosing this information on its Statement of Stockholders'
Equity. Comprehensive income comprises equity except those resulting from
investments by owners and distributions to owners. The Company has no elements
of "other comprehensive income" for the period ended August 31, 2008.
Income Taxes
The Company has adopted Statement of Financial Accounting Standards No. 109
(SFAS 109), Accounting for Income Taxes, which requires the Company to recognize
deferred tax liabilities and assets for the expected future tax consequences of
events that have been recognized in the Company's financial statements or tax
returns using the liability method. Under this method, deferred tax liabilities
and assets are determined based on the temporary differences between the
financial statement and tax bases of assets and liabilities using enacted tax
rates in effect in the years in which the differences are expected to reverse.
Basic and Diluted Loss Per Share
In accordance with SFAS No. 128 - "Earnings Per Share", the basic loss per
common share is computed by dividing net loss available to common stockholders
by the weighted average number of common shares outstanding. Diluted loss per
common share is computed similar to basic loss per common share except that the
denominator is increased to include the number of additional common shares that
would be outstanding if the potential common shares had been issued and if the
additional common shares were dilutive.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
New Accounting Pronouncements
In December 2007, the Financial Accounting Standards Board ("FASB") issued SFAS
No. 141, (revised 2007), "Business Combinations". SFAS 141(R) applies the
acquisition method of accounting for business combinations established in SFAS
141 to all acquisitions where the acquirer gains a controlling interest,
regardless of whether consideration was exchanged. Consistent with SFAS 141,
SFAS 141(R) requires the acquirer to fair value the assets and liabilities of
the acquiree and record goodwill on bargain purchases, with main difference the
application to all acquisitions where control is achieved. SFAS 141(R) is
effective for financial statements issued for fiscal years beginning after
December 15, 2008. The adoption of this statement is not expected to have a
material effect on the Company's future financial position or results of
operations.
In December 2007, the Financial Accounting Standards Board ("FASB") issued SFAS
No. 160, "Noncontrolling Interests in Consolidated Financial Statements - An
amendment of ARB No. 51".SFAS 160 requires companies with noncontrolling
interests to disclose such interests clearly as a portion of equity but separate
from the parent's equity. The noncontrolling interest's portion of net income
must also be clearly presented on the Income Statement. SFAS 160 is effective
for financial statements issued for fiscal years beginning after December 15,
2008. The adoption of this statement is not expected to have a material effect
on the Company's future financial position or results of operations.
In March 2008, the FASB issued FASB Statement No. 161 ("SFAS 161"), "Disclosures
about Derivative Instruments and Hedging Activities". SFAS 161 requires
companies with derivative instruments to disclose information that should enable
financial-statement users to understand how and why a company uses derivative
instruments, how derivative instruments and related hedged items are accounted
for under FASB Statement No. 133 "Accounting for Derivative Instruments and
Hedging Activities" and how derivative instruments and related hedged items
affect a company's financial position, financial performance and cash flows.
SFAS 161 is effective for financial statements issued for fiscal years and
interim periods beginning after November 15, 2008. The adoption of this
statement is not expected to have a material effect on the Company's future
financial position or results of operations.
In May 2008, the FASB issued SFAS No. 162, "The Hierarchy of Generally Accepted
Accounting Principles". SFAS 162 identifies the sources of accounting principles
and the framework for selecting the principles to be used in the preparation of
financial statements of non-governmental entities that are presented in
conformity with generally accepted accounting principles in the United States.
It is effective 60 days following the SEC's approval of the Public Company
Accounting Oversight Board amendments to AU Section 411, "The Meaning of Present
Fairly in Conformity With Generally Accepted Accounting Principles". The
adoption of this statement is not expected to have a material effect on the
Company's financial statements.
In April 2008, the FASB issued FSP No. 142-3, "Determination of the Useful Life
of Intangible Assets" ("FSP 142-3"). FSP 142-3 amends the factors an entity
should consider in developing renewal or extension assumptions used in
determining the useful life of recognized intangible assets under FASB Statement
No. 142, "Goodwill and Other Intangible Assets". This new guidance applies
prospectively to intangible assets that are acquired individually or with a
group of other assets in business combinations and asset acquisitions. FSP 142-3
is effective for financial statements issued for fiscal years and interim
periods beginning after December 15, 2008. Early adoption is prohibited. The
adoption of this statement is not expected to have a material effect on the
Company's financial statements.
In May 2008, FASB issued FASB Staff Position ("FSP") APB 14-1, "Accounting for
Convertible Debt Instruments That May Be Settled in Cash upon Conversion
(Including Partial Cash Settlement)" ("FSP APB 14-1"). FSP APB 14-1 clarifies
that convertible debt instruments that may be settled in cash upon either
mandatory or optional conversion (including partial cash settlement) are not
addressed by paragraph 12 of APB Opinion No. 14, "Accounting for Convertible
Debt and Debt issued with Stock Purchase Warrants." Additionally, FSP APB 14-1
specifies that issuers of such instruments should separately account for the
liability and equity components in a manner that will reflect the entity's
nonconvertible debt borrowing rate when interest cost is recognized in
subsequent periods. FSP APB 14-1 is effective for financial statements issued
for fiscal years beginning after December 15, 2008, and interim periods within
those fiscal years. We will adopt FSP APB 14-1 beginning in the first quarter of
2009, and this standard must be applied on a retrospective basis. The adoption
of this statement is not expected to have a material effect on the Company's
financial statements.
FASB has issued Statement of Financial Accounting Standards ("SFAS") No. 163,
Accounting for Financial Guarantee Insurance Contracts. SFAS No. 163 clarifies
how SFAS No. 60, Accounting and Reporting by Insurance Enterprises, applies to
financial guarantee insurance contracts issued by insurance enterprises, and
addresses the recognition and measurement of premium revenue and claim
liabilities. It requires expanded disclosures about contracts, and recognition
of claim liability prior to an event of default when there is evidence that
credit deterioration has occurred in an insured financial obligation. It also
requires disclosure about (a) the risk-management activities used by an
insurance enterprise to evaluate credit deterioration in its insured financial
obligations, and (b) the insurance enterprise's surveillance or watch list. The
adoption of this statement is not expected to have a material effect on the
Company's financial statements.
NOTE 3 - MINERAL PROPERTY INTEREST
On October 31, 2005 the Company acquired a 100% interest in two non-contiguous
mineral claims located along southeastern coastal Labrador, approximately 13
kilometers northeast of the community of Charlottetown, Labrador, Canada. The
claims were acquired from a non-affiliated third party for a consideration of
$4,250 CAD which covered an exploration program security deposit and staking and
other related costs of $401 (CAD$450) and $3,199 (CAD$3,800), respectively. The
Company expensed the staking and other related costs of $3,199 in connection
with the acquisition of the mineral claims.
One of the licenses comprising eight claims, was inadvertently allowed to expire
and was cancelled on January 24, 2007. The Company reacquired a 100% interest
in the same eight claims under a new mineral license by a Transfer of Mineral
Disposition dated July 16, 2007, from a non-affiliated third party, for $505
CAD. The Company expensed the entire cost of reacquiring the mineral claims.
Up to August 31, 2008, the Company has paid $8,069 towards a security deposit on
its exploration program. The Company is required to incur total exploration
expenditures of CAD$13,500 for the above noted mineral claims before July 13,
2009. Failure in compliance of the exploration requirement will result the
forfeiture of the exploration program deposit made to the mining division of
Labrador Canada.
NOTE 4 - PROMISSORY NOTE
On July 31, 2007, the Company issued an unsecured promissory note of $15,000 to
a non affiliated party, bearing an interest rate of 20% per annum, maturing on
July 31, 2008. The note, together with accrued interest of $2,336, was paid in
full on May 1, 2008.
NOTE 5 - PREFERRED AND COMMON STOCK
The Company has 50,000,000 shares of preferred stock authorized and none issued.
The Company has 100,000,000 shares of common stock authorized, of which
12,435,000 shares are issued and outstanding. All shares of common stock are
non-assessable and non-cumulative, with no preemptive rights.
During the year ended August 31, 2008, the Company sold 1,205,000 shares of
common stock at $0.05 per share through a public offering that was exempt from
registration under Regulation A, promulgated under the Securities Act of 1933.
The gross proceeds of the offering was $60,250. The Company did not issue any
shares during the year ended August 31, 2007. During the year ended August 31,
2006, the Company issued 750,000 shares of common stock for cash consideration
of $15,000 and 180,000 shares of common stock for settlement of debt of $3,600.
NOTE 6 - INCOME TAXES
At August 31, 2008, the Company had deferred tax assets of approximately $12,600
principally arising from net operating loss carryforwards for income tax
purposes. As our management cannot determine that it is more likely than not
that we will realize the benefit of the deferred tax asset, a valuation
allowance equal to the deferred tax asset has been established at August 31,
2008. The significant components of the deferred tax asset at August 31, 2008
and 2007 were as follows:
- --------------------------------------------------------------------------------
August 31, 2008 August 31, 2007
- --------------------------------------------------------------------------------
Net operating loss carryforwards $ 36,000 $ 16,800
Valuation allowance (12,600) (5,900)
Net deferred tax asset $ 12,600 $ 5,900
- --------------------------------------------------------------------------------
At August 31, 2008, we had net operating loss carryforwards of approximately
$36,000, which expire in the year 2025 through 2028.
NOTE 7 - COMMITMENT AND CONTINGENCY
See Note 3
NOTE 8 - SEGMENT INFORMATION
The Company currently conducts all of its operations in Canada
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
In March 2008, we engaged the services of Chang Lee LLP, Chartered Accountants,
of Vancouver, British Columbia, to provide an audit of our financial statements
for the period from August 31, 2005 to August 31, 2008. This is our first
auditor. We have no disagreements with our auditor through the date of this
registration statement.
ITEM 9A. CONTROLS AND PROCEDURES
EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES
As of August 31, 2008, we carried out an evaluation, under the supervision and
with the participation of our management, including our Chief Executive Officer
and Chief Financial Officer (who are one and the same person), of the
effectiveness of the design and operation of our disclosure controls and
procedures pursuant to Exchange Act Rules 13a-15(e) and 15d-15(e) under the
Securities Exchange Act of 1934, as amended. Based solely on the material
weaknesses described below, our Chief Executive Officer and Chief Financial
Officer concluded that, as of August 31, 2008, the Company's disclosure controls
and procedures were not effective:
1. The Company presently has only two officers and no employees. Inasmuch
as there is no segregation of duties within the Company, there is no management
oversight, no one to review control documentation and no control documentation
is being produced.
CHANGES IN DISCLOSURE CONTROLS AND PROCEDURES
Except as described below, there were no changes in disclosure controls and
procedures that occurred during the period covered by this report that have
materially affected, or are reasonably likely to materially effect, our
disclosure controls and procedures.
We will implement the following measures to address the identified material
weaknesses in our disclosure controls and procedures:
1. We will appoint accounting personnel who are able to implement applicable
accounting requirements, policies and procedures applicable to our reporting
obligations.
We will not be implementing any further changes to our disclosure controls and
procedures until there is a significant change in our operations or capital
resources.
LIMITATIONS ON THE EFFECTIVENESS OF CONTROLS
Our management, including our CEO and CFO (who are one and the same person),
does not expect that our disclosure controls and internal controls will prevent
all errors and all fraud. A control system, no matter how well conceived and
operated, can provide only reasonable, not absolute, assurance that the
objectives of the control system are met. Further, the design of a control
system must reflect the fact that there are resource constraints, and the
benefits of controls must be considered relative to their costs. Because of the
inherent limitations in all control systems, no evaluation of controls can
provide absolute assurance that all control issues and instances of fraud, if
any, within the Company have been detected. These inherent limitations include
the realities that judgments in decision-making can be faulty, and that
breakdowns can occur because of a simple error or mistake. Additionally,
controls can be circumvented by the individual acts of some persons, by
collusion of two or more people, or by management or board override of the
control.
The design of any system of controls also is based in part upon certain
assumptions about the likelihood of future events, and there can be no assurance
that any design will succeed in achieving its stated goals under all potential
future conditions; over time, controls may become inadequate because of changes
in conditions, or the degree of compliance with the policies or procedures may
deteriorate. Because of the inherent limitations in a cost-effective control
system, misstatements due to error or fraud may occur and not be detected.
CEO AND CFO CERTIFICATIONS
Appearing immediately following the Signatures section of this report there are
Certifications of our CEO and CFO (who are one and the same person). The
Certifications are required in accordance with Section 302 of the Sarbanes-Oxley
Act of 2002 (the Section 302 Certifications). This Item of this report is the
information concerning the Evaluation referred to in the Section 302
Certifications and this information should be read in conjunction with the
Section 302 Certifications for a more complete understanding of the topics
presented.
MANAGEMENT'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
Our management is responsible for establishing and maintaining adequate internal
control over financial reporting, as such term is defined in Exchange Act Rule
13a-15(f). Our internal control over financial reporting is a process designed
to provide reasonable assurance to our management and board of directors
regarding the reliability of financial reporting and the preparation of the
financial statements for external purposes in accordance with accounting
principles generally accepted in the United States of America.
Our internal control over financial reporting includes those policies and
procedures that (i) pertain to the maintenance of records that, in reasonable
detail, accurately and fairly reflect the transactions and dispositions of the
assets of the Company; (ii) provide reasonable assurance that transactions are
recorded as necessary to permit preparation of financial statements in
accordance with accounting principles generally accepted in the United States of
America, and that receipts and expenditures of the Company are being made only
in accordance with authorizations of management and directors of the Company;
and (iii) provide reasonable assurance regarding prevention or timely detection
of unauthorized acquisition, use, or disposition of the Company's assets that
could have a material effect on the financial statements.
Because of its inherent limitations, internal controls over financial reporting
may not prevent or detect misstatements. All internal control systems, no matter
how well designed, have inherent limitations, including the possibility of human
error and the circumvention of overriding controls. Accordingly, even effective
internal control over financial reporting can provide only reasonable assurance
with respect to financial statement preparation. Also, projections of any
evaluation of effectiveness to future periods are subject to the risk that
controls may become inadequate because of changes in conditions, or that the
degree of compliance with the policies or procedures may deteriorate.
Our management assessed the effectiveness of our internal control over financial
reporting as of August 31, 2008. In making this assessment, it used the
criteria set forth by the Committee of Sponsoring Organizations of the Treadway
Commission (COSO) in Internal Control-Integrated Framework. Based solely on the
material weaknesses described below, our management has concluded that, as of
August 31, 2008, the Company's internal control over financial reporting was not
effective. Management has identified the following deficiencies that, when
aggregated, may possibly be viewed as a material weakness in our internal
control over financial reporting as of August 31, 2008:
1. We do not have an Audit Committee - While not being legally obligated to
have an audit committee, it is our management's view that such a committee,
including a financial expert member, is an utmost important entity level control
over our financial statements. To date we have not established an audit
committee.
2. Insufficient documentation of financial statement preparation and review
procedures - We employ policies and procedures in reconciliation of the
financial statements and the financial information based on which the financial
statements are prepared. Notwithstanding, the controls and policies we employ
are not sufficiently documented.
3. We did not maintain proper segregation of duties for the preparation of
our financial statements - As of August 31, 2008 the majority of the preparation
of financial statements was carried out by one person. Additionally, we
currently only have one officer/director having oversight on all transactions.
This has resulted in several deficiencies including:
a. Significant, non-standard journal entries were prepared and approved by
the same person, without being checked or approved by any other personnel.
b. Lack of control over preparation of financial statements, and proper
application of accounting policies.
4. We lack sufficient information technology controls and procedures - As of
August 31, 2008, we lacked a proper data back up procedure, and while backup did
take place in actuality, we believe that it was not regulated by methodical and
consistent activities and monitoring.
CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING
We have also established and evaluated our internal control over financial
reporting, and there have been no significant changes in our internal controls
or in other factors that could significantly affect those controls subsequent to
the date of their last evaluation. Nor have there have been any changes in our
internal control over financial reporting during the last fiscal quarter.
Except as set out below, we do not intend to implement any changes to our
internal control over financial reporting until there is a significant change in
our level of operations and capital resources:
1. We will engage additional personnel to assist with the preparation of our
financial statements; which will allow for proper segregation of duties, as well
as additional manpower for proper documentation.
2. We will engage in a thorough review and restatement of our information
technology control procedures, in addition to procurement of all hardware and
software that will enable us to maintain proper backups, access, control etc.
This annual report does not include an attestation report of our registered
public accounting firm regarding internal control over financial reporting. We
are not required to provide an attestation report by our registered public
accounting firm pursuant to the rules of the Securities and Exchange Commission.
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
DIRECTORS AND OFFICERS
The following sets forth our directors, executive officers, promoters and
control persons, their ages, and all offices and positions held. Directors are
elected for a period of one year and thereafter serve until their successor is
duly elected by the shareholders. Officers and other employees serve at the
will of the Board of Directors.
- --------------------------------------------------------------------------------
TERM PERIOD SERVED AS
NAME POSITION AGE DIRECTOR/OFFICER
- --------------------------------------------------------------------------------
Fidel Thomas Chief Executive Officer, 42 2007 to present
President, Chief Financial Officer
and a director
Alfonso Quijada Vice-President, 37 2006 to present
Chief Operating Officer,
Secretary and a director
================================================================================
Fidel Thomas has been an independent corporate communications and business
development consultant since 2003. His clients include numerous private and
publicly held corporations, including Minco Gold Corp., Minco Silver Corp.,
Trivello Energy Corp., SMS Active Technologies and Visiphor Corp. Originally,
an actor, screen-writer and director, Mr. Thomas was active in the Canadian
entertainment industry from 1997 to 2002, through his production company, Inner
Vision Images Motion Picture Corp., and later, as an officer and director of AMP
Productions, Ltd. from 2003 to 2007. He is also currently Chief Executive
Officer and a director of Pickford Minerals, Inc. Ltd, an exploration company
having mineral interests in Labrador, Canada. Mr. Thomas received a Bachelor of
Sociology from the University of East London in September, 1994. He earned a
Diploma in Media Practice from the University of Central London in 1998. In
2007, he successfully completed a mining professional development course at the
Norman B. Keevil Institute of Mining Engineering at the University of British
Columbia.
Alfonso Quijada has raised millions of dollars for private and public companies,
including $1.8 million for Rhino Films and $2.5 million for an oil refinery in
Bulgaria. From 1994 through to 1998 he was the founder and president of New
World Artist Productions Inc., an international production company, focused
primarily on live-productions and music development in Japan. He was the VP of
Investor Relations for Tri-Gate Entertainment Inc. from 2000 to 2003. From 2002
to 2003, Mr. Quijada also headed up investor relations for TNR Gold Corp. Since
2003, he has served as an independent consultant, advising companies on
corporate development and finance. He is also currently Chief Operating Officer
and a director of Pickford Minerals, Inc. Ltd, an exploration company having
mineral interests in Labrador, Canada.
Messrs. Thomas and Quijada are the only "promoters" of our company, as defined
by Rule 405 of the Securities Act.
The address for all our officers and directors is 4620 Manilla Road, SE, Suite
10, Calgary, AB T2G 4B7.
INVOLVEMENT IN CERTAIN LEGAL PROCEEDINGS
During the past five years none of our directors, executive officers, promoters
or control persons have:
(1) had any bankruptcy petition filed by or against any business of which
such person was a general partner or executive officer either at the time of the
bankruptcy or within two years prior to that time;
(2) been convicted in a criminal proceeding or subject to a pending criminal
proceeding;
(3) been subject to any order, judgment, or decree, not subsequently
reversed, suspended or vacated, of any court of competent jurisdiction,
permanently or temporarily enjoining, barring, suspending or otherwise limiting
his involvement in any type of business, securities or banking activities; or
(4) been found by a court of competent jurisdiction in a civil action, the
Commission or the Commodity Futures Trading Commission to have violated a
federal or state securities or commodities law, and the judgment has not been
reversed, suspended, or vacated.
COMMITTEES OF THE BOARD
All proceedings of the board of directors for the fiscal year ended August 31,
2008 were conducted by resolutions consented to in writing by our board of
directors and filed with the minutes of the proceedings of our board of
directors. Our company currently does not have nominating, compensation or
audit committees or committees performing similar functions nor does our company
have a written nominating, compensation or audit committee charter. Our board of
directors does not believe that it is necessary to have such committees because
it believes that the functions of such committees can be adequately performed by
the board of directors.
Our company does not have any defined policy or procedure requirements for
shareholders to submit recommendations or nominations for directors. The board
of directors believes that, given the stage of our development, a specific
nominating policy would be premature and of little assistance until our business
operations develop to a more advanced level. Our company does not currently have
any specific or minimum criteria for the election of nominees to the board of
directors and we do not have any specific process or procedure for evaluating
such nominees. The board of directors will assess all candidates, whether
submitted by management or shareholders, and make recommendations for election
or appointment.
A shareholder who wishes to communicate with our board of directors may do so by
directing a written request addressed to our President, Fidel Thomas, at the
address appearing on the first page of this registration statement.
AUDIT COMMITTEE FINANCIAL EXPERT
We do not have a standing audit committee. Our directors perform the functions
usually designated to an audit committee. Our board of directors has determined
that we do not have a board member that qualifies as an "audit committee
financial expert" as defined in Item 407(d)(5) of Regulation S-K, nor do we have
a board member that qualifies as "independent" as the term is used in Item
7(d)(3)(iv)(B) of Schedule 14A under the Securities Exchange Act of 1934, as
amended, and as defined by Rule 4200(a)(14) of the NASD Rules.
We believe that our board of directors is capable of analyzing and evaluating
our financial statements and understanding internal controls and procedures for
financial reporting. Our board of directors does not believe that it is
necessary to have an audit committee because management believes that the
functions of an audit committees can be adequately performed by the board of
directors. In addition, we believe that retaining an independent director who
would qualify as an "audit committee financial expert" would be overly costly
and burdensome and is not warranted in our circumstances given the stage of our
development and the fact that we have not generated any positive cash flows from
operations to date.
As we generate revenue in the future, we intend to form a standing audit
committee and identify and appoint a financial expert to serve on our audit
committee.
CODE OF ETHICS
The Company has adopted a Code of Ethics for Senior Financial Officers that is
applicable to our principal executive officer, principal financial officer,
principal accounting officer or controller, or persons performing similar
functions. A copy of our Code of Ethics for Senior Financial Officers is filed
as an exhibit to this annual report on Form 10-K.
INDEMNIFICATION
Under our Articles of Incorporation and Bylaws of the corporation, we may
indemnify an officer or director who is made a party to any proceeding,
including a law suit, because of his position, if he acted in good faith and in
a manner he reasonably believed to be in our best interest. We may advance
expenses incurred in defending a proceeding. To the extent that the officer or
director is successful on the merits in a proceeding as to which he is to be
indemnified, we must indemnify him against all expenses incurred, including
attorney's fees. With respect to a derivative action, indemnity may be made only
for expenses actually and reasonably incurred in defending the proceeding, and
if the officer or director is judged liable, only by a court order. The
indemnification is intended to be to the fullest extent permitted by the laws of
the State of Nevada.
Regarding indemnification for liabilities arising under the Securities Act of
1933, which may be permitted to directors or officers under Nevada law, we are
informed that, in the opinion of the Securities and Exchange Commission,
indemnification is against public policy, as expressed in the Act and is,
therefore, unenforceable.
ITEM 11. EXECUTIVE COMPENSATION
To date we have no employees other than our officers. No compensation has been
awarded, earned or paid to our officers. We have no employment agreements with
any of our officers. We do not contemplate entering into any employment
agreements until such time as we have proven mineral reserves.
There is no arrangement pursuant to which any of our directors has been or is
compensated for services provided as one of our directors.
There are no stock option plans, retirement, pension, or profit sharing plans
for the benefit of our officers or directors. We do not have any long-term
incentive plans that provide compensation intended to serve as incentive for
performance.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDERS MATTERS
The following table sets forth certain information regarding the beneficial
ownership of our common stock as of May 31, 2008 by (i) each person known by us
to be a beneficial owner of more than five percent (5%) of our issued and
outstanding common stock; (ii) each of our Directors and executive officers; and
(iii) all our directors and executive officers as a group.
- ----------------------------------------------------------------------
NAME NUMBER OF SHARES %
- ----------------------------------------------------------------------
Fidel Thomas 1,000,000 8
4620 Manilla Road SE, Suite 10
Calgary, Alberta T2G 4B7
Alfonso Quijada 8,300,000 67
4620 Manilla Road SE, Suite 10
Calgary, Alberta T2G 4B7
- ----------------------------------------------------------------------
Directors and officers as a group (two persons) 9,300,000 75
======================================================================
Unless otherwise noted, we believe that all persons named in the table have sole
voting and investment power with respect to all shares of common stock
beneficially owned by them. For purposes hereof, a person is considered to be
the beneficial owner of securities that can be acquired by such person within 60
days from the date hereof, upon the exercise of warrants or options or the
conversion of convertible securities. Each beneficial owner's percentage
ownership is determined by assuming that any such warrants, options or
convertible securities that are held by such person (but not those held by any
other person) and which can be exercised within 60 days from the date hereof,
have been exercised.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE
We have issued common stock to the following officers, directors, promoters and
beneficial owners of more than 5% of our outstanding securities.
- ----------------------------------------------------------------------------------
NAME POSITION WITH COMPANY SHARES CONSIDERATION DATE
- ----------------------------------------------------------------------------------
Fidel Thomas Chief Executive Officer, 1,000,000 $ 100 June 30, 2007
President,
Chief Financial Officer
and a director
Alfonso Quijada Vice-President, 8,300,000 $ 830 July 15, 2006
Chief Operating Officer,
Secretary and a director
==================================================================================
Messrs. Thomas and Quijada are the only "promoters" of our company, as defined
by the Rule 405 of the Securities Act.
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
AUDIT FEES
The aggregate fees billed by Chang Lee LLP for professional services rendered
for the audit of our annual financial statements included in our registration
statement on Form 10 filed July 7, 2008 for the fiscal year ended August 31,
2007 was $7,550.00.
The aggregate fees billed by Chang Lee LLP for professional services rendered
for the audit of our annual financial statements included in this Annual Report
on Form 10-K for the fiscal year ended August 31, 2008 will be approximately
$5,000.
AUDIT RELATED FEES
For the fiscal years ended August 31, 2008 and 2007, the aggregate fees billed
for assurance and related services by Chang Lee LLP relating to our quarterly
financial statements which are not reported under the caption "Audit Fees"
above, were $1,575 and nil, respectively.
TAX FEES
For the fiscal years ended August 31, 2008 and 2007, the aggregate fees billed
for tax compliance, by Chang Lee LLP were nil.
ALL OTHER FEES
For the fiscal years ended August 31, 2008 and 2007, the aggregate fees billed
by Chang Lee LLP for other non-audit professional services, other than those
services listed above, totaled nil.
Effective May 6, 2003, the Securities and Exchange Commission adopted rules that
require that before Chang & Lee is engaged by us or our subsidiaries to render
any auditing or permitted non-audit related service, the engagement be:
-approved by our audit committee; or
- -entered into pursuant to pre-approval policies and procedures established by
the audit committee, provided the policies and procedures are detailed as to the
particular service, the audit committee is informed of each service, and such
policies and procedures do not include delegation of the audit committee's
responsibilities to management.
We do not have an audit committee. Our entire board of directors pre-approves
all services provided by our independent auditors. The pre-approval process has
just been implemented in response to the new rules. Therefore, our board of
directors does not have records of what percentage of the above fees were
pre-approved. However, all of the above services and fees were reviewed and
approved by the entire board of directors either before or after the respective
services were rendered.
PART IV
ITEM 13. EXHIBITS
EXHIBIT TITLE
3.1 Articles of Incorporation, Castmor Resources Ltd., incorporated by
reference from the Form 10 filed July 7, 2008
3.2 Bylaws, Castmor Resources Ltd., incorporated by reference from the
Form 10 filed July 7, 2008
4.1 Form of Stock certificate, Castmor Resources Ltd., incorporated by
reference from the Form 10 filed July 7, 2008
14.1 Code of Ethics for Senior Financial Officers, Castmor Resources Ltd.
31.1 Certification pursuant to Section 302 of the Sarbanes-Oxley Act of
2002
32.1 Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of
2002
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the Registrant has
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
CASTMOR RESOURCES LTD.
Date: November 28, 2008 By:/s/ Fidel Thomas
Fidel Thomas
Chief Executive Officer, President,
Chief Financial Officer and
Principal Accounting Officer
In accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the Registrant and in the capacities and on the
dates indicated.
SIGNATURE TITLE DATE
/s/ Fidel Thomas Chief Executive Officer, November 28, 2008
Fidel Thomas President, Chief Financial Officer,
Principal Accounting Officer
& a director