R
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED July 31, 2013.
|
£
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM _________ TO _________.
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Nevada
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91-1766677
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State or other jurisdiction of
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(I.R.S. Employer
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incorporation or organization
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Identification No.)
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Large accelerated filer o | Accelerated filer R | Non-accelerated filer o | Smaller reporting company o |
(Do not check if a smaller reporting company) |
Page
|
||
PART I - FINANCIAL INFORMATION
|
2
|
|
Item 1.
|
Financial Statements (Unaudited)
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2
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Item 2.
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Management’s Discussion and Analysis of Financial Condition and Results of Operations
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20
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Item 3.
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Quantitative and Qualitative Disclosures about Market Risk
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30
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Item 4.
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Controls and Procedures
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30
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PART II - OTHER INFORMATION
|
31
|
|
Item 1.
|
Legal Proceedings
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31
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Item 1A.
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Risk Factors
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31
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Item 2.
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Unregistered Sales of Equity Securities and Use of Proceeds
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31
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Item 3.
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Defaults Upon Senior Securities
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31
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Item 4.
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Mine Safety Disclosures
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31
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Item 5.
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Other Information
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31
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Item 6.
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Exhibits
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32
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Signatures
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33
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|
July 31,
2013
|
October 31,
2012
|
||||||
(Unaudited)
|
** | |||||||
ASSETS
|
||||||||
CURRENT ASSETS
|
||||||||
Cash and cash equivalents
|
$ | 6,160,256 | $ | 3,201,240 | ||||
Restricted cash (Note 5)
|
— | 12,614 | ||||||
Value-added tax receivable, net of allowance for uncollectible taxes of $173,705 and $203,835, respectively (Note 6)
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441,374 | 940,212 | ||||||
Other receivables
|
64,473 | 116,251 | ||||||
Prepaid expenses and deposits
|
221,504 | 308,453 | ||||||
Total Current Assets
|
6,887,607 | 4,578,770 | ||||||
Office and mining equipment, net (Note 7)
|
592,399 | 709,322 | ||||||
Property concessions (Note 8)
|
8,929,126 | 8,526,662 | ||||||
Goodwill (Note 9)
|
18,495,031 | 18,495,031 | ||||||
Other assets
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— | 43,843 | ||||||
TOTAL ASSETS
|
$ | 34,904,163 | $ | 32,353,628 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
||||||||
CURRENT LIABILITIES
|
||||||||
Accounts payable
|
$ | 125,322 | $ | 500,619 | ||||
Accrued liabilities and expenses
|
1,264,523 | 654,750 | ||||||
Income tax payable
|
3,310 | 8,540 | ||||||
Payable to AngloGold (Note 10)
|
— | 490,095 | ||||||
Total Current Liabilities
|
1,393,155 | 1,654,004 | ||||||
COMMITMENTS AND CONTINGENCIES (Notes 12 and 17)
|
||||||||
STOCKHOLDERS’ EQUITY (Notes 12, 13, 14 and 15)
|
||||||||
Common stock, $0.01 par value; 300,000,000 shares authorized,
159,072,657 and 136,160,157 shares issued and outstanding, respectively
|
1,590,726 | 1,361,601 | ||||||
Additional paid-in capital
|
124,544,672 | 116,199,819 | ||||||
Deficit accumulated during exploration stage
|
(92,693,946 | ) | (86,920,276 | ) | ||||
Other comprehensive income
|
69,556 | 58,480 | ||||||
Total Stockholders’ Equity
|
33,511,008 | 30,699,624 | ||||||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
|
$ | 34,904,163 | $ | 32,353,628 | ||||
Three Months Ended
July 31,
|
Nine Months Ended
July 31,
|
Period from
November 8,
1993 (Inception)
to July 31,
|
||||||||||||||||||
2013
|
2012
|
2013
|
2012
|
2013
|
||||||||||||||||
REVENUES
|
$ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||
EXPLORATION AND PROPERTY HOLDING COSTS
|
||||||||||||||||||||
Exploration and property holding costs
|
1,258,116 | 1,441,918 | 3,355,570 | 7,296,110 | 48,408,330 | |||||||||||||||
Depreciation and asset write-off (Note 8)
|
39,771 | 601,594 | 820,743 | 1,023,607 | 4,386,044 | |||||||||||||||
TOTAL EXPLORATION AND PROPERTY HOLDING COSTS
|
1,297,887 | 2,043,512 | 4,176,313 | 8,319,717 | 52,794,374 | |||||||||||||||
GENERAL AND ADMINISTRATIVE EXPENSES
|
||||||||||||||||||||
Personnel
|
236,464 | 233,232 | 662,439 | 706,200 | 17,495,079 | |||||||||||||||
Office and administrative (Note 11)
|
185,224 | 187,413 | 813,418 | 639,125 | 5,701,043 | |||||||||||||||
Professional services
|
88,298 | 69,554 | 320,973 | 406,127 | 8,736,435 | |||||||||||||||
Directors’ fees
|
123,328 | 90,543 | 286,031 | 407,876 | 5,294,987 | |||||||||||||||
Provision for (recovery of) uncollectible value-added taxes
|
38,890 | (120,015 | ) | 38,030 | (928,898 | ) | 572,124 | |||||||||||||
Depreciation
|
1,168 | 1,168 | 3,505 | 2,616 | 268,069 | |||||||||||||||
TOTAL GENERAL AND ADMINISTRATIVE EXPENSES
|
673,372 | 461,895 | 2,124,396 | 1,233,046 | 38,067,737 | |||||||||||||||
LOSS FROM OPERATIONS
|
(1,971,259 | ) | (2,505,407 | ) | (6,300,709 | ) | (9,552,763 | ) | (90,862,111 | ) | ||||||||||
OTHER INCOME (EXPENSES)
|
||||||||||||||||||||
Interest and investment income
|
1,818 | 73,035 | 8,748 | 138,942 | 1,104,070 | |||||||||||||||
Foreign currency transaction gain (loss)
|
14,833 | (268,206 | ) | 58,423 | (433,557 | ) | (3,055,072 | ) | ||||||||||||
Miscellaneous income
|
514,566 | 9,562 | 518,555 | 243,398 | 541,235 | |||||||||||||||
TOTAL OTHER INCOME (EXPENSE)
|
531,217 | (185,609 | ) | 585,726 | (51,217 | ) | (1,409,767 | ) | ||||||||||||
LOSS BEFORE INCOME TAXES
|
(1,440,042 | ) | (2,691,016 | ) | (5,714,983 | ) | (9,603,980 | ) | (92,271,878 | ) | ||||||||||
INCOME TAX EXPENSE
|
18,613 | 24,722 | 58,687 | 101,370 | 295,978 | |||||||||||||||
NET LOSS
|
$ | (1,458,655 | ) | $ | (2,715,738 | ) | $ | (5,773,670 | ) | $ | (9,705,350 | ) | $ | (92,567,856 | ) | |||||
OTHER COMPREHENSIVE INCOME (LOSS) – Foreign currency translation adjustments
|
4,435 | (201,502 | ) | 11,076 | (366,154 | ) | 69,556 | |||||||||||||
COMPREHENSIVE LOSS
|
$ | (1,454,220 | ) | $ | (2,917,240 | ) | $ | (5,762,594 | ) | $ | (10,071,504 | ) | $ | (92,498,300 | ) | |||||
BASIC AND DILUTED NET LOSS PER COMMON SHARE
|
$ | (0.01 | ) | $ | (0.02 | ) | $ | (0.04 | ) | $ | (0.07 | ) | ||||||||
BASIC AND DILUTED WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING
|
159,072,657 | 136,160,157 | 150,260,157 | 132,932,437 | ||||||||||||||||
Common Stock |
Additional
|
Deficit
Accumulated
During
|
Other
|
|||||||||||||||||||||
Number of
Shares |
Amount
|
Paid-in
Capital
|
Exploration
Stage
|
Comprehensive
Income
|
Total | |||||||||||||||||||
Balance, October 31, 2012
|
136,160,157 | $ | 1,361,601 | $ | 116,199,819 | $ | (86,920,276 | ) | $ | 58,480 | $ | 30,699,624 | ||||||||||||
Issuance of common stock as follows:
|
||||||||||||||||||||||||
- for cash at an average price of $0.40 per share with attached warrants less offering costs of $1,121,947 (Note 13)
|
22,912,500 | 229,125 | 7,813,928 | — | — | 8,043,053 | ||||||||||||||||||
Stock option and warrants activity as follows:
|
||||||||||||||||||||||||
- stock based compensation for options issued to officers, employees, consultants and directors
|
— | — | 479,253 | — | — | 479,253 | ||||||||||||||||||
- fair value of warrants issued to agents in connection with the Offering (Notes 13 and 15)
|
— | — | 51,672 | — | — | 51,672 | ||||||||||||||||||
Other Comprehensive Income – Foreign Currency Translation Adjustment
|
— | — | — | — | 11,076 | 11,076 | ||||||||||||||||||
Net loss for the period ended July 31, 2013
|
— | — | — | (5,773,670 | ) | — | (5,773,670 | ) | ||||||||||||||||
Balance, July 31, 2013
|
159,072,657 | $ | 1,590,726 | $ | 124,544,672 | $ | (92,693,946 | ) | $ | 69,556 | $ | 33,511,008 |
Nine months Ended
July 31,
|
Period from
November 8,
1993 (Inception)
to July 31,
|
|||||||||||
2013
|
2012
|
2013
|
||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
||||||||||||
Net loss
|
$ | (5,773,670 | ) | $ | (9,705,350 | ) | $ | (92,567,856 | ) | |||
Adjustments to reconcile net loss to net cash used by operating activities:
|
||||||||||||
Depreciation and asset write-off
|
824,248 | 1,026,223 | 4,622,470 | |||||||||
Provision for (recovery of) uncollectible value-added taxes
|
38,030 | (928,898 | ) | 565,149 | ||||||||
Noncash (income) expenses
|
(508,057 | ) | — | (381,193 | ) | |||||||
Foreign currency transaction (gain) loss
|
(47,772 | ) | 366,577 | 3,086,950 | ||||||||
Common stock issued for services
|
— | — | 1,563,574 | |||||||||
Common stock issued for compensation and directors’ fees
|
— | — | 1,753,222 | |||||||||
Stock options issued for compensation
|
479,253 | 671,665 | 10,614,992 | |||||||||
Stock options and warrants issued for services, financing fees and directors’ fees
|
— | — | 4,769,840 | |||||||||
Decrease (increase) in, net of merger transaction:
|
||||||||||||
Value-added tax receivable
|
478,572 | 1,381,030 | (1,182,577 | ) | ||||||||
Restricted cash
|
12,614 | (16,881 | ) | (5,125 | ) | |||||||
Other receivables
|
53,155 | (69,048 | ) | (50,710 | ) | |||||||
Prepaid expenses and deposits
|
91,617 | (131,697 | ) | (197,025 | ) | |||||||
(Decrease) increase in, net of merger transaction:
|
||||||||||||
Accounts payable
|
(380,716 | ) | (493,089 | ) | (98,618 | ) | ||||||
Income tax payable
|
(5,566 | ) | (4,211 | ) | 6,403 | |||||||
Accrued liabilities and expenses
|
176,945 | (513,619 | ) | 919,648 | ||||||||
Other liabilities
|
— | — | 7,649 | |||||||||
Net cash (used by) operating activities
|
(4,561,347 | ) | (8,417,298 | ) | (66,573,207 | ) | ||||||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
||||||||||||
Purchase of investments
|
— | — | (21,609,447 | ) | ||||||||
Proceeds from sale of investments
|
— | — | 21,609,447 | |||||||||
Cash acquired in merger with Dome Ventures
|
— | — | 2,618,548 | |||||||||
Equipment purchases
|
— | (65,813 | ) | (3,095,062 | ) | |||||||
Proceeds from sale of equipment
|
24,448 | — | 485,792 | |||||||||
Proceeds from mining concession option payment
|
— | — | 200,000 | |||||||||
Acquisition of property concessions
|
(632,733 | ) | (1,241,348 | ) | (7,983,945 | ) | ||||||
Net cash (used by) investing activities
|
(608,285 | ) | (1,307,161 | ) | (7,774,667 | ) | ||||||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
||||||||||||
Proceeds from issuance of common stock, net of offering costs
|
8,094,725 | 10,217,774 | 73,003,430 | |||||||||
Proceeds from sales of options and warrants
|
— | — | 949,890 | |||||||||
Proceeds from exercise of options
|
— | — | 188,913 | |||||||||
Proceeds from exercise of warrants
|
— | — | 6,350,286 | |||||||||
Deferred offering costs
|
43,843 | 49,865 | — | |||||||||
Payable to AngloGold
|
(11,551 | ) | 75,170 | 453,878 | ||||||||
Proceeds from shareholder loans
|
— | — | 30,000 | |||||||||
Payment of note payable
|
— | — | (15,783 | ) | ||||||||
Net cash provided by financing activities
|
8,127,017 | 10,342,809 | 80,960,614 | |||||||||
Effect of exchange rates on cash and cash equivalents
|
1,631 | (103,304 | ) | (452,484 | ) | |||||||
Net increase in cash and cash equivalents
|
2,959,016 | 515,046 | 6,160,256 | |||||||||
Cash and cash equivalents beginning of period
|
3,201,240 | 4,239,899 | — | |||||||||
Cash and cash equivalents end of period
|
$ | 6,160,256 | $ | 4,754,945 | $ | 6,160,256 |
Nine months Ended
July 31,
|
Period from
November 8,
1993 (Inception)
to July 31,
|
|||||||||||
2013
|
2012
|
2013
|
||||||||||
SUPPLEMENTAL CASH FLOW DISCLOSURES:
|
||||||||||||
Income taxes paid
|
$ | 48,989 | $ | 91,468 | $ | 283,508 | ||||||
Interest paid
|
$ | — | $ | 440 | $ | 287,211 | ||||||
NON-CASH INVESTING AND FINANCING ACTIVITIES:
|
||||||||||||
Accrued liabilities and expenses – acquisition of property concessions
|
$ | 420,000 | $ | — | $ | 420,000 | ||||||
Warrants issued for offering costs (Note 15)
|
$ | 51,672 | $ | — | $ | 51,672 | ||||||
Common stock issued in merger with Dome Ventures
|
$ | — | $ | — | $ | 24,840,886 | ||||||
Warrants issued in merger with Dome Ventures
|
$ | — | $ | — | $ | 1,895,252 | ||||||
Common stock issued for equipment
|
$ | — | $ | — | $ | 25,000 | ||||||
Common stock options issued for financing fees
|
$ | — | $ | — | $ | 276,000 | ||||||
Common stock options issued for non-cash options
|
$ | — | $ | — | $ | 59,947 |
Allowance for uncollectible VAT taxes – October 31, 2012
|
$ | 203,835 | ||
Provision for uncollectible VAT Taxes
|
38,030 | |||
Write-off VAT receivable
|
(57,326 | ) | ||
Foreign currency translation adjustment
|
(10,834 | ) | ||
Allowance for uncollectible VAT taxes – July 31, 2013
|
$ | 173,705 |
July 31,
|
October 31,
|
|||||||
2013
|
2012
|
|||||||
Mining equipment
|
$ | 780,838 | $ | 799,724 | ||||
Vehicles
|
179,178 | 215,618 | ||||||
Buildings and structures
|
197,723 | 197,723 | ||||||
Computer equipment and software
|
130,263 | 141,978 | ||||||
Well equipment
|
39,637 | 39,637 | ||||||
Office equipment
|
53,900 | 53,900 | ||||||
1,381,539 | 1,448,580 | |||||||
Less: Accumulated depreciation
|
(789,140 | ) | (739,258 | ) | ||||
$ | 592,399 | $ | 709,322 |
Sierra Mojada,
|
Ndjole,
|
Mitzic,
|
Mevang,
|
Ogooue,
|
|||||||||||||||||||
Mexico
|
Gabon
|
Gabon
|
Gabon
|
Gabon
|
Total
|
||||||||||||||||||
Property Concessions – November 1, 2011
|
$ | 4,846,687 | $ | 2,578,192 | $ | 958,801 | $ | 306,376 | $ | 656,779 | $ | 9,346,835 | |||||||||||
Acquisitions
|
1,547,736 | — | — | — | — | 1,547,736 | |||||||||||||||||
Impairment
|
(68,284 | ) | (490,000 | ) | (590,000 | ) | (286,710 | ) | (570,671 | ) | (2,005,665 | ) | |||||||||||
Foreign currency translation adjustment
|
— | (190,299 | ) | (66,171 | ) | (19,666 | ) | (86,108 | ) | (362,244 | ) | ||||||||||||
Property Concessions – October 31, 2012
|
$ | 6,326,139 | $ | 1,897,893 | $ | 302,630 | $ | — | $ | — | $ | 8,526,662 | |||||||||||
Acquisitions
|
1,052,732 | 1,052,732 | |||||||||||||||||||||
Impairment
|
(714,038 | ) | — | — | — | — | (714,038 | ) | |||||||||||||||
Foreign currency translation adjustments
|
— | 55,660 | 8,110 | — | — | 63,770 | |||||||||||||||||
Property Concessions – July 31, 2013
|
$ | 6,664,833 | $ | 1,953,553 | $ | 310,740 | $ | — | $ | — | $ | 8,929,126 |
Goodwill – November 1, 2011
|
$ | 18,495,031 | ||
Goodwill – October 31, 2012
|
$ | 18,495,031 | ||
Goodwill – July 31, 2013
|
$ | 18,495,031 |
Nine months Ended
July 31,
|
||||
Options
|
2013
|
2012
|
||
Expected volatility
|
54% - 70%
|
69% - 104%
|
||
Risk-free interest rate
|
0.29% - 0.88%
|
0.29% - 0.63%
|
||
Dividend yield
|
—
|
—
|
||
Expected term (in years)
|
2.50 – 3.50
|
2.50 – 3.50
|
Options
|
Shares
|
Weighted Average Exercise Price
|
Weighted Average Remaining Contractual Life (Years)
|
Aggregate Intrinsic Value
|
||||||||||||
Outstanding at November 1, 2012
|
7,530,002 | $ | 0.66 | 3.93 | 12,500 | |||||||||||
Granted
|
2,515,000 | 0.39 | ||||||||||||||
Forfeited/Cancelled
|
(181,665 | ) | 0.53 | |||||||||||||
Expired
|
(396,664 | ) | 0.64 | |||||||||||||
Outstanding at July 31, 2013
|
9,466,673 | $ | 0.59 | 3.65 | $ | — | ||||||||||
Vested or Expected to Vest at July 31, 2013
|
9,466,673 | $ | 0.59 | 3.65 | $ | — | ||||||||||
Exercisable at July 31, 2013
|
6,196,672 | $ | 0.66 | 3.25 | $ | — |
Options Outstanding
|
Options Exercisable
|
|||||||||||||||||||||
Exercise Price
|
Number Outstanding
|
Weighted Ave. Remaining Contractual Life (Years)
|
Weighted Average Exercise Price
|
Number Exercisable
|
Weighted Average Exercise Price
|
|||||||||||||||||
$ | 0.37 - 0.73 | 8,561,671 | 3.73 | $ | 0.52 | 5,291,670 | $ | 0.57 | ||||||||||||||
1.00 - 1.20 | 805,000 | 2.55 | 1.11 | 805,000 | 1.11 | |||||||||||||||||
2.18 | 100,002 | 2.62 | 2.18 | 100,002 | 2.18 | |||||||||||||||||
$ | 0.37 - 2.18 | 9,466,673 | 3.65 | $ | 0.59 | 6,196,672 | $ | 0.66 |
Warrants
|
Shares
|
Weighted Average Exercise Price
|
Weighted Average Remaining Contractual Life (Years)
|
Aggregate Intrinsic Value
|
||||||||||||
Outstanding at November 1, 2012
|
90,000 | $ | 0.34 | 0.28 | 13,500 | |||||||||||
Expired
|
(90,000 | ) | 0.34 | |||||||||||||
Issued in the Offering (Note 13)
|
11,456,250 | 0.55 | ||||||||||||||
Agents compensation warrants (Note 13)
|
1,187,250 | 0.55 | ||||||||||||||
Outstanding at July 31, 2013
|
12,643,500 | $ | 0.55 | 1.04 | $ | — | ||||||||||
Exercisable at July 31, 2013
|
12,643,500 | $ | 0.55 | 1.04 | $ | — | ||||||||||
Warrants Outstanding
|
Warrants Exercisable
|
|||||||||||||||||||||
Exercise Price
|
Number Outstanding
|
Weighted Ave. Remaining Contractual Life (Years)
|
Weighted Average Exercise Price
|
Number Exercisable
|
Weighted Average Exercise Price
|
|||||||||||||||||
$ | 0.55 | 12,643,500 | 1.04 | $ | 0.55 | 12,643,500 | $ | 0.55 |
Level 1
|
Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;
|
Level 2
|
Quoted prices in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability;
|
Level 3
|
Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity).
|
Olympia (1 concession)
|
|
Payment Date
|
Payment Amount
|
March 2014 (1)
|
$MXN 500,000
|
(1) If a change of control occurs prior to the payment date, this payment is due upon the change of control.
Nuevo Dulces Nombres (Centenario) and Yolanda III (2 concessions)
|
|
Payment Date
|
Payment Amount (1)
|
Monthly payment beginning August 2014 and ending July 2016
|
$20,000 per month
|
Poder de Dios, Anexas a Poder de Dios, and Ampliacion a Poder de Dios (3 concessions)
|
||
Payment Date
|
Payment Amount
|
Option Purchase Price (1)
|
April 2014
|
$300,000
|
$6 million
|
October 2014
|
$300,000
|
$6 million
|
April 2015 (2)
|
$300,000
|
$7 million
|
Veta Rica o La Inglesa (1 concession)
|
|
Payment Date
|
Payment Amount
|
April 2014
|
$300,000
|
For the Three Months Ended
July 31, |
For the Nine months Ended
July 31, |
Period from November 8, 1993 (Inception) To
July 31,
|
||||||||||||||||||
2013
|
2012
|
2013
|
2012
|
2013
|
||||||||||||||||
Net income (loss) for the period
|
||||||||||||||||||||
Mexico
|
$ | (1,108,000 | ) | $ | (1,382,000 | ) | $ | (3,818,000 | ) | $ | (6,199,000 | ) | $ | (49,035,000 | ) | |||||
Canada
|
(636,000 | ) | (634,000 | ) | (2,090,000 | ) | (2,232,000 | ) | (6,414,000 | ) | ||||||||||
Gabon
|
286,000 | (700,000 | ) | 134,000 | (1,274,000 | ) | (2,810,000 | ) | ||||||||||||
United States
|
- | - | - | - | (34,309,000 | ) | ||||||||||||||
$ | (1,458,000 | ) | $ | (2,716,000 | ) | $ | (5,774,000 | ) | $ | (9,705,000 | ) | $ | (92,568,000 | ) | ||||||
United States
|
Canada
|
Mexico
|
Gabon
|
Total
|
||||||||||||
Cash and cash equivalents
|
$
|
2,771,000
|
$
|
2,848,000
|
$
|
14,000
|
$
|
526,000
|
$
|
6,159,000
|
||||||
Value-added tax receivable, net
|
-
|
-
|
424,000
|
17,000
|
441,000
|
|||||||||||
Other receivables
|
-
|
14,000
|
50,000
|
1,000
|
65,000
|
|||||||||||
Prepaid expenses and deposits
|
- | 80,000 | 141,000 | 1,000 | 222,000 | |||||||||||
Office and mining equipment, net
|
-
|
5,000
|
560,000
|
28,000
|
593,000
|
|||||||||||
Property concessions
|
-
|
-
|
6,665,000
|
2,264,000
|
8,929,000
|
|||||||||||
Goodwill
|
-
|
-
|
18,495,000
|
-
|
18,495,000
|
|||||||||||
$
|
2,771,000
|
$
|
2,947,000
|
$
|
26,349,000
|
$
|
2,837,000
|
$
|
34,904,000
|
United States
|
Canada
|
Mexico
|
Gabon
|
Total
|
||||||||||||
Cash and cash equivalents
|
$
|
101,000
|
$
|
3,013,000
|
$
|
39,000
|
$
|
48,000
|
$
|
3,201,000
|
||||||
Restricted cash
|
-
|
-
|
-
|
13,000
|
13,000
|
|||||||||||
Value-added tax receivable, net
|
-
|
-
|
449,000
|
491,000
|
940,000
|
|||||||||||
Other receivables
|
-
|
64,000
|
52,000
|
-
|
116,000
|
|||||||||||
Prepaid expenses and deposits
|
- | 157,000 | 151,000 | 1,000 | 309,000 | |||||||||||
Office and mining equipment, net
|
-
|
8,000
|
663,000
|
38,000
|
709,000
|
|||||||||||
Property concessions
|
-
|
-
|
6,326,000
|
2,201,000
|
8,527,000
|
|||||||||||
Goodwill
|
-
|
-
|
18,495,000
|
-
|
18,495,000
|
|||||||||||
Other assets
|
-
|
44,000
|
-
|
-
|
44,000
|
|||||||||||
$
|
101,000
|
$
|
3,286,000
|
$
|
26,175,000
|
$
|
2,792,000
|
$
|
32,354,000
|
For the Three Months Ended
July 31, |
For the Nine
Months Ended
July 31, |
Period from November 8, 1993 (Inception) To
July 31,
|
||||||||||||||||||
2013
|
2012
|
2013
|
2012
|
2013
|
||||||||||||||||
Exploration and property holding costs for the period
|
||||||||||||||||||||
Mexico Sierra Mojada
|
$ | (1,096,000 | ) | $ | (1,476,000 | ) | $ | (3,802,000 | ) | $ | (7,321,000 | ) | $ | (49,716,000 | ) | |||||
Gabon Ndjole
|
(183,000 | ) | - | (303,000 | ) | - | (1,039,000 | ) | ||||||||||||
Gabon Mitzic
|
(19,000 | ) | 3,000 | (71,000 | ) | (141,000 | ) | (1,048,000 | ) | |||||||||||
Gabon Ogooue
|
- | (570,000 | ) | - | (570,000 | ) | (704,000 | ) | ||||||||||||
Gabon Mevang
|
- | - | - | (287,000 | ) | (287,000 | ) | |||||||||||||
$ | (1,298,000 | ) | $ | (2,043,000 | ) | $ | (4,176,000 | ) | $ | (8,319,000 | ) | $ | (52,794,000 | ) |
·
|
Results of future exploration at our Sierra Mojada Project;
|
·
|
Our ability to raise necessary capital to conduct our exploration activities and to do so on acceptable terms;
|
·
|
Worldwide economic and political events affecting the market prices for silver, gold, zinc, lead, copper, manganese and other minerals that may be found on our exploration properties;
|
·
|
The amount and nature of future capital and exploration expenditures;
|
·
|
Competitive factors, including exploration-related competition;
|
·
|
Our ability to obtain required permits;
|
·
|
Timing of receipt and maintenance of government approvals;
|
·
|
Unanticipated title issues;
|
·
|
Changes in tax laws;
|
·
|
Changes in regulatory frameworks or regulations affecting our activities;
|
·
|
Our ability to retain key management necessary to successfully operate and grow our business; and
|
·
|
Political and economic instability in Mexico and other countries in which we conduct our business and future actions of the governments in such countries with respect to nationalization of natural resources or other changes in mining or taxation policies. |
(a)
|
Evaluation of Disclosure Controls and Procedures.
|
Incorporated by Reference
|
||||||||
Exhibit Number
|
Exhibit Description
|
Form
|
Date
|
Exhibit
|
Filed Herewith
|
|||
31.1
|
Certification of CEO Pursuant to Exchange Act Rules 13a-14 and 15d-14, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, filed herewith.
|
X
|
||||||
31.2
|
Certification of CFO Pursuant to Exchange Act Rules 13a-14 and 15d-14, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, filed herewith.
|
X
|
||||||
32.1
|
Certification of CEO Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, filed herewith.
|
X
|
||||||
32.2
|
Certification of CFO Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, filed herewith.
|
X
|
||||||
101.INS*
|
XBRL Instance Document
|
X
|
||||||
101.SCH*
|
|
XBRL Schema Document
|
X
|
|||||
101.CAL*
|
XBRL Calculation Linkbase Document
|
X
|
||||||
101.DEF*
|
XBRL Definition Linkbase Document
|
X
|
101.LAB*
|
XBRL Labels Linkbase Document
|
X
|
101.PRE*
|
XBRL Presentation Linkbase Document
|
X
|
Dated: September 5, 2013
|
By
|
/s/ Timothy Barry
|
Timothy Barry
|
||
President and Chief Executive Officer
|
||
(Principal Executive Officer)
|
||
Dated: September 5, 2013
|
By
|
/s/ Sean Fallis
|
Sean Fallis
|
||
Chief Financial Officer
|
||
(Principal Financial Officer and Principal Accounting Officer)
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Silver Bull Resources, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal controls over financial reporting, or caused such internal controls over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Dated: September 5, 2013
|
By
|
/s/ Timothy Barry
|
Timothy Barry, President and Chief Executive Officer
(Principle Executive Officer)
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Silver Bull Resources, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal controls over financial reporting, or caused such internal controls over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Dated: September 5, 2013
|
By
|
/s/ Sean Fallis
|
Sean Fallis, Chief Financial Officer
(Principal Accounting and Financial Officer)
|
1.
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Dated: September 5, 2013
|
By
|
/s/ Timothy Barry
|
||
Timothy Barry, President and Chief Executive Officer
(Principle Executive Officer)
|
1.
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Dated: September 5, 2013
|
By
|
/s/ Sean Fallis
|
||
Chief Financial Officer
(Principal Accounting and Financial Officer)
|
PAYABLE TO ANGLOGOLD
|
9 Months Ended |
---|---|
Jul. 31, 2013
|
|
JOINT VENTURE AGREEMENTS [Abstract] | |
PAYABLE TO ANGLOGOLD | NOTE 10 - PAYABLE TO ANGLOGOLD Pursuant to the terms of two joint venture agreements between the Company and AngloGold which were terminated effective August 16, 2012, exploration costs were funded 100% by AngloGold through the Company's wholly owned subsidiary, Dome Gabon SARL. As at October 31, 2012, the Company had $477,481 (Central African Francs ("$CFA") 241,738,722) of VAT receivable outstanding related to expenditures incurred by AngloGold, which was included in the payable to AngloGold of $490,095 recorded at October 31, 2012. Based on the Company's current legal interpretation of the joint venture agreements, the Company has concluded that AngloGold has no right to the VAT receivable and related cash collected, because AngloGold abandoned all of its rights and benefits under the joint venture agreements upon AngloGold's termination of such agreements. Therefore, the Company has not recorded a payable to AngloGold at July 31, 2013. |
COMMITMENTS AND CONTINGENCIES (Property Concessions) (Details)
|
9 Months Ended | |||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jul. 31, 2013
|
Jul. 31, 2013
Olympia [Member]
USD ($)
|
Jul. 31, 2013
Nuevo Dulces Nombres (Centenario) and Yolanda III [Member]
USD ($)
|
Jul. 31, 2013
Poder de Dios, Anexas a Poder de Dios, and Ampliacion a Poder de Dios [Member]
USD ($)
|
Jul. 31, 2013
Veta Rica o La Inglesa [Member]
USD ($)
|
Jul. 31, 2013
Gabon [Member]
XAF
|
Jul. 31, 2013
Ndjole, Gabon [Member]
XAF
|
Jul. 31, 2013
Mitzic, Gabon [Member]
XAF
|
Jul. 31, 2013
Nuevo Dulces Nombres [Member]
USD ($)
|
Jul. 31, 2013
Yolanda III [Member]
USD ($)
|
Jul. 31, 2013
Sierra Mojada [Member]
USD ($)
|
||||||||||||
Property Concessions By Location Of Concessions [Line Items] | ||||||||||||||||||||||
Payment required to obtain full ownership of property concessions, payment one | $ 500,000 | $ 300,000 | $ 300,000 | |||||||||||||||||||
Payment required to obtain full ownership of property concessions, payment two | 300,000 | |||||||||||||||||||||
Payment required to obtain full ownership of property concessions, payment three | 300,000 | [1] | ||||||||||||||||||||
Purchase price for the acquisition of 100% of the concession at time of option purchase price one | 6,000,000 | [2] | 4,000,000 | 2,000,000 | ||||||||||||||||||
Purchase price for the acquisition of 100% of the concession at time of option purchase price two | 6,000,000 | [2] | ||||||||||||||||||||
Purchase price for the acquisition of 100% of the concession at time of option purchase price three | 7,000,000 | [1],[2] | ||||||||||||||||||||
Purchase price for the acquisition of 100% of the concession | 5,000,000 | 4,000,000 | 2,000,000 | |||||||||||||||||||
The cost to renew each exploration license for a second term of three years | 2,926,000,000 | 901,000,000 | ||||||||||||||||||||
The cost to renew each exploration license for a third term of three years | 800,000,000 | 400,000,000 | ||||||||||||||||||||
Foreign currency exchange rate translation | 1.03 | 494 | ||||||||||||||||||||
Monthly payment through 48 months after the initial payment date to obtain full ownership of concession | 20,000 | [3] | ||||||||||||||||||||
Number of concessions per property | 1 | 2 | 3 | 1 | ||||||||||||||||||
Payment date of first property concession payment | Mar. 01, 2014 | [4] | Aug. 01, 2014 | Apr. 01, 2014 | Apr. 01, 2014 | Jul. 01, 2016 | Jul. 01, 2016 | |||||||||||||||
Payment date of second property concession payment | Jul. 01, 2016 | Oct. 01, 2014 | ||||||||||||||||||||
Payment date of third property concession payment | Apr. 01, 2015 | [1] | ||||||||||||||||||||
Percentage rate of net smelter return royalties | 2.00% | |||||||||||||||||||||
The maximum net smelter return royalties that can be paid | $ 6,875,000 | |||||||||||||||||||||
|
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (USD $)
|
3 Months Ended | 9 Months Ended | 237 Months Ended | ||
---|---|---|---|---|---|
Jul. 31, 2013
|
Jul. 31, 2012
|
Jul. 31, 2013
|
Jul. 31, 2012
|
Jul. 31, 2013
|
|
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS [Abstract] | |||||
REVENUES | |||||
EXPLORATION AND PROPERTY HOLDING COSTS | |||||
Exploration and property holding costs | 1,258,116 | 1,441,918 | 3,355,570 | 7,296,110 | 48,408,330 |
Depreciation and asset write-off (Note 8) | 39,771 | 601,594 | 820,743 | 1,023,607 | 4,386,044 |
TOTAL EXPLORATION AND PROPERTY HOLDING COSTS | 1,297,887 | 2,043,512 | 4,176,313 | 8,319,717 | 52,794,374 |
GENERAL AND ADMINISTRATIVE EXPENSES | |||||
Personnel | 236,464 | 233,232 | 662,439 | 706,200 | 17,495,079 |
Office and administrative (Note 11) | 185,224 | 187,413 | 813,418 | 639,125 | 5,701,043 |
Professional services | 88,298 | 69,554 | 320,973 | 406,127 | 8,736,435 |
Directors' fees | 123,328 | 90,543 | 286,031 | 407,876 | 5,294,987 |
Provision for (recovery of) uncollectible value-added taxes | 38,890 | (120,015) | 38,030 | (928,898) | 572,124 |
Depreciation | 1,168 | 1,168 | 3,505 | 2,616 | 268,069 |
TOTAL GENERAL AND ADMINISTRATIVE EXPENSES (RECOVERY) | 673,372 | 461,895 | 2,124,396 | 1,233,046 | 38,067,737 |
LOSS FROM OPERATIONS | (1,971,259) | (2,505,407) | (6,300,709) | (9,552,763) | (90,862,111) |
OTHER (EXPENSES) INCOME | |||||
Interest and investment income | 1,818 | 73,035 | 8,748 | 138,942 | 1,104,070 |
Foreign currency transaction (loss) gain | 14,833 | (268,206) | 58,423 | (433,557) | (3,055,072) |
Miscellaneous income | 514,566 | 9,562 | 518,555 | 243,398 | 541,235 |
TOTAL OTHER (EXPENSES) INCOME | 531,217 | (185,609) | 585,726 | (51,217) | (1,409,767) |
LOSS BEFORE INCOME TAXES | (1,440,042) | (2,691,016) | (5,714,983) | (9,603,980) | (92,271,878) |
INCOME TAX EXPENSE | 18,613 | 24,722 | 58,687 | 101,370 | 295,978 |
NET LOSS | (1,458,655) | (2,715,738) | (5,773,670) | (9,705,350) | (92,567,856) |
OTHER COMPREHENSIVE INCOME (LOSS) | |||||
Foreign currency translation adjustments | 4,435 | (201,502) | 11,076 | (366,154) | 69,556 |
COMPREHENSIVE LOSS | $ (1,454,220) | $ (2,917,240) | $ (5,762,594) | $ (10,071,504) | $ (92,498,300) |
BASIC AND DILUTED NET LOSS PER COMMON SHARE | $ (0.01) | $ (0.02) | $ (0.04) | $ (0.07) | |
BASIC AND DILUTED WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING | 159,072,657 | 136,160,157 | 150,260,157 | 132,932,437 |
SIGNIFICANT ACCOUNTING POLICIES
|
9 Months Ended |
---|---|
Jul. 31, 2013
|
|
SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |
SIGNIFICANT ACCOUNTING POLICIES | NOTE 3 - SIGNIFICANT ACCOUNTING POLICIES The significant accounting policies are defined in the Company's Form 10-K/A for the year ended October 31, 2012 filed on February 4, 2013, except as follows. Recent Accounting Pronouncements Adopted in the Nine Months Ended July 31, 2013 Effective November 1, 2012, the Company adopted Accounting Standards Update ("ASU") 2011-04 "Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs." This update amended explanations of how to measure fair value to result in common fair value measurement and disclosure requirements in GAAP and International Financial Reporting Standards. The adoption of this standard had no material effect on the Company's financial position, results of operations or cash flows. Effective November 1, 2012, the Company adopted ASU 2011-05 , "Presentation of Comprehensive Income," to provide an entity the option to present the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. The Company chose to use the single continuous statement approach and the update had no effect on the Company's financial position, results of operations or cash flows. Effective November 1, 2012 the Company adopted ASU 2011-08 "Intangibles - Goodwill and Other". This new guidance on testing goodwill provides an entity the option to first perform a qualitative assessment to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If an entity determines that this is the case, it is required to perform the currently prescribed two-step goodwill impairment test to identify potential goodwill impairment and measure the amount of goodwill impairment loss to be recognized for that reporting unit (if any). If an entity determines that the fair value of a reporting unit is not less than its carrying amount, the two-step goodwill impairment test is not required. The adoption of this guidance had no material effect on the Company's financial position, results of operations or cash flows. Recent Accounting Pronouncements In December 2011, the Financial Accounting Standards Board ("FASB") issued ASU 2011-11, "Balance Sheet (Topic 201): Disclosures about Offsetting Assets and Liabilities." This ASU adds certain additional disclosure requirements about financial instruments and derivative instruments that are subject to netting arrangements. ASU 2011-11 is effective for fiscal years, and interim periods within those years, beginning after January 1, 2013, with retrospective application required. We do not believe the adoption of this update will have a material impact on the disclosure requirements for the Company's consolidated financial statements. Other recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force) and the SEC did not or are not believed to have a material impact on the Company's present or future consolidated financial statements. |
COMMITMENTS AND CONTINGENCIES
|
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jul. 31, 2013
|
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COMMITMENTS AND CONTINGENCIES [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||
COMMITMENTS AND CONTINGENCIES | NOTE 17 - COMMITMENTS AND CONTINGENCIES Compliance with Environmental Regulations The Company's activities are subject to laws and regulations controlling not only the exploration and mining of mineral properties, but also the effect of such activities on the environment. Compliance with such laws and regulations may necessitate additional capital outlays; affect the economics of a project, and cause changes or delays in the Company's activities. Employment Agreements On February 26, 2013, the Company entered into an amended and restated employment agreement with Brian Edgar, its Chairman. The amended and restated employment agreement provides that Mr. Edgar is entitled to receive a lump sum severance payment equal to 12 months of his base salary ($CDN 7,500 per month) if Mr. Edgar is terminated without cause. However, upon a change of control (which is defined in the amended and restated employment agreement), Mr. Edgar is entitled to receive a lump sum severance payment equal to 24 months of his base salary plus the previous year bonus, if Mr. Edgar or the Company terminates his employment within three months of such change in control. On February 26, 2013, the Company entered into an amended and restated employment agreement with Timothy Barry, its President and Chief Executive Officer. The amended and restated employment agreement provides that Mr. Barry is entitled to receive a lump sum severance payment equal to 12 months of his base salary ($CDN 18,000 per month) if Mr. Barry is terminated without cause. However, upon a change of control (which is defined in the amended and restated employment agreement), Mr. Barry is entitled to receive a lump sum severance payment equal to 24 months of his base salary plus the previous year bonus, if Mr. Barry or the Company terminates his employment within three months of such change in control. On February 26, 2013, the Company entered into an amended and restated employment agreement with Sean Fallis, its Chief Financial Officer that provides for an annual base salary effective March 1, 2013 of $CDN 180,000. The amended and restated employment agreement provides that Mr. Fallis is entitled to receive a lump sum payment equal to six months of his base salary if Mr. Fallis is terminated without cause after February 7, 2014 and four months of his base salary if terminated prior to such date. However, upon a change of control (which is defined in the amended and restated employment agreement), Mr. Fallis is entitled to receive a lump sum severance payment equal to 24 months of his base salary plus the previous year bonus, if Mr. Fallis or the Company terminates his employment within three months of such change in control. Property Concessions Mexico To properly maintain property concessions in Mexico, the Company is required to pay a semi-annual fee to the Mexican government and complete annual assessment work. In addition, seven of the concessions in the Sierra Mojada project are subject to options to purchase from existing third party concession owners. The agreements are considered option purchase agreements and give the Company the option, but not the obligation, to acquire the concessions at established prices. Pursuant to the option purchase agreements, the Company is required to make certain payments over the terms of these contracts. The payments required to obtain full ownership of these concessions are set forth in the table below:
(1) Until July 2016, the Company has the option of acquiring Nuevo Dulces Nombres (100% interest) for $4 million and Yolanda III (100% interest) for $2 million plus a lump sum payment equal to any remaining monthly payments.
(1) Payments shown in the second column are required to maintain the option. Payments shown in the third column reflect the option purchase price for a period of six months from the payment date for the acquisition of 100% of the concessions. The option purchase price until April 2014 is $5 million. Upon payment of the option purchase price, no subsequent payments are required. (2) After April 2015, the Company must pay $300,000 every 6 months in order to maintain the option-purchase agreement. During this period, the Company has the option of acquiring Poder de Dios, Anexas a Poder de Dios, and Ampliacion a Poder de Dios (100% interest) for $7 million.
Property Concessions Gabon The Company holds title to the Ndjole and Mitzic concessions in Gabon, Africa that require the Company to spend minimum amounts each term to renew the concessions. Each concession is renewable twice with each renewal lasting for three years. The initial renewal of the Ndjole concession was granted on June 21, 2012 and the initial renewal of the Mitzic concession was granted on July 24, 2012. Per the renewed concession licenses the Company must spend $CFA 2,926,000,000 on exploration work on the Ndjole concession and $CFA 901,000,000 on exploration work on the Mitzic concession in order to renew these concessions for a third term of three years. The Company plans to request the concession licenses be amended to reflect the required exploration expenditures of $CFA 400,000,000 per concession to renew the concessions for a third term of three years per Gabonese law. The Company must spend $CFA 800,000,000 in the third term per Gabonese law. The Company may apply for a mining license at any time during these periods. As of July 31, 2013, one U.S. dollar approximates $CFA 494. Royalty The Company has agreed to pay a 2% net smelter return royalty on certain property concessions within the Sierra Mojada Property. Total payments under this royalty are limited to $6.875 million. Office Lease Commitment The Company entered into a five-year office lease agreement from April 1, 2012 to March 31, 2017 for the Company's corporate office in Vancouver, Canada. The monthly lease payment is $CDN 7,506 until March 31, 2014, increasing to $CDN 7,743 on April 1, 2014, with a further increase to $CDN 7,981 on April 1, 2016. As of July 31, 2013, one U.S. dollar approximates $CDN 1.03. |
SEGMENT INFORMATION (Schedule of Segment Exploration and Property Holding Costs) (Details) (USD $)
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3 Months Ended | 9 Months Ended | 237 Months Ended | ||
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Jul. 31, 2013
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Jul. 31, 2012
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Jul. 31, 2013
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Jul. 31, 2012
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Jul. 31, 2013
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Segment Reporting Information [Line Items] | |||||
Exploration and property holding costs for the period | $ (1,297,887) | $ (2,043,512) | $ (4,176,313) | $ (8,319,717) | $ (52,794,374) |
Mexico, Sierra Mojada [Member]
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Segment Reporting Information [Line Items] | |||||
Exploration and property holding costs for the period | (1,096,000) | (1,476,000) | (3,802,000) | (7,321,000) | (49,716,000) |
Ndjole, Gabon [Member]
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Segment Reporting Information [Line Items] | |||||
Exploration and property holding costs for the period | (183,000) | (303,000) | (1,039,000) | ||
Mitzic, Gabon [Member]
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Segment Reporting Information [Line Items] | |||||
Exploration and property holding costs for the period | (19,000) | 3,000 | (71,000) | (141,000) | (1,048,000) |
Ogooue, Gabon [Member]
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Segment Reporting Information [Line Items] | |||||
Exploration and property holding costs for the period | (570,000) | (570,000) | (704,000) | ||
Mevang, Gabon [Member]
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Segment Reporting Information [Line Items] | |||||
Exploration and property holding costs for the period | $ (287,000) | $ (287,000) |
RELATED PARTY TRANSACTIONS
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9 Months Ended |
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Jul. 31, 2013
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RELATED PARTY TRANSACTIONS [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 11 - RELATED PARTY TRANSACTIONS The Company had an arrangement with Rand Edgar Investment Corp., a company owned by Brian Edgar, the Company's Chairman, whereby the Company paid approximately $10,000 per month for general corporate development, rent and administrative services for an office in Vancouver, British Columbia. This arrangement ended on March 31, 2012. During the three months ended July 31, 2013 and July 31, 2012, the Company paid $nil and $nil respectively, and during the nine months ended July 31, 2013 and July 31, 2012, the Company paid $nil and $54,000 respectively, to Rand Edgar Investment Corp. for general corporate development, rent and administrative services, which is included in the office and administrative line of the condensed consolidated statement of operations and comprehensive loss. |
VALUE-ADDED TAX RECEIVABLE (Summary of the Changes in the Allowance for Uncollectable Taxes) (Details) (USD $)
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9 Months Ended | 237 Months Ended | |
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Jul. 31, 2013
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Jul. 31, 2012
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Jul. 31, 2013
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VALUE-ADDED TAX RECEIVABLE [Abstract] | |||
Allowance for uncollectible VAT taxes, beginning balance | $ 203,835 | ||
Provision for (recovery of) uncollectible value-added taxes | 38,030 | (928,898) | 565,149 |
Write-off VAT receivable | (57,326) | ||
Foreign currency translation adjustment | (10,834) | ||
Allowance for uncollectible VAT taxes, ending balance | $ 173,705 | $ 173,705 |
VALUE-ADDED TAX RECEIVABLE (Tables)
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9 Months Ended | |||||||||||||||||||||||||
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Jul. 31, 2013
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VALUE-ADDED TAX RECEIVABLE [Abstract] | ||||||||||||||||||||||||||
Summary of the Changes in the Allowance for Uncollectable Taxes | A summary of the changes in the allowance for uncollectible VAT taxes for the nine months ended July 31, 2013 is as follows:
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SIGNIFICANT ACCOUNTING POLICIES (Policy)
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9 Months Ended |
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Jul. 31, 2013
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SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Adopted in the Nine Months Ended July 31, 2013 Effective November 1, 2012, the Company adopted Accounting Standards Update ("ASU") 2011-04 "Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs." This update amended explanations of how to measure fair value to result in common fair value measurement and disclosure requirements in GAAP and International Financial Reporting Standards. The adoption of this standard had no material effect on the Company's financial position, results of operations or cash flows. Effective November 1, 2012, the Company adopted ASU 2011-05 , "Presentation of Comprehensive Income," to provide an entity the option to present the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. The Company chose to use the single continuous statement approach and the update had no effect on the Company's financial position, results of operations or cash flows. Effective November 1, 2012 the Company adopted ASU 2011-08 "Intangibles - Goodwill and Other". This new guidance on testing goodwill provides an entity the option to first perform a qualitative assessment to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If an entity determines that this is the case, it is required to perform the currently prescribed two-step goodwill impairment test to identify potential goodwill impairment and measure the amount of goodwill impairment loss to be recognized for that reporting unit (if any). If an entity determines that the fair value of a reporting unit is not less than its carrying amount, the two-step goodwill impairment test is not required. The adoption of this guidance had no material effect on the Company's financial position, results of operations or cash flows. Recent Accounting Pronouncements In December 2011, the Financial Accounting Standards Board ("FASB") issued ASU 2011-11, "Balance Sheet (Topic 201): Disclosures about Offsetting Assets and Liabilities." This ASU adds certain additional disclosure requirements about financial instruments and derivative instruments that are subject to netting arrangements. ASU 2011-11 is effective for fiscal years, and interim periods within those years, beginning after January 1, 2013, with retrospective application required. We do not believe the adoption of this update will have a material impact on the disclosure requirements for the Company's consolidated financial statements. Other recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force) and the SEC did not or are not believed to have a material impact on the Company's present or future consolidated financial statements. |